K.M.V. Collegiate Sr. Sec. School, Jalandhar V. The Income Tax Officer, (Exemption), Jalandhar

ITA 155/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0500 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISHRA
• Assessee Lawyers: Y K SUD
• Keywords: Invalid notice; Charitable institution; Application of stay; Reasonable cause; Competent authority; Reason to believe
• Section: 143(3); 12A; 12AA; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.154 & 155(ASR)/2016 ASSESSMENT YEARS:2007-08 & 2008-09 PAN:AAHFK6709K M/S. KMV COLLEGIATE SR. SEC. SCHOOL, VS. INCOME TAX OFFICER KMV CAMPS, TANDA ROAD, (EXEMPTION), JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) S.A. NOS.5 & 6(ASR)/2016 (ARISING OUT OF ITA NOS.154 & 155(ASR)/2016 ASSESSMENT YEARS:2007-08 & 2008-09 PAN:AAHFK6709K M/S. KMV COLLEGIATE SR. SEC. SCHOOL, VS. INCOME TAX OFFICER KMV CAMPS, TANDA ROAD, (EXEMPTION), JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.Y.K. SUD, CA RESPONDENT BY: SH. A.N. MISHRA, DR DATE OF HEARING: 23/05/2016 DATE OF PRONOUNCEMENT: 15/07/2016 ORDER PER A.D. JAIN, JM: THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE SEPARATE ORDERS OF LD. CIT(A), JALANDHAR, EACH DATE D 23.02.2016 FOR THE ASSESSMENT YEARS 2007-08 & 2008-09, RESPECTIVELY. A S THE ISSUE INVOLVED ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 2 IN BOTH THE APPEALS IS COMMON, THEY ARE BEING ADJUD ICATED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HAS RAISED COMMON GROUNDS IN BOTH THE APPEALS. THE GROUNDS RAISED IN ITA NO.154(ASR)/2016 FOR THE ASSESSMENT YEAR 2007-08 ARE AS FOLLOWS: 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF THE AO OF REOPENING OF THE ASSESSMENT PROCEEDINGS U /S 147/148 OF THE INCOME TAX ACT. 2. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT TH E A.O. BEFORE REOPENING THE ASSESSMENT FAILED TO FORM ANY BELIEF THAT INCOME HAD ESCAPED ASSESSMENT AND HE HAS NO TANGIB LE MATERIAL IN HIS POSSESSION BY WHICH A REASONABLE BE LIEF COULD BE FORMED FOR ESCAPEMENT OF INCOME. 3. THAT THE LD. CIT(A0 FAILED TO APPRECIATE THAT TH E AO HAS FAILED TO DISPOSE OFF THE OBJECTIONS RAISED BY THE ASSESSE E IN RESPECT TO THE REASONS RECODED FOR REOPENING BY WAY OF SPE AKING ORDER. 4. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF THE AO OF DENIAL OF EXEMPTION AMOUNTING TO RS.22,18 ,321/- CLAIMING U/S 10(23C) (IIIAD) BY THE ASSESSEE. 5. THAT THE LD. CIT(A) HAS PASSED A NON-SPEAKING OR DER BY IGNORING ALL THE JUDGMENTS RELIED UPON BY THE ASSES SEE INCLUDING THAT OF THIS BENCH AND JURISDICTIONAL PU NJAB & HARYANA HIGH COURT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E INSTITUTION/SCHOOL, WHICH IS BEING RUN BY A SOCIETY , NAMELY, ARYA SHIKSHA MANDAL, HAD FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 29.10.2007, DECLARING THEREIN NIL INCOME AFTER CLAIMING THE EXCESS OF INCOME OVER EXPENDITURE AS E XEMPT UNDER ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 3 SECTION 10(23C)(IIIAD) OF THE ACT. THE EXCESS OF IN COME OVER EXPENDITURE HAD BEEN SHOWN BY THE ASSESSEE INSTITUT ION AT RS.22,18,321/-, WHICH HAD BEEN CLAIMED AS EXEMPT UNDER SECTION 10(23C)(IIIAD) OF THE ACT ON THE GROUND THAT THE RE CEIPTS OF THE SCHOOL WERE LESS THAN ONE CRORE RUPEES. AS PER INFO RMATION AVAILABLE WITH THE ASSESSING OFFICER, THE ASSESSEE INSTITUTION HAD AN INCOME OF RS.22,18,321/- DURING THE YEAR UNDER C ONSIDERATION, WHICH, ACCORDING TO THE ASSESSING OFFICER, HAD ESCA PED ASSESSMENT IN VIEW OF THE FACT THAT THE SOCIETY, ARYA SHIKSHA MANDAL, WHICH RUNS THE ASSESSEE INSTITUTION/SCHOOL, HAS AIMS AND OBJECTIVES WHICH ARE PARTLY RELIGIOUS IN NATURE. ONE OF THE RE ASONS FOR COMING TO THIS CONCLUSION WAS THAT THE APPLICATION FOR APP ROVAL UNDER SECTION 10(23C)(VI) OF THE ACT FILED BY THE ASSESSE E INSTITUTION FOR THE A.Y. 2012-13 WAS REJECTED BY THE LD. CHIEF COMM ISSIONER OF INCOME TAX, LUDHIANA VIDE HIS OFFICE ORDER DATED 0 4.09.2013, ON THE GROUND THAT THE SOCIETY, NAMELY, ARYA SHIKSHA M ANDAL, WHICH RUNS THE ASSESSEE INSTITUTION, HAS AIMS AND OBJECTI VES WHICH ARE PARTLY RELIGIOUS IN NATURE AND ALSO ON THE GROUND T HAT THE ASSESSEE INSTITUTION DID NOT EXIST SOLELY FOR EDUCATIONAL PU RPOSES. THE ASSESSEE INSTITUTION WAS ALSO NOT FOUND TO BE REGIS TERED UNDER SECTION 12A/12AA OF THE ACT. ACCORDINGLY, PROCEEDI NGS UNDER SECTION 147 OF THE ACT WERE INITIATED BY THE ASSESS ING OFFICER IN THIS CASE BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT ON ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 4 06.03.2014, WHICH WAS STATED TO BE SERVED ON THE AS SESSEE INSTITUTION ON 07.03.2014. IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE INSTITUTION, VIDE LETT ER DATED 31.03.3014, HAD SUBMITTED THAT THE RETURN OF INCOME FOR THE A.Y. 2007-08, FILED BY THE ASSESSEE INSTITUTION ON 29.10 .2007, MAY BE TREATED AS ITS RETURN IN RESPONSE TO THE NOTICE UND ER SECTION 148 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESS EE INSTITUTION HAD ALSO BEEN PROVIDED WITH THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT IN ITS CASE. THE ASSESS EE INSTITUTION FILED ITS OBJECTIONS WITH REGARD TO THE REOPENING OF THE ASSE SSMENT IN ITS CASE, WHICH WERE STATED TO BE DISPOSED OF BY THE ASSESSIN G OFFICER, AS PER DISCUSSION MADE IN THE ASSESSMENT ORDER. THE ASSESS EE INSTITUTION ALSO FILED A PETITION UNDER SECTION 144A OF THE ACT BEFO RE THE COMMISSIONER OF INCOME TAX, AS WELL AS BEFORE THE ADDL. CIT (EXEMPT IONS), WHICH WAS ALSO DISPOSED OF BY THE RESPECTIVE AUTHORITIES, AS PER D ISCUSSION MADE IN THE ASSESSMENT ORDER. 3.1. THE ASSESSING OFFICER NOTICED THAT THE ASSESSE E INSTITUTION HAD BEEN CLAIMING ITS ENTIRE I NCOME (EXCESS OF INCOME OVER EXPENDITURE) AS EXEMPT UNDER SECTION 10(23C)(IIIAD) OF THE ACT, AS THE RECEIPTS OF THE ASSESSEE INSTITUTION IN EARLIER YEARS WERE LESS THA N RS.1,00,00,000/. WHEN THE RECEIPTS OF THE ASSESSEE INSTITUTION EXCEE DED RS.I.00.00,000/- IN A.Y. 2012-13, IT APPLIED TO THE COMPETENT AUTHOR ITY FOR GETTING APPROVAL UNDER SECTION 10(23C)(VI) OF THE. ACT. HOW EVER, APPROVAL TO THE ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 5 ASSESSEE INSTITUTION UNDER SECTION 10(23C)(VI) OF T HE ACT FOR THE A.Y. 2012-13 WAS REFUSED BY THE LD. CHIEF COMMISSIONER O F INCOME TAX, LUDHIANA, VIDE ORDER DATED 04.09.2013, ON THE GROUN D THAT THE ASSESSEE INSTITUTION DID NOT EXIST SOLELY FOR EDUCATIONAL PU RPOSES AND THE SOCIETY WHICH RUNS THE ASSESSEE INSTITUTION HAS AIMS AND OB JECTIVES WHICH ARE RELIGIOUS IN NATURE. THE ASSESSING OFFICER FURTHER NOTICED THAT THE SOCIETY WHICH RUNS THE ASSESSEE INSTITUTION HAD AIMS AND O BJECTIVES OTHER THAN THAT OF PROVIDING EDUCATION AND THE AIMS AND OBJECT IVES ARE ALSO OF A RELIGIOUS NATURE. IT HAD ALSO BEEN NOTICED BY THE A SSESSING OFFICER THAT ON AN IDENTICAL ISSUE, THE CHIEF COMMISSIONER OF INCO ME TAX, LUDHIANA, WHO IS ALSO A QUASI-JUDICIAL AUTHORITY, HAD REFUSED REGISTRATION TO THE ASSESSEE INSTITUTION FOR THE A.Y. 2012-13 UNDER SEC TION 10(23C)(VI) OF THE ACT VIDE ORDER DATED 04.09.2013. WHILE REFUSING APPROVAL TO THE ASSESSEE INSTITUTION FOR THE A.Y. 2012-13, THE LD. CHIEF COMMISSIONER OF INCOME TAX, LUDHIANA, AFTER CONSIDERING THE FACTS O N RECORD AND THE SUBMISSIONS OF THE ASSESSEE INSTITUTION AND DULY TA KING INTO CONSIDERATION THE AIMS AND OBJECTIVES OF THE SOCIET Y WHICH RUNS THE SCHOOL, CAME TO THE CONCLUSION THAT THE AIMS AND OB JECTIVES OF THE ASSESSEE INSTITUTION ARERE PARTLY RELIGIOUS IN NATU RE AND THAT AS SUCH, THE ASSESSEE INSTITUTION IS NOT EXISTING SOLELY FOR EDU CATIONAL PURPOSES, WHICH IS THE PRECONDITION FOR GETTING APPROVAL UNDER SECT ION 10(23C)(VI) OF THE ACT. IN OTHER WORDS, IT WAS CONCLUDED THAT THE ASSE SSEE INSTITUTION WAS NOT UTILIZING THE WHOLE OF ITS RECEIPTS FOR THE PUR POSES OF THE AIMS AND ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 6 OBJECTIVES OF THE ASSESSEE INSTITUTION. WHILE COMIN G TO THE SAID CONCLUSION, THE MEMORANDUM OF ASSOCIATION OF THE AR YA SHIKSHA MANDAL, WHICH RUNS THE ASSESSEE INSTITUTION, WAS AL SO TAKEN INTO CONSIDERATION. ACCORDING TO THIS MEMORANDUM, THE MO NEY/FUND OF THE SOCIETY WAS ALSO TO BE UTILIZED FOR TEACHING VEDIC DHARMA, BRAHMACHARYA, ARYAN CULTURE, CLASSICAL SANSKRIT AND THE VEDAS. ACCORDINGLY, IT WAS HELD BY THE LD. CHIEF COMMISSIO NER OF INCOME TAX, THAT FOR THE PURPOSE OF EXEMPTION UNDER SECTION 10( 23C)(VI) OF THE ACT, THE INSTITUTION HAD TO EXIST SOLELY FOR EDUCATIONAL PURPOSES AND EXEMPTION WAS NOT TO BE GRANTED IF THE ASSESSEE DID NOT EXIST SOLELY FOR EDUCATIONAL PURPOSES. 