ADIT, Hyderabad V. Hyderabad Archdiocese Educational Society, Secunderabad

ITA 1473/HYD/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53848 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Section: 12A; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M. & SMT. ASHA VIJAYARAGHAVAN, J.M. ITA NO.1473/HYD/2010 ASSESSMENT YEAR 2007-08 THE ADIT (E) - III, HYDERABAD VS THE HYDERABAD ARCHDIOCESE EDUCATIONAL SOCIETY, SECUNDERABAD (PAN AAATH0869G) APPELLANT RESPONDENT APPELLANT BY : SHRI B.V. PRASAD REDDY RESPONDENT BY : NONE DATE OF HEARING : 12.12.2011 DATE OF PRONOUNCEMENT : 27.12.2011 ORDER PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER PASSED BY THE CIT(A) IV, HYDERABAD DATED 15. 9.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEES EDUCATIONAL INSTITUTION HAD ANNUAL R ECEIPTS EXCEEDING THE PRESCRIBED LIMIT OF RS.1 CRORE. HOWEVER, IT HA D NOT RECEIVED NECESSARY APPROVAL FROM PRESCRIBED AUTHORITY AS MAN DATED BY SUB CLAUSE (VI) OF SECTION 10(23C) OF THE ACT, 1961. I T WAS CONTENDED BEFORE HIM THAT THE SOCIETY WAS ALREADY REGISTERED U/S 12A AND THEREFORE EXEMPTION U/S 11 SHOULD BE CONSIDERED AS PER THE ACT PROVIDES AN OPTION BETWEEN SECTION 10 & 11. IT WAS ALSO CLAIMED THAT THE ASSESSEE SOCIETY WAS NOT EXISTING SOLELY FOR ED UCATIONAL PURPOSES AS IT HAD OTHER OBJECTS ALSO WHEREAS SECTION 10(23C ) IS APPLICABLE ONLY ITA NO.1474 OF 2010 HYDERABAD ARCHDIOCESE EDU. SOCIETY, HYD. 2 TO SOCIETIES HAVING EDUCATION AS A SOLE OBJECT. HO WEVER, THE ASSESSING OFFICER DENIED THE ALTERNATIVE CLAIM OF EXEMPTION U /S 11. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A). 4. THE CIT(A) HAS HELD AS FOLLOWS: BESIDES IN THE CASE OF VASAVI ACADEMY EDUCATION IN IT A NO.1749/H/2009 DATED 4.2.2010, THE TRIBUNAL HAVE FU RTHER OPTED THAT IN VIEW OF THE DECISION OF THE HONBLE A PEX COURT IN THE CASE OF TMA PAI FOUNDATION AND OTHERS VS. STATE OF KARNATAKA & OTHERS (2002) 8 SCC 481, HAVE HELD THAT INSTITUTION S COLLECTING CAPITATION FEES OVER AND ABOVE THE PRESCRIBED FEES FOR ADMISSION OF STUDENTS CANNOT BE CONSTRUED AS CHARITABLE EDUCA TIONAL INSTITUTIONS. THE HONBLE COURT HAS ALSO OPINED TH AT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIBED FEE FOR THE ADMISSION OF STUDENT IS TO BE CONSTRUED AS CAPITATION FEE. THE HONBLE NOTED THAT A SIMILAR VIEW WAS TAKEN BY THE HONBLE APEX C OURT IN THE CASE OF ISLAMIC ACADEMY OF EDUCATION AND OTHER VS. STATE OF KARNATAKA AND OTHERS (2003) 6 SCC 697 ALSO. THEY N OTED THAT A SIMILAR VIEW WAS TAKEN IN THE CASE OF M/S JAMIA NIZ AMIA IN IT A NO.763/H/2007 IN ITA NO.494/H/2007 AND 518/H/2008 A ND SAI SUDHEER EDUCATIONAL SOCIETY, HYDERABAD IT A NO.999/H/2006. THEY HELD THAT IF DONATIONS ARE REC EIVED COMPULSORILY FOR THE ADMISSION OF STUDENTS BY WHATE VER THE NAME IT MAY BE CALLED I.E. DONATION, BUILDING FUND, AUDI TORIUM FUND ETC. OVER AND ABOVE THE PRESCRIBED FEE FROM THE STUDENTS FOR ADMISSION, THE ASSESSEE WOULD NOT BE ENTITLED FOR E XEMPTION U/S 10(23C) OR U/S 11 OF THE ACT. THOUGH IT IS NOTICED THAT IN THE ASSESSEES CASE NO FINDING WITH REGARD TO CHARGING OF DONATION ETC. HAS BEEN MADE B Y THE ASSESSING OFFICER, KEEPING IN VIEW THE OBSERVATIONS OF THE TRIBUNAL IN THE CASES CITED SUPRA THE ASSESSING OFF ICER IS DIRECTED ITA NO.1474 OF 2010 HYDERABAD ARCHDIOCESE EDU. SOCIETY, HYD. 3 TO VERIFY THIS ASPECT AGAIN WHILE GIVING EFFECT TO THIS ORDER. IN CASE IT IS FOUND THAT BESIDES FULFILLING THE CONDI TIONS ATTACHED TO THE APPROVAL U/S 10(23C) THE ASSESSEE HAS NOT CHARG ED ANY FEES FROM THE STUDENTS OVER AND ABOVE THE PRESCRIBED FEE S, THE ASSESSEE WOULD BE ENTITLED FOR EXEMPTION U/S 10(23C ). THE GROUNDS TAKEN IN THIS APPEAL ARE THEREFORE ALLOWED IN FAVOUR OF THE ASSESSEE, SUBJECT TO SUCH VERIFICATION. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), REVENUE P REFERRED PRESENT APPEAL BEFORE US. 6. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HEARD THE DEPARTMENTAL REPRESENTATIVE AND DECIDE D THE ISSUE ON MERIT. WE FIND THAT THE CIT(A) HAS MERELY HELD THA T IN THE CASE OF ASSESSEE SINCE NO FINDING WITH REGARD TO CHARGING O F DONATION HAS BEEN GIVEN BY THE ASSESSING OFFICER, THE ASSESSING OFFICER SHALL KEEPING IN VIEW THE OBSERVATIONS OF THE TRIBUNAL IN THE CASES OF VASAVI ACADEMY EDUCATION IN IT A NO.1749/H/2009 DATED 4.2. 2010, THE TRIBUNAL HAVE FURTHER OPTED THAT IN VIEW OF THE DEC ISION OF THE HONBLE APEX COURT IN THE CASE OF TMA PAI FOUNDATION AND O THERS VS. STATE OF KARNATAKA & OTHERS (2002) 8 SCC 481, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THIS ASPECT AGAIN WHILE GIVING E FFECT TO HIS ORDER. FURTHER, THE CIT(A) HELD THAT I N CASE IT IS FOUND THAT BESIDES FULFILLING THE CONDITIONS ATTACHED TO THE APPROVAL U/S 10(23C) THE ASSESSEE HAS NOT CHARGED ANY FEES FROM THE STUDENTS OVER AND ABO VE THE PRESCRIBED FEES, THE ASSESSEE WOULD BE ENTITLED FOR EXEMPTION U/S 10(23C). THE GROUNDS TAKEN IN THIS APPEAL ARE THEREFORE ALLOWED IN FAVOUR OF THE ASSESSEE, SUBJECT TO SUCH VERIFICATION. WE ARE OF THE OPINION THAT NO GRIEVANCE IS CAUSED TO THE DEPARTMENT, IN AS MUCH A S THE CIT(A) HAS MERELY DIRECTED THE ASSESSING OFFICER TO VERIFY WHE THER OBSERVATIONS OF THE TRIBUNAL IN THE CASE OF VASAVI ACADEMY HAS BEEN FULFILLED BY THE ASSESSEE AND AFTER SUCH VERIFICATION TO DECIDE THE SAME IN ACCORDANCE WITH LAW. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN THIS BEHALF. ITA NO.1474 OF 2010 HYDERABAD ARCHDIOCESE EDU. SOCIETY, HYD. 4 ACCORDINGLY THE ORDER OF THE CIT(A) IS CONFIRMED AN D THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE REJECTED. 7. IN THE RESULT, THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.12.2011 SD/- SD/- (CHANDRA POOJARI) ( (ASHA VIJAYA RAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 27 DECEMBER, 2011 COPY FORWARDED TO: 1. THE ASST. DIRECTOR OF IT(E), HYDERABAD 2. M/S HYDERABAD ARCHDIOCESE EDUCATIONAL SOCIETY, 9-1- 17/1, ARCH BISHOPS HOUSE, SECUNDERABAD 3. THE CIT(A)- IV, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/