ADIT, Hyderabad V. Vassavi Academy of Education, Hyderabad

ITA 1794/HYD/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6051 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-02-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 31-12-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.: 1749/HYD/2008 ASSTT. YEAR : 2004-05 ASSESSMENT. DIRECTOR OF IT (E), III HYDERABAD VS M/S VASAVI ACADEMY OF EDUCATION, HYDERABAD (AAATV 1119 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.V.N. CHARYA, DR RESPONDENT BY : SHRI VASANT KUMAR FOR SHRI C.P. RAMASWAMI O R D E R PER : CHANDRA POOJARI, ACCOUNTANT MEM BER THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A) IV, HYDERABAD AND PERTAINS TO THE ASSESSMENT YEARS 2004-05. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: 2. THE CIT(A) HAS FAILED TO APPRECIATE THAT OBTAI NING APPROVAL OF THE PRESCRIBED AUTHORITY IS MANDATORY AS PER THE PLAIN MEANING OF THE PROVISIONS. 3. THE CIT(A) HAS FAILED TO APPRECIATE THAT SEC.10( 23C) AS SUCH IS NOT REPLACEMENT OF SECTION 10(22) AND (22A) AS STATED I N THE APPELLATE ORDER BUT ONLY SUB CLAUSES (IIIAD) AND (IIIAE) ARE REPLACEMENTS OF THE ERSTWHILE SECTION 10(22) AND SECTION (22A) RESPECTI VELY. 4. THE CIT(A) HAS FAILED TO APPRECIATE THAT SUB CLA USES (VI) AND (VIA) ARE ENTIRELY NEW PROVISIONS MEANT TO PROVIDE THE MU CH NEEDED MONITORING MECHANISM THAT WAS LACKING IN THE EARLIE R PROVISIONS (AS STATED IN CIRCULAR NO.772). 5. THE CIT(A) HAS WRONGLY HELD THAT PROVISIONS OF S EC.10(23C) (VII) DO NOT OVERRIDE SEC.11 IN SPITE OF OVERWHELMING JUDICI AL OPINION THAT SPECIFIC PROVISIONS OVERRIDE GENERAL PROVISIONS. 2 2 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL VID E ITS ORDER DATED 29.1.2009 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2005 -06 IN ITA NO.1120/HYD/2009 BY HOLDING AS FOLLOWS: 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE COVERED IN FAVOUR OF THE ASSESSEE B Y THE ORDER OF THE HYDERABAD BENCH A OF THE TRIBUNAL DATED 15.4.2009 IN ASSESSEES OWN CASES IN ITA NO.1133/HYD/2006 FOR THE ASSESSMENT YEARS 20 03-04 AND ORDER DATED 17.4.2009 IN ITA NO.1206/HYD/2007 FOR THE ASSESSME NT YEAR 2004-05. HOWEVER, WE FIND THAT THE CONSTITUTIONAL BENCH OF A PEX COURT IN THE CASE OF T.M.A. PAI FOUNDATIONS AND OTHERS VS. STATE OF KARN ATAKA & OTHERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COLLECTION OF CAPIT ATION FEES FOR THE ADMISSION OF STUDENTS OVER AND ABOVE FEES PRESCRIBE D BY THE PRIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPITATION FEES FOR ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESC RIBED CANNOT BE CONSTRUED AS CHARITABLE/EDUCATION INSTITUTION. APEX COURT FURTHER OBSERVED THAT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIB ED FEE FOR ADMISSION OF THE STUDENT HAS TO BE CONSTRUCTED AS CAPITATION FEE. T HE APEX COURT, FURTHER OBSERVED THAT THE CONCERNED UNIVERSITY AND REGULATE D BODY HAS TO TAKE ACTION FOR WITHDRAWAL OF THE RECOGNITION IN CASE IT IS FOU ND THAT 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 KARNATAKA & A NOTHER (2003) 6 SCC 697. IF THE DONATIONS WERE RECEIVED COMPULSORILY FOR ADM ISSION OF STUDENTS, THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITHER U/S 1 0(23C) OR U/S 11 OF THE IT ACT. SINCE THE LOWER AUTHORITIES WERE NOT EXAMI NED THE COLLECTION OF CAPITATION FEES IN THIS CASE, IN OUR OPINION, THE M ATTER REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER WHETHER THE ASSES SEE IS COLLECTING THE CAPITATION FEES FROM STUDENTS OR NOT AND IT IS NECE SSARY FOR BRINGING THE ACTUAL FACTS ON RECORD FOR DECIDING THE ISSUE EFFECTIVELY. SIMILAR VIEW WAS TAKEN 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 ASSESS MENT YEARS 2002- 2003 AND 2004-05 AND SRI SAI SUDHIR EDUCATIONAL SOC IETY, HYDERABAD IN ITA NO.999/HYD/20-06 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT BACK THE MATTER TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO ASSESSING OFFICER THAT HE SHALL RECONSIDER THE ENTIRE ISSUE IN THE LIGHT OF JUDGEME NT OF SUPREME COURT IN THE CASE OF M/S ISLAMIC ACADEMY OF EDUCATION & ANOTHER VS. STATE OF KARNATAKA AND ANOTHER (SUPRA), AND IN THE CASED 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 AND ABOVE THE FEES PRESCRIB ED AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVIN G REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . WE MAKE IT CLEAR THAT TH E ASSESSEE IS NOT ENTITLED FOR EXEMPTION 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 ADMISSI ON OF STUDENTS. 4. IN THE RESULT, REVENUES APPEAL IS ALLOWED FO R STATISTICAL PURPOSE. 3 3 4. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY T HE TRIBUNAL IN THE ABOVE ORDER, WE SET ASIDE THE ISSUE IN DISPUTE TO T HE FILE OF ASSESSING OFFICER ON SIMILAR DIRECTION FOR FRESH CONSIDERATION. 5. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR ST ATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT : 4.2.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED 4 TH FEBRUARY, 2010 COPY FORWARDED TO: 1. THE ASST. DIRECTOR OF INCOME TAX (E)-III, BASHEERBAGH , HYDERABAD 2. M/S VASAVI ACADEMY OF EDUCATION, 9-5-81, IBRAHIMBAG H, HYDERABAD. 3. CIT(A)-IV, HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD.