ACIT., Central Circle-1(1), Hyderabad, Hyderabad V. Sri Venkata Sai Educational Society, Hyderabad

ITA 1851/HYD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2444 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Capital asset; Business income; Depreciation; Search and seizure; Document seized; Charitable institution; Cost of acquisition; Benefit of exemption; Documents seized; Capital expenditure
• Section: 143(3); 153A; 12A; 132; 12; 11

Judgement Text

ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 1 OF 18 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS.464 TO 467/HYD/2012 AND ITA NO.1851/HYD/2014 (A.YS: 2005-06, 2007-08, 2008-09, 2009-10 & 2010-11 ) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 HYDERABAD VS M/S. SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAN: AABTS 9158 K (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.V.N.CHARYA, DR FOR ASSESSEE : SHRI V.RAGHAVENDRA R AO O R D E R PER SMT. P. MADHAVI DEVI, J.M. ALL ARE THE APPEALS FILED BY THE REVENUE FOR THE A. YS 2005-06, 2007-08, 2008-09, 2009-10 & 2010-11 RESPEC TIVELY. IN ALL THESE APPEALS, THE ISSUE IS COMMON AND THE GROU NDS OF APPEAL RAISED BY THE REVENUE ARE ALSO THE SAME. THEREFORE, FOR THE SAKE OF CONVENIENCE AND READY REFERENCE, THE GROUNDS OF APPEAL RAISED BY THE REVENUE FOR THE A.Y 2005-06 ARE REPRODUCED H EREUNDER: '1. WHETH ER THE CIT(A) ERRED IN APPRECIATING THE FACT THAT OBTAINING APPROVAL OF THE PRESCRIBED AUTHORITY IS NOT MANDATORY AS PER THE PLAIN MEANING OF THE PROVISIONS OF 10(23C)(VI) OF THE I. T. ACT AND IT D OES NOT CALL FOR ANY INTERPRETATION. DATE OF HEARING: 27.09.2017 DATE OF PRONOUNCEMENT: 31 . 1 0 .2017 ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 2 OF 18 2. WHETHER THE CIT(A) ERRED IN APPRECIATING THE FAC T THAT WHEN GROSS RECEIPTS EXCEED RS. 1 CRORE, APPROV AL U/S. 10(23C)(VI) IS MANDATORY AND THE ASSESSEE IS N OT ENTITLED FOR EXEMPTION U/S. 11 OF THE I. T. ACT. 3. WHETHER THE CIT(A) ERRED IN APPRECIATING THE FAC T THAT SECTION 10(23C) AS SUCH IS NOT A REPLACEMENT O F SECTION 10(22) AND (22A) BUT ONLY SUB CLAUSES (IIIA D) AND (IIIAC) ARE REPLACEMENTS OF THE ERSTWHILE SECTI ON 10(22) AND 10(22A) RESPECTIVELY. 4. WHETHER THE CIT(A) ERRED IN APPRECIATING THE FAC T THAT IS WAS SECTION 10(22) THAT PROVIDED FOR EXEMPT ION OF THE EDUCATIONAL INCOME OF THE TRUSTS, SOCIETIES ETC., AND NOT SECTION 11. 5. WHETHER THE CIT(A) ERRED IN APPRECIATING THE FAC T THAT THE PURCHASE OF CAPITAL ASSET THAT COULD BE US ED TO PROMOTE THE OBJECTIVES OF THE SYSTEMS RUN BY THE TRUST IS ALLOWED AS APPLICATION OF INCOME. THEREFOR E THE DEPRECIATION IS NOT ALLOWABLE ON THE CAPITAL AS SET WHERE ENTIRE COST OF ACQUISITION IS EITHER WRITTEN OFF IN THE FIRST YEAR ITSELF OF THE COST OF ACQUISITION IS TREATED AS APPLICATION OF INCOME AS HAS BEEN HELD IN RULING OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF ESCOR TS LTD., AND ANOTHER VS. UNION OF INDIA (199 ITR 44). 6. WHETHER THE CIT(A) ERRED IN DELETING THE ADDITIO N MADE ON ACCOUNT OF UNRECORDED CAPITATION FEES COLLECTED FROM THE STUDENTS ADMITTED UNDER THE MANAGEMENT QUOTA. 7. WHETHER THE CIT(A) ERRED IN NOT HOLDING THE ADDITION MADE ON ACCOUNT OF UNRECORDED CAPITATION FEES COLLECTED FROM THE STUDENTS ADMITTED UNDER THE MANAGEMENT QUOTA AS SUBSTANTIVE, INSPITE OF COGENT EVIDENCES . 2. BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEA RCH & SEIZURE OPERATION U/S 132 OF THE ACT AT THE PREMISE S OF THE ASSESSEE AND ALSO AT THE RESIDENTIAL PREMISES OF TH E TRUSTEES OF THE ASSESSEE TRUST ON 7.8.2008. DURING THE COURSE O F SEARCH, ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 3 OF 18 CERTAIN DOCUMENTS WERE FOUND AND SEIZED BOTH FROM T HE PREMISES OF THE ASSESSEE AS WELL AS THE TRUSTEES. ON THE BAS IS OF THE SAID DOCUMENTS FOUND AND SEIZED, A NOTICE U/S 153A DATED 13.04.2010 FOR THE A.Y 2009-10 WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SAME, THE ASSESSEE FILED ITS RETURN OF INCOME ON 23 .07.2010 ADMITTING NIL INCOME. 3. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) W.R .S. 153A OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE SOCIETY WAS STARTED IN THE YEAR 1998 BY FOUR PERSONS INCLUDING SHRI K. KRISHNA REDDY, HIS BROTHER AND FRIENDS AND APART FR OM THE ABOVE PROMOTERS OF THE SOCIETY, THERE ARE ABOUT 50 MEMBER S AND THAT THE MAIN OBJECT OF THE SOCIETY IS TO IMPART EDUCATI ON AND TRAINING AT ALL STAGES FOR THE PROMOTION OF MEDICINE, PHARMA CY, DENTAL, NURSING ETC. IT WAS OBSERVED THAT THE SOCIETY HAD E STABLISHED A MEDICAL COLLEGE AT MAHABOOBNAGAR AND IS RUNNING A H OSPITAL AT MAHABOOBNAGAR. HE OBSERVED THAT THE ASSESSEE TRUST WAS INCORPORATED IN THE YEAR 1998 AND HAS ALSO OBTAINED REGISTRATION U/S 12A OF THE ACT FROM THE DEPARTMENT TO AVAIL THE BENEFITS OF TAX EXEMPTION AVAILABLE TO CHARITABLE INSTITUTIONS. 4. DURING THE POST SEARCH INQUIRY, THE SECRETARY OF THE SOCIETY, SHRI K. KRISHNA REDDY, PROVIDED DETAILS OF FEES COLLECTED FROM STUDENTS AND IN HIS SWORN STATEMENT DATED 14.1 1.2008, HE STATED THAT THE GOVT. HAS FIXED MINIMUM FEES OF RS. 4.00 LAKHS PER YEAR FOR MANAGEMENT QUOTA STUDENTS WHEREAS THERE IS NO UPPER LIMIT STIPULATED BY THE GOVT. HE ALSO STATED THAT N O DONATIONS ARE BEING COLLECTED FROM THE STUDENTS AND THAT ALL THE FEES COLLECTED FROM THE STUDENTS IS SHOWN ON ACCRUAL BASIS. IT WAS ALSO ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 4 OF 18 SUBMITTED THAT THE ENTIRE RECEIPTS FROM THE STUDENT S INCLUDING THE STUDENTS ADMITTED UNDER THE MANAGEMENT AND NRI QUOT A ARE ROUTED THROUGH THE BOOKS OF ACCOUNT AND MOST OF THE SE ARE RECEIVED IN CASH. ON PERUSAL OF THE DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH, WHICH ARE CASH RECEIPT S ISSUED UNDER THE SIGNATURE OF ONE OF THE TRUSTEES, THE AO OBSERV ED THAT THE ASSESSEE HAD COLLECTED CASH OVER AND ABOVE THE PRES CRIBED FEE FOR ADMISSION OF STUDENTS INTO P.G AS WELL AS MBBS COUR SES. THEREFORE, HE ASKED THE ASSESSEE TO SHOW-CAUSE AND EXPLAIN THE ENTRIES AS PER THE SEIZED DOCUMENTS VIS--VIS CASH BOOK OF THE ASSESSEE. 5. THE ASSESSEE VIDE REPLY DATED 23.12.2010, SUBMIT TED THAT THE GOVERNING BODY OF THE SOCIETY APPROVED THE FINAL LIST OF CANDIDATES TO BE ADMITTED AND BEFORE TAKING ADMISSI ONS THE COMMITTEE INSISTS ON WRITTEN COMMITMENT FROM THE PA RENTS ALONG WITH CHEQUES FOR ASSURANCE AND ONCE FINAL ADMISSION IS APPROVED BY THE COMMITTEE, THE COLLEGE COLLECTS THE FIRST IN STALMENT. IT WAS SUBMITTED THAT IT IS QUITE COMMON THAT PARENTS COME FORWARD TO PAY LUMP SUM FEE DUE ALSO FOR SUBSEQUENT YEARS AND THAT THE FINAL LIST APPROVED BY THE MANAGEMENT COMMITTEE UND ER THE MANAGEMENT QUOTA IS FORWARDED TO THE ACCOUNTS DEPAR TMENT WHICH COLLECTS THE FEE AND FEE SO COLLECTED ALONE F ORMS PART OF ACCOUNTS OF THE SOCIETY AND THE SOCIETY DOES NOT HA VE ANY KNOWLEDGE OR INFORMATION OF THE STUDENTS APPROACHIN G THE COMMITTEE MEMBERS FOR ADMISSION. THE SOCIETY DENIED THE COLLECTION OF ANY FEE OVER AND ABOVE THE PRESCRIBED FEE FIXED BY THE GOVT. ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 5 OF 18 6. THE AO VERIFIED THE CASH RECEIPTS AND RECONCILED THEM WITH CASH BOOK OF THE SOCIETY. HE FOUND VARIOUS DIS CREPANCIES AND ALSO FOUND THAT VARIOUS CASH PAYMENTS HAVE NOT BEEN ROUTED THROUGH THE CASH BOOK OF THE SOCIETY AND ONLY A PAR T OF THE AMOUNT COLLECTED IS ACCOUNTED FOR. THUS, HE CAME TO THE CONCLUSION THAT THE ASSESSEE SOCIETY HAS COLLECTED FEE OVER AND ABOVE WHAT IS REFLECTED IN THE BOOKS OF ACCOUNT. HE ALSO DID NOT ACCEPT THE ASSESSEES CONTENTION THAT IT HAS NO KNO WLEDGE OF THESE TRANSACTIONS EXCEPT OF THOSE FINALLY ADMITTED INTO ITS COLLEGE AND IS ACCOUNTED FOR IN ITS BOOKS OF ACCOUNT, FOR THE REAS ON, THAT MOST OF THE RECEIPTS ARE WITH THE SIGNATURE OF SHRI K. KRIS HNA REDDY, THE SECRETARY OF THE SOCIETY AND SOME OF THE DOCUMENTS WERE SEIZED FROM THE PREMISES OF THE SOCIETY. HE INVOKED THE PR OVISION