M/s Sri Venkateswara Vidya Peeth, Visakhapatnam V. The ACIT, Range-5, Visakhapatnam

ITA 215/VIZ/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50173 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Set aside
• Section: 12A; 11

Judgement Text

ITA NO.214 AND 215 OF 2010 BALAJI VIDYA PARISHAD AN D SRI VENKATESWARA VIDYA PEETH VIZAG PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 214 /VIZAG/20 10 ASSESSMENT YEAR: 2006 - 07 SRI BALAJI VIDYA PAR ISHAD, VISAKHAPATNAM VS. ACIT RANGE - 5 VISAKHAPATNAM (APPELLANT) PAN NO:AABAS 8111 Q (RESPONDENT) ITA NO.215/VIZAG/2010 ASSESSMENT YEAR:2006 - 07 SRI VENKATESWARA VIDYA PEETH, VISAKHAPATNAM VS. ACIT RANGE-5 VISAKHAPATNAM (APPELLANT) PAN NO:AAETS 8295 F (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI R.K. SINGH, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: BOTH THE ASSESSEES HAVE PREFERRED APPEAL BEFORE US CHALLENGING THE ORDER PASSED BY LD CIT(A), VISAKHAP ATNAM IN THEIR RESPECTIVE HANDS AND BOTH THE APPEALS RELATE TO THE ASSESSMENT YEAR 2006-07. SINCE THE ISSUES URGED IN THESE TWO AP PEALS ARE IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THOUGH BOTH THE ASSESSEES HAVE RAISED MANY G ROUNDS, THE LD A.R APPEARING ON BEHALF OF THE ASSESSEES RESTRICTED HIS ARGUMENTS TO THE GROUND RELATING TO THE APPLICABILITY OF THE PRO VISIONS OF SEC.10(23C) OF THE ACT TO THE INCOME GENERATED BY T HESE ASSESSEES. ITA NO.214 AND 215 OF 2010 BALAJI VIDYA PARISHAD AN D SRI VENKATESWARA VIDYA PEETH VIZAG PAGE 2 OF 5 3. WE SHALL FIRST SET OUT THE FACTS RELATING TO THE CASES IN BRIEF. BOTH THE ASSESSEES ARE SOCIETIES REGISTERED UNDER S OCIETIES REGISTRATION ACT AND RUNNING EDUCATIONAL INSTITUTIO NS. THEY FILED THEIR RESPECTIVE RETURNS OF INCOME CLAIMING EXEMPTION U/S 11 OF THE ACT. HOWEVER, BEFORE THE ASSESSING OFFICER, BOTH THE ASS ESSEES COULD NOT PRODUCE COPIES OF REGISTRATION GRANTED BY THE CONCE RNED LEARNED CIT U/S 12A OF THE ACT. BOTH THE ASSESSEES ALSO CLAIME D THAT THEY HAVE FILED APPLICATIONS BEFORE THE CHIEF COMMISSIONER OF INCOME TAX SEEKING REGISTRATION U/S 10(23C) OF THE ACT, BUT TH EY COULD NOT CLARIFY ABOUT THE FATE OF THOSE APPLICATIONS. IN THESE CIRC UMSTANCES, THE ASSESSING OFFICER DENIED DEDUCTION OF CAPITAL EXPEN DITURE CLAIMED U/S 11 OF THE ACT AND ALSO MADE SOME MORE ADDITIONS. B OTH THE PARTIES PREFERRED APPEAL BEFORE LD CIT(A), BUT THEY WERE DI SMISSED. HENCE BOTH THE PARTIES ARE IN APPEAL BEFORE US. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES HEREIN ARE EDUCATIONAL SOCIETIES RUNNING EDUCATIONA L INSTITUTIONS. IN CASE OF M/S BALAJI VIDYA PARISHAD, THE GROSS RECEIP TS ARE LESS THAN ONE CRORE AND HENCE, BY VIRTUE OF THE PROVISIONS OF SEC . 