3.2 IT WAS ALSO NOTICED THAT THE ASSESSEE INSTITUT ION HAD FILED A WRIT PETITION BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF REFUSAL, WHICH IS STILL PENDING FOR ADJUDICATION. 3.3. IN VIEW OF THE FACT THAT THE ASSESSEE INSTITU TION, ACCORDING TO THE ASSESSING OFFICER, DID NOT EXIST SOLELY FOR EDUCATI ONAL PURPOSES AND ALSO DUE TO DENIAL OF APPROVAL TO THE ASSESSEE INSTITUTI ON FOR THE A.Y. 2012-13 UNDER SECTION 10(23C)(VI) OF THE ACT, THE ASSESSING OFFICER DENIED THE CLAIM OF EXEMPTION OF INCOME TO THE ASSESSEE INSTIT UTION UNDER SECTION 10(23C)(VI) OF THE ACT. THE ASSESSMENT IN THIS CASE WAS ULTIMATELY COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 14 3(3) READ WITH SECTION 147 OF THE ACT, VIDE ORDER DATED 12.02.2015 , AT AN ASSESSED INCOME OF RS.22,18,321/-. WHILE COMPLETING THE ASSE SSMENT, THE ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 7 ASSESSING OFFICER HAD MADE AN ADDITION OF RS.22,18, 321/- TO THE RETURNED INCOME OF THE ASSESSEE INSTITUTION, WHICH REPRESENTS EXCESS OF INCOME OVER EXPENDITURE DISCLOSED BY THE ASSESSEE I NSTITUTION AND CLAIMED AS EXEMPT UNDER SECTION 10(23C)(IIIAD) OF T HE ACT. 3.4 THE ACTION OF THE ASSESSING OFFICER IN REOPENING TH E ASSESSMENT UNDER SECTION 147 OF THE ACT, WITH REGARD TO DENIAL OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT AND THEREAFTER BR INGING THE EXCESS OF INCOME OVER EXPENDITURE DECLARED BY THE ASSESSEE IN STITUTION AT RS.22,18,321/- TO TAX WAS CHALLENGED BY THE ASSESSEE INSTITUTION B EFORE THE LD. CIT(A). 4. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL, BRINGING THE ASSESSEE IN FURTHER APPEAL BEFORE US. 5. APROPOS GROUND NO.1, THE LD. COUNSEL FOR THE ASS ESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS GONE WRONG IN CO NFIRMING THE AOS ACTION OF REOPENING THE COMPLETED ASSESSMENT OF THE ASSESSEE; THAT WHILE DOING SO, THE LD. CIT(A) HAS ERRED IN BASING HIS CO NCLUSION ON TWO FACTORS, I.E., THAT THE CHIEF COMMISSIONER OF INCOME TAX RE JECTED THE ASSESSEES APPLICATION FOR THE ASSESSMENT YEAR 2012-13, FOR GR ANT OF APPROVAL U/S 10(23C)(VI) OF THE I.T.ACT AND THAT A PART OF THE A IMS AND OBJECTIVES OF THE PARENT BODY OF THE ASSESSEE SCHOOL, VIZ., ARYA SHIK SHA MANDAL , WHICH RUNS THE ASSESSEE SCHOOL, IS RELIGIOUS IN NATURE; THAT SO FAR AS REGARDS THE REFUSAL OF GRANT OF APPROVAL UNDER SECTION 10(2 3C)(VI) OF THE ACT, IT IS ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 8 ONLY WHERE THE RECEIPTS OF AN ASSESSEE EXCEED RS. 1 CRORE, THAT THIS ISSUE COMES INTO PLAY; THAT FOR THE YEAR UNDER CONSIDERAT ION, I.E., A.Y. 2007-08, THE ASSESSEES RECEIPTS ARE OF RS.55,01,115.28, AS AVAILABLE FROM THE INCOME & EXPENDITURE ACCOUNT OF THE ASSESSEE FOR T HE YEAR ENDING 31.03.2006 (APB 20); THAT THE LD. CIT(A) HAS FAILE D TO CONSIDER THAT FOR A.Y. 2010-11, THE ASSESSEE WAS ALLOWED EXEMPTION U/ S 10(23C)(IIIAD) OF THE ACT AND THERE WAS NO REASON FOR THE DEPARTMENT TO TAKE A DIFFERENT STAND FOR THE YEAR UNDER CONSIDERATION AND FOR THA T PURPOSE, TO REOPEN THE COMPLETED ASSESSMENT ILLEGALLY; THAT THE LD. CI T(A) HAS ERRED IN OVER- LOOKING THE FACT THAT THE TRIBUNAL, FOR THE ASSESSM ENT YEARS 2006-07, 2007-08 & 2009-10, VIDE ITS ORDER DATED 20.03.2015, TOOK DUE NOTE OF THE ASSESSEES CONTENTION THAT DESPITE THE EXISTENC E OF THE RELIGIOUS AIMS AND OBJECTS OF ARYA SHIKSHA MANDAL, THE GOVERNING B ODY OF THE ASSESSEES SCHOOL, THE ASSESSEE HAD NOT ENGAGED IN THE PROMOT ION OF ANY SUCH OBJECT OF RELIGIOUS NATURE AND IT HAD ONLY IMPARTE D EDUCATION BASED ON THE EDUCATIONAL COURSES BY THE GURU NANAK DEV UNIVE RSITY, AMRITSAR AND THAT NO RELIGIOUS TEACHING HAVING BEEN IMPARTED BY THE ASSESSEE AS EDUCATION, THE REQUIREMENT OF SECTION 10(23C)(IIIAD ) OF THE ACT WAS MET; THAT THE LD. CIT(A) HAS ALSO FAILED TO CONSIDER T HAT IN THE CASE OF ARYA SHIKSHA MANDAL TOO, FOR THE ASSESSMENT YEAR 2010-11 , VIDE ORDER PASSED U/S 143(3) OF THE ACT, EXEMPTION U/S 10(23)(IIIAD) WAS ALLOWED, AS IS THE CASE HEREIN, WHERE THE REASON FOR REOPENING OF THE ASSESSMENT IS A MISTAKEN FACTUAL PREMISE; THAT SUCH REOPENING OF TH E ASSESSMENT IS NOT ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 9 SUSTAINABLE IN LAW, AS HELD IN CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC), AS REFERRED TO IN DR. AJIT GUPTA VS. AC IT, 383 ITR 361 (DEL.); AND THAT, THEREFORE, LOOKED AT FROM ANY ANGLE, THE REOPENING OF THE COMPLETED ASSESSMENT IN THE PRESENT CASE IS INVALID , WHICH, ALONGWITH EVERYTHING CONSEQUENT THERETO, INCLUDING THE IMPUG NED ORDER, BE ORDERED TO BE QUASHED. 6. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT SINCE TH E CCIT HAD REJECTED THE ASSESSEES APPLICATION FOR THE A.Y. 2012-13, FO R GRANT OF APPROVAL U/S 10(23C)(VI) OF THE ACT AND SINCE THE MAIN AIMS AND OBJECTIVES OF THE GOVERNING BODY OF THE ASSESSEE SCHOOL, I.E., ARYA S HIKSHA MANDAL, ARE RELIGIOUS IN NATURE, WHICH FACT HAS NOWHERE BEEN DE NIED, THE AO HAD A PERFECTLY GOOD PRIMA FACIE REASONABLE CAUSE TO REOP EN THE COMPLETED ASSESSMENT OF THE ASSESSEE, WHICH ACTION OF THE AO HAS RIGHTLY BEEN UPHELD BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS PREL IMINARY ISSUE CHALLENGING THE LD. CIT(A)S ACTION OF CONFIRMING T HE REOPENING OF THE COMPLETED ASSESSMENT OF THE ASSESSEE. WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD. THE AO RECORDED THE FOLL OWING REASONS OF BELIEF OF ESCAPEMENT OF INCOME IN THE ASSESSEES CA SE, FOR THE A.Y. 2007- 08 (APB-2): ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 10 REASONS FOR REOPENING U/S 147 THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-0 8 WAS FILED BY THE ASSESSEE ON 29.10.2007 DECLARING TOTAL INCOME O F RS. NIL AFTER CLAIMING THE ENTIRE SURPLUS AS EXEMPT U/S 10. THE R ETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT. AS PER INFORMATION AVAILABLE IN THIS CASE, THE ASSE SSEE SCHOOL IS SETUP UNDER THE AEGIS OF ARYA SHIKSHA MANDAL, THE A IMS AND OBJECTIVES (I.E. TO TEACH VEDIC DHARMA, BRAHMACHARY A, ARYAN CULTURE, CLASSICAL SANSKRIT AND VEDAS) OF WHICH ARE PARTLY RELIGIOUS IN NATURE. IN ORDER TO CLAIM EXEMPTION U/S 10(23C)( IIIAD), THE EDUCATIONAL INSTITUTION SHOULD EXIST 'SOLELY FOR ED UCATIONAL PURPOSES', HOWEVER IN THE PRESENT CASE, THE OBJECTIVES OF ASSE SSEE INSTITUTION ARE PARTLY RELIGIOUS IN NATURE. THUS, THE ASSESSEE IS NOT ENTITLED TO CLAIM EXEMPTION U/S 10(23C)(IIIAD). FURTHER, THE WORTHY CHIEF COMMISSIONER OF INCOME TA X, LUDHIANA WHILE REJECTING THE APPLICATION FILED BY ASSESSEE U /S 10(23C)(VI) FOR ASSESSMENT YEAR 2012- 13 AND ONWARDS HAS ALSO HELD VIDE HER ORDER NO. CCIT/LDH/JB/10(23C)(VI)/218/2013- 14/2050 DATED 04.09.2013 THAT THE ASSESSEE INSTITUTION IS NOT EXI STING 'SOLELY FOR EDUCATIONAL PURPOSES'. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE I NSTITUTION IS NEITHER REGISTERED U/S 12AA NOR APPROVED U/S 10(23C)(VI) OF THE INCOME TAX ACT, 1961 FOR THE YEAR UNDER CONSIDERATION. IN VIEW OF ABOVE STATED FACTS, I HAVE REASON TO BEL IEVE THAT INCOME/SURPLUS OF THE ASSESSEE CHARGEABLE TO TAX TO THE TUNE OF RS. 22,18,321/- HAS ESCAPED FROM ASSESSMENT FOR THE ASS ESSMENT YEAR 2007-08. THEREFORE, APPROVAL UNDER SECTION 151(2) O F INCOME TAX ACT IS SOUGHT TO INITIATE ASSESSMENT PROCEEDING IN THIS CASE FOR A.Y. 2007-08. DATE: 05.03.2014 (RATINDER KAUR) DY. COMMISSIONER OF INCOME TAX, CIRCLE-II, JALANDHAR. 8. THUS, THERE WERE TWO REASONS RECORDED BY THE AO AS REASONS TO BELIEVE ESCAPEMENT OF INCOME. THE FIRST REASON WAS THAT THE OBJECTIVES OF THE ASSESSEE SCHOOL ARE PARTLY RELIGIOUS IN NATURE, SINCE THE SCHOOL HAS ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 11 BEEN SET UP UNDER THE AEGIS OF ARYA SHIKSHA MANDAL, WHOSE AIMS AND OBJECTIVES ARE PARTLY RELIGIOUS IN NATURE, THAT IS, TO TEACH VEDIC DHARMA, BRAMCHARYA, ARYAN CULTURE, CLASSIC SANSKRIT AND THE VEDAS. THE SECOND REASON WAS THAT FOR THE ASSESSMENT YEAR 2012-13, TH E LD. CCIT HAD REJECTED THE ASSESSEES APPLICATION FILED U/S 10(23 C)(VI) OF THE ACT AND WHILE DOING SO, THE LD. CCIT HAD OBSERVED THAT THE ASSESSEE WAS NOT EXISTING SOLELY FOR EDUCATIONAL PURPOSES. 9. THE LD. CIT(A), WHILE UPHOLDING THE REOPENING OF THE COMPLETED ASSESSMENT OF THE ASSESSEE, HELD AS FOLLOWS: 5.4. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS W ELL AS IN THE REMAND REPORT. I HAVE ALSO CONSIDERED THE WRITT EN SUBMISSIONS OF THE ASSESSEE FILED VIDE LETTER DATED 24.10.2015 AS WELL AS ITS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFFICER. I HAVE ALSO CONSIDERED VARIO US JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE INSTITUT ION INCLUDING THAT OF THE ORDER OF THE HONBLE JURISDI CTIONAL ITAT IN THE CASES OF DOABA COLLEGE AND KMV COLLEGE FOR THE A.YS. 2006-07 & 2007-08 ALSO RUN BY THE SOCIETY NAMELY AR YA SHIKSHA MANDAL AND OTHER MATERIAL PLACED BY THE ASS ESSEE INSTITUTION ON RECORD. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, IT HAS BEEN NOTICED THAT WORTHY CHIEF COMMISSIONER OF INCOME TAX, LUDHIANA WHO IS A QUASI -JUDICIAL AUTHORITY FOR GRANTING APPROVAL UNDER SECTION 10(23 C)(VI) OF THE ACT VIDE HIS ORDER DATED 04.09.2013 HAS REJECTED APPLICATION OF THE ASSESSEE INSTITUTION FOR THE A.Y. 2012-13 FO R GRANTING APPROVAL UNDER SECTION 10(23)(VI) OF THE ACT. IN VI EW OF REFUSAL TO THE ASSESSEE INSTITUTION FOR THE A.Y. 2012-13 FO R CLAIMING EXEMPTION UNDER SECTION 1-0(23)(VI) OF THE ACT AND A/SO IN VIEW OF THE FACT THAT PART OF THE MAIN AIMS AND OBJECTIV ES OF THE SOCIETY NAMELY ARYA SHIKSHA MANDAL WHICH RUNS THE ASSESSEE INSTITUTION ARE RELIGIOUS IN NATURE, THE A SSESSING OFFICER WAS HAVING A PRIMA FACIE REASONABLE CAUSE T O REOPEN THE ASSESSMENT IN THE CASE OF THE ASSESSEE INSTITUT ION AS THE ASSESSEE INSTITUTION WAS NOT EXISTING SOLELY FOR ED UCATION PURPOSES AS HELD BY THE COMPETENT AUTHORITY. THE JU DICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE INSTITUT ION HAVE ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 12 ALTOGETHER DISTINGUISHABLE FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE INSTITUTION AND HAVE NO APPLICATION IN THE CASE OF THE ASSESSEE. 5.5 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE, 1 AM OF THE CONSIDERED O PINION THAT THE ASSESSING OFFICER IS FULLY JUSTIFIED IN REOPENI NG THE ASSESSMENT IN THE CASE OF THE ASSESSEE INSTITUTION IN VIEW OF THE FACT THAT THE EXEMPTION CLAIMED BY THE ASSESSEE SOCIETY UNDER SECTION 10(23)(IIIAD) OF THE ACT WAS NOT AVAI LABLE TO IT AND AS THE ASSESSEE INSTITUTION WAS NOT EXISTING SO LELY FOR EDUCATION PURPOSES. IN THE RESULT, THE GROUNDS NO. 1, 2 AND 3 OF APPEAL TAKEN BY THE ASSESSEE INSTITUTION ARE DIS MISSED. 10. THUS, THE LD. CIT(A) UPHELD THE TWO REASONS REC ORDED BY THE AO TO BE GOOD REASONS FOR REOPENING THE ASSESSMENTS. THE ASSESSEE HAS CHALLENGED BOTH THESE REASONS, AS ABOVE. LET US EXA MINE THE MERITS OF THE ASSESSEES CHALLENGE. 11. APROPOS THE AOS FIRST REASON TO BELIEVE ESCAPE MENT OF INCOME, I.E., SINCE THE GOVERNING BODY OF THE ASSESSEE SCHOOL HAS PARTLY RELIGIOUS AIMS AND OBJECTS, THE OBJECTIVES OF THE ASSESSEE SCHOOL ARE ALSO PARTLY RELIGIOUS IN NATURE, THE ASSESSEE HAD RAISED OBJECTIONS TO TH E REASONS RECORDED FOR REOPENING THE ASSESSMENT FOR THE A.Y. 2007-08. A CO PY OF THESE OBJECTIONS IS AT APB FOR AY 2007-08, PAGES 3 & 4. IN PARA 4 THEREOF, THE ASSESSEE HAS OBJECTED AS FOLLOWS: 4. YOU HAVE FURTHER GIVEN AN OBSERVATION IN THE RE ASONS RECORDED THAT THE GOVERNING BODY I.E. ARYA SHIKSHA MANDAL HA S PARTLY RELIGIOUS AIMS AND OBJECTS I.E. TO TEACH VEDIC DHAR MA, BRHAMCHARIYA, ARYAN CULTURE, CLASSICAL SANSKRIT AND VEDAS. THEREF ORE IT IS NOT ENTITLED FOR EXEMPTION U/S 10(23C)(IIIAD). IN THIS REGARD IT IS ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 13 SUBMITTED THAT THERE MAY BE SUCH AN OBJECT OF ARYA SHIKSHA MANDAL WHICH IS THE GOVERNING BODY BUT NO SUCH EDUCATION H AS EVER BEEN IMPARTED BY THE SCHOOL EVER SINCE ITS INCEPTION AND AS STATED ABOVE IN THE PROCEEDING PARAGRAPHS THE SCHOOL IS AFFILIAT ED WITH PSEB AND IS ONLY IMPARTING EDUCATION ON THE PATTERN ON PSEB WHICH IS A RECOGNIZED PATTERN IN INDIA FOR EDUCATION PURPOSES. THIS FACT CAN BE VERIFIED FROM THE AUDITED ACCOUNTS OF THE SCHOOL. E VEN OTHERWISE WITHOUT PREJUDICE TO THE SUBMISSIONS MADE ABOVE TEA CHING OF SANSKRIT AND VEDAS, ARYAN CULTURE AND BRAHMCHARYA I S NOT RELIGIOUS AS ALLEGED BY YOU. EVEN FOR ARGUMENT SAKE THESE OBJ ECTS ARE TREATED TO BE RELIGIOUS ALSO NO COGNIZANCE CAN BE TAKEN TO THESE OBJECTS SINCE THE SCHOOL HAS NOT CARRIED OUT ANY ACTIVITY ACCORDI NG TO THESE OBJECTS DURING THE YEAR OR EVER SINCE ITS INCEPTION AND EVE N TILL DATE. IN THIS REGARD YOUR KIND ATTENTION IS DRAWN TOWARDS THE LAT EST JUDGMENT OF ALLAHABAD HIGH COURT IN CASES REPORTED IN 359 ITR 3 22 AND 360 ITR 168 WHICH SUPPORT THE CONTENTION OF THE ASSESSEE. 12. THIS OBJECTION OF THE ASSESSEE STANDS REPRODUCE D IN PARA 2.2 OF THE ASSESSMENT ORDER FOR THE A.Y. 2007-08 ALSO. 13. THIS OBJECTION OF THE ASSESSEE WAS REJECTED BY THE AO, BY HOLDING AS FOLLOWS: THERE IS NO DOUBT THAT THE ASSESSEE IS RUNNING A SC HOOL AND THE GROSS RECEIPTS OF THE SCHOOL ARE LESS THAN RS. ONE CRORE. THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 10(23C)(II IAD). FROM THE INFORMATION PROVIDED BY THE ASSESSEE AND PLACED ON RECORDS ,IT IS EVIDENT THAT THE ASSESSEE HAS WRONGLY CLAIMED EXEMP TION UNDER SECTION 10(23C)(IIIAD), SINCE THE SOCIETY THE PAREN T BODY I.E. 'ARYA SHIKSHA MANDAL' THAT IS RUNNING THE SCHOOL HAS OBJE CTS OTHER THAN THE EDUCATION ALSO. THE SCHOOL DOES NOT HAVE ANY OB JECTIVES OF ITS OWN WHILE THE OBJECTIVE OF THE PARENT BODY ' ARYA S HIKSHA MANDAL' IS TO PROPOGATE VEDIC TEACHINGS AND OTHER TEACHINGS OF RELIGIOUS NATURE . THIS IS THE BASIC VIOLATION THAT DEBARS THE SOCIETY FROM OBTAINING EXEMPTION UNDER SECTION 10(23C)(IIIAD). FURTHERMORE , THE ASSESSEE HAS NOT FILED THE ACCOUNTS OF THE SOCIETY AS A WHOL E AND HAS TRIED TO MISLEAD THE DEPARTMENT BY SUBMITTING THE ACCOUNTS O F THE SCHOOL ONLY IN THE RETURN OF INCOME. THE PROVISIONS OF THE SECTION AS NARRATED BELOW IS VERY CLEAR THAT EXEMPTION U/S 10( 23C)(IIIAD)ARE AVAILABLE TO AN EDUCATIONAL INSTITUTION IF IT EXIST S SOLELY FOR EDUCATIONAL PURPOSES IF THE EDUCATIONAL INSTITUTION DOES NOT EXIST ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 14 SOLELY FOR EDUCATIONAL PURPOSE AND EXIST FOR OTHER PURPOSE ALSO , THE EXEMPTION U/S 10(23C)(IIIAD) CANNOT BE ALLOWED . 14. HENCE, THE AO WAS OF THE VIEW THAT SINCE THE PA RENT BODY OF THE ASSESSEE SCHOOL HAS OBJECTS WHICH ARE OF A RELIGIOU S NATURE AND SINCE THE ASSESSEE SCHOOL DOES NOT HAVE ANY OBJECTIVES OF ITS OWN, THE OBJECTIVES OF THE ASSESSEE SCHOOL ARE ALSO PARTLY RELIGIOUS IN NA TURE, WHEREAS EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT IS AVAILAB LE TO AN EDUCATIONAL INSTITUTION, IF IT EXISTS SOLELY FOR EDUCATIONAL PU RPOSES. THE LD. CIT(A) DITTOED THIS VIEW OF THE AO. 15. HOWEVER, NEITHER OF THE AUTHORITIES BELOW, NOR THE LD. DR BEFORE US HAS BEEN ABLE TO REPUDIATE THE ASSESSEES CATEGORIC AL ASSERTION THAT NO RELIGIOUS EDUCATION HAS EVER BEEN IMPARTED BY THE A SSESSEE SCHOOL RIGHT FROM SINCE ITS INCEPTION AND THAT THE ASSESSEE SCHO OL IS AFFILIATED WITH THE PUNJAB SCHOOL EDUCATION BOARD (IN SHORT, PSEB), AND IT IS IMPARTING EDUCATION ONLY ON THE PATTERN OF THE PSEB, WHICH PA TTERN IS A RECOGNIZED PATTERN IN INDIA AND IS THE PATTERN PRESCRIBED BY T HE STATE GOVT. IN PUNJAB. IN THIS REGARD, THE LD. COUNSEL FOR THE ASS ESSEE HAS PLACED ON RECORD A COPY OF AFFILIATION CERTIFICATE DATED 08.0 5.2015, SL. NO.1205, BEARING SCHOOL CODE 0097713, ISSUED BY THE PSEB, CE RTIFYING THAT THE ASSESSEE SCHOOL IS AFFILIATED WITH THE PSEB, UP TO THE SR. SECONDARY LEVEL, UNDER IDENTITY NO. 003373, FOR THE SESSION 2 004-05. IT HAS BEEN CONTENDED THAT THIS AFFILIATION CONTINUES HITHERTO, IN SITU. THERE IS NO DISPUTE ABOUT THE AFORESAID AFFILIATION OF THE ASSE SSEE SCHOOL WITH THE ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 15 PSEB, CONFIRMING THE ASSESSEES STAND THAT THE ASSE SSEE SCHOOL IS IMPARTING EDUCATION UNDER THE PSEB PATTERN, WHICH I S A DULY RECOGNIZED EDUCATIONAL PATTERN ALL OVER THE COUNTRY, HAVING BE EN PRESCRIBED IN THE STATE OF PUNJAB AS THE GOVERNMENT RECOGNIZED SR. S ECONDARY PATTERN OF EDUCATION. 16. THE DEPARTMENT HAS NOT MADE OUT ANY CASE THAT T HE ASSESSEE SCHOOL HAS BEEN IMPARTING ANY RELIGIOUS EDUCATION. THE ONLY BASIS ADOPTED BY THE AUTHORITIES BELOW IS THAT THE OBJECT S OF THE ASSESSEES SCHOOL ARE ABSENT AND IT IS THE OBJECTS OF ITS GOVE RNING BODY, ARYA SHIKSHA MANDAL, WHICH ARE ALSO THE OBJECTS OF THE A SSESSEE SCHOOL AND THESE OBJECTS INCLUDE PROPAGATION OF VEDIC TEACHI NGS AND OTHER TEACHINGS OF RELIGIOUS NATURE, I.E., VEDIC DHARMA, BRAMCHARYA, ARYAN CULTURE CLASSIC SANSKRIT AND THE VEDAS. NOW, IT IS INCOMPREHENSIBLE AS TO HOW THE MERE EXISTENCE OF CERTAIN OBJECTS WHICH, IN THE OPINION OF THE TAXING AUTHORITIES, AMOUNT TO OBJECTS OF A RELIGIOU S NATURE, COULD FORM THE BASIS FOR NURSING A BELIEF OF ESCAPEMENT OF INC OME, WHEN NONE OF SUCH OBJECTS HAS BEEN SHOWN TO HAVE BEEN CARRIED OU T BY THE ASSESSEE. 17. IN HARF CHARITABLE TRUST (REGD) VS. CHIEF CIT AND ANOTHER, 376 ITR 110 (P&H), THE SCHOOL RUN BY THE ASSESSEE WAS AFFILIATED WITH THE CBSE AND IT ALSO HAD BEEN GRANTED REGISTRATION U/S 12A OF THE ACT. IT WAS HELD THAT MERELY BECAUSE ONE OF THE CLAUSES OF THE TRUST DEED PROVIDED THAT THE TRUST WOULD CARRY ON OTHER BUSIN ESS AS DECIDED BY THE ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 16 TRUSTEES, THAT WOULD NOT PER SE DISENTITLE FROM IT FROM BEING CONSIDERED FOR REGISTRATION U/S 10(23C)(VI) OF THE ACT; THAT T HE REASONING THAT THE TRUST HAD INTENTION TO CARRY OUT BUSINESS AND THE I NSTITUTION WAS NOT EXISTING SOLELY FOR EDUCATIONAL PURPOSES, WOULD AMO UNT TO GIVING A VERY NARROW MEANING TO THE SECTION, WHEREAS THE PREDOMIN ANT OBJECT TEST WAS TO BE APPLIED; THAT IT WAS NOT THAT THE CHIEF CIT H AD COME TO THE CONCLUSION THAT THE TRUST WAS DOING SOME OTHER BUSI NESS AND THE BUSINESS WAS GENERATING SUBSTANTIAL AMOUNTS WHICH W OULD OVERRIDE THE MAIN OBJECTIVES OF THE TRUST, WHICH PERTAINED MAINL Y TO THE CAUSE OF EDUCATION; THAT IN THE ABSENCE OF ANY FINDING THAT THE TRUST WAS DOING BUSINESS, THE APPLICATION COULD NOT HAVE BEEN REJEC TED ONLY ON THIS GROUND THAT ONE OF THE CLAUSES IN THE OBJECTIVES PR OVIDED SUCH RIGHT TO THE TRUST; THAT THE PRESCRIBED AUTHORITY COULD HAVE MADE IT CONDITIONAL BY HOLDING THAT IF ANY SUCH BUSINESS WAS CARRIED OUT, THE REGISTRATION GRANTED WAS LIABLE TO BE CANCELLED; THAT, THEREFO RE, THE ORDER REFUSING TO GRANT APPROVAL OF EXEMPTION U/S 10(23C) COULD NOT BE JUSTIFIED SOLELY ON THE GROUND THAT IN VIEW OF A CLAUSE WHICH PROVIDED THAT THE TRUST COULD RUN A BUSINESS, IT WOULD BE DEBARRED AS SUCH FROM R EGISTRATION ON THE GROUND THAT IT WAS NOT EXISTING SOLELY FOR EDUCATIO NAL PURPOSES; THAT MERELY A CONFERMENT OF POWER TO DO BUSINESS WOULD N OT AMOUNT TO THE ACTUAL DOING OF THE BUSINESS; THAT THUS, CCIT MISDI RECTED HIMSELF IN REJECTING THE APPLICATION ON THIS GROUND, WITHOUT COMING TO ANY CONCLUSION THAT THE TRUST WAS CARRYING ON ANY OTHER ACTIVITY. THE FACTS OF ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 17 THE PRESENT CASE ARE EXACTLY SIMILAR TO THOSE IN H ART CHARITABLE TRUST (SUPRA). 18. IN C.P. VIDYA NIKETAN INTER COLLEGE SHIKSHA SO CIETY VS. UNION OF INDIA AND OTHERS, 359 ITR 322 (ALL.), IT HAS BEEN HELD THAT WHERE A CHARITABLE SOCIETY IS NOT HAVING ANY ACTIVITY OTHER THAN RUNNING AND MAINTAINING AN EDUCATIONAL INSTITUTION, THE MERE PO SSIBILITY THAT THE SOCIETY MAY, IN THE FUTURE, PURSUE ACTIVITIES WHIC H ARE NOT CHARITABLE, OR CLOSELY CONNECTED WITH EDUCATION, FOR MAKING PROFIT , CANNOT BE A GROUND TO REJECT GRANT OF APPROVAL U/S 10(23C)(VI) OF THE I.T. ACT. IN THE PRESENT CASE ALSO, THE BEST CASE OF THE AUTHORITIES BELOW I S THAT SINCE THE OBJECTS OF THE GOVERNING BODY OF THE ASSESSEE SCHOOL ARE PA RTLY RELIGIOUS IN NATURE, INCOME HAS ESCAPED ASSESSMENT. THIS, IN KEE PING, WITH C.P. VIDYA NIKETAN INTER COLLEGE SHIKSHA SOCIETY (SUPRA ), IS UNSUSTAINABLE IN LAW. 19. C.P. VIDYA NIKETAN INTER COLLEGE SHIKSHA SOCIE TY (SUPRA), WAS FOLLOWED IN NEERAJ JANHITKARI GRAMIN SEVA SANSTHAN VS. CCIT & OTHERS, 360 ITR 168 (ALL.). 20. IT IS THUS EVIDENT THAT THE AOS FIRST REASON T O BELIEVE ESCAPEMENT OF INCOME IS A NON EST REASON. IT IS TRITE THAT A R EASON OF BELIEF OF ESCAPEMENT OF INCOME HAS TO BE A PLAUSIBLE REASON, AND THE REASON HERE, AS DISCUSSED HEREIN BEFORE, IS NOT A PLAUSIBLE REAS ON. THIS REASON IS, ACCORDINGLY, SET ASIDE AND CANCELLED. ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 18 21. THE OTHER REASON RECORDED BY THE AO WAS THAT TH E ASSESSEES APPLICATION FOR GRANT OF APPROVAL U/S 10(23C)(VI) F ILED FOR THE A.Y. 2012- 13, WAS REJECTED BY THE LD. CCIT. IN THIS REGARD, T HE ASSESSEE RAISED THE FOLLOWING OBJECTIONS: 3. YOU HAVE RELIED UPON THE FINDING OF THE CCIT WHILE REJECTING THE APPLICATION FILED BY ASSESSEE U/S 10( 23C)(VI) FOR ASST. YEAR 2012-2013 FOR REOPENING OF THE ASSESSMEN T, BUT YOU HAVE FAILED TO ESTABLISH THAT HOW THE ASSESSEE INSTITUTION IS NOT EXISTING SOLELY FOR EDUCATIONAL PURPOSES. IT IS NOT CLEAR AS TO HOW YOU HAVE ARRIVED AT THIS CONCLUSION AND R ECORDED YOUR SATISFACTION ON THE SAME WHEN THE ENTIRE AUDIT ED ACCOUNTS ARE AVAILABLE WITH YOU AND THERE IS NOT EV EN AN IOTA OF EVIDENCE THAT ANY AMOUNT HAS BEEN SPENT FOR ANY PURPOSE OTHER THAN EDUCATION. IT IS IMPORTANT TO POINT OUT HERE THAT PSEB WHILE GRANTING AFFILIATION TO THE SCHOOL W.E.F . 