OF SECTION 132(4A) OF THE ACT TO HOLD THAT THE ASSESSE E SOCIETY CANNOT THUS, DISOWN THE ENTRIES. HE, THEREFORE, HELD THAT THE CASH RECEIPTS RECORDED IN THE SEIZED DOCUMENTS ARE GENUINE AND RE MAIN UNACCOUNTED WITH AN INTENTION TO SUPPRESS THE INCOM E OF THE SOCIETY. HE AGGREGATED THE UNACCOUNTED RECEIPTS DUR ING THE FINANCIAL YEARS RELEVANT TO A.YS 2005-06 TO 2009-10 AT RS.9,81,31,577. HE CONSIDERED DECISIONS OF THE HON BLE SUPREME COURT IN THE FOLLOWING CASES; I) MOHINI JAIN VS. STATE OF KARNATAKA (2 SCC 666) II) ISLAMIC ACADEMY OF EDUCATION VS. STATE OF KARNATAKA (6 SCC 697) III) J.P.UNNIKRISHNAN VS. STATE OF A.P ( 1993) SCC (1) 645. AND OBSERVED THAT ANY AMOUNT OR FEE, WHATEVER IS TH E NOMENCLATURE, COLLECTED BY THE MANAGEMENT FROM THE STUDENTS ADMITTED INTO COLLEGES, HAS TO BE TREATED AS CAPIT ATION FEE ONLY AND IN SUCH CIRCUMSTANCES, THE ASSESSEE IS NOT ELIG IBLE FOR ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 6 OF 18 EXEMPTION OF ITS INCOME FROM TAXATION. IN VIEW OF T HE ABOVE LEGAL PRONOUNCEMENTS, HE HELD THAT THE ASSESSEE LOSSES EX EMPTION AND THE ENTIRE SURPLUS AS PER THE BOOKS AND ALSO THE AB OVE UNACCOUNTED RECEIPTS ARE REQUIRED TO BE BROUGHT TO TAX AS NORMAL BUSINESS PROFIT OF THE ASSESSEE IN THE STATUS OF AO P. THEREAFTER, HE ALSO PROCEEDED TO CONSIDER THE APPLICABILITY OF THE PROVISIONS OF SECTION 10(23C)(VI) OF THE ACT TO THE ASSESSEE AND OBSERVED THAT SINCE THE GROSS RECEIPTS OF THE ASSESSEE FOR THE RE LEVANT FINANCIAL YEARS EXCEEDED RS.1.00 CRORES, THE ASSESSEE WAS REQ UIRED TO OBTAIN REGISTRATION U/S 10(23C)(VI) OF THE ACT AND AS THE ASSESSEE FAILED TO OBTAIN SUCH REGISTRATION, THE EXEMPTION I S NOT ALLOWABLE EVEN U/S 11 OF THE ACT AND THE ENTIRE SURPLUS IS TO BE BROUGHT TO TAX. 7. THE AO ALSO PROCEEDED TO CONSIDER IF THE ASSESSE E WAS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT INDEPENDEN TLY. HE HELD THAT THE ONLY SOURCE OF RECEIPT IN THE CASE OF THE ASSESSEE IS FEE, PART OF WHICH IS OUTSIDE THE BOOKS OF ACCOUNT WHICH MAKES IT INELIGIBLE FOR CLAIM OF ANY EXEMPTION U/S 11 OF THE ACT AS THE ASSESSEE HAS NOT FOLLOWED THE DUE PROCEDURE AS PRES CRIBED IN SECTION 12A OF THE ACT FOR ITS REGISTRATION I.E. MA INTENANCE OF TRUE AND CORRECT BOOKS OF ACCOUNT AND INTIMATING THE I.T . DEPARTMENT OF ALL OF ITS FINANCIAL TRANSACTIONS FROM TIME TO T IME. 8. THE AO ALSO EXAMINED THE APPLICABILITY OF THE PROVISIONS OF SECTION 13 OF THE ACT. HE OBSERVED TH AT WHEN THE MONEY COLLECTED IS OVER AND ABOVE THE PRESCRIBED FE E FOR ADMITTING THE STUDENTS AND UNDERSTANDABLY HAS BEEN HANDED OVE R TO SECRETARY AND OTHER INTERESTED PERSONS OF THE SOCIE TY, IT IS USED ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 7 OF 18 DIRECTLY/INDIRECTLY FOR THE BENEFIT OF A PERSON, I. E. THE FOUNDER OR ANY INTERESTED PERSON AS REFERRED TO IN SECTION 13 OF THE I.T. ACT AND THEREFORE, THE SOCIETY IS NOT ENTITLED FOR EXEM PTION U/S 11 OF THE ACT. 9. THE AO, WHILE COMPUTING THE BUSINESS INCOME OF T HE ASSESSEE, OBSERVED FROM THE INCOME AND EXPENDITURE STATEMENT, THAT THE TRUST HAS CLAIMED DEPRECIATION AS AN EXPEN DITURE AND THAT IT HAS NOT CONSIDERED THIS DEPRECIATION ON FIX ED ASSETS FOR CALCULATION OF THE YARDSTICK TO SEE WHETHER 85% OF THE GROSS RECEIPTS HAVE BEEN APPLIED FOR THE CHARITABLE ACTIV ITIES DURING THE YEAR. OBSERVING THAT THE ASSESSEE IS NOT ELIGIBLE F OR DEPRECIATION ON THE CAPITAL ASSETS WHERE THE ENTIRE COST OF ACQU ISITION IS EITHER WRITTEN OFF IN THE FIRST YEAR ITSELF OR COST OF ACQ UISITION IS TREATED AS APPLICATION OF INCOME, HE HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE DEPRECIATION ON SUCH ASSETS. TO COME TO THIS CO NCLUSION, HE RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF ESCORTS LTD & ANR. VS. UNION OF INDIA (199 ITR 4 4). SIMILAR ASSESSMENTS WERE ALSO PASSED FOR THE A.YS 2007-08, 2008-09 AND 2009-10. AGGRIEVED BY THE ABOVE DENIAL OF EXEMPTION U/S 11 AND ALSO THE CLAIM OF DEPRECIATION, THE ASSESSEE FILED APPEALS BEFORE THE CIT (A) FOR THE RESPECTIVE A.YS. THE ASSESSEE S UBMITTED THE FOLLOWING DURING THE APPELLATE PROCEEDINGS BEFORE T HE CIT (A): 05.0 DURING THE APPELLATE PROCEEDINGS, THE AR OF T HE APPELLANT APPEARED AND ARGUED THAT THE AO SHOULD HAVE CONSIDERED THE FEE STATED TO HAVE BEEN COLLECT ED BY SRI K KRISHNAREDDY IN THE HANDS OF INDIVIDUAL INSTE AD OF SOCIETY FOR THE FOLLOWING SUBMISSIONS: A) THE SOCIETY HAS BEEN INFORMED OF THE COMMITMENT FROM EACH STUDENT AS PER THE APPROVAL IN THE COMMITTEE AND THE SOCIETY HAS BEEN RECEIVING FEE ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 8 OF 18 FROM EACH AND EVERY STUDENT ADMITTED UNDER MANAGEMENT QUOTA (C CATEGORY) YEAR ON YEAR WHICH IS EVIDENTLY CLEAR FROM THE STATEMENTS ANNEXE D IN RESPECT OF ALL STUDENTS WHO WERE ADMITTED AS PER UNIVERSITY LIST UNDER THE SAID CATEGORY. B) THE AO SHOULD NOT HAVE ASSESSED THE INCOME IN THE HANDS OF ASSESSEE WHATEVER INCOME FOUND IN EXCESS OF WHAT IS COMMITTED TO THE SOCIETY AS CLEARLY SUBMITTED IN THE STATEMENT AT THE TIME OF ASSESSMEN T WHICH ARE SUMMARIZED AND SUBMITTED. C) THE AO SHOULD HAVE NOTICED THAT THE FEE FOUND IN SEARCH PAPERS IS ALSO REFLECTED IN THE ACCOUNTS OF THE SOCIETY YEAR ON YEAR AS AND WHEN COLLECTED AS PER THE COMMITMENT GIVEN TO SOCIETY IN THE COLLEGE. D) THE AO HAVING CONVINCED THAT IT SHOULD HAVE BEEN ALSO ASSESSED IN THE HANDS OF INDIVIDUAL UNDER PROTECTIVE BASIS, SHOULD NOT HAVE MADE THE SOCIETY RESPONSIBLE FOR THE AMOUNTS COLLECTED BY THE MEMBERS INDIVIDUALLY AND WHEREAS THE SOCIETY HAS BEEN ACCOUNTING THE RECEIPTS OF FEE ON ACCRUED BASI S BASED ON THE INCOME DUE AS PER THE COMMITMENT GIVEN BY EACH AND EVERY STUDENT AT THE TIME OF ADMISSION. E) THE AO HAVING ACCEPTED BOOKS OF ACCOUNT, SHOULD NOT HAVE REJECTED THE BASIS OF ACCOUNTING FOLLOWED BY T HE SOCIETY REGULARLY AND SHOULD HAVE NOTICED THE RECEIPTS ACCOUNTED BY THE SOCIETY YEAR ON YEAR. F) THE AO SHOULD HAVE NOTICED THAT INCOME SOUGHT TO BE LEVIED TAX IN CERTAIN YEARS WOULD VIRTUALLY DUPLICA TE THE FEE ALREADY SHOWN BY THE SOCIETY YEAR ON YEAR I N THE BOOKS OF ACCOUNT. THAT THE SOCIETY MAY KINDLY B E EXONERATED FROM SHOWING INCOME FROM THE FEE NOT COLLECTED BY IT ANY TIME IN THE COLLEGE FROM THE STUDENTS, WHICH IS EVIDENTLY CONFIRMED BY THE PARENTS AT THE TIME OF SEARCH BEFORE THE WING. 05.1 AS REGARDS THE ADDITION UNDER THE UNACCOUNTE D RECEIPTS, IT IS ARGUED THAT THE APPELLANT SOCIETY IS COMPLETELY IGNORANT OF THE AMOUNTS COLLECTED FROM PROSPECTIVE STUDENTS BY SRI KRISHNA REDDY AND THE SOCIETY HAD ACCOUNTED FOR THE FEE OF THE ADMITTED STUDENTS REGULARLY OF ALL CATEGORIES INCLUDING THOS E ADMITTED UNDER MANAGEMENT QUOTA BASED ON ACCRUAL SYSTEM OF ACCOUNTING WHICH WAS REGULARLY FOLLOWED B Y ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 9 OF 18 THE SOCIETY AND ACCEPTED BY THE DEPARTMENT FOR MANY YEARS. IT VEHEMENTLY ARGUED THAT IT IS NOT THE CASE OF THE AO THAT THE SOCIETY HAS NOT RECORDED THE FEE COLLEC TED FROM THE STUDENTS. IF ANY SUM IS COLLECTED BY SECRE TARY IN HIS INDIVIDUAL CAPACITY, THE SOCIETY CANNOT BE H ELD RESPONSIBLE WHICH IS VARYING ON ITS CHARITABLE ACTI VITY OF PROVIDING EDUCATION AND MEDICAL FACILITIES IN THE BACKWARD AREA OF MAHABOOBNAGAR DISTT. EVEN AFTER SEARCH AND SEIZURE OPERATIONS, THE DEPARTMENT COULD NOT FIND ANY ACTIVITY OF THE SOCIETY WHICH IS NOT CHARITABLE NOR FOUND ANY EVIDENCE CONFERRING ANY BENEFIT TO THE PROMOTERS OR INTERESTED PERSONS. THEREFORE, THE ACTION OF THE AO IN ASSESSING THE AMOUNTS COLLECTED BY MR. KRISHNA REDDY IN THE HANDS OF THE SOCIETY IS TOTALLY UNJUSTIFIED AND UNCALLED FOR . HENCE THE ADDITION OF UNACCOUNTED RECEIPTS FOR ALL THE YE ARS UNDER APPEAL SHOULD BE DELETED FORTHWITH AS THE SOC IETY OR COLLEGE HAS ACCOUNTED FOR THE FEE FROM THESE STU DENTS ADMITTED UNDER MANAGEMENT QUOTA IN YEAR AFTER YEAR. ACCORDINGLY, THE APPELLANT PRAYED FOR DELETION OF UNACCOUNTED RECEIPTS OF FEE ASSESSED IN ALL THE FOU R A.YS UNDER APPEAL. 05.2 AS REGARDS DISALLOWANCE OF DEPRECIATION, IT WAS ARGUED THAT THE SOCIETY HAS BEEN CLAIMING DEPRECIAT ION ON ASSETS TOWARDS NORMAL WEAR AND TEAR AS PER THE RATES PRESCRIBED UNDER THE INCOME-TAX RULES. THE SOCIETY HAD ALSO ACCUMULATED CAPITAL EXPENDITURE ON INFRASTRUCTURE CREATED FOR RUNNING THE MEDICAL COLL EGE OVER A PERIOD OF TIME. THE CAPITAL EXPENDITURE INCU RRED AND CLAIMED FROM THE TOTAL INCOME OF THE RELEVANT A .Y UNDER DEEMING PROVISION IS AS UNDER: AS PER RETURNS OF INCOME FILED A.Y DEPRECIATION CLAIMED BY DEBITING INCOME AND EXPENDITURE ACCOUNT (RS.) AMOUNT CLAIMED FROM CAPITAL EXPENDITURE AS DEEMED TO HAVE BEEN APPLIED (RS.) 2005-06 2,69,62,604 0 2007 - 08 2,76,76,674 13,17,096 2008 - 09 3,23,50,576 1,21,29,565 2009-10 4,30,45,799 0 ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 10 OF 18 THAT THE AO SHOULD NOT HAVE DENIED THE BENEFIT OF DEPRECIATION HAVING RECEIVED THE DETAILS OF ADDITIO NS TO FIXED ASSETS AT THE TIME OF ASSESSMENT FOLLOWING TH E DECISION RENDERED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. MANAV MANGAL SOCIETY (2010) 328 ITR 421 ON A SIMILAR ISSUE CLEARLY UPHOLDING THE CLAIM FOR DEPRECIATION DESPITE APPLICATION OF INCOME FOR MEET ING THE CAPITAL EXPENDITURE. THE HONBLE HIGH COURT ALS O OBSERVED AT PAGE 423 THAT THE AMOUNT SPENT ON CONSTRUCTION OF SCHOOL BUILDING AT PANCHKULA IS A C APITAL EXPENDITURE BUT FOR THE PURPOSE OF SEC. 11, IT IS A N OUTGOING WHICH IS APPLICATION OF THE INCOME OF THE APPELLANT FOR CHARITABLE PURPOSE. THE APPELLANT SHA LL ALSO BE ENTITLED TO CLAIM DEPRECIATION ON THE SCHOO L BUILDING. IT IS ALSO IMPORTANT THAT THE AO SHOULD ALSO HAVE APPRECIATED THAT THE HONBLE SUPREME COURT UPHOLDING THE VIEW OF THE HIGH COURT (SUPRA), HAD DISMISSED THE SLP OF THE DEPARTMENT ON THIS ISSUE, CLEARLY STATING THAT THE EARLIER DECISION OF THE TR IBUNAL AGAINST THE APPELLANT, DID NOT HAVE THE BENEFIT OF THE HIGH COURT DECISION ON THE ISSUE CAN NO LONGER BE A GOOD LAW SINCE THE DECISION OF HIGH COURT SUPERSEDE S THAT OF THE TRIBUNAL. ACCORDINGLY THE DEPARTMENTAL APPEALS ON THIS ISSUE HAVE BEEN DISMISSED COMPLETEL Y. EVEN OTHERWISE ALSO, THE CLAIM OF THE DEPRECIATION ON ASSETS CLAIMED BY THE SOCIETY IS ALLOWABLE DUE TO T HE FACT THAT NO CAPITAL EXPENDITURE HAS BEEN CLAIMED A S APPLICATION OF INCOME IN THE YEAR OF PURCHASE OF TH OSE ASSETS EXCEPT FOR THE A.Y 2007-08 FOR RS.13,17,096 AND A.Y 2008-09 FOR RS.1,21,29,565. THEREFORE, THE APPELLANT SOCIETY IS ELIGIBLE FOR DEPRECIATION CLAI M ON THE ASSETS. ACCORDINGLY THE APPELLANT PRAYED FOR ALLOWI NG DEPRECIATION CLAIM. 05.3 ON THE ISSUE OF DISALLOWANCE OF DONATIONS TO TEMPLE AND TEMPLE MAINTENANCE FOR THE A.YS 2007-08 TO 2009-10, THE APPELLANT ARGUES THAT THESE TWO ITEMS ARE PART AND PARCEL OF THE OBJECTS OF THE SOCIETY AND INCIDENTAL TO THE MAIN ACTIVITY; HENCE ALLOWABLE AS PER THE PROVISIONS OF THE I.T. ACT. ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 11 OF 18 10. AFTER CONSIDERING THE ABOVE CONTENTIONS OF THE ASSESSEE, THE CIT (A) CAME TO THE CONCLUSION THAT A S LONG AS THE ASSESSEE IS ENJOYING THE BENEFIT OF REGISTRATION U/ S 12A OF THE ACT, THE BENEFIT OF THE PROVISIONS UNDER SECTION 11 AND 12 CANNOT BE DENIED UNTIL AND UNLESS OTHER CONDITIONS MENTIONED THEREIN ARE NOT COMPLIED WITH. HE HELD THAT SEEKING EXEMPTION U /S 10(23C)(VI) OF THE I.T. ACT IS ONLY ONE OF THE OPTIONS AVAILABL E TO THE CHARITABLE INSTITUTIONS TO AVAIL THE BENEFIT AND IT IS NOT MAN DATORY FOR ALL THE CHARITABLE INSTITUTIONS WHOSE GROSS RECEIPTS EXCEED RS.1.00 CRORES TO OBTAIN THE APPROVAL UNDER THIS SECTION AS SECTIO N 11 AND THAT SECTION 10(23C)(VI) OPERATE INDEPENDENTLY AND THERE IS NO COMPULSION ON THE PART OF THE TRUST OR INSTITUTION TO OBTAIN APPROVAL U/S 10(23C)(VI) OF THE ACT. THEREFORE, HE DIRECTED THE AO TO ALLOW THE BENEFIT OF EXEMPTION U/S 11 OF THE ACT TO THE SOCIETY IN THE YEARS UNDER APPEAL AND TO RECAST THE INCOME AND