SREYAS EDUCATIONAL SOCIETY, Hyderabad V. Director of Income Tax (Exemptions), Hyderabad

ITA 1564/HYD/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69890 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1564/HYD/2012 ASSESSMENT YEAR : N.A. M/S. SREYAS EDUCATIONAL SOCIETY, TATTIANNARAM VILLAGE, HAYATNAGAR MANDAL, RR DIST. PAN: AAGAS1798E VS. THE DIRECTOR OF INCOME - TAX (EXEMPTIONS) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI MOHD. AFZAL RESPONDENT BY: SRI D. SUDHAKAR RAO DATE OF HEARING: 0 6 .11.2013 DATE OF PRONOUNCEMENT: 0 6 .11.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) [DIT(E)], H YDERABAD DATED 31.7.2012 WHEREIN THE DIT(E) DENIED REGISTRATION OF ASSESSEE SOCIETY U/S. 12AA OF INCOME-TAX ACT, 1961. 2. IN THIS CASE, THE ASSESSEE FILED APPLICATION IN FOR M 10A ON 20.1.2012. THE DIT(E) REQUESTED THE ASSESSEE TO FU RNISH COPIES OF THE ACCOUNTS OF THE SOCIETY FOR THE FINANCIAL YEAR 2011-12. HE HAS ALSO ASKED THE ASSESSEE TO FURNISH THE FEE STRUCTUR E IN RESPECT OF DIFFERENT ENGINEERING COURSES OFFERED BY THE ASSESS EE. THE HAS ASSESSEE FURNISHED THE PROVISIONAL INCOME AND EXPEN DITURE ACCOUNT FROM 1.4.2011 TO 31.3.2012 AND PROVISIONAL BALANCE SHEET. THE ASSESSEE ALSO FURNISHED BIFURCATION OF FEE COLLECTE D STATEMENT FOR THE PERIOD 2011-12. ITA NO. 1564/HYD/2012 M/S. SREYAS EDUCATIONAL SOCIETY ======================== 2 3. THE DIT(E) OBSERVED THAT IN THAT INCOME AND EXPENDI TURE ACCOUNT, THE FEE COLLECTIONS ARE SHOWN AT RS. 11,96 3,770, HOSTEL FEE COLLECTION AT RS. 15,15,000 AND JNTU EXEMPTION FEE AT RS. 66,500. IN THE SAID STATEMENT OF FEE COLLECTION, UNDER B. TECH WHILE REFERRING TO THREE COURSES OF MECHANICAL, ECE AND CSE OFFERED BY THE INSTITUTE, THE TOTAL NUMBER OF SEATS ALLOTTED IN RESPECT OF SU CH COURSES ARE SHOWN AT 60, 120 AND 120 RESPECTIVELY. FURTHER UND ER EACH SUCH COURSE, WHILE REFERRING TO 'FEE DETAILS', THE NUMBE R OF SEATS ALLOTTED ARE SHOWN AT 60, 97 AND 96 RESPECTIVELY. AS REGARDS MECHANICAL ENGINEERING COURSE IS CONCERNED, THE BREAK-UP OF SE ATS PERTAINING TO MANAGEMENT SEATS, CONVENER & SPOT AND FREE SEATS ARE SHOWN AT 18, 14 AND 28 RESPECTIVELY. THE TUITION FEE PERTAIN ING TO MANAGEMENT SEAT IS SHOWN AT RS. 95,000 AND THE SAME PERTAINING TO CONVENER & SPOT IS SHOWN AT RS. 31,000. AS REGARDS THE ECE COURSE IS CONCERNED, THE SEATS PERTAINING TO MANAGEMENT SE ATS, CONVENER & SPOT AND FREE SEATS ARE SHOWN AT 31, 15 AND 46 RE SPECTIVELY. THE SUM TOTAL OF THESE THREE FIGURES COMES TO 92, WHICH DOES NOT MATCH WITH THE FIGURE OF 97 SHOWN AGAINST 'FEE DETA ILS' UNDER THAT COURSE. THE COURSE FEE FOR MANAGEMENT SEATS AND CON VENER & SPOT SEATS ARE SHOWN AT SAME FIGURES OF RS. 95,000 AND R S. 31,000 RESPECTIVELY. AS REGARDS CSE COURSE IS CONCERNED, T HE SEATS PERTAINING TO MANAGEMENT, CONVENER & SPOT AND FREE SEATS ARE SHOWN AT 31, 26 AND 34 RESPECTIVELY. THE SUM TOTAL OF THESE THREE FIGURES COMES TO 91, WHICH DOES NOT MATCH WITH THE EARLIER FIGURE OF 96 SHOWN AGAINST 'FEE DETAILS' UNDER THE SAME COURS E I.E., CSE. THE TUITION FEE PERTAINING TO MANAGEMENT AND CONVENER & SPOT SEATS ARE SHOWN AT THE SAME FIGURES OF RS. 95,000 AND RS. 31,000 RESPECTIVELY. IN A SEPARATE COLUMN, JNTU FEE IS SH OWN AT RS. 5,500 PER SEAT AND THE GRAND TOTAL OF SUCH FEES FROM EACH SUCH COURSE IS SHOWN AT RS. 3,30,000, RS. 5,30,500 AND RS. 5,28,0 00, RESPECTIVELY. 