16.03.2004 HAS RECOGNIZED THAT SCHOOL AS EDUCATIONAL INSTITUTI ON WORTH GRANTING AFFILIATION AFTER SATISFYING THE FULFILLME NT OF THEIR CONDITIONS WHERE AS ON THE OTHER HAND THE CCIT WHIL E CONSIDERING THE REGISTRATION APPLICATION IN ASSI. Y EAR 2012- 2013 HAS GIVEN A BASELESS FINDING WITHOUT ANY EVIDE NCE THAT SCHOOL IS NOT EXISTING SOLELY FOR EDUCATION PURPOSE . THIS FINDING OF THE CCIT CANNOT BE MADE A BASE FOR RE-OPENING TH E ASSESSMENT FOR ASST. YEAR 2007-2008. 22. THE AO MET THIS OBJECTION, OBSERVING AS FOLLOWS : POINT NO.3: THE WORTHY CCIT, LUDHIANA REJECTED THE APPLICATION FILED BY THE ASSESSEE U/S 10(23C)(VI) O F THE ACT FOR THE A.Y. 2012-13 O THE SAME GROUND THAT THE ASSESSE E SOCIETY IS NOT EXISTING SOLELY FOR EDUCATION PURPOSES. THER E IS NO DIFFERENCE UNDER SECTION 10(23C)(IIIAD) EXCEPT THAN THAT OF MONETARY LIMIT OF RS. ONE CRORE. THE SOCIETIES HAVI NG RECEIPTS LESS THAN ONE CRORE ARE NOT REQUIRED TO GET THE REG ISTRATION BUT THE ASSESSEE-SOCIETY MUST EXIST SOLELY FOR EDUCATIO N PURPOSES. 23. THE AO WAS, THUS, OF THE VIEW THAT NO REGISTRAT ION IS REQUIRED U/S 10(23C)(VI) OF THE ACT, WHERE THE RECEIPTS OF THE S OCIETY ARE OF LESS THAN ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 19 RS. 1 CRORE, BUT THE ASSESSEE SHOULD EXIST SOLELY F OR EDUCATIONAL PURPOSES, WHICH WAS NOT SO IN THE CASE OF THE ASSES SEE. THE LD. CIT(A) AGAIN CONFIRMED THE AOS VIEW. 24. THE EXISTENCE OF THE ASSESSEE SOLELY FOR EDUCAT IONAL PURPOSES HAS BEEN ELABORATED AND CONFIRMED BY US IN THE PRECEDIN G PARAS. SO FAR AS REGARDS THE RECEIPTS OF THE ASSESSEE, FIRSTLY, NEIT HER OF THE AUTHORITIES BELOW HAS RAISED ANY OBJECTION WITH REGARD TO THE R ECEIPTS OF THE ASSESSEE BEING LESS THAN THE PRESCRIBED LIMIT OF RS.1 CRORE . FOR THE A.Y. 2007-08, THE RECEIPTS OF THE ASSESSEE, AS PER THE INCOME & E XPENDITURE ACCOUNT FOR THE YEAR ENDING 31.03.2007, AMOUNTED TO RS.52,0 1,115.28, I.E., MUCH BELOW THE PRESCRIBED LIMITED OF RS. 1 CRORE. 25. THE ABOVE APART, IT IS PATENT ON RECORD THAT IN THE CASE OF ARYA SHIKSHA MANDAL, THE GOVERNING BODY OF THE ASSESSEE SCHOOL, IN SCRUTINY ASSESSMENT, VIDE ORDER DATED 29.11.2012 (APB 2007-0 8 PG 12 13), THE STATUS AS WELL AS THE NATURE OF SERVICE OF THE MAND AL WAS ACCEPTED AS THAT OF A CHARITABLE EDUCATIONAL SOCIETY. 26. FROM THE ABOVE DISCUSSION, IT IS EVIDENT THAT B OTH THE REASONS RECORDED BY THE AO FOR REOPENING THE COMPLETED ASSE SSMENTS OF THE ASSESSEE ARE BASED ON FACTUAL ERRORS, RENDERING THE NOTICE ISSUED U/S 147, FINDING ITS BASIS IN THE AFORESAID REASONS, TO BE AN INVALID NOTICE, IN KEEPING WITH THE DECISION OF THE HONBLE SUPREME CO URT IN KELVINATOR OF INDIA LTD. (SUPRA), AS CONSIDERED IN DR. AJIT GUP TA (SUPRA). ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 20 CONSEQUENTLY, ALL PROCEEDINGS PURSUANT THERETO, CUL MINATING IN THE IMPUGNED ORDER FOR THE A.Y. 2007-08, ARE ALSO HELD TO BE NULL AND VOID. 27. IN VIEW OF THE VERY REOPENING OF THE COMPLETED ASSESSMENT AND PROCEEDINGS PURSUANT THERETO, INCLUDING THE IMPUGNE D ORDER, HAVING BEEN QUASHED, NOTHING FURTHER SURVIVES FOR ADJUDICA TION. 28. AS INDICATED IN THE INITIAL PART OF THIS ORDER, THE FACTS IN ITA NO.155(ASR)/2016, FOR THE A.Y. 2008-09, ARE EXACTLY SIMILAR TO THOSE DECIDED BY US HEREINABOVE, IN ITA NO. 154(ASR)/201 6 FOR THE A.Y. 2007- 08. THEREFORE, THE FINDINGS GIVEN THEREIN WILL APPL Y EQUALLY, MUTATIS MUTANDIS, TO THIS APPEAL AS WELL. 29. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. 30. AS REGARDS THE STAY APPLICATIONS IN S.A. NOS.05 & 06(ASR)/2016 FILED BY THE ASSESSEE, THE SAME ARE DISMISSED AS IN FRUCTUOUS, SINCE WE HAVE DECIDED THE APPEALS OF THE ASSESSEE, AS INDICA TED ABOVE. 31. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED, WH EREAS BOTH THE STAY APPLICATIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/07/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 15/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. KMV COLLEGIATE SR. SEC. SCHOOL, J ALANDHAR. 2. THE ITO (EXEMPTIONS), JALANDHAR 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY ITA NOS. 154 & 155(ASR)/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 21 BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.