10(23C)(IIIAD) OF THE ACT, ITS INCOME IS EXEMPT. IN THE CASE OF M/S VENKATESWARA VIDYA PARISHAD, THE SOCIETY IS RUNNING THREE EDUCAT IONAL INSTITUTIONS. OUT OF THE THREE INSTITUTIONS, TWO INSTITUTIONS ARE RECEIVING FINANCES FROM THE GOVERNMENT AND HENCE THE INCOME OF THOSE I NSTITUTIONS ARE EXEMPT U/S 10(23C)(IIIAB) OF THE ACT. THE INCOME O F THE THIRD INSTITUTION IS EXEMPT U/S 10(23C(IIIAD) OF THE ACT, SINCE THE GROSS RECEIPTS FROM THAT INSTITUTION IS LESS THAN ONE CRO RE. HE FURTHER SUBMITTED THAT THESE ASSESSEES HAVE TAKEN SPECIFIC GROUND BEFORE LEARNED CIT(A) REQUESTING HIM TO APPLY THE PROVISIO NS OF SEC. ITA NO.214 AND 215 OF 2010 BALAJI VIDYA PARISHAD AN D SRI VENKATESWARA VIDYA PEETH VIZAG PAGE 3 OF 5 10(23C), BUT THE LEARNED CIT(A) FAILED TO DISPOSE O F THE SAID GROUND. ACCORDINGLY, IT WAS PLEADED THAT THE ORDERS OF LD C IT(A) BE SET ASIDE AND THE ASSESSING OFFICER MAY BE DIRECTED TO ALLOW EXEMPTION ON THE INCOME OF THESE ASSESSEES U/S 10(23C) OF THE ACT. 5. ON THE OTHER HAND, THE LD D.R STOOD BY THE O RDERS OF LD CIT(A0. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. THE UNDISPUTED FACT REMAINS THAT THESE TWO ASSESSEES ARE RUNNING EDUCATIONAL INSTITUTIONS AND ARE NOT ENGAGE D IN ANY OTHER TYPE OF ACTIVITIES. THOUGH THESE TWO ASSESSEES HAV E CLAIMED THAT THEY HAVE FILED APPLICATIONS SEEKING REGISTRATION U /S 12A/10(23C) OF THE ACT, YET THEY COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THE SAID CLAIMS. THERE CANNOT BE ANY DISPUTE THAT IT I S THE RESPONSIBILITY OF THE ASSESSEE TO ADDUCE NECESSARY EVIDENCE IN SUP PORT OF SUCH CLAIMS MADE BEFORE THE ASSESSING OFFICER. SINCE TH E ASSESSEES HAVE FAILED TO ADDUCE ANY EVIDENCE IN SUPPORT OF CLAIM T HAT IT IS ELIGIBLE FOR EXEMPTION U/S 11, IN OUR VIEW, THE ASSESSING OFFICE R IS RIGHT IN DENYING EXEMPTION U/S 11 OF THE ACT FOR THESE TWO A SSESSEES. 7. HOWEVER, THE ALTERNATIVE CLAIM OF THE ASSESS EES IS THAT THEIR INCOME WOULD BE EXEMPT U/S 10(23C) OF THE ACT. IT WAS SUBMITTED THAT THE APPROVAL OF THE PRESCRIBED AUTHORITY U/S 1 0(23C)(VI) OF THE ACT IS REQUIRED ONLY IN THE CASES WHERE THE AGGREGA TE ANNUAL RECEIPTS OF THE EDUCATIONAL INSTITUTION EXCEEDS THE PRESCRIB ED LIMITS OR IN THE CASES WHERE THE EDUCATIONAL INSTITUTION IS NOT WHOL LY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. IT WAS FURTHER SUBMITT ED THE PRESENT LIMIT PRESCRIBED IS ONE CRORE RUPEES. ITA NO.214 AND 215 OF 2010 BALAJI VIDYA PARISHAD AN D SRI VENKATESWARA VIDYA PEETH VIZAG PAGE 4 OF 5 8. THE CLAIM OF THE ASSESSEE IS THAT THE AGGREG ATE ANNUAL RECEIPTS IN THE HANDS OF M/S BALAJI VIDYA PARISHAD DO NOT EX CEED THE PRESCRIBED LIMIT OF ONE CRORE AND HENCE ITS INCOME IS EXEMPT U/S 10(23C(IIIAD) OF THE ACT. IN THE CASE OF M/S VENKA TESWARA VIDYA PARISHAD, IT WAS SUBMITTED THAT THE TWO OF ITS INST ITUTIONS ARE RECEIVING GRANT IN AID FROM THE GOVERNMENT AND HENC E THEIR INCOME IS EXEMPT U/S 10(23C)(IIIAB) OF THE ACT, AS THEY ARE S UBSTANTIALLY FINANCED BY THE GOVERNMENT. THE AGGREGATE ANNUAL R ECEIPTS OF THE REMAINING EDUCATIONAL INSTITUTION IS LESS THAN THE PRESCRIBED LIMIT OF ONE CRORE AND HENCE ITS INCOME IS EXEMPT U/S 10(23C )(IIIAD) OF THE ACT. ACCORDINGLY IT WAS SUBMITTED THAT THE APPROVAL OF THE PRESCRIBED AUTHORITY AS REQUIRED UNDER SECTION 10(23C(VI) OF T HE ACT IS NOT REQUIRED FOR THESE ASSESSEES FOR THE YEAR UNDER CON SIDERATION. IT WAS ALSO POINTED OUT THAT THE ALTERNATIVE CLAIM WAS RAI SED BEFORE THE LD CIT(A), BUT THE FIRST APPELLATE AUTHORITY DID NOT D ISPOSE OF THE SAID GROUND. 9. WE FIND FORCE IN THE ALTERNATIVE CLAIM OF TH E ASSESSEE. WE NOTICE THAT THE APPROVAL OF THE PRESCRIBED AUTHO RITY IS NOT REQUIRED FOR CLAIMING EXEMPTION UNDER SECTION 10(23 C)(AB) OR 10(23C)(AD) OF THE ACT. IT IS A WELL SETTLED PROPO SITION THAT AN INCOME, WHICH IS EXEMPT UNDER ANY OF THE PROVISIONS OF THE ACT, CANNOT BE SUBJECTED TO TAX. HOWEVER, WE NOTICE THA T THESES ASSESSEES HAVE NOT RAISED THE ABOVE SAID ALTERNATIV E CLAIM OF EXEMPTION BEFORE THE ASSESSING OFFICER. HENCE, WE ARE OF THE VIEW THAT THE SAID CLAIM IS REQUIRED TO BE EXAMINED BY T HE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDERS OF L D CIT(A) PASSED IN THE RESPECTIVE HANDS OF BOTH THE ASSESSEES AND RES TORE THE MATTER TO ITA NO.214 AND 215 OF 2010 BALAJI VIDYA PARISHAD AN D SRI VENKATESWARA VIDYA PEETH VIZAG PAGE 5 OF 5 THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ALTERNATIVE CLAIM OF THE ASSESSEES HEREIN AND DECID E THE SAME IN ACCORDANCE WITH THE LAW AFTER AFFORDING NECESSARY O PPORTUNITY OF BEING HEARD. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSE SSEES ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT M EMBER PVV/SPS VISAKHAPATNAM, DATE:11-05-2011 COPY TO 1 SRI BALAJI VIDYA PARISHAD, PLOT NO.10, SECTOR 7 M VP COLONY, VISAKHAPATNAM 2 SRI VENKATESWARA VIDYA PEETH, PLO T NO;10, SECTOR 7 MVP COLONY, VISAKHAPATNAM 3 THE ACI T RANGE - 5, VISAKHAPATNAM 4 5 THE CIT 1, VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 6 THE DR, ITAT, VISAKHAPATNAM. GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM