Appeal details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 1340 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-02-2013
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
B
Assessment Year
2009-2010
Appeal Filed On
02-11-2012
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.1642/HYD/12 : A SSTT. YEAR 2009-10 ASST. DIRECTOR OF INCOME- TAX(EXEMPTION)-I, HYDERABAD. V/S. M/S. SRI GOWTHAM ACADEMY OF GENERAL & TECHNICAL EDUCATION, SECUNDERABAD. ( PAN - AADTS 7203 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.SUDHAKAR RAO, CIT - DR RESPONDENT BY : SHRI V.SHIV KUMAR DATE OF HEARING 31.01.2013 DATE OF PRONOUNCEMENT 22.02.2013 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IV, HYDERABAD, DATED 21.08.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. EFFECTIVE GROUNDS OF THE REVENUE IN THIS APPEAL READ AS FOLLOWS- 1. THE ORDER OF THE LEARNED. CIT(A) IS ERRONEOUS B OTH ON FACTS AND IN LAW. 2. THE LEARNED. CIT(APPEALS) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 11 , EVEN IN ABSENCE OF APPROVAL UNDER SUB-CLAUSE (VI) TO THE SE CTION 10(23C). 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT APPROVAL UNDER SUB-CLAUSE (VI) TO THE SECTION 10(23 C) IS DISTINCT FROM REGISTRATION U/S. 12A OF THE ACT. 4. THE LEARNED CIT(A) FAILED TO SEE THAT SUB-CLAUSE (VI) TO THE SECTION 10(23C) AS INSERTED BY THE FINANCE ACT, 199 8 W.E.F. 01.04.1999, STATES THAT THE UNIVERSITY OR OTHER EDU CATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSE , AND WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY. THE IS SUE IS ITA NO.1642/ HYD/2012 M/S. SRI GOWTHAM ACADEMY OF GENERAL & TECHNICAL EDUCATION, SECUNDERABAD . 2 EXPLICITLY DEALT WITH BY THE ACT ITSELF AND THE INT ENTION OF THE LEGISLATURE IS QUITE CLEAR FROM IT. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E DECISION OF THE APEX COURT IN THE CASE OF CIT V/S. BAR COUNCIL OF MAHARASHTRA WAS MADE IN THE YEAR 1981 PRIOR TO INTR ODUCTION OF THE SUB-CLAUSE (VI) OF THE SECTION 10(23C) (INSE RTED BY THE FINANCE ACT, 1998 W.E.F. 01.04.1999) 6. THE LEARNED. CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT OBTAINING APPROVAL OF THE PRESCRIBED AUTHORITY IS M ANDATORY AS PER THE PLAIN MEANING OF SECTION 10(23C)(VI) OF THE I.T. ACT, 1961 WHEREVER THE AGGREGATE GROSS RECEIPTS OF EDUCATIONAL INSTITUTIONS ARE OVER AND ABOVE RS.1.00 CRORES. 7. .. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. THE CLAIM OF THE ASSESSEE FOR EXEMPTION OF ITS INCOME FOR ASSESSMENT YEARS 2009-10 EVEN UND ER S.11 OF THE ACT, HAS BEEN REJECTED BY THE ASSESSING OFFICER ON THE G ROUND THAT THE ASSESSEE-SOCIETY HAS NOT OBTAINED THE APPROVAL U/S. 10(23C)(IV) OF THE ACT. HE ACCORDINGLY, DENYING THE ASSESSEES CLAIM F OR EXEMPTION, COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.8, 52,74,994, VIDE ORDER OF ASSESSMENT DATED 23.12.2011, PASSED UNDER S.143 (3) OF THE ACT. ON APPEAL, THE CIT(A) FOLLOWING THE DECISIONS OF THE T RIBUNAL IN SIMILAR MATERS HELD THAT THE ASSESSEE WOULD BE ELIGIBLE FOR CLAIMI NG EXEMPTION UNDER S.11 OF THE ACT, SUBJECT TO FULFILLMENT OF OTHER CONDITI ONS OF S.11 TO 13 OF THE ACT. 4. THE ONLY ISSUE INVOLVED IN THE ABOVE GROUNDS OF APPEAL RELATES TO DENIAL OF ASSESSEES CLAIM FOR EXEMPTION OF ITS INCOME FROM TAX. WE FIND THAT THIS ISSUE IS COVERED BY THE ORDER OF THE HYDE RABAD BENCH A OF THE TRIBUNAL DATED 15.4.2009 IN THE CASES OF VASAVI ACA DEMY OF EDUCATION, HYDERABAD IN ITA NO.1133/HYD/2006 FOR THE ASSESSMEN T YEAR 2003-04 AND ORDER DATED 17.4.2009 IN ITA NO.1206/HYD/2007 F OR THE ASSESSMENT YEAR 2004-05, WHEREIN IT WAS HELD THAT IF DONATIONS ARE RECEIVED COMPULSORILY FOR THE ADMISSION OF STUDENTS, BY WHAT EVER NAME IT MAY BE ITA NO.1642/ HYD/2012 M/S. SRI GOWTHAM ACADEMY OF GENERAL & TECHNICAL EDUCATION, SECUNDERABAD . 