EXPENDITURE A/C AND IF THERE IS ANY SURPLUS OVER 15 %, THEN TO BRING THE SAME TO TAX. 11. THEREAFTER, HE CONSIDERED THE ASSESSEES CLAIM OF DEPRECIATION ON ASSETS WHICH WERE NOT CLAIMED AS AP PLICATION OF INCOME IN THE YEAR OF ACQUISITION. HE OBSERVED THA T ONLY IN THE A.Y 2007-08 AND 2008-09, THE ASSESSEE HAS CLAIMED C APITAL EXPENDITURE AS APPLICATION OF INCOME. THEREFORE, HE DIRECTED THE AO TO REDUCE THESE TWO AMOUNTS FROM THE WRITTEN DOW N VALUE OF THE ASSETS FOR THE RELEVANT A.YS AND TO ALLOW THE D EPRECIATION ONLY ON THE BALANCE. HE OBSERVED THAT THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF ESCORTS INDIA LTD (SUP RA) IS ONLY THAT DOUBLE DEDUCTION IS NOT PERMITTED UNDER THE I. T. ACT I.E. AS ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 12 OF 18 APPLICATION OF INCOME AND ALSO DEPRECIATION THEREON AND NOT TO THE CLAIM OF DEPRECIATION ALONE DURING THE RELEVANT A.YS. 12. THE CIT (A) ALSO CONSIDERED THE ADDITIONS MADE ON ACCOUNT OF UNACCOUNTED RECEIPTS COLLECTED FROM THE STUDENTS SEEKING ADMISSION UNDER THE MANAGEMENT AND NRI QUOT A FOR ALL THESE YEARS. HE OBSERVED THAT THE SECRETARY OF THE SOCIETY, MR. K. KRISHNA REDDY, WAS THE KINGPIN IN ADMISSION OF THE STUDENTS AND THAT IT IS HE WHO HAS COLLECTED THE CASH FROM THE S TUDENTS. HE ALSO OBSERVED THAT THERE IS NO MATERIAL IN THE FORM OF A NY STATEMENT FROM THE STUDENTS OR PARENTS ON RECORD TO CONSIDER THAT CAPITATION FEE IS COLLECTED BY THE SOCIETY. HE ALSO OBSERVED T HAT THE ASSESSEE IS ACCOUNTING TUITION FEE COLLECTED FROM THE STUDEN TS ON YEARLY BASIS AND THAT THE EXCESS AMOUNT COLLECTED BY THE S ECRETARY HAS BEEN UTILIZED BY HIM FOR HIS PERSONAL BENEFIT. IN V IEW OF THE SAME, HE HELD THAT THE SOCIETY CANNOT BE TAXED OR PENALIZ ED FOR SUCH ACTION OF THE SECRETARY. HE ALSO OBSERVED THAT WHAT EVER FEE IS COLLECTED FROM THE STUDENTS IS ACCOUNTED UNDER THE HEAD TUITION FEE AND THE LIST OF SUCH CANDIDATES AND THE FEE CO LLECTED FROM THEM IS FORWARDED TO THE HEALTH UNIVERSITY EVERY YE AR AND IF ANY VIOLATION IS COMMITTED BY THE ASSESSEE SOCIETY IN R ESPECT OF FEE STRUCTURES, THE UNIVERSITY WOULD HAVE NOTICED AND T AKEN ACTION AGAINST THE SOCIETY. HE ALSO OBSERVED THAT IT IS NO T THE CASE THAT THE SOCIETY IS CHARGING FEE UNDER VARIOUS HEADS SUC H AS TUITION FEE, BUILDING FEE, DEVELOPMENT FEE ETC. AND THEREFO RE, THE ASSESSEE CANNOT BE ACCUSED OF COLLECTING CAPITATION FEE, IF ANY, FROM THE STUDENTS UNDER THE MANAGEMENT & NRI QUOTA. ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 13 OF 18 13. THE CIT (A) HAS ALSO OBSERVED THAT THE AO HAS M ADE ADDITION OF THESE UNACCOUNTED RECEIPTS IN THE HANDS OF THE TRUSTEE, MR. K. KRISHNA REDDY, ALSO ON PROTECTIVE B ASIS. THE CIT (A) OBSERVED THAT IN THE APPEAL FILED BY MR. KRISHN A REDDY, HE HAD CONFIRMED THE ADDITION OF UNACCOUNTED RECEIPTS IN H IS HANDS SUBJECT TO ALLOWING RELIEF IN RESPECT OF REFUND OF MONEY TO THE CANDIDATES NOT ADMITTED, DUPLICATED AMOUNTS, IF ANY , AND FEE ACCOUNTED FOR BY THE COLLEGE. IN VIEW OF THE SAME, THE CIT (A) HELD THAT IT IS DIFFICULT TO SUSTAIN THESE ADDITIONS AGA IN IN THE HANDS OF THE SOCIETY ALSO. HE DIRECTED THE AO TO DELETE THE ADDITIONS MADE ON ACCOUNT OF UNACCOUNTED RECEIPTS FOR ALL THESE YE ARS IN APPEAL AND AFTER EXAMINING ANY FEE RELATING TO THE ADMITTE D STUDENTS NOT ACCOUNTED FOR BY THE COLLEGE AND DIRECTED THAT IT M AY BE ADDED AS INCOME OF THE COLLEGE IN THE RESPECTIVE A.YS ON ACC RUAL BASIS, IRRESPECTIVE OF THE FACT THAT THE SAID FEE WAS ADDE D AS INCOME IN THE HANDS OF SHRI K. KRISHNA REDDY ON THE BASIS OF CASH RECEIPTS. FURTHER, HE ALSO DIRECTED THE AO TO ENSURE THAT THE MINIMUM FEE PRESCRIBED FOR THE RELEVANT YEAR HAS BEEN ACCOUNTED FOR BY THE SOCIETY IN RESPECT OF EACH STUDENT FALLING UNDER TH E MANAGEMENT QUOTA. ACCORDINGLY, HE GRANTED RELIEF TO THE ASSESS EE. 14. HE ALSO OBSERVED THAT IN RESPECT OF CHARITABLE ACTIVITIES OF THE SOCIETY, THE AO HAS NOT BROUGHT ON RECORD AN Y VIOLATION OF THE OBJECTS OF THE SOCIETY AND THAT IT IS THE CASE OF THE BENEFITS DERIVED BY THE SECRETARY BY MISUSING HIS POSITION, RATHER THAN THE SOCIETY CONFERRING BENEFIT ON HIM AND THEREFORE, TH E SAME CANNOT BE HELD AGAINST THE SOCIETY TO HOLD THAT RELATED PE RSON IS BENEFITTED BY THE ASSESSEE. ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 14 OF 18 15. FOR THE A.YS 2007-08 TO 2009-10, THERE WAS A DISALLOWANCE OF DONATIONS TO TEMPLE AND EXPENSES TO WARDS TEMPLE MAINTENANCE BY THE AO. THE CIT (A) OBSERVED THAT TH E ASSESSEE HAS FAILED TO ESTABLISH THAT SUCH DONATIONS ARE IN CONSONANCE WITH THE OBJECTS OF THE SOCIETY AS NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE. THEREFORE, HE HELD THAT THE CLAIM OF THE ASSESSEE CANNOT BE ALLOWED AS APPLICATION OF INCOME TOWARDS OBJECTS OF THE SOCIETY. THE ADDITIONS SO MADE BY THE AO DURING THE A.YS 200 7-08 TO 2009-10 WERE CONFIRMED. 16. AGAINST THE RELIEF GRANTED BY THE CIT(A), ALLOW ING EXEMPTIONS U/S 11 OF THE ACT AND ALSO DEPRECIATION ON ASSETS, THE REVENUE IS IN APPEAL BEFORE US. THE ASSESSEE IS NOT IN APPEAL BEFORE US AGAINST THE ADDITIONS CONFIRMED BY THE CI T (A) FOR THE A.YS 2007-08 TO 2009-10. 17. AS REGARDS GROUND 1 O 4 ARE CONCERNED, WE FIND THAT THIS ISSUE HAD ARISEN IN THE ASSESSEES OWN CASE FO R THE A.Y 2003- 04 TO 2006-07 AND THE TRIBUNAL HAD HELD THAT THE AS SESSEE IS ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT EVEN IF IT HAS NOT OBTAINED APPROVAL U/S 10(23C)(VI) OF THE ACT AND THE CIT (A) HAS FOLLOWED THE SAME FOR GRANTING RELIEF TO THE ASSESSEE. THERE FORE, THESE GROUNDS OF APPEAL OF THE REVENUE ARE REJECTED. 18. AS REGARDS GROUND NO.5, WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISI ONS INCLUDING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASES OF CIT VS. INSTITUTE OF BANKING (2003) 264 ITR 110 (BOM.) AND DIT VS. ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 15 OF 18 FRAMJEE CAWASJEE INSTITUTE (1993) 109 CTR 463 (BOM. ). RESPECTFULLY FOLLOWING THE SAME, THIS GROUND OF APP EAL IS ALSO REJECTED. 19. AS REGARDS GROUNDS NO.6 & 7 ARE CONCERNED, THE LD DR HAS FILED DETAILED WRITTEN SUBMISSIONS STATING THAT THE UN ACCOUNTED RECEIPTS HAVE TO BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AND THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT AS IT HAD COLLECTED FEE OVER AND ABOV E THE FEE PRESCRIBED FEE BY THE GOVT. FURTHER, HE ALSO SUBMIT TED THAT THE EVIDENCE COLLECTED FROM THE PREMISES OF THE SOCIETY AS WELL AS THE RESIDENTIAL PREMISES OF THE SECRETARY CLEARLY SHOWS THAT THE ASSESSEE SOCIETY WAS HAVING KNOWLEDGE OF THE COLLEC TION OF THE EXCESS FEE BY THE SECRETARY AND THEREFORE, THE SOCI ETY HAS VIOLATED THE PROVISIONS OF SECTION 12 OF THE ACT. IT IS ALSO SUBMITTED THAT THE CHIEF EXECUTIVE I.E. THE SECRETARY IS CONTINUIN G AS THE SECRETARY OF THE SOCIETY AND THEREFORE, IT CAN BE C ONCLUDED THAT THE MEMBERS OF THE SOCIETY ARE WELL AWARE OF THE FA CT OF COLLECTING FEE FROM THE STUDENTS AND WHEN THESE FACTS SURFACED CONSEQUENT TO THE SEARCH, THE SOCIETY HAS TAKEN A FEEBLE STAND THAT THE EXCESS COLLECTION OF FEES HAS BEEN TAXED IN THE HANDS OF T HE INDIVIDUAL AND THAT THESE ADDITIONS ARE CONFIRMED AND HENCE TH E SOCIETY SHOULD BE LET OFF. THEREFORE, ACCORDING TO THE LD D R, THE ORDER OF THE CIT (A), HAS TO BE SET ASIDE AND THE ORDER OF T HE AO SHOULD BE RESTORED. 20. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT SUBSTANTIVE ADDITION WAS MADE BY THE AO IN THE HAND S OF THE SOCIETY, WHILE PROTECTIVE ASSESSMENT WAS MADE IN TH E HANDS OF THE ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 16 OF 18 SECRETARY. HE SUBMITTED THAT THE CIT (A) HAS CONFIR MED THE PROTECTIVE ASSESSMENT IN THE HANDS OF THE SECRETARY AS SUBSTANTIVE ADDITION AND HAS DELETED THE ADDITION I N THE HANDS OF THE SOCIETY. HE SUBMITTED THAT THE SAME INCOME CANN OT BE BROUGHT TO TAX IN BOTH THE HANDS AS IT WOULD AMOUNT TO DOUBLE ADDITION. HE ALSO SUBMITTED THAT THE AO HAS NOT BRO UGHT ON RECORD, ANY EVIDENCE TO SHOW THAT THE SECRETARY HAS COLLECTED THE FUNDS ON BEHALF OF THE SOCIETY OR THAT THE SOCIETY HAS BENEFITTED FROM SUCH EXCESS COLLECTION. HE SUBMITTED THAT THE CIT (A) HAS ALSO BROUGHT ON RECORD THAT THE SECRETARY HAD UTILI ZED THESE EXCESS COLLECTIONS TO PURCHASE MOVABLE AND IMMOVABL E PROPERTIES IN HIS AND HIS FAMILY MEMBERS NAMES. THUS, HE REL IED UPON THE ORDER OF THE CIT (A) TO ARGUE THAT THE ASSESSEE CAN NOT BE PENALIZED FOR THE ACTION OF THE SECRETARY FOR THE RELEVANT A. YS. HE ALSO SUBMITTED THAT THE DEPARTMENT HAS NOT CHALLENGED TH E FINDINGS OF THE CIT (A) IN THE APPEAL OF THE SECRETARY THAT THE EXCESS AMOUNTS HAVE BEEN COLLECTED BY HIM IN HIS CAPACITY AS SECRE TARY OF THE SOCIETY FOR HIS OWN PERSONAL USE. HE SUBMITTED THAT THE SECRETARY HAS ACCEPTED THE ADDITIONS MADE IN HIS INDIVIDUAL H ANDS AND HAS ALSO PAID TAXES THEREON. HE HAS FILED COPIES OF THE ASSESSMENT ORDERS AND THE ORDERS OF THE CIT (A) IN THE CASE OF MR. K. KRISHNA REDDY AND ALSO THE PENALTY ORDERS AND THE ORDERS BY THE CIT (A) CONFIRMING THE PENALTY, IN THE PAPER BOOK FILED BEF ORE US. 21. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE SEARCH AND SEIZURE OPER ATION HAS REVEALED THAT THE CASH HAS BEEN COLLECTED IN EXCESS OF THE PRESCRIBED FEE UNDER THE SIGNATURE OF THE SECRETARY OF THE SOCIETY, FROM THE STUDENTS WHO HAVE BEEN ADMITTED TO MBBS AN D PG ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 17 OF 18 COURSES RUN BY THE ASSESSEE SOCIETY. FROM THE DOCUM ENTS FOUND AND SEIZED, MOST OF THE COLLECTIONS HAVE BEEN MADE BY THE SECRETARY, MR.K.KRISHNA REDDY, AND ON SOME OF THE D OCUMENTS, THE SIGNATURE OF ONE MR. VENKATA REDDY IS ALSO FOUN D. THE AO HAS MADE SUBSTANTIVE ADDITION IN THE HANDS OF THE ASSES SEE AND PROTECTIVE ASSESSMENT IN THE HANDS OF THE SECRETARY . THE CIT (A), IN THE CASE OF THE SECRETARY, MR. K. KRISHNA REDDY, HAS HELD THAT, HE, IN HIS PERSONAL CAPACITY, HAS COLLECTED EXCESS FEE AND HAS ALSO MISAPPROPRIATED THE SAME BY INVESTING IN PROPERTIES IN HIS PERSONAL NAME AND IN THE NAME OF HIS FAMILY MEMBERS . THE REVENUE HAS NOT CHALLENGED THIS FINDING OF THE CIT (A) IN THE CASE OF MR. K. KRISHNA REDDY AND THEREFORE, THE FINDINGS HAVE BECOME FINAL. THE CIT (A), IN THE CASE OF THE ASSESSEE, HA S RELIED UPON SUCH FINDINGS TO HOLD THAT THE SAME AMOUNT CANNOT B E BROUGHT TO TAX IN THE HANDS OF BOTH THE SECRETARY AS WELL AS T HE SOCIETY. HE HAS ALSO HELD THAT THE AO HAS NOT BROUGHT ON RECORD THE STATEMENT OF ANY PARENT OR STUDENT TO THE EFFECT TH AT THE ASSESSEE SOCIETY HAS COLLECTED FEE OVER AND ABOVE THE FEE PR ESCRIBED BY THE GOVT. THE LD DR HAS NOT BEEN ABLE TO REBUT THIS FIN DING OF THE CIT (A). UNLESS AND UNTIL THE ASSESSEE SOCIETY IS FOUND TO HAVE VIOLATED THE PROVISIONS OF SECTIONS 11 TO 13, THE ASSESSEE C ANNOT BE DENIED THE EXEMPTION U/S 11 OF THE ACT. THOUGH IT IS NOT D ENIED THAT SHRI K.KRISHNA REDDY IS CONTINUING AS SECRETARY OF THE S OCIETY, THAT ALONE IS NOT SUFFICIENT TO HOLD THAT THE SOCIETY WA S HAVING KNOWLEDGE OF HIS COLLECTING EXCESS FEE. WITHOUT ANY MATERIAL ON RECORD THAT SUCH EXCESS FEE WAS BEING COLLECTED FOR THE SOCIETY OR ON BEHALF OF THE SOCIETY FOR THE BENEFIT OF THE SOC IETY, IT CANNOT BE HELD AGAINST THE SOCIETY. IN VIEW OF THE SAME, WE A RE CONSTRAINED TO UPHOLD THE FINDINGS OF THE CIT (A) ON THIS ISSUE . ITA NOS 464 TO 467 AND 1851 OF 2014 SRI VENKATA SAI EDUCATIONAL SOCIETY HYDERABAD PAGE 18 OF 18 22. IN THE RESULT, THESE TWO GROUNDS OF THE REVENUE ARE ALSO REJECTED. 23. IN THE RESULT, APPEALS OF THE REVENUE FOR THE A .YS 2005-06 TO 2010-11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST OCTOBER, 2017. VINODAN/SPS COPY TO: 1 ACIT CENTRAL CIRCLE - 1 HYDERABAD 2 M/S. SRI VENKATA SAI EDUCATIONAL SOCIETY, HOUSE N O.16-2-740/51 KALYAN NAGAR, GADDINNARAM, HYDERABAD 3 CIT (A) - I HYDERABAD 4 CIT CENTRAL, HYDERABAD 5 THE DR, IT AT HYDERABAD 6 GUARD FILE BY ORDER