Sri Balaji Educational & Charitable Public Trust, CHENNAI V. CIT, CHENNAI

ITA 260/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90702 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 03-02-2014
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: S SRIDHAR
• Keywords: Document seized; Charitable institution; Principle of natural justice; Documents seized
• Section: 80G; 12A; 12AA; 132; 10

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI , . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 260/MDS/2014 SRI BALAJI EDUCATIONAL & CHARITABLE PUBLIC TRUST, 3 RD FLOOR, JAI DURGA COMPLEX, NEW NO. 60, 1 ST AVENUE, ASHOK NAGAR, CHENNAI 600 083. [PAN: AACTS1386D] VS. THE COMMISSIONER OF INCOME TAX, CENTRAL III, CHENNAI 34. ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) %& ) * / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE '(%& ) * / RESPONDENT BY : SHRI S. DAS GUPTA, JCIT ) + / DATE OF HEARING : 26.05.2015 ,-. ) + /DATE OF PRONOUNCEMENT : 24.07.2015 / / / / / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, CENTRAL III, CHENNA I, DATED 31.12.2013 PASSED UNDER SECTION 80G OF THE INCOME TAX ACT. 2. THE ASSESSEE SRI BALAJI EDUCATIONAL AND CHARITA BLE PUBLIC TRUST WAS REGISTERED AS PUBLIC CHARITABLE TRUST VIDE REGISTRA TION NO. 1649 OF 1996 IN THE OFFICE OF THE REGISTRAR, PONDICHERRY. THE TRUST WAS REGISTERED UNDER SECTION 12A(A) OF THE INCOME TAX ACT, 1961 VIDE ORD ER C. NO. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 2 6162E(142)/97-98, DATED 13.02.1998, PASSED BY THE L D. CIT. THE ASSESSEE TRUST WAS APPROVED UNDER SECTION 80G(5) OF THE INCO ME TAX ACT BY THE LD. CIT, PONDICHERRY VIDE C. NO. 9165-E(236)/CIT/PDT/20 04-05 DATED 14.12.2004 FROM 01.04.2001 TO 31.03.2006. THEREAFTE R, THE AFORESAID APPROVAL WAS RENEWED VIDE C. NO. 9165-E(236)/CIT/PD T/2006-07 DATED 22.11.2006 FOR A PERIOD 01.04.2007 TO 31.03.2008. THEREAFTER, THE TRUST MADE AN APPLICATION IN FORM NO. 10G DATED 03.04.200 8 SEEKING APPROVAL UNDER SECTION 80G(5) OF THE ACT WITH EFFECT FROM 01 .04.2008. THE LD. CIT HAS REJECTED THE APPLICATION FILED BY THE ASSESSEE TO G RANT APPROVAL UNDER SECTION 80G(5) BY ORDER DATED 24.09.2008. IN HIS ORDER, HE HAS OBSERVED THAT THE TRUST IS RUNNING A MEDICAL COLLEGE ALONG WITH ENGIN EERING COLLEGES, DENTAL COLLEGE AND COLLEGE FOR EDUCATION AT PUDUCHERRY AND CLAIMING APPROVAL EXEMPTION UNDER SECTION 80G AND REGISTRATION UNDER SECTION 12AA OF THE ACT AS A CHARITABLE TRUST. IT IS A FACT THAT MANY OF TH E SO CALLED CHARITABLE INSTITUTIONS IMPARTING MEDICAL AND ENGINEERING EDUC ATIONS ARE ACTUALLY RUNNING THEM FOR PROFIT BY COLLECTING CAPITATION FE ES IN THE NAME OF VOLUNTARY DONATIONS. WITH THIS BACKGROUND, A SEARCH UNDER SEC TION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THIS CASE ON 13.08.2007 . VARIOUS BOOKS OF ACCOUNTS AND DOCUMENTS WERE SEIZED. IN THE COURSE O F THE SEARCH ON 13.08.2007, SWORN STATEMENTS UNDER SECTION 132(4) O F THE ACT WERE RECORDED FROM SHRI M.K.RAJAGOPALAN, CHAIRMAN OF THE GROUP. AS PER THE SWORN STATEMENT OF THE CHAIRMAN DEPOSED ON 13.08.20 07, HE HAS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 3 ANSWERED TO QUESTION NO.7 THAT THE TRUST ADMITS STU DENTS ON MANAGEMENT QUOTA AT VARIOUS EDUCATIONAL INSTITUTIONS RUN BY TH E TRUST FOR VARIOUS COURSES. IN HIS ANSWER TO QUESTION NO.8, HE HAS DEC LARED THAT THE TRUST DOES RECEIVE DONATIONS FROM THE STUDENTS FOR VARIOU S COURSES AT ITS EDUCATIONAL INSTITUTIONS AND HE HAS MENTIONED THE A MOUNT OF DONATIONS RECEIVED ALSO. DURING THE COURSE OF THE SEARCH, EVI DENCES WERE GATHERED ESTABLISHING THE FACT THAT THE TRUST HAD IN FACT, C OLLECTED CAPITATION FEES FROM STUDENTS ADMITTED TO VARIOUS PROFESSIONAL COURSES U NDER THE MANAGEMENT QUOTA. SHRI M.K.RAJAGOPALAN, CHAIRMAN OF THE TRUST HAS DISCLOSED AN ADDITIONAL INCOME OF . 3 CRORES TOWARDS INCREASE IN THE FORM OF JEWELLER Y, ADDITION TO HOME FURNITURE AND OTHER ASSETS AND ALS O TOWARDS SOME OTHER UNDISCLOSED EXPENDITURE IN HIS OWN HAND. IT IS FOUN D FROM THE NOTINGS OF SHRI M.K. RAJAGOPALAN IN SHEET NO.4 OF IV IN ANN/SP/B&D/ LS/S-I OF THE SEIZED DOCUMENT THAT THE TOTAL VALUE OF LAND AND BUILDING OWNED BY SHRI M.K. RAJAGOPALAN AS ON 31.03.2006 IS .601.63 LAKHS, WHEREAS, AS PER THE INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2006-07 T HE VALUE IS .357.12 LAKHS. AS PER THE SEIZED MATERIAL IN ANN/SP/B&D/LS/ S-7, IT IS REVEALED THAT THE CASH COLLECTION OF .284.55 LAKHS HAS BEEN GIVEN TO VARIOUS PERSONS. IN HIS ANSWER TO QUESTION NO.17 OF HIS STATEMENT DATED 12.11.2007, HE HAS STATED THAT THE EXPENSES HAVE BEEN INCURRED IN CONN ECTION WITH THE COLLEGES. BUT HE HAS FAILED TO PROVIDE ANY MATERIALS EVIDENCE IN SUPPORT OF HIS CLAIM. IN HIS ANSWER TO QUESTION NO.L7, HE HAS DECLARED THAT THERE IS INCREASE IN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 4 ASSETS TO THE TUNE OF .78 CRORES IN THE LAST 6 YEARS. IN HIS LETTER DATED 14.11.2007 AND 23.11.2007 HE HAS STATED THAT THE FI XED ASSET OF THE TRUST HAS INCREASED TO .67.68 CRORES INSTEAD OF .78.81 CRORES. EVEN IF HIS CONTENTION IS ACCEPTED, THERE IS STILL A DIFFERENCE OF .12.74 CRORES, WHICH IS NOT EXPLAINED. IN VIEW OF THE ABOVE AND THE EVIDENC ES SEIZED DURING THE COURSE OF SEARCH, IT IS VERY MUCH EVIDENT THAT THE TRUST HAS VIOLATED THE OBJECTS OF THE TRUST, THE TRUST IS BEING RUN TO EAR N PROFIT, IN VIOLATION OF 80G (5)(I) OF THE ACT AND THE TRUST HAS NOT PROPERLY IN CLUDED ALL ITS TRANSACTIONS IN ITS BOOKS OF ACCOUNTS, IN VIOLATION OF SECTION 80G( 5)(IV) OF THE ACT. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE TRIBUNAL. 4. WHILE DISMISSING THE APPEAL FILED BY THE ASSESS EE IN I.T.A. NO. 2127/MDS/2008 VIDE ORDER DATED 11.09.2009, THE TRIB UNAL HAS OBSERVED IN RESPECT OF VIOLATION OF PRINCIPLES OF NATURAL JUSTI CE THAT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE LD. CIT DATED 05.09 .2008, SHRI RAJAGOPALAN, CHAIRMAN OF THE TRUST HAS SUBMITTED A DETAILED REPLY VIDE HIS LETTER DATED 10.09.2008, BUT IN THIS LETTER SHRI RA JAGOPALAN DID NOT ALