P.K.D.Trust, CHENNAI V. ITO, Pollachi

ITA 1819/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7987 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-01-2017
• Assessment Year: misc
• Appeal Filed On: 16-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice; Competent authority
• Section: 12A; 12AA; 147; 54; 12; 10; 154; 11; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI [ CAMP: COIMBATORE ] . . . , ! .#$#%, ' !( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2053/MDS/2014 ./ ITA NOS.1820 & 1819/MDS/2016 % *% / ASSESSMENT YEARS : 2010-11 & 2012-13 M/S PKD TRUST, PKD MATRICULATION SCHOOL, COIMBATORE ROAD, POLLACHI 642 001. PAN : AAAAP 1297 K V. THE INCOME TAX OFFICER, WARD I(2) / WARD 1(1), POLLACHI. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT 2 0 3' / DATE OF HEARING : 18.01.2017 45* 0 3' / DATE OF PRONOUNCEMENT : 10.02.2017 / O R D E R PER BENCH: THESE ARE APPEALS FILED BY THE ASSESSEE, OF WHICH FIRST ONE IS DIRECTED AGAINST THE ORDER DATED 29.05.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE, SECOND ONE IS DIRECTED AGAINST 2 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 THE ORDER DATED 30.03.2015 OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-2, COIMBATORE AND THE THIRD ONE IS DIRECT ED AGAINST THE ORDER DATED 06.05.2016 OF THE CHIEF COMMISSIONER OF INCOM E TAX, COIMBATORE. APPEAL IN I.T.A. NO.2053/MDS/2014 IS TAKEN UP FIR ST FOR DISPOSAL. 2. GROUNDS TAKEN BY THE ASSESSEE IS REPRODUCED HERE UNDER:- (1) THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) III, BE DATED 29.05.2014 IN I.T.A. NO.101 /2012-13 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. (2) THE CIT(APPEALS) ERRED IN SUSTAINING THE ASSES SMENT IN THE STATUS OF AOP OVERLOOKING THE PROCEEDINGS IN ITIATED U/S 12A(A) OF THE ACT AS WELL AS THE PENDING PROCEE DINGS U/S 10(23C) OF THE ACT WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. (3) THE CIT(APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF ` 1,01,81,782/- IN THE COMPUTATION OF TAXABLE TOTAL I NCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. (4) THE CIT(APPEALS) FAILED TO APPRECIATE THAT THE RE WAS NO PROPER OPPORTUNITY GIVEN BEFORE THE PASSING OF T HE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE WOULD BE NULLITY IN LA W. 3. FACTS APROPOS ARE THAT THE ASSESSEE, A TRUST EVI DENCED BY A TRUST DEED DATED 09.09.1992, IS ENGAGED IN RUNNING EDUCATIONAL INSTITUTIONS. FOR THE IMPUGNED ASSESSMENT YEAR, IT HAD CLAIMED 3 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 EXEMPTION UNDER SECTION 10(23C) OF THE INCOME-TAX A CT, 1961 (IN SHORT 'THE ACT'). ASSESSEE WAS RUNNING THE FOLLOWING INS TITUTIONS:- 1. PKD MATRIC HIGHER SECONDARY SCHOOL 