Tetrahedron Educational Academy, Hyderabad V. Director of Income Tax (Exemptions), Hyderabad

ITA 1639/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1314 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 02-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: GVVS MURTHY
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1639 & 1640/HYD/2012 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD (PAN - AAAAT 2742 B) V/S DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.V.V.S.MURTHY RESPONDENT BY : MS.AMISHA S.GUPT DR DATE OF HEARING 31 .0 1 . 2013 DATE OF PRONOUNCEMENT 22. 0 2.2013 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDERS OF THE DIRECTOR OF INCOME-TAX(EXEMPTION), HYDERABAD DA TED 30.8.2012, FOR REFUSING TO GRANT REGISTRATION UNDER S.12AA AND APP ROVAL AND S.80G(5)VI) OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE- SOCIET Y. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FILED APPLICATIONS IN FORM NO.10A AND 10G ON 31.03.2009 S EEKING REGISTRATION UNDER S.12A AND APPROVAL UNDER S.80G(5) OF THE INCO ME-TAX ACT, 1961. WHILE PROCESSING THE SAID APPLICATION IN FORM NO.10 A FOR REGISTRATION UNDER S.12A OF THE ACT, THE THEN DIRECTOR OF INCOME -TAX(EXEMPTION) HAS ASKED THE ASSESSEE INSTITUTION VIDE QUESTIONNAIRE D ATED 8.5.2009, TO PRODUCE THE BOOKS OF ACCOUNTS AND BILLS AND VOUCHER S FOR VERIFICATION. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE BOOKS O F ACCOUNTS FOR FINANCIAL YEARS 2007-08 AND 2008-09, AND COULD NOT MAKE OTHER COMPLIANCES AS REQUISITIONED. IT WAS NOTED BY THE DIRECTOR OF INCOME- ITA NO.1639 & 1640/HYD/12 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD 2 TAX(EXEMPTION) THAT THE ASSESSEE SOCIETY APPEARS TO BE CONDUCTING COACHING CLASSES FOR FITJEE LTD. AND FIT JEE (HYD. CLASSES) LTD. FOR IIT ENTRANCE EXAMINATION. HE FURTHER OBSERVED THAT COA CHING OF STUDENTS IS NOT AN ACTIVITY COMING WITHIN THE AMBIT OF IMPARTI NG EDUCATION AND RUNNING OF PRIVATE COACHING INSTITUTES FOR THE PURP OSE OF TRAINING STUDENTS TO APPEAR AT SOME SPECIFIED EXAMINATION UPON TAKING SPECIFIED SUM FROM THE TRAINEES WOULD NOT BRING SUCH SOCIETY WITHIN TH E PROVISIONS OF S.2(15) OF THE ACT. FOR THIS PROPOSITION , HE PLACED RELIAN CE ON THE DECISION OF THE HONBLE PATNA HIGH COURT IN THE CASE OF BIHAR INSTI TUTE OF MINING AND MINE SURVEY V/S. CIT(1984 208 ITR 608, AND REJECTED THE APPLICATION OF THE ASSESSEE SOCIETY IN FORM NO.10A FOR REGISTRATION UN DER S.12A, VIDE ORDER DATED 24.6.2009. WHEN THE ASSESSEE CONTESTED THE SAID ACTION OF THE DIRECTOR OF INCOME-TAX(EXEMPTION) IN REJECTING THE APPLICATION FOR REGISTRATION UNDER S.12A OF THE ACT, ON APPEAL BEFO RE THE TRIBUNAL, THE TRIBUNAL VIDE ITS ORDER DATED 11.2.2011 IN ITA NO. 1043/HYD/2009, CONSIDERING THE CLAIM OF THE ASSESSEE THAT IT HAS N OT BEEN CONDUCTING ANY COACHING CLASSES AND THE PROVISIONS