DDIT, Hyderabad V. Chiree Educational Society, R.R.Dist

ITA 1728/HYD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3191 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Keywords: Charitable institution; Competent authority; Set aside
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO. 1728/HYD/2008 ASSESSMENT YEAR 2005-06 DDIT(E)-I HYDERABAD VS. M/S. CHIREC EDUCATIONAL SOCIETY, R.R. DISTRICT PAN/GIR NO.: C-021 APPELLANT BY: SHRI E.S. NAGENDRA PRASAD RESPONDENT BY: SHRI Y. RATNAKAR O R D E R PER N.R.S. GANESAN, JM: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV, HYDERABAD DATED 30.9.2008 AND PERTAI NS TO ASSESSMENT YEAR 2005-06. 2. WE HEARD SHRI E.S. NAGENDRA PRASAD, THE LEARNED DEPARTMENTAL REPRESENTATIVE AND SHRI Y. RATNAKAR, T HE LEARNED COUNSEL FOR THE ASSESSEE. THE ONLY ISSUE ARISING FOR CONSIDERATION IS EXEMPTION U/S. 11 OF THE INCOME-TA X ACT, 1961. 3. ADMITTEDLY, THE ASSESSEE IS RUNNING AN EDUCATIONAL INSTITUTION AND CLAIMED EXEMPTION U/S. 10(23C) OF T HE ACT. WHEN THE ASSESSEE COULD NOT GET THE APPROVAL FROM T HE COMPETENT AUTHORITY, THE ASSESSEE CLAIMED EXEMPTION U/S. 11 OF THE ACT. NO DOUBT, THE ASSESSEE IS ENTITLED FOR EX EMPTION EITHER U/S. 11 OR U/S. 10(23C) OF THE ACT, PROVIDED THE AS SESSEE SOCIETY WAS REGISTERED U/S. 12A / OBTAINS THE NECESSARY APP ROVAL FROM THE COMPETENT AUTHORITY, AS THE CASE MAY BE. HOWEV ER, WE FIND THAT THE APEX COURT IN THE CASE OF T.M.A. PAI FOUND ATION VS. STATE OF KARNATAKA (2002) 8 SCC 481 CONSIDERED AN I DENTICAL ISSUE ELABORATELY AND FOUND THAT WHEN THE ASSESSEE COLLECTS ANY MONEY OVER AND ABOVE THE PRESCRIBED FEE THEN SUCH A MOUNT ITA NO. 1728/HYD/2008 M/S. CHIREC EDUCATIONAL SOCIETY ================ 2 SHALL BE TREATED AS CAPITATION FEE AND SUCH INSTITU TION CANNOT BE TREATED AS CHARITABLE INSTITUTION/EDUCATIONAL INSTI TUTION. THE APEX COURT FURTHER HELD THAT IN CASE CAPITATION FEE S WAS COLLECTED, THE CONCERNED UNIVERSITY AND REGULATORY BODY HAS TO WITHDRAW ITS APPROVAL/RECOGNITION. THE SAME VIEW WA S REITERATED BY THE APEX COURT IN THE CASE OF ISLAMIC ACADEMY OF EDUCATION VS. STATE OF KARNATAKA (2003) 6 SCC 697. IN VIEW O F THE ABOVE, IT IS NECESSARY FOR THE ASSESSING OFFICER TO FIND O UT WHETHER THE ASSESSEE COLLECTS ANY MONEY OVER AND ABOVE THE PRES CRIBED FEE IN THE NATURE OF CAPITATION FEE. IF THE ASSESSING OFFICER FINDS THAT THE ASSESSEE COLLECTS CAPITATION FEE FOR ADMIS SION OF STUDENTS THEN THE ASSESSEE CANNOT BE TREATED AS AN EDUCATIONAL INSTITUTION/CHARITABLE INSTITUTION AND THE ASSESSEE ALSO IS NOT ENTITLED FOR ANY EXEMPTION EITHER U/S. 11 OR U/S. 1 0(23C) OF THE ACT. THE LOWER AUTHORITIES HAVE NOT EXAMINED THE F ACT THAT WHETHER THE ASSESSEE COLLECTS CAPITATION FEE FOR AD MISSION OF STUDENTS. THEREFORE, IN OUR OPINION, THE MATTER NE EDS TO BE RECONSIDERED BY THE ASSESSING OFFICER IN ORDER TO F IND OUT WHETHER ASSESSEE COLLECTS CAPITATION FEE OVER AND A BOVE THE PRESCRIBED FEE FOR ADMISSION OF STUDENTS. 4. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISIONS O F THIS TRIBUNAL IN THE CASE OF RAJASTHANI SIKSHA SAMITI V IDE I.T.A. NOS. 80 & 81/HYD/08 AND IN THE CASE OF ST. THERESA CONVENT SOCIETY, I.T.A. NO. 844/HYD/07. IN THESE DECISIONS , THE TRIBUNAL HAS NO OCCASION TO CONSIDER THE JUDGEMENTS OF THE APEX COURT IN THE CASE OF T.M.A. PAI FOUNDATION (SU PRA) AND ISLAMIC ACADEMY OF EDUCATION (SUPRA). IT IS PERTIN ENT TO KNOW THAT THE CONSTITUTION BENCH OF THE APEX COURT CONSI DERED THE CASES OF T.M.A. PAI FOUNDATION (SUPRA) AND ISLAMIC ACADEMY OF EDUCATION (SUPRA). THE JUDGEMENT OF THE APEX COURT IS BINDING ON ALL AUTHORITIES INCLUDING THIS TRIBUNAL. THEREF ORE, THE ASSESSING OFFICER IS BOUND TO EXAMINE WHETHER THE A SSESSEE COLLECTS CAPITATION FEE OR NOT. SINCE SUCH AN EXER CISE WAS NOT ITA NO. 1728/HYD/2008 M/S. CHIREC EDUCATIONAL SOCIETY ================ 3 DONE BY THE ASSESSING OFFICER, WE SET ASIDE THE ORD ERS OF THE LOWER AUTHORITIES AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE MATTER IN THE LIGHT OF THE JUDGEMENTS OF THE APEX C OURT IN THE CASE OF T.M.A. PAI FOUNDATION (SUPRA) AND IN THE CA SE OF ISLAMIC ACADEMY OF EDUCATION (SUPRA) AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING A REASON ABLE OPPORTUNITY TO THE ASSESSEE. 5. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH JUNE, 2010. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (N.R.S. GANESAN) JUDICIAL MEMBER TPRAO HYDERABAD, DATED 17TH JUNE, 2010 COPY FORWARDED TO: 1. THE APPELLANT - DDIT(E)-I, GROUND FLOOR, L.B. ST ADIUM, BASHEERBAGH, HYDERABAD 2. THE RESPONDENT M/S. CHIREC EDUCATIONAL SOCIETY , 1-22, KONDAPUR VILLAGE, SERLINGAMPALLI MANDAL, R.R. DISTR ICT. 3. THE CIT(A)-IV, HYDERABAD 4 THE DIT (EXEMPTION), HYDERABAD 5. THE DR B BENCH, HYDERABAD