3 CALLED, I.E. DONATION, BUILDING FUND, AUDITORIUM FU ND, ETC. OVER AND ABOVE THE PRESCRIBED FEE, FROM THE STUDENTS, THE ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION EITHER UNDER S.10(23C) OR UNDER S.11 OF THE ACT. FURTHER, WE FIND THAT THE CONSTITUTIONAL BENCH OF APEX COURT IN THE CASE OF T.M.A. PAI FOUNDATIONS AND OTHERS VS. STATE OF KARNATAKA & OTHERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COLLECTION OF CAPITATIO N FEES FOR THE ADMISSION OF STUDENTS OVER AND ABOVE FEES PRESCRIBED BY THE P RIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPI TATION FEES FOR ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESCRIBED CANN OT BE CONSTRUED AS CHARITABLE/EDUCATION INSTITUTION. APEX COURT FURTHE R OBSERVED THAT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIBED FEE FOR ADM ISSION OF THE STUDENT HAS TO BE CONSTRUCTED AS CAPITATION FEE. THE APEX COURT, FURTHER OBSERVED THAT THE CONCERNED UNIVERSITY AND REGULATED BODY HA S TO TAKE ACTION FOR WITHDRAWAL OF THE RECOGNITION IN CASE IT IS FOUND T HAT THE EDUCATIONAL INSTITUTION RECEIVED ANY MONEY OVER AND ABOVE THE F EES PRESCRIBED FOR THE COURSES. SAME VIEW WAS TAKEN BY APEX COURT IN THE C ASE OF ISLAMIC ACADEMY OF EDUCATION AND ANOTHER VS. STATE OF KARNA TAKA & ANOTHER (2003) 6 SCC 697. IF THE DONATIONS WERE RECEIVED C OMPULSORILY FOR ADMISSION OF STUDENTS, THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITHER U/S 10(23C) OR U/S 11 OF THE IT ACT. SINCE THE REV ENUE AUTHORITIES HAVE NOT EXAMINED THE COLLECTION OF CAPITATION FEES IN T HIS CASE FOR BOTH THE YEARS, IN OUR OPINION, THE MATTER REQUIRES TO BE EX AMINED BY THE ASSESSING OFFICER WHETHER THE ASSESSEE IS COLLECTING THE CAPI TATION FEES FROM STUDENTS OR NOT AND IT IS NECESSARY FOR BRINGING THE ACTUAL FACTS ON RECORD FOR DECIDING THE ISSUE EFFECTIVELY. SIMILAR VIEW WAS T AKEN BY US IN THE CASE OF M/S. JAMIA NIZAMIA IN ITA NO.763/HYD/2007 DATED 30. 6.2008, IN THE CASE OF INTERNATIONAL EDUCATIONAL ACADEMY, HYDERABAD IN ITA NO.494/HYD/2007 AND 518/HYD/2008 FOR THE ASSESSMENT YEARS 2002- 200 3 AND 2004-05 AND SRI SAI SUDHIR EDUCATIONAL SOCIETY, HYDERABAD IN IT A NO.999/HYD/20-06 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, WE SE T ASIDE THE ORDERS OF THE REVENUE AUTHORITIES AND REMIT BACK THE MATTER FOR BOTH THE YEARS TO ITA NO.1642/ HYD/2012 M/S. SRI GOWTHAM ACADEMY OF GENERAL & TECHNICAL EDUCATION, SECUNDERABAD . 4 THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO A SSESSING OFFICER THAT HE SHALL RECONSIDER THE ENTIRE ISSUE IN THE LIGHT OF J UDGMENT OF SUPREME COURT IN THE CASE OF M/S ISLAMIC ACADEMY OF EDUCATION & A NOTHER VS. STATE OF KARNATAKA AND ANOTHER (SUPRA), AND IN THE CASE OF T .M.A. PAI FOUNDATION AND OTHERS VS. STATE OF KARNATAKA AND OTHERS (SUPRA ), AND FIND OUT WHETHER THE ASSESSEE HAS RECEIVED ANY MONEY OVER AN D ABOVE THE FEES PRESCRIBED AND THEREAFTER DECIDE THE ISSUE AFRESH I N ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO T HE ASSESSEE. WE MAKE IT CLEAR THAT THE ASSESSEE IS NOT ENTITLED FOR EXEM PTION EITHER U/S 11 OR U/S 10(23C) IN CASE IT COLLECTED ANY MONEY BY WHATEVER NAME IT IS CALLED I.E., DONATION, BUILDING FUND, AUDITORIUM FUND ETC. ETC., OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSION OF STUDENTS. 5. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 22 ND FEBRUARY, 2013 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/- 22 ND FEBRUARY, 2013 COPY FORWARDED TO: 1. M/S. SRI GOWTHAM ACADEMY OF GENERAL & TECHNICAL EDUCATION, 10-2-249/2509, GVR;S LAKSHMI NIVAS, WES T MARREDPALLY, SECUNDERABAD - 26. 2 . ASST. DIRECTOR OF INCOME - TAX(EXEMPTION) - 1, HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) IV, HYDERABA D 4. COMMISSIONER OF INCOME - TAX III HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S
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