Chaitanya Bharati Institute of Technology, Hyderabad V. Director of Income Tax- (E), Hyderabad

ITA 1202/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74511 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: P MURALI MOHAN RAO; JAGNI
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1202/HYD/2013 CHAITANYA BHARATI INSTITUTE OF TECHNOLOGY, HYDERABAD. PANAABTC1906A VS. DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) FOR APPELLANT : S/SHRI JAGNI & P.MURALIMOHAN RAO FOR RESPONDENT : SHRI P.SOMASEKHAR REDDY DATE OF HEARING : 21.11.2013 DATE OF PRONOUNCEMENT :17.01.2014 ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 31.05.2013 PASSED BY THE DIT(E) REFUSIN G TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT FR OM 01.07.2009 I.E., THE DATE OF FORMATION OF THE TRUST . 2. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A SOCIET Y REGISTERED UNDER THE ANDHRA PRADESH SOCIETIES REGIS TRATION ACT, 2001 W.E.F. 01.07.2009. THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE TECHNICAL EDUCATION WITHOUT ANY PROFIT M OTIVE. TO ACHIEVE THIS OBJECT, THE SOCIETY HAS SET UP AN ENGI NEERING COLLEGE IN THE NAME AND STYLE OF CHAITANYA BHARATHI INSTITUTE OF TECHNOLOGY. THE SOCIETY ON 30.09.2010 MADE AN APPLICATION IN FORM NO. 10A SEEKING REGISTRATION UN DER SECTION 12A OF THE ACT. AFORESAID APPLICATION OF TH E ASSESSEE WAS REJECTED BY THE DIT(E) VIDE ORDER DATED 31.03.2 011. THE ASSESSEE CHALLENGED THE ORDER OF REJECTION BY FILIN G AN APPEAL 2 ITA.NO.1202/HYD/2013 CHAITANYA BHARATI INSTITUTE OF TECHNOLOGY, HYDERABAD. BEFORE THE ITAT. THE ITAT VIDE ORDER DATED 09.09.20 11 PASSED IN ITA.NO.795/HYD/2011 REMITTED THE MATTER BACK TO THE DIT(E) FOR CONSIDERING THE ISSUE DENOVO. IN THE MEA NWHILE, DURING THE PENDENCY OF APPEAL BEFORE THE TRIBUNAL, THE ASSESSEE HAS MADE ANOTHER APPLICATION IN FORM 10A B EFORE THE DIT(E) ON 04.05.2011 AND THE DIT(E) CONSIDERING THAT APPLICATION HAD PASSED AN ORDER ON 09.08.2011 GRANT ING REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT W.E.F. 01.04.2011. BE THAT AS IT MAY, DURING THE PR OCEEDING TAKEN-UP CONSEQUENT UPON THE DIRECTION OF THE TRIBU NAL, THE DIT(E) RAISED QUESTION ABOUT A RECEIPT OF RS.26,57, 245/- DURING THE FINANCIAL YEAR 2009-2010. THOUGH THE ASS ESSEE EXPLAINED, THE SAID AMOUNT REPRESENTS EXCESS TUITIO N FEE PAID BY SOME OF THE STUDENTS AND THE ASSESSEE ALSO SUBMI TTED THE DETAILS BREAK-UP OF SUCH FEES, THE DIT(E) HELD THAT THERE IS NO REASON WHY EXTRA MONEY WAS COLLECTED FROM THE STUDE NTS. HE FURTHER INFERRED THAT THE ASSESSEE HAS COLLECTED EX TRA MONEY, OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSION OF STUDENTS DURING THAT YEAR. ON THAT BASIS, THE DIT(E) CONCLUD ED THAT AS THE ASSESSEE HAD COLLECTED EXTRA MONEY IT WOULD NOT BE ELIGIBLE FOR EXEMPTION EITHER UNDER SECTION 11 OR U NDER SECTION 10(23C) OF THE ACT. CONSEQUENTLY, THE ASSES SEE WOULD NOT BE ENTITLED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THE DIT(E), THEREFORE, REFUSED TO GRANT REGISTRATIO N UNDER SECTION 12AA OF THE ACT FROM 01.07.2009 TILL 31.03. 2011. 3. WE HAVE HEARD THE CONTENTIONS OF THE PARTIES AN D PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSEE SOCIETY HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT W.E.F. 01.04.2011. THEREFORE, THE FACT THAT THE SOCIETY IS GENUINE AND ITS ACTIVITIES ARE ABOVE BOARD IS BE YOND DOUBT. 3 ITA.NO.1202/HYD/2013 CHAITANYA BHARATI INSTITUTE OF TECHNOLOGY, HYDERABAD. THEREFORE, THE ONLY ISSUE WHICH REMAINS TO BE LOOKE D INTO IS, WHETHER THE AMOUNT OF RS.26,57,245/- IS ACTUALLY TH E EXTRA MONEY RECEIVED BY THE ASSESSEE OVER AND ABOVE THE P RESCRIBED FEE AS ALLEGED BY THE DIT(E). IN THIS REGARD, THE C ONTENTION OF THE LEARNED A.R. IS THAT THE SAID AMOUNT REPRESENTS EXCESS TUITION FEE PAID BY SOME OF THE STUDENTS. ON PERUSA L OF SCHEDULE-3 TO THE BALANCE SHEET AS ON 31.03.2010 IN DICATES THAT THE ASSESSEE IN FACT HAD SHOWN THE AFORESAID A MOUNT AS EXCESS TUITION FEE IN THE LIABILITY SIDE. THE BREAK UP OF EXCESS TUITION FEE HAS ALSO BEEN FURNISHED BY THE ASSESSEE . WHEN THE ASSESSEE HAS SHOWN THE AMOUNT OF RS.26,57,245/- AS EXCESS TUITION FEE IN ITS ACCOUNTS THERE IS NO REASON TO D ISBELIEVE IT IN THE ABSENCE OF ANY ADVERSE MATERIAL BROUGHT ON RECO RD TO ESTABLISH THAT THE ASSESSEE HAS COLLECTED EXTRA MON EY OVER AND ABOVE THE PRESCRIBED FEE. IN THESE CIRCUMSTANCE S, THE DIT(E) WAS NOT CORRECT IN DENYING REGISTRATION TO T HE ASSESSEE FOR THE PERIOD 01.07.2009 TO 31.03.2011. FURTHERMOR E, THE DIT(E)S OBSERVATION THAT INELIGIBILITY TO EXEMPTIO N UNDER SECTION 11 OR 10(23C) WILL AUTOMATICALLY DISENTITLE THE ASSESSEE FROM GETTING REGISTRATION UNDER SECTION 12 AA OF THE ACT IS TOTALLY MISCONCEIVED. THE ELIGIBILITY TO EXE MPTION UNDER SECTION 11 AND REGISTRATION UNDER SECTION 12AA ARE TWO DIFFERENT MATTERS. WHILE REGISTRATION UNDER SECTION 12AA OF THE ACT WOULD DEPEND UPON THE GENUINENESS OF THE SO CIETY AND CHARITABLE NATURE OF ITS ACTIVITIES, EXEMPTION UNDER SECTION 11 DEPENDS UPON FULFILMENT OF CONDITIONS LA ID DOWN IN SECTIONS 11, 12 AND 13 OF THE ACT. IN AFORESAID VIE W OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE DIT(E) TO GRANT REGISTRATION TO THE ASSESSEE ALSO FOR THE PERIOD 01.07.2009 TO 31.03.2011. 4 ITA.NO.1202/HYD/2013 CHAITANYA BHARATI INSTITUTE OF TECHNOLOGY, HYDERABAD. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.01.2014. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATE 17 TH JANUARY, 2014 VBP/- COPY TO 1. CHAITANYA BHARATI INSTITUTE OF TECHNOLOGY, HYDER ABAD. C/O. P. MUJRALI & CO. CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. DIT(E), HYDERABAD. 3. ADIT(E)-I, HYDERABAD. 4. D.R. A BENCH, ITAT, HYDERABAD.