ADIT (Exemptions)-I, Hyderabad V. Aravinda Educational Soceity, Karimnagar

ITA 1380/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53604 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T DIWAKAR PRASAD
• Section: 260A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1380/HYD/2011 : ASSESSMENT YEAR 2006-07 ASST. DIRECTOR OF INCOME TAX(EXEMPTION)-I, HYDERABAD VS ARAVINDA EDUCATIONAL SOCIETY, HYDERABAD (PAN/GIR A-157 ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.DIWAKAR PRASAD RESPONDENT BY : SHRI SAMUEL NAGADESI DATE OF HEARING 29.8.2011 DATE OF PRONOUNCEMENT 16.9.2011 O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME- TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- (I) THE ORDER OF THE CIT(A) IS NOT ACCEPTABLE AS I T IS ERRONEOUS IN LAW AND ON FACTS. (II) THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT OBTAINING APPROVAL OF THE PRESCRIBED AUTHORITY IS MANDATORY AS PER THE PLAIN MEANING OF THE PROVISION S OF 10(23C)(VI) OF THE I.T. ACT AND IT DOES NOT CALL FO R ANY INTERPRETATION. (III) THE CIT(A) FAILED TO APPRECIATE THAT SECTION 10(23C) AS SUCH IS NOT A REPLACEMENT OF SECTION 10(22) AND (22 A) AS STATED IN THE APPELLATE ORDER BUT ONLY SUB-CLAUS ES ITA NO.1380/H/2011 ARAVINDA EDUCATIONAL SOCIETY, HYDERABAD 2 (III)(AD) AND (III AC) ARE REPLACEMENTS OF THE ERST WHILE SEC.10(22) AND 10(22A) RESPECTIVELY. (IV) THE CIT(A) OUGHT TO HAVE CONSIDERED THE FACT T HAT SUB CLAUSE (IV) AND (VIA) ARE ENTIRELY NEW PROVISIONS M EANT TO PROVIDE THE MONITORING MECHANISM THAT WAS LACKIN G IN THE EARLIER PROVISIONS. (V) THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT T HAT IT WAS SECTION 10(22) THAT PROVIDED FOR EXEMPTION OF T HE EDUCATIONAL INCOME OF THE TRUSTS, SOCIETIES ETC. AN D NOT SECTION 11. (VI) THE CIT(A) ERRED IN OBSERVING THAT SECTION 11 PROVIDES SUFFICIENT MONITORING MECHANISM TO CHECK THE ASSESSEES ACTIVITIES AND CONDITION OF SECTION 11. (VII) IN THE CASE OF RAJASTHAN SIKSHA SAMITHI THE DECISION OF THE ITAT ON SIMILAR ISSUE HAS NOT BEEN ACCEPTED IN PRINCIPLE BUT APPEAL BUT APPEAL U/S. 260A HAS NOT B EEN PREFERRED DUE TO THE MONETARY LIMITS BEING LESS THA N THE PRESCRIBED FOR FILING. (VIII) THE ORDER OF THE ITAT IN ITA NO.233/HYD/07 IN THE CASE OF ST. THERASAS SOCIETY, HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL U/S. 260A HAS BEEN PREFERRED BEFORE THE HONBLE A.P.HIGH COURT. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE DECISION OF THE TRIBUNAL IN ST. THERASAS SOCIE TYS CASE, RELIED UPON BY THE CIT(A), HAS NOT BEEN ACCEPTED BY THE DE PARTMENT AND AN APPEAL UNDER S.260A OF THE ACT HAS BEEN PREFERRE D BEFORE THE HON'BLE A.P. HIGH COURT. HE SUBMITTED THAT THE ASS ESSEE HAS NOT OBTAINED THE NOTIFICATION UNDER S.10(23C)(VI) OF TH E ACT AND THEREFORE, THE EXCESS OF INCOME OVER EXPENDITURE WA S RIGHTLY BROUGHT TO TAX BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER OF THE DDIT(E). THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A) AND HAS REFERRED TO THE RELEVAN T PORTIONS OF THE APPELLATE ORDER OF THE CIT(A) IN SUPPORT OF HIS SUB MISSIONS. ITA NO.1380/H/2011 ARAVINDA EDUCATIONAL SOCIETY, HYDERABAD 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CARE FULLY. WE FIND THAT IT IS NOW SETTLED WITH SERIES OF DECISION S OF THE HYDERABAD BENCHES OF THE TRIBUNAL, AS IN THE CASE OF NATIONAL INSTITUTE OF TOURISM & HOSPITALITY (ITA NO.1203/HYD/2010) DATED 11 TH MARCH, 2011; IN THE CASE OF VARDHAMAN COLLEGE OF ENGINEERING, HYDERABAD(ITA NO.741/HYD/2009) DATED 8.4.2011; AND IN THE CASES OF RAVI RISHI EDUCATIONAL SOCIETY, HYDERABAD AND OTHERS (ITA NO.1289 TO 1291/HYD/2010 AND CROSS-OBJECTIONS THEREIN AND OTHERS) DATED 13.4.2011; THAT AN ASSESSEE CAN MAKE ALTERNATIVE CLAIM UNDER S.11 OF THE ACT AND IT IS N OT MANDATORY FOR THE ASSESSEE TO OBTAIN A NOTIFICATION UNDER S.10(23C)(V I) OF THE ACT. THE ISSUE BEING COVERED IN FAVOUR OF THE ASSESSEE WITH SERIES OF DECISIONS OF THE TRIBUNAL, WE HOLD THAT THE ASSESSEE CAN MAKE ALTERNATIVE CLAIM FOR EXEMPTION UNDER S.11 OF THE ACT AND THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A), ON THIS ISSUE, WE HOLD THA T NO INTERFERENCE WITH HIS ORDER IS CALLED FOR. 5. WE HOWEVER, FIND THAT THE HYDERABAD BENCH OF T HE TRIBUNAL IN DIRECTOR OF INCOME-TAX(EXEMPTION) V/S. VASAVI ACADEMY OF EDUCATION IN ITA NO.1449/HYD/2008, VIDE ORDER DA TED 4.2.2010, HAS HELD THAT AN EDUCATIONAL INSTITUTION IS ENTITLE D FOR EXEMPTION UNDER S.10(23C) OR UNDER S.11, IF NO DONATION WAS C OLLECTED FROM THE STUDENTS. WE BEING IN AGREEMENT WITH THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VASAVI ACADEM Y OF EDUCATION (SUPRA), DIRECT THE ASSESSING OFFICER TO VERIFY THE ASPECT OF DONATION, CAPITATION FEE ETC. IF ANY COLLECTED BY THE ASSESSE E, AND FURTHER DIRECT THAT IF IT IS FOUND THAT BESIDES FULFILLING OTHER P REREQUISITES FOR EXEMPTION UNDER S.11, THE ASSESSEE HAS NOT CHARGED ANY MONEY BY WHATEVER NAME IT IS CALLED, I.E. DONATION, BUILDING FUND, AUDITORIUM ITA NO.1380/H/2011 ARAVINDA EDUCATIONAL SOCIETY, HYDERABAD 4 FEE ETC, OVER AND ABOVE THE PRESCRIBED FEE FOR THE ADMISSION OF STUDENTS, THE ASSESSEE WOULD BE ENTITLED FOR EXEMPT ION UNDER S.11, EVEN THOUGH THE NOTIFICATION UNDER S.10(23C)(VI) OF THE ACT HAVE NOT BEEN RECEIVED BY IT. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 16.9.2011 SD/- SD/- (CHANDRA POOJARI) ( G.C. G UPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED 16 TH SEPTEMBER, 2011 COPY FORWARDED TO: 1. ARAVINDA EDUCATIONAL SOCIETY, 7 - 1 - 40, MANKAMMA THOTA, KARIMNAGAR. 2. DY. DIRECTOR OF INCOME TAX(EXEMPTION) I, HYDERABAD 3. CIT (A) - IV , HYDERABAD. 4. COMMISSIONER OF INCOME - TAX III , HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S