2. KRISHNASAMY MATRICULATION SCHOOL 3. PKD DT.ED. EDUCATION COLLEGE 4. PKD COLLEGE OF EDUCATION 5. PKD SCHOOL HOSTEL 4. THE RECEIPTS AND INCOME FROM ABOVE INSTITUTIONS, DURING THE RELEVANT PREVIOUS YEAR, WERE AS UNDER:- NAME OF THE INSTITUTION TOTAL RECEIPTS ( ` `` ` ) INCOME ( ` `` ` ) 1. PKD MATRIC HIGHER SECONDARY SCHOOL 2,59,99,053 75,72,480 2. KRISHNASAMY MATRICULATION SCHOOL 15,53,868 ( - ) 1,60,219 3. PKD COLLEGE OF EDUCATION 40,90,657 2,23,130 4. PKD DT.ED. EDUCATION COLLEGE 24,64,463 6,33,369 5. PKD SCHOOL HOSTEL 57,72,478 19,13,022 TOTAL 3,98,80,519 1,01,81,782 ASSESSING OFFICER WAS OF THE OPINION THAT A CLAIM U NDER SECTION 10(23C) OF THE ACT COULD BE ALLOWED ONLY IF GROSS R ECEIPTS DURING THE RELEVANT PREVIOUS YEAR WAS LESS THAN ` 1 CRORE. AS PER THE A.O., IF THE GROSS RECEIPT EXCEEDED THAT AMOUNT, IT WAS REQUIRED FOR THE ASSESSEE TO OBTAIN AN APPROVAL AS PRESCRIBED UNDER SECTION 1 0(23C)(VI) OF THE ACT FROM THE CHIEF COMMISSIONER OF INCOME TAX. SIN CE ASSESSEE HAD NOT OBTAINED SUCH APPROVAL, AS PER THE A.O., IT WAS NOT ELIGIBLE TO CLAIM 4 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 EXEMPTION UNDER SECTION 10(23C) OF THE ACT. WHEN T HIS WAS PUT TO THE NOTICE OF THE ASSESSEE, REPLY OF THE ASSESSEE WAS T HAT SUCH EXEMPTION WAS ALLOWED BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2007-08. AS PER THE ASSESSEE, IT HAD FILED APPLICATION SEEKI NG SUCH APPROVAL IN FORM 56D ON 26.10.2006 WITH THE COMMISSIONER OF INC OME TAX-III, COIMBATORE. FURTHER, AS PER THE ASSESSEE, BY VIRTU E OF CBDT CIRCULAR NO.7/2010 DATED 27.10.2010, ONCE AN APPROVAL UNDER SECTION 10(23C) OF THE ACT WAS GRANTED, IT WAS TO BE CONSIDERED PER PETUAL TILL IT WAS WITHDRAWN. HOWEVER, THE ASSESSING OFFICER WAS NOT IMPRESSED BY THE ABOVE ARGUMENTS. ACCORDING TO HIM, MERE FILING OF APPLICATION IN FORM NO.56D WOULD NOT MAKE THE ASSESSEE IPSO FACTO ELIGIBLE FOR CLAIMING THE EXEMPTION. FURTHER AS PER THE LD. A.O., IN THE SCRUTINY ASSESSMENT FOR ASSESSMENT YEAR 2007-08, QUESTION WHETHER THE A SSESSEE HAD OBTAINED APPROVAL UNDER SECTION 10(23C) OF THE ACT WAS NEVER CONSIDERED. HE HELD THAT ASSESSEE HAD FAILED TO SA TISFY THE TESTS LAID DOWN UNDER SECTION 10(23C) OF THE ACT IN SOFAR AS A PPROVAL WAS NOT OBTAINED FROM THE COMPETENT AUTHORITY DESPITE RECEI PTS EXCEEDING ` 1 CRORE. CLAIM OF EXEMPTION WAS DENIED. TOTAL INCO ME WAS FIXED AT ` 1,01,81,782/- AND TAX LEVIED THEREON. 