RAJASTHAN HINDI GRANTH ACADEMY, Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTION), Jaipur

ITA 25/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6161 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: SHAMBHU LAL GUPTA
• Section: 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 25/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 RAJASTHAN HINDI GRANTH ACADEMY, 01, INSTITUTIONAL AREA, JHALANA, JAIPUR CUKE VS. ACIT (EXEMPTION), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACR8838E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SHAMBHU LAL GUPTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 24/05/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-1, JODHPUR DATED 25.09.2017 FOR ASSESSME NT YEAR 2012-13 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL:- 1. THAT BASED ON THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LD. CIT APPEALS-1 HAS GROSSLY ERRED IN LAW AS WELL AS FACT OF THE CASE IN CONFIRMING THE ACTION OF THE AO FOR NOT TREATING TH E INSTITUTION AS EDUCATIONAL INSTITUTION AND DENIAL OF EXEMPTION U/S 10(23C)(IIIAB) OF THE INCOME TAX ACT 1961. ITA NO. 25/JP/2018 RAJASTHAN HINDI GRANTH ACADEMY, JAIPUR VS. AC IT(E), JAIPUR 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE APPELLANT RAJASTHAN HINDI GRANTH ACADEMY IS AN AUTONOMOUS B ODY ESTABLISHED/ CONSTITUTED FOR PUBLICATION OF BOOKS IN HINDI LANGU AGE FOR POST GRADUATE STUDENTS IN UNIVERSITIES IN INDIA AS PER THE EDUCAT ION POLICY DECISION OF THE MINISTRY OF EDUCATION & SOCIAL WELFARE, DEPARTM ENT OF EDUCATION, GOVERNMENT OF INDIA. THE ACADEMY IS FUNCTIONING UND ER THE ARRANGEMENT, CONTROL AND SUPERVISION OF THE GOVERNM ENT OF RAJASTHAN. THE ACADEMY IS CARRYING ON ITS ACTIVITIES UNDER CEN TRALLY SPONSORED SCHEME OF PRODUCTION OF BOOKS AT THE UNIVERSITY LEV EL IN DIFFERENT LANGUAGES, BY THE CREATION OF A REVOLVING FUND AS P ER ENCLOSED LETTER OF JANUARY 21, 1974 OF SHIKSHA AUR SAMAJ KALYAN MA NTRALAYA (SHIKSHA VIBHAG), NEW DELHI. 3. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE F ILED ITS RETURN OF INCOME DECLARING INCOME AT NIL ON 18.11.2014 BY SHO WING THE SURPLUS OF RS. 98,70,134/- OVER EXPENSES AND CLAIMED THE EXEMP TION U/S 10(23C)(IIIAB) AND 10(23C) (IV) AS WELL AS THE BENE FIT U/S 10,11 AND 12. THE LD. AO DISALLOWED THE EXEMPTION BY STATING THAT THE ACTIVITY OF THE TRUST ARE IN THE NATURE OF TRADE, COMMERCE OR BUSIN ESS AND NOT EDUCATIONAL. THUS THE AO DENIES THE EXEMPTION U/S 1 0(23C)(IIIAB) AND 10(23C) (IV) AS WELL AS THE BENEFIT U/S 10, 11 AND 12 AND ADDED RS. 98,70,134/- IN THE INCOME OF ASSESSEE. ON APPEAL BE FORE THE LD CIT (APPEAL), THE LD. CIT(APPEAL) ALSO REJECTED THE CLA IM OF EXEMPTION U/S 10(23C)(IIIAB) AND ALLOWED EXEMPTION U/S 11. NOW, THE ASSESSEE IS IN APPEAL AGAINST THE DENIAL OF EXEMPTION UNDER 10(23C )(IIIAB) OF THE ACT. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE SIMILAR ISSUE HAS BEEN DECIDED BY HONBLE HIGH COUR T OF RAJASTHAN (D.B INCOME TAX APPEAL NO 302/2016 IN ORDER DATED 01.11. 2017) IN THE CASE ITA NO. 25/JP/2018 RAJASTHAN HINDI GRANTH ACADEMY, JAIPUR VS. AC IT(E), JAIPUR 3 OF ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2010-11. IT WAS SUBMITTED THAT IN THE ORDER, THE HONBLE HIGH COURT CLEARLY G IVES ITS OPINION THAT THIS ACADEMY IS RUNNING ONLY WITH A VIEW TO PUBLISH EDUCATIONAL BOOKS AND ACCEPTED THAT THIS IS ONLY FOR PURPOSE OF ACADE MY WHICH IS EDUCATIONAL IN NATURE AND WILL ENTITLE FOR THE BENE FIT U/S 10(23)(IIIAB). IT WAS SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF T HE CASE ARE EXACTLY SAME IN THIS YEAR AND THE SAID DECISION OF THE HON BLE RAJASATHAN HIGH COURT SUPPORTS THE CASE OF THE ASSESSEE. 5. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF RAJASTHAN HINDI GRANTH ACADEMY VS. DCIT, CIRCLE-05, JAIPUR VIDE ITS ORDER DATED 1.11.2017 HAS HELD AS UNDER- 10. BEFORE PROCEEDING WITH THE MATTER, IT WILL NOT BE OUT OF PLACE TO MENTION THAT RAJASTHAN HINDI GRANTH ACADEMY IS ESTA BLISHED BY THE STATE GOVERNMENT TO SEE THAT THE BOOKS ARE AVAILABL E TO THE STUDENT OF THE EDUCATIONAL INSTITUTIONS AT THE GRASS ROOT LEVE L, THEREFORE, WHILE CONSIDERING THE MATTER, WE HAVE CONSIDERED THAT MAI NLY THE SUBSTANTIVE AMOUNT OUT OF RECEIPTS OF RS. 1,81,44,567/-, RS. 1, 24,10,000/- IS RECEIVED BY THE ASSESSEE FROM STATE GOVERNMENT BY W AY OF SUBSIDY. EVEN IF, NAME OF THE INSTITUTION I.E. RAJASTHAN HIN DI GRANTH ACADEMY IS CONSIDERED, IT IS ESTABLISHED THAT IT IS FOR THE PURPOSE OF PUBLICATION OF HINDI GRANTH ACADEMY IS F OR EDUCATION. IN THAT VIEW OF THE MATTER, IN OUR CONSI DERED VIEW, IN VIEW OF DECISIONS REFERRED BY MR. RANKA, THIS IS AN EDUCATIONAL INSTITUTION ACTIVITY. 11. IN THAT VIEW OF THE MATTER, WE ARE OF THE OPINI ON THAT THIS ACADEMY IS RUNNING ONLY WITH A VIEW TO PUBLISH EDUC ATIONAL BOOKS AND ITA NO. 25/JP/2018 RAJASTHAN HINDI GRANTH ACADEMY, JAIPUR VS. AC IT(E), JAIPUR 4 WE HAVE NO HESITATION IN ACCEPTING THE SUBMISSIONS OF MR. RANKA THAT THIS IS ONLY FOR THE PURPOSE OF ACADEMY WHICH IS EDUCATIONAL IN NATURE. 12. IN THAT VIEW OF THE MATTER, THE ASSESSEE WILL B E ENTITLED FOR THE BENEFIT U/S 10(23)(IIIAB). EVEN FROM THE TABLE, LOO KING TO THE TURNOVER, THE PROFIT IS NEGLIGIBLE, THEREFORE, IT IS CLEAR TH AT THE INSTITUTION HAS NO PROFIT MOTIVE. 13. IN VIEW OF THE ABOVE, THE ISSUE IS REQUIRED TO BE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 6. THE LD DR IS HEARD WHO HAS RELIED ON THE ORDER O F THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE UNDER CONSID ERATION IS WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10(23C)( IIIAB) OF THE ACT WHICH PROVIDES FOR EXEMPTION TO ANY UNIVERSITY OR OTHER E DUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FO R THE PURPOSES OF PROFIT AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCE BY THE GOVERNMENT. THE TERM SUBSTANTIALLY FINANCED BY THE GOVERNMENT HAS BEEN DEFINED IN RULE 2BBB WHICH READS AS UNDER: 2BBB. FOR THE PURPOSES OF SUB-CLAUSES (IIIAB) AN D (IIIAC) OF CLAUSE (23C) OF SECTION 10, ANY UNIVERSITY OR OTHER EDUCAT IONAL INSTITUTION, HOSPITAL OR OTHER INSTITUTION REFERRED THEREIN, SHA LL BE CONSIDERED AS BEING SUBSTANTIALLY FINANCED BY THE GOVERNMENT FOR ANY PREVIOUS YEAR, IF THE GOVERNMENT GRANT TO SUCH UNIVERSITY OR OTHER ED UCATIONAL INSTITUTION, HOSPITAL OR OTHER INSTITUTION EXCEEDS FIFTY PER CENT OF THE TOTAL ITA NO. 25/JP/2018 RAJASTHAN HINDI GRANTH ACADEMY, JAIPUR VS. AC IT(E), JAIPUR 5 RECEIPTS INCLUDING ANY VOLUNTARY CONTRIBUTIONS, OF SUCH UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION, HOSPITAL OR OTHER IN STITUTION, AS THE CASE MAY BE, DURING THE RELEVANT PREVIOUS YEAR. 8. IN THE MATTER BEFORE THE HONBLE RAJASTHAN HIGH COURT WHICH WAS PERTAINING TO AY 2010-11, 68.4% OF THE RECEIPTS WER E IN THE FORM OF GRANT-IN-AID FROM THE GOVERNMENT OF RAJASTHAN TOWAR DS PUBLICATION OF BOOKS. DURING THE YEAR UNDER CONSIDERATION, IT HA S BEEN STATED THAT 63.10% OF THE TOTAL RECEIPTS ARE IN THE FORM OF GRA NT-IN-AID FROM THE RAJASTHAN GOVERNMENT. IN LIGHT OF THE SAME, WE FIND THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDENTICAL AND THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT SUPPORTS THE CASE OF T HE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN ASSESSEES OWN CASE, THE AS SESSEE IS HELD ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAB) FOR THE I MPUNGED ASSESSMENT YEAR. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/05/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/05/2018 * GANESH KR. ITA NO. 25/JP/2018 RAJASTHAN HINDI GRANTH ACADEMY, JAIPUR VS. AC IT(E), JAIPUR 6 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RAJASTHAN HINDI GRANTH ACADEMY, JAIP UR 2. IZR;FKHZ@ THE RESPONDENT- ACIT(E), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 25/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR