Assistant Director of Income Tax(Exemption)-II, Hyderabad V. Kesava Reddy Educational Society, Nandyal

ITA 1312/HYD/2013

• Counselvise Citation: 131222514 RSA 2013
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARITHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1312/HYD/13 : ASSTT. YEAR 2010 - 11 ASST. DIRECTOR OF INCOME - TAX(EXEMPTION) II, HYDERABAD V/S. M/S. KESAVA REDDY EDUCATIONAL SOCIETY, NANDYAL ( PAN - AAACAS 1523 M ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. HARITHA DR RESPONDENT BY : NONE DATE OF HEARING 30.01.2014 DATE OF PRONOUNCEMENT 05.02.2014 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) IV, HYDERABAD, DATED 29.7.2013 FOR THE ASSESSMENT YEAR 2010 - 11. 2. EFFECTIVE GROUNDS OF THE REVENUE IN THIS APPEAL READ AS FOLLOWS - 1. THE ORDER OF THE LEARNED. CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED. CIT(APPEALS) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 11, EVEN IN ABSENCE OF APPROVAL UNDER SUB - CLAUSE (VI) TO THE SECTION 10(23C) OF THE I.T. ACT, 1961. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THAT SUB - CLAUSE (VI) TO THE SECTION 10(23C) OF THE I.T.ACT, 1961 IS DISTINCT FROM REGISTRATIO N UNDER S.12A OF THE ACT. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT SUB - CLAUSE (VI) TO THE SECTION 10(23C) AS INSERTED BY THE FINANCE ACT, 1998 W.E.F. 01.04.1999, STATES THAT ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSE, AND WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY. THE ISSUE IS EXPLICITLY DEALT WITH BY THE ACT ITSELF AND THE INTENTION OF THE LEGISLATURE IS QUITE CLEAR FROM IT. I TA NO. 131 2 / HYD/2013 M/S. KESAVA REDDY EDUCATIONAL SOCIETY, NANDYAL 2 5. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT OBTAININ G APPROVAL FROM THE PRESCRIBED AUTHORITY IS MANDATORY, AS PER THE PLAIN MEANING OF SECTION 10(23)(IV) OF THE I.T. ACT, 1961 WHE N EVER THE AGGREGATE GROSS RECEIPTS OF EDUCATIONAL INSTITUTIONS ARE OVER AND ABOVE RS. 1 CRORE. 6. FROM THE OBSERVATIONS MADE A ND THE SPECIFIC DIRECTION GIVEN BY THE LD. CIT(A) IN PARA 6.0 OF HER ORDER, PRACTICALLY, SHE HAS SET ASIDE THE ASSESSMENT WITH REFERENCE TO SUCH ISSUE, TO THE FILE OF THE ASSESSING OFFICER, WHEREAS THE CIT(A) HAS NO SUCH POWER UNDER THE PRESENT PROVISIONS OF THE ACT. 7. .. 3. DESPITE NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE - RESPONDENT AT THE TIME OF HEARING ON 30.1.2014. THERE IS NOT EVEN AN ADJOURNMENT PETITION RECEIVED FROM THE ASSESSEE. IN THIS VIEW OF THE MATTER, W E HEARD THE LEARNED DEP ARTMENTAL REPRESENTATIVE AND WE PERUSED THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES AND PROCEED TO DISPOSE OF THIS APPEAL EX - PARTE QUA THE ASSESSEE - ON THE BASIS OF OTHER MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE IS AN EDUCATIONAL INSTITUTION AND THE ISSUE INVOLVED RELATES TO ITS CLAIM FOR EXEMPTION IN RESPECT OF ITS INCOME UNDER S.11 OF THE ACT. ASSESSEES CLAIM FOR EXEMPTION UNDER S.11 OF THE AC T, WA S REJECTED BY THE ASSESSING OFFICER, ON THE GROUND THAT BEING AN EDUCATIONAL INSTITUTION, IT WAS ELIGIBLE FOR EXEMPTION UNDER S.10(23C ) (VI ) AND NOT UNDER S.11, AND IT HAD NOT OBTAINED THE REQUISITE APPROVAL UNDER THAT PROVISION AND HENCE IT IS NOT ELIGIBL E FOR EXEMPTION EVEN UNDER S.10(23C)(VI) OF THE ACT. THE CIT(A) IN THE IMPUGNED ORDER, FOLLOWING THE CONSISTENT VIEW TAKEN BY THE COORDINATE BENCHES OF THE TRIBUNAL IN SIMILAR MATTERS, NOTED BELOW FROM HIS ORDER, HELD THAT THOUGH THE ASSESSEE HAS NOT BEEN NOTIFIED UNDER S.10(23C) OF THE ACT, AND AS SUCH IT IS NO T ELIGIBLE FOR EXEMPTION UNDER THAT PROVISION, SINCE IT IS REGISTERED UNDER S.12AA IT CAN MAKE AN ALTERNATIVE CLAIM FOR EXEMPTION UN D ER S.11 OF THE ACT. ( I ) CIT V/S. BAR COUNCIL OF MAHARASHTRA(1981)130 ITR 28(SC) ( II ) AMERICAN HOTEL AND LODGING ASSOCIATION/EDUCATIONAL INSTITUTE V/S. CBDT(2008) 170 TAXMAN 306(SC) I TA NO. 131 2 / HYD/2013 M/S. KESAVA REDDY EDUCATIONAL SOCIETY, NANDYAL 3 ( III ) RAJASTHANI SIKSHA SAMITHI (ITA NO.80 & 81/HYD/2008) ( IV ) ST. THERESAS CONVENT SOCIETY, HYDERABAD 9ITA NO.844/HYD/08) ( V ) ADIT(EXEMPTIONS) V/S. LOUIS EDUCATIONAL SOCIETY (ITA NO.1456/HYD/2008 DATED 26.12.2008) ( VI ) AP SOCIETY OF KNOWLEDGE (ITA NO.843/HYD/09 DATED 9.10.2009) 4. HAVING HELD THAT THE ASSESSEE IS ENTITLED TO MAKE AN ALTERNATIVE CLAIM UNDER S.11, HAVING BEEN REGISTERED UNDER S.12AA OF THE ACT, THE CIT(A) PROCEEDED TO OB SE RVE, BASING ON DECISION S O F THE TR IBUNAL, TH A T IF THE DONATION S ARE RECEIVED COMPULSORILY FOR THE ADMISSION OF STUDENTS, BY WH A TEVER NAME CALLED, I.E. DONATION, BUILDING FUND, AUDITORIUM FUND, ET C. O V ER AND ABOVE THE PR E SCRIB E D FEE, FROM TH E S TUDENTS, THE ASSESSEE WOULD NO T B E ENTITLED TO EX E MPTION UNDER S.10(23C) OR U/S. 11 - I . VA S AVI ACADEMY OF EDUCATION (ITA NO.1133/HYD/2006, DATED 15.45.2009 II . JAMIA NIZAMIA ()ITA NO.763/HYD/2O007 DATED 30.6.2008 III . I N TERN A TIONAL EDUCATIONAL ACADEMY (ITA NO.494/HYD/2007) IV . SRI V E NAKATA SAI EDUCATIONAL S O C I E TY (ITA NO.1440/HYD/2011, DATED 9.4.2012) THE CIT(A) ACCORDINGLY FOLLOWING THE ABOVE DECISIONS O F THE HYDERABAD BENCHES OF THE T RIBUNAL IN SIMILAR MATT E RS HELD T H A T IF THE ASSESSING OFFICER HAS FOUND THAT BESIDES FULFILLING OTHER PREREQUISIT E S FOR EXEMPTION UNDER S.11 AS STIPULATED IN SECTIONS 11 TO 13 OF THE AC T, THE ASSESSEE DID NO T CHARGE ANY MONEY, BY WHATEVER NAME IT IS CALLED, I.E. DONATION, BUILDING, FUN D , AUD ITORIUM FEES ETC. OVER AND ABOVE THE P RE SCRIBED FEE FOR THE ADMISSIONS OF THE STUDENTS, THE ASSESSEE WOULD B E ENTITLED FOR EXEMPTION UNDER S.11, EVEN IF THE NOTIFICATION UNDER S.10(23C) OF THE ACT HAS NO T BEEN OBTAINED BY IT. 5. SINCE THE IMPUGNED OR D ER OF THE CIT(A) IS BASED ON THE CONSISTENT VIEW TAKEN BY VARIOUS BENCHES OF THE TRIBUNAL IN SIMILAR MATTERS, WE FIND NO I TA NO. 131 2 / HYD/2013 M/S. KESAVA REDDY EDUCATIONAL SOCIETY, NANDYAL 4 INFIRMITY IN HIS ACTION. WE ACCORDINGLY UPHOLD THE O R DER OF THE CIT(A), AND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 05.02.2014 SD/ - SD/ - (B.RAMAKOTAIAH) (SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 5 TH FEBRUARY, 2014 COPY FORWARDED TO: 1. M/S. KESAVA REDDY EDUCATIONAL SOCIETY, NO.2/428 - 53 - A - 3 - A, BALAJI COMPLEX, NANDYAL, KURNOOL DIST. AP 2 . ASST. DIRECTOR OF INCOME - TAX(EXEMPTION) II , HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) IV, HYDERABAD 4. COMMISSIONER OF INCOME - TAX III HYDERABA D 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S