5 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 5. AGGRIEVED, THE ASSESSEE MOVED IN APPEAL BEFORE T HE CIT(APPEALS). ARGUMENT OF THE ASSESSEE WAS THAT IT HAD FILED AN APPLICATION ON 16.11.2005 FOR ASSESSMENT YEAR 2005- 06 AND ON 25.10.2006 FOR ASSESSMENT YEAR 2006-07 FOR APPROVAL UNDER SECTION 10(23C) (VI) OF THE ACT. ACCORDING TO THE ASSESSEE , SINCE THE SAID APPLICATIONS WERE STILL TO BE PROCESSED BY THE DEPA RTMENT, TAX EXEMPTION CLAIMED COULD NOT BE DENIED. HOWEVER, TH E CIT(APPEALS) WAS NOT IMPRESSED BY THE ABOVE ARGUMENT. ACCORDING TO HIM, THOUGH THE ASSESSEE HAD FILED AN APPLICATION FOR APPROVAL UNDER SECTION 10(23C)(VI) OF THE ACT ON 25.10.2006 FOR ASSESSMENT YEAR 2006-07, IT HAD NOT FOLLOWED UP ON SUCH APPLICATION. LD. CIT(AP PEALS) ALSO NOTED THAT THE ASSESSEE NEVER SOUGHT REGISTRATION UNDER S ECTION 12A OF THE ACT FOR CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT AS WELL. FURTHER, AS PER THE LD. CIT(APPEALS), THE CHIEF COM MISSIONER OF INCOME TAX HAD VIDE ORDER DATED 24.06.2013, REJECTE D THE APPLICATION FILED BY THE ASSESSEE FOR APPROVAL UNDER SECTION 10 (23C)(VI) OF THE ACT. HE THUS CONFIRMED THE ORDER OF THE A.O. 6. NOW BEFORE US, THE LD. A.R., STRONGLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES, SUBMITTED THAT ASSESSEE HAD OBTA INED REGISTRATION UNDER SECTION 12AA OF THE ACT ON 28.07.2015. COPY OF THE ORDER OF 6 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHENNA I IN THIS REGARD WAS PLACED ON RECORD. ACCORDING TO HIM, BY VIRTUE OF FIRST PROVISO TO SECTION 12A(2) OF THE ACT, A REGISTRATION GRANTED W OULD APPLY FOR ALL ASSESSMENT YEARS, PROCEEDINGS OF WHICH WERE PENDING BEFORE THE ASSESSING OFFICER. ACCORDING TO HIM, THOUGH THERE WERE NO PROCEEDING DIRECTLY PENDING BEFORE THE ASSESSING OFFICER FOR T HE IMPUGNED ASSESSMENT YEAR, AS ON THE DATE ON WHICH THE ASSESS EE WAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT, APPEALS FOR THE IMPUGNED ASSESSMENT YEAR WERE ALIVE. ACCORDING TO HIM, PRO CESSING OF APPEALS COULD BE CONSIDERED ONLY AS CONTINUATION OF THE PRO CEEDINGS BEFORE THE ASSESSING OFFICER. THUS, ACCORDING TO HIM, ASSESSE E HAD TO BE GIVEN EXEMPTION UNDER SECTION 11 OF THE ACT SINCE IT WAS SAVED BY THE FIRST PROVISO TO SECTION 12A(2) OF THE ACT. IN ANY CASE, ACCORDING TO HIM, APPLICATION FOR APPROVAL UNDER SECTION 10(23C)(VI) OF THE ACT FILED FOR ASSESSMENT YEAR 2006-07, WAS DISPOSED OF BY THE CHI EF COMMISSIONER OF INCOME TAX AFTER MORE THAN SIX YEAR S AND HENCE, THE APPLICATION HAD TO BE DEEMED AS ALLOWED WITHIN A RE ASONABLE PERIOD. RELIANCE WAS PLACED ON THE DECISION OF CALCUTTA BEN CH OF THIS TRIBUNAL IN THE CASE OF SREE SREE RAMKRISHNA SAMITY V. DCIT (2016) 156 ITD 646. 7 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ASSESSEE HAD NEITHER GOT APPROVAL UNDER SECTION 10( 23C) OF THE ACT NOR REGISTRATION UNDER SECTION 12A OF THE ACT FOR T HE IMPUGNED ASSESSMENT YEAR. AS PER THE LD. D.R., ASSESSEE WAS THEREFORE, NOT ELIGIBLE FOR CLAIMING EXEMPTION UNDER EITHER SECTIO N 10(23C) OR UNDER SECTIONS 11 AND 12 OF THE ACT. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. DURING THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSES SMENT YEAR, ASSESSEE WAS NOT HAVING APPROVAL AS REQUIRED UNDER SECTION 10(23C)(VI) OF THE ACT. IT MAY BE TRUE THAT THE AS SESSEE HAD MOVED AN APPLICATION FOR SUCH APPROVAL FOR ASSESSMENT YEA R 2006-07 ON 25.10.2006 AND THE APPLICATION WAS STILL TO BE DISP OSED OF. THIS IN OUR OPINION, WOULD NOT MEAN THAT FOR THE IMPUGNED ASSES SMENT YEAR, ASSESSEE WAS HAVING A VALID APPROVAL UNDER THE SAID SECTION FOR CLAIMING EXEMPTION. FURTHER THE LD. CIT(APPEALS) H AS SPECIFICALLY NOTED THAT ASSESSEES APPLICATION FOR APPROVAL UNDE R SECTION 10(23C)(VI) OF THE ACT STOOD REJECTED BY THE CCIT B Y HIS ORDER DATED 24.06.2013. AS TO THE CLAIM OF THE ASSESSEE THAT R EGISTRATION UNDER SECTION 12AA OF THE ACT GRANTED TO IT BY CHIEF COMM ISSIONER OF 8 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 INCOME TAX ON 28.07.2015 WAS RELEVANT FOR THE IMPUG NED ASSESSMENT YEAR ALSO, IT IS REQUIRED TO HAVE A LOOK AT SUB-SEC TION (2) OF SECTION 12A OF THE ACT, WHICH HAS BEEN RELIED ON BY THE LD. A.R .:- 12A. (1) . . .. .. .. .. .. . . . . . . . . . . . . .. .. .. .. .. .. .. .. .. .. .. .. .. .. . (2) WHERE AN APPLICATION HAS BEEN MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF SECTIONS 11 AND 12 SHALL APPLY IN RELATION TO THE INCOME OF SUCH TRUST OR INSTITUTION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION IS MADE. PROVIDED THAT WHERE REGISTRATION HAS BEEN GRANTED T O THE TRUST OR INSTITUTION UNDER SECTION 12AA, THEN, THE PROVIS IONS OF SECTIONS 11 AND 12 SHALL APPLY IN RESPECT OF ANY IN COME DERIVED FROM PROPERTY HELD UNDER TRUST OF ANY ASSESSMENT YE AR PRECEDING THE AFORESAID ASSESSMENT YEAR, FOR WHICH ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICE R AS ON THE DATE OF SUCH REGISTRATION AND THE OBJECTS AND ACTIV ITIES OF SUCH TRUST OR INSTITUTION REMAIN THE SAME FOR SUCH PRECE DING ASSESSMENT YEAR : PROVIDED FURTHER THAT NO ACTION UNDER SECTION 147 S HALL BE TAKEN BY THE ASSESSING OFFICER IN CASE OF SUCH TRUST OR I NSTITUTION FOR ANY ASSESSMENT YEAR PRECEDING THE AFORESAID ASSESSM ENT YEAR ONLY FOR NON-REGISTRATION OF SUCH TRUST OR INSTITUT ION FOR THE SAID ASSESSMENT YEAR : PROVIDED ALSO THAT PROVISIONS CONTAINED IN THE FIRS T AND SECOND PROVISO SHALL NOT APPLY IN CASE OF ANY TRUST OR INS TITUTION WHICH WAS REFUSED REGISTRATION OR THE REGISTRATION GRANTE D TO IT WAS CANCELLED AT ANY TIME UNDER SECTION 12AA. 9 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 FIRST PROVISO, IN OUR OPINION, CAN BE BROUGHT INTO APPLICATION ONLY FOR THE YEARS WHERE ASSESSMENT PROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER AS OF THE DATE OF GRANT OF REGIST RATION UNDER SECTION 12AA OF THE ACT. ADMITTEDLY, ON 28.07.2015, WHEN T HE REGISTRATION UNDER SECTION 12AA OF THE ACT WAS GRANTED TO THE AS SESSEE, NO PROCEEDINGS WERE PENDING BEFORE THE ASSESSING OFFIC ER FOR THE IMPUGNED ASSESSMENT YEAR SINCE ASSESSMENT HAD REACH ED A COMPLETION. NO DOUBT, ASSESSEES COUNSEL HAD PLACE D STRONG RELIANCE ON THE DECISION OF CALCUTTA BENCH OF THIS TRIBUNAL IN THE CASE OF SREE SREE RAMKRISHNA SAMITY (SUPRA). HOWEVER, IN THE SA ID CASE, PROCEEDING FOR REASSESSMENT FOR THE RELEVANT ASSESS MENT YEAR WAS STILL PENDING BEFORE THE ASSESSING OFFICER AND THE BENCH HAD RELIED ON THE DEFINITION OF ASSESSMENT AS GIVEN UNDER SECTI ON 2(8) OF THE ACT BY VIRTUE OF WHICH A REASSESSMENT WAS ALSO MADE A P ART OF ASSESSMENT. IN OUR OPINION, THE SAID DECISION WOUL D NOT HELP THE ASSESSEE SINCE ADMITTEDLY NO PROCEEDINGS WERE PENDI NG BEFORE THE ASSESSING OFFICER FOR THE IMPUGNED ASSESSMENT, AS O N THE DATE OF GRANT OF THE REGISTRATION UNDER SECTION 12AA OF THE ACT. THE PLAIN WORDS USED IN FIRST PROVISO FOR WHICH ASSESSMENT P ROCEEDINGS ARE PENDING BEFORE THE ASSESSING OFFICER DOES NOT GIVE ANY ROOM FOR THE 10 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 TYPE OF INTERPRETATION CANVASSED BY THE LD. A.R. A PPEAL PROCEEDING CANNOT BE EQUATED AS PROCEEDING PENDING BEFORE THE ASSESSING OFFICER. WHILE INTERPRETING A TAXING STATUTE, COUR TS CANNOT TRAVEL BEYOND THE WORDS THEREIN IF ITS MEANING IS PLAIN AN D UNAMBIGUOUS. THUS WE ARE NOT INCLINED TO ACCEPT THE LINE OF ARGU MENT TAKEN BY LD. A.R. 9. HOWEVER, A QUESTION DOES REMAIN AS TO WHETHER SE CTION 10(23C) OF THE ACT HAS BEEN CORRECTLY APPLIED IN TH E CASE OF THE ASSESSEE. AT THIS JUNCTURE, IT IS REQUIRED TO HAVE A CAREFUL READING OF SECTION 10(23C) OF THE ACT. THE RELEVANT CLAUSES U NDER WHICH THE INCOME OF AN EDUCATIONAL INSTITUTION CAN BE TREATED AS EXEMPT UNDER SECTION 10(23C) OF THE ACT ARE GIVEN IN SUB-CLAUSE (IIIAD) AND (VI). BOTH THESE SUB-CLAUSES ARE REPRODUCED HEREUNDER:- 10(23C) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF-- (I) .. .. .. .. (II) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. (III) .. .. .. .. .. .. . .. .. .. .. . . .. . . . (IIIA) . . .. .. .. .. .. .. .. .. .. . . .. .. .. (IIIAB) .. .. .. .. .. .. .. .. .. .. .. .. .. .. 11 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 (IIIAC) .. .. .. .. .. .. .. .. .. .. .. .. .. .. (IIIAD) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITU TION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDUCATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECEIPTS AS MAY BE PRESCRIBED ; OR (IIIAE) .. .. .. .. .. .. .. .. .. .. .. .. .. .. (IV) .. .. .. .. .. .. .. .. .. .. . . .. .. .. .. (V) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . (VI) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTIO N EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT, OTHER THAN THOSE MENTIONED IN SUB-CLAUSE (IIIAB) OR SUB-CLAUSE (IIIAD) AND WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY ; 10. WHAT IS EXEMPT IS INCOME RECEIVED BY A PERSON O N BEHALF OF A UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION. HERE, THE INCOME HAS BEEN RECEIVED BY THE ASSESSEE ON BEHALF OF FIVE DIFFEREN T EDUCATIONAL INSTITUTIONS, WHICH HAVE BEEN LISTED BY US AT PARA 4 ABOVE. BLANKET EXEMPTION IS AVAILABLE WHERE RECEIPTS OF SUCH UNIVE RSITY OR EDUCATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECE IPT WHICH HAS BEEN PRESCRIBED. ADMITTEDLY, THE PRESCRIBED LIMIT WAS ` 1 CRORE FOR THE IMPUGNED ASSESSMENT YEAR. IF WE TAKE EACH OF THE E DUCATIONAL INSTITUTION SEPARATELY, ONLY IN THE CASE OF PKD MAT RIC HIGHER SECONDARY SCHOOL, THE RECEIPT HAS EXCEEDED ` 1 CRORE. ANNUAL RECEIPTS OF ALL 12 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 OTHER INSTITUTIONS WERE LESS THAN THE THRESHOLD AMO UNT OF ` 1 CRORE. IN OUR OPINION, LOWER AUTHORITIES HAD NOT APPLIED SECT ION 10(23C) OF THE ACT IN RESPECT OF THESE EDUCATIONAL INSTITUTIONS, W HICH HAS GROSS RECEIPTS LESS THAN ` 1 CRORE. THE QUESTION WHETHER EACH EDUCATIONAL INSTITUTION COULD BE CONSIDERED SEPARATELY FOR APPL YING THE THRESHOLD ANNUAL RECEIPT OF ` 1 CRORE, WHICH WAS APPLICABLE FOR THE IMPUGNED ASSESSMENT YEAR, HAS NOT BEEN CONSIDERED BY ANY OF THE LOWER AUTHORITIES IN THE PROPER PERSPECTIVE. IN OUR OPIN ION, THE MATTER THEREFORE, REQUIRES A FRESH LOOK BY THE A.O. THOUG H THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT, THE QUESTION WHETHER IT COULD CLAIM EXEMPTION UNDER SECTION 10(2 3C) OF THE ACT IN THE CASE OF THESE INSTITUTIONS WHICH HAD GROSS RECE IPTS BELOW THE THRESHOLD LIMIT REQUIRES A FRESH LOOK. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE ISSUE REGARDING APPLICATION OF SECTION 10(23C) OF THE ACT BACK TO T HE A.O. FOR CONSIDERATION AFRESH, IN ACCORDANCE WITH LAW. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 12. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN I.T.A . NO.1820/MDS/2016. 13. GROUNDS TAKEN BY THE ASSESSEE FOR THIS ASSESSME NT YEAR IS SIMILAR TO WHAT HAS BEEN TAKEN BY IT FOR ASSESSMENT YEAR 2010-11. ASSESSEE WAS DENIED EXEMPTION UNDER SECTION 10(23C) OF THE ACT AS WELL AS EXEMPTION UNDER SECTION 11 OF THE ACT. THE INCOME AND RECEIPTS OF THE ASSESSEE FROM VARIOUS INSTITUTIONS RUN BY IT, FOR THE RELEVANT PREVIOUS YEAR, WERE AS UNDER:- INCOME ` `` ` RECEIPTS ` `` ` 1. P.K.D. MATRICULATION SCHOOL : 83,78,259 3,64,11,087 2. HOSTEL DIVISION : 32,15,580 86,06,721 3. P.K.D. PRE - SCHOOL : 3,69,984 9,47,787 4. KRISHNASAMY MATRICULATION SCHOOL : - 1,43,198 1,55,126 5. P.K.D. COLLEGE OF EDUCATION : 8,74,255 44,38,485 6. P.K.D.T.ED. COLLEGE : 11,31,780 32,02,058 7. DISHA SCHOOL : - 13,59,563 1,51,17,971 1,24,67,097 6,88,79,235 WE ARE OF THE OPINION THAT DIRECTIONS GIVEN BY US F OR ASSESSMENT YEAR 2010-11 AT PARA 10 ABOVE WILL SQUARELY APPLICABLE H ERE ALSO. SIMILAR DIRECTIONS ARE GIVEN FOR ASSESSMENT YEAR 2012-13 AL SO. 14. APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALL OWED FOR STATISTICAL PURPOSES. 14 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 15. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN I.T.A . NO.1819/MDS/2016. 16. IN THIS APPEAL, THE ASSESSEE ASSAILS REJECTION OF ITS REVIEW PETITION AGAINST DENIAL OF APPROVAL SOUGHT UNDER SE CTION 10(23C)(VI) OF THE ACT. 17. FACTS APROPOS ARE THAT ASSESSEE HAD FILED AN AP PLICATION IN FORM 56D ON 28.09.2012 SEEKING APPROVAL UNDER SECTI ON 10(23C)(VI) OF THE ACT. THE SAID APPLICATION WAS REJECTED BY T HE CHIEF COMMISSIONER OF INCOME TAX VIDE HIS ORDER DATED 24. 06.2013. REASON FOR REJECTION OF APPLICATION WAS THAT THE TR UST DEED DID NOT HAVE A CLAUSE MENTIONING THE NON-PROFITABLE STATUS OF THE ASSESSEE. THEREAFTER, THE ASSESSEE MOVED A REVIEW PETITION ON 28.04.2014. THE LD. CCIT REJECTED THE REVIEW PETITION NOTING THAT T HERE WAS NO PROVISION UNDER THE ACT FOR REVIEW OF AN ORDER PASS ED UNDER SECTION 10(23C)(VI) OF THE ACT. 18. NOW BEFORE US, THE LD. A.R. SUBMITTED THAT REVI EW PETITION FILED BY THE ASSESSEE HAD TO BE CONSIDERED AS A RECTIFICA TION APPLICATION UNDER SECTION 154 OF THE ACT. AS PER THE LD. A.R., UNDER SECTION 154 15 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 OF THE ACT, IT WAS POSSIBLE TO RECTIFY A MISTAKE AP PARENT FROM RECORD. THE MISTAKE COULD BE IN ANY ORDER PASSED BY ANY INC OME-TAX AUTHORITY. AS PER THE LD. A.R., THERE WAS A CLEAR MISTAKE OF L AW COMMITTED BY THE LD. CCIT WHEN HE REJECTED THE APPLICATION FILED BY THE ASSESSEE UNDER SECTION 10(23C)(VI) OF THE ACT. ACCORDING TO HIM, IT WAS NOT NECESSARY TO MENTION SPECIFICALLY THAT THE INSTITUTION WAS NO T RUNNING FOR THE PURPOSE OF PROFIT, IN THE TRUST DEED. THUS, ACCORD ING TO HIM, WHEN A MISTAKE WHICH WAS APPARENT ON RECORD, WAS SOUGHT TO BE RECTIFIED BY THE ASSESSEE THROUGH A REVIEW PETITION, WITHOUT CIT ING ANY REASON, THE PETITION COULD NOT HAVE BEEN REJECTED BY THE LD. CC IT. 19. PER CONTRA, THE LD. D.R. SUBMITTED THAT AN ORDE R PASSED BY PRESCRIBED AUTHORITY UNDER SUB-SECTION (VI) AND (VI A) OF SECTION 10(23C) OF THE ACT WAS MADE APPEALABLE ONLY FROM 01 .06.2015. ACCORDING TO HIM, CLAUSE (F) WAS INTRODUCED TO SECT ION 253(1) OF THE ACT BY FINANCE ACT, 2015 WITH EFFECT FROM 01.06.201 5 AND PRIOR TO THAT DATE, THE ORDER OF THE PRESCRIBED AUTHORITY UNDER T HE SAID CLAUSE WAS NOT APPEALABLE. AS PER THE LD. D.R., THE ASSESSEE WAS TRYING TO CIRCUMVENT THE SECTION BY RELYING ON A REVIEW PETIT ION WHICH WAS RIGHTLY REJECTED BY THE LD. CCIT. 16 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 20. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. CLAUSE (F) OF SECTION 253(1) OF THE ACT, WHEREBY OR DER OF THE PRESCRIBED AUTHORITY UNDER SUB-CLAUSE (VI) AND (VIA ) OF SECTION 10(23C) OF THE ACT WAS MADE APPEALABLE, WAS INTRODUCED BY F INANCE ACT, 2015 WITH EFFECT FROM 01.06.2015. PRIOR TO THAT, THE LI ST OF ORDERS WHICH WERE APPEALABLE BEFORE THE APPELLATE TRIBUNAL, MENTIONED IN SECTION 253(1) OF THE ACT DID NOT HAVE IN IT AN ORDER PASSED UNDER SUB-CLAUSES (VI) AND (VIA) OF SECTION 10(23C) OF THE ACT. CONTENTION OF THE LD. A.R. IS THAT THE REVIEW PETITION FILED BY THE ASSESSEE BEFORE TH E LD. CCIT WAS ONLY AN APPLICATION FOR RECTIFICATION UNDER SECTION 154 OF THE ACT. EVEN IF WE PRESUME THAT THIS IS ONLY AN APPLICATION FOR RECTIF ICATION OF MISTAKE, SUCH MISTAKE WHICH CAN BE RECTIFIED UNDER SECTION 1 54 OF THE ACT, IS ONE WHICH IS GLARING AND APPARENT. ORDER DATED 24. 06.2013 PASSED UNDER SECTION 10(23C)(VI) OF THE ACT, ON WHICH THE REVIEW PETITION WAS FILED, HAD SPECIFICALLY STATED THAT THE APPLICATION WAS BEING REJECTED FOR NON-MENTIONING OF NON-PROFIT NATURE OF THE INSTITUT IONS RUN BY THE ASSESSEE IN ITS TRUST DEED. WE CANNOT SAY THAT NO REASON WAS CITED BY THE LD. CCIT, OR THE REASON CITED WAS PERVERSE. THUS THE ORDER WAS NOT, IN OUR OPINION, AMENABLE TO A RECTIFICATIO N PROCEEDING UNDER SECTION 154 OF THE ACT. THERE WAS NO MISTAKE WHICH WAS GLARING 17 I.T.A. NO.2053/MDS/14 I.T.A. NOS.1820 & 1819/MDS/16 ENOUGH, WHICH COULD HAVE BEEN RECTIFIED UNDER SECTI ON 154 OF THE ACT. VIEWED IN ANY MANNER, WE ARE OF THE OPINION THAT TH E APPEAL OF THE ASSESSEE HAS NO MERITS. SUCH APPEAL STANDS DISMIS SED. 21. TO SUM UP RESULT, ASSESSEES APPEAL IN I.T.A. NO.2053/MDS/2014 AND I.T.A. NO.1820/MDS/2016 ARE PA RTLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS ITS APPEAL IN I.T.A. N O.1819/MDS/2016 IS DISMISSED. ORDER PRONOUNCED ON 10 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( . . . ) ( ! .#$#% ) (N.R.S. GANESAN) (ABRAHAM P. GEORGE) /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER /CHENNAI, 7 /DATED, THE 10 TH FEBRUARY, 2017. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-II, COIMBATORE 4. 2 ;3 /CIT-III, COIMBATORE 5. CIT, EXEMPTION, CHENNAI 6. 9< .3 /DR 7. =% > /GF.