4. THE DIT(E), IN ORDER TO VERIFY SUCH FEE RECEIPTS DU RING THE ACADEMIC YEAR 2011-12, REQUESTED THE AR TO PRODUCE T HE FEE RECEIPT ITA NO. 1564/HYD/2012 M/S. SREYAS EDUCATIONAL SOCIETY ======================== 3 BOOKS PREPARED BY THE SOCIETY DURING THE FINANCIAL YEAR 2011-12. IN RESPONSE TO THE SAME, THE AR PRODUCED SOME SMALL REC EIPT BOOKS MAINTAINED /PREPARED BY THE SAID ENGINEERING COLLEG E FOR VERIFICATION. FROM SUCH BOOKS, IT WAS NOTICED THAT ONLY, THE NAME OF STUDENT IS MENTIONED SHOWING CERTAIN AMOUNT TOWARDS TUITION FEE/JNTU FEE. THERE IS NO MENTION ABOUT THE COURSE AND THE PARTICULARS OF VARIOUS FEES INCLUDING TUITION FEE C OLLECTED BY THE SOCIETY AT THE TIME OF ADMISSION FROM DIFFERENT STU DENTS. UNDER THESE CIRCUMSTANCES, THE FEES COLLECTED BY THE SOCI ETY ON DIFFERENT ACCOUNTS FROM THE STUDENTS DURING THE PREVIOUS YEAR ARE NOT VERIFIABLE. THE ASSESSEE-SOCIETY HAS ALSO NOT FURNI SHED THE BASIS OF RECEIPT FROM OTHER SOURCES INCLUDING HOSTEL FEE COL LECTION. UNDER THESE CIRCUMSTANCES AND IN ABSENCE OF BREAK-UP OF R ECEIPTS FROM ALL SOURCES FURNISHED BY THE ABOVE SOCIETY, THE TOTAL R ECEIPTS DURING THE SAID FINANCIAL YEAR ARE NOT VERIFIABLE. IN FACT, T HE FINANCIAL AFFAIRS OF THE SOCIETY AND ALSO THE ACTIVITIES CARRIED ON BY T HE SOCIETY ARE NOT VERIFIABLE. HENCE, THE ASSESSEE SOCIETY, IN HIS VI EW, IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE IT ACT. ACCORDINGLY , HE REJECTED THE CLAIM OF THE ASSESSEE. AGAINST THIS, THE ASSESSEE I S IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL ON RECORD. IN OUR OPINION, THE OBSERVATION OF THE DIT (E) IS NOT APPROPRIATE. HE IS CONCERNED WITH REGISTRATION U/S . 12AA OF THE ACT. HE HAS TO SEE WHETHER THE OBJECTS OF THE ASSESSEE A RE CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT AND W HETHER THE ACTIVITIES OF THE ASSESSEE ARE GENUINE. IF THE ACT IVITIES OF THE ASSESSEE FALL UNDER THE PROVISIONS OF SECTION 2(15) OF THE ACT, HE CANNOT DENY THE REGISTRATION UNLESS HE BRINGS ON RE CORD THE MATERIAL TO SHOW THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT CARRIED OUT IN ACCORDANCE WITH THE OBJECTS FOR WHICH IT IS FORMED. HE CANNOT STEP INTO THE SHOES OF THE AO SO AS TO INVOKE THE PROVISI ONS OF SECTIONS 11 AND 13 OF THE ACT WHICH SHALL BE EXERCISED BY THE AO ONLY. BEING SO, ITA NO. 1564/HYD/2012 M/S. SREYAS EDUCATIONAL SOCIETY ======================== 4 WE ARE INCLINED TO OBSERVE THAT THE DIT(E) IS REQUI RED TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE AND MAKE NECESSARY ENQUIRY AS HE DEEM IT FIT IN THIS BE HALF AND IF HE IS SATISFIED ABOUT THE OBJECTS OF THE ASSESSEE SOCIETY AS GENUINE, HE SHALL GRANT REGISTRATION ACCORDINGLY. WITH THIS OB SERVATION, WE REMIT THE ENTIRE ISSUE TO THE FILE OF THE DIT(E) FOR FRES H CONSIDERATION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2013 SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 6 TH NOVEMBER, 2013 TPRAO COPY FORWARDED TO: 1. M/S. SREYAS EDUCATIONAL SOCIETY, C/O. SRI MOHD. AFZA L, ADVOCATE, 11-5-465, FLAT NO. 402, SHERSON'S RESIDEN CY, CRIMINAL COURT ROAD, RED HILLS, HYDERABAD-500 004. 2. THE DIRECTOR OF INCOME - TAX (EXEMPTIONS), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3. THE DEPUTY DIRECTOR OF INCOME - TAX (EXEMPTIONS) - II, HYDERABAD. 4 . THE DR ' B ' BENCH, ITAT, HYDERABAD