OF S.2(5) READ WITH PROVISO WAS NOT APPLICABLE IN ITS CASE, HAS SET ASIDE THE ORDERS O F THE DIRECTOR OF INCOME- TAX(EXEMPTION) AND RESTORED THE MATTER TO HIS FILE WITH A DIRECTION TO PASS THE ORDERS DE NOVO IN ACCORDANCE WITH LAW AND AFTER ALLOWING REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. IN THE PROCEEDINGS THAT ENSUED IN PURSUANCE OF T HE ORDER OF THE TRIBUNAL, THE DIRECTOR OF INCOME-TAX(EXEMPTION), AF TER HEARING THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, AGAIN REFUSED REGISTRATION UNDER S.12AA AND APPROVAL UNDER S.80G OF THE ACT. HIS OBSERVATIONS IN THE CONTEXT OF REFUSAL OF REGISTRAT ION UNDER S.12AA ARE AS FOLLOWS- 2.3 AS MAY BE SEEN FROM THE ABOVE, THE COMPETENT A UTHORITY OF BOE, ANDHRA PRADESH, HAVE MERELY ALLOWED THE MANAGEMENT OF THE OLD COLLEGE FOR CHANGE OF NAME OF SUCH COLLEGE. IT MAY BE FURT HER MENTIONED HERE THAT, THOUGH SPECIFICALLY ASKED FOR IN THAT REGARD, THE ASSESSEE SOCIETY ITA NO.1639 & 1640/HYD/12 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD 3 HAS NOT FURNISHED ANY COPY OF LETTER/ORDER ISSUED B Y ANY AUTHORITY OR ANY DOCUM ENTARY EVIDENCE IN SUPPORT OF THEIR FEE STRUCTURE A ND ALSO THE FEES CHARGED BY THEM FROM STUDENTS. 2.4 AFTER CONSIDERING THE SUBMISSIONS, VIDE LETT ER DATED 28.06.2012, THE ASSESSEE SOCIETY WAS ASKED TO FURNI SH A COPY OF THE LETTER WRITTEN BY THEM TO THE BOARD OF INTERMEDIATE EDUCATION, ANDHRA PRADESH, IN RESPONSE TO WHICH, THEY HAVE ISSUED SAI D LETTER DT.23.10.2004. SINCE, THE ASSESSEE SOCIETY HAS NOT FURNISHED ANY EVIDENCE IN RESPECT OF THE FEES STRUCTURE, IT WAS A SKED TO FURNISH THE SAME. FURTHER, REFERRING TO THE AMOUNTS CLAIMED AS PAID TOWARDS RENT AND INFRASTRUCTURE RENT DURING THE YEAR ENDED ON 31.03.2008, IT WAS ASKED TO FURNISH COPIES OF RENT AGREEMENTS FOR THE SAME AND ALSO TO PRODUCE BILLS ETC. FOR MAKING PAYM ENT OF SUCH AMOUNTS. VIDE THAT LETTER ISSUED ON 28.06.2012, THE CASE WAS POSTED FOR HEARI NG ON 10.07.2012. HOWEVER, NO COMPLIANCE WAS MADE BY THE ASSESSEE SO CIETY ON THAT DATE. IT IS FURTHER PERTINENT TO MENTION HERE THAT, IN RE SPONSE TO THE OTHER LETTER DT.26.07.2012, ISSUED TO THE ABOVE INSTITUTI ON, IN THE CONTEXT OF THE OTHER PROCEEDINGS PERTAINING TO APPROVAL U/S. 80G O F THE ACT, ARISING OUT OF THE HONBLE ITATS ORDER IN ITA NO.139/HYD/11, D T.05.08.2012, FIXING THE CASE FOR HEARING ON 07.08.2012, THE ASSESSEE SO CIETY HAS NOT MADE ANY COMPLIANCE ON THAT DATE I.E. ON 07.08.2012. EV EN NO COMPLIANCE HAS BEEN MADE BY THE ASSESSEE SOCIETY IN RESPONSE TO TH E SAID LETTER DATED 28.06.2012, CALLING FOR SPECIFIC INFORMATION AND OT HER DOCUM ENTS, TILL DATE. 3. UNDER THE AFOREMENTIONED CIRCUMSTANCES I.E., IN THE FACE OF SUCH NON-COMPLIANCE ON THE PART OF THE ABOVE SOCIE TY TO THE SAID LETTER ISSUED ON 28.06.2012 AND FURTHER KEEPING IN VIEW TH E SAID LETTER DATED 23.10.2004 ISSUED BY BOE, AP, WHEREIN THERE IS REFE RENCE TO FIITJEE JUNIOR (FITJEE) COLLEGE, I AM INCLINED TO BELIEVE T HAT THE APPLICANT SOCIETY IN THIS CASE, IS RUNNING SOME COACHING INST ITUTE FOR THE STUDENTS AND HAVING REGARD TO THE DECISION OF THE HONBLE PA TNA HIGH COURT IN THE CASE OF BIHAR INSTITUTE OF MINING AND MINE SURVEY V S. CIT(1994)208 ITR 608, WHERE IT WAS HELD THAT COACHING OF THE STUDEN TS IN AN INSTITUTION COULD NOT BE HELD AS EDUCATION AS IT WAS NOT A PROC ESS OF TRAINING AND DEVELOPMENT OF THE STUDENTS IN NORMAL SCHOOLING AND KEEPING IN VIEW THE MEANING OF THE TERMINOLOGY EDUCATION AS CONTAINED IN THE PROVISIONS OF SECTION 2(15) OF THE ACT, I AM OF THE VIEW THAT THE APPLICANT SOCIETY CANNOT BE CONSIDERED AS AN CHARITABLE INSTITUTION A ND HENCE, IS NOT ENTITLED FOR REGISTRATION U/S. 12AA OF THE ACT. THU S, REGISTRATION SOUGHT FOR U/S. 12AA OF THE ACT, IS REFUSED TO THE ABOVE S OCIETY. 4. THE ASSESSEES APPLICATION FOR APPROVAL UNDER S .80G(5) OF THE ACT, WAS ALSO INITIALLY REJECTED BY THE DIRECTOR OF INCO ME-TAX(EXEMPTION) VIDE HIS ORDER DATED 24.6.2009. ON APPEAL, THE TRIBUNAL VIDE TIS ORDER DATED 5.8.2011 IN ITA NO.139/HYD/.2011, HAS SET ASIDE THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTION) AND RESTORED THE MATTER TO HIS FILE WITH CERTAIN DIRECTIONS FOR DE-NOVO CONSIDERATION. THE DIRECTOR OF ITA NO.1639 & 1640/HYD/12 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD 4 INCOME-TAX(EXEMPTION), AS IN THE CASE OF REGISTRATI ON UNDER S.12A, CONSIDERING NON-COMPLIANCES BY THE ASSESSEE, REJECT ED THE APPLICATION OF THE ASSESSEE FOR APPROVAL UNDER S.80G(5) OF THE ACT , VIDE IMPUGNED ORDER DATED 30.08.2012. 5. AGGRIEVED BY THE ORDERS OF THE DIRECTOR OF INCO ME- TAX(EXEMPTION), REFUSING REGISTRATION UNDER S.12AA AND APPROVAL UNDER S.80G(5) OF THE ACT, ASSESSEE PREFERRED PRESENT APP EALS BEFORE US. 6. IN THE APPEAL AGAINST REFUSAL OF REGISTRATION UNDER S.12A OF THE ACT, VIZ. ITA NO.1639/HYD/2012, EFFECTIVE GROUN DS RAISED BY THE ASSESSEE READ AS UNDER- 1. THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTI ON) IS ERRONEOUS IN LAW AND ON THE FACTS OF THE CASE. 2. THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) ER RED IN REFUSING TO GRANT REGIST4RATION TO THE APPLICANT SO CIETY U/S. 12AA OF THE I.T.ACT, 61. 3. THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) ER RED IN HOLDING THAT THE APPELLANT SOCIETY IS NOT IMPARTING EDUCATION WITHIN THE MEANING OF SEC.2(15) OF THE I.T. ACT, 6 1 AND HENCE THE APPELLANT CANNOT BE CONSIDERED AS A CHARI TABLE INSTITUTION. 4, THE DL DIRECTOR OF INCOME-TAX(EXEMPTION) ERRED I N REFUSING TO GRANT REGISTRATION US/. 12AA ON THE GROUND THAT THE APPELLANT SOCIETY IS RUNNING SOME COACHING CLASSES WITHOUT ANY BASIS OR EVIDENCE THEREFOR. 5,. .. SIMILARLY, IN THE APPEAL AGAINST REFUSAL OF REGISTR ATION UNDER S.12A OF THE ACT, VIZ. ITA NO.1640/HYD/2012, EFFECTIVE GROUNDS R AISED BY THE ASSESSEE READ AS UNDER- 1. THE ORDER OF THE DIRECTOR OF INCOME-TAX(EXEMPTI ON) IS ERRONEOUS IN LAW AND ON THE FACTS OF THE CASE. 2. THE LEARNED DIRECTOR OF INCOME-TAX(EXEMPTION) ER RED IN REFUSING TO GRANT APPROVAL U/S. 80G OF THE I.T. AC T, 61 THOUGH THE ASSESSEE COMPLIED WITH THE CONDITIONS LA ID DOWN UNDER RULE 11AA(4) OF THE I.T. RULES 1962. ITA NO.1639 & 1640/HYD/12 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD 5 7. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE LOWER AUTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DIRECTOR OF INCOME-TAX(EXEMPTION) HAS REFUSED REGIS TRATION UNDER S.12AA OF THE ACT, ONLY ON THE GROUND THAT THE ASSESSEE HA S BEEN CONDUCTING COACHING CLASSES, AND THE ASSESSEE HAS NOT COMPLIED WITH AND FURNISH THE DETAILS CALLED FOR IN SUPPORT OF ITS CASE. EVEN TH E APPLICATION OF THE ASSESSEE FOR APPROVAL UNDER S.80G(5) OF THE ACT WAS REJECTED, ON THE GROUND OF THE ASSESSEES INABILITY TO COMPLY WITH T HE REQUISITIONS OF THE DIRECTOR OF INCOME-TAX(EXEMPTION) CERTAIN DETAILS. THE LEARNED COUNSEL PLEADED BEFORE US FOR ONE MORE OPPORTUNITY BEING AF FORDED, TO FURNISH THE NECESSARY DETAILS AS REQUISITIONED FOR BY THE DIREC TOR OF INCOME- TAX(EXEMPTION). CONSIDERING TOTALITY OF FACTS AND C IRCUMSTANCES OF THE CASE AND KEEPING IN MIND THE ENDS OF JUSTICE, WE SE T ASIDE BOTH THE IMPUGNED ORDERS OF THE DIRECTOR OF INCOME-TAX(EXEMP TION), AND RESTORE THE MATTERS TO THE FILE OF THE DIRECTOR OF INCOME-T AX(EXEMPTION) WITH A DIRECTION TO REDECIDE AFRESH THE APPLICATIONS OF TH E ASSESSEE FOR REGISTRATION UNDER S.12A AND APPROVAL UNDER S.80G(5 ) OF THE ACT, AFTER GIVING ONCE AGAIN REASONABLE OPPORTUNITY TO THE ASS ESSEE TO FURNISH THE DETAILS AS REQUISITIONED BY THE DIRECTOR OF INCOME- TAX(EXEMPTION) AND TO SUBSTANTIATE ITS CASE. THE ASSESSEE IS DIRECTED T O COOPERATE IN THE EARLY DISPOSAL OF THE MATTERS, BY PROPER COMPLIANCES WITH THE NOTICES/LETTERS OF THE DIRECTOR OF INCOME-TAX(EXEMPTION), AS OTHERWISE , THE DIRECTOR OF INCOME-TAX(EXEMPTION) WOULD BE AT LIBERTY TO DRAW H IS OWN INFERENCES AND DISPOSE OF THE MATTERS ACCORDINGLY. THE DIRECT OR OF INCOME- TAX(EXEMPTION) IS DIRECTED TO EXAMINE THE APPLICATI ONS OF THE ASSESSEE FOR REGISTRATION UNDER S.12A AND APPROVAL UNDER S.80G(5 ) OF THE ACT AFRESH, AND PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, ITA NO.1639 & 1640/HYD/12 TETRAHEDRON EDUCATIONAL ACADEMY, HYDERABAD 6 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 22 ND FEBRUARY, 2013 SD/ - (CHANDRA POOJARI) SD/ - (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 22 ND FEBRUARY, 2013 COPY FORWARDED TO: 1. TETRAHEDRON EDUCATIONAL ACADEMY, 14/D, SAIFABAD, OPP. SECRETARIAT HYDERABAD 2. DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD 3. 4. ADDL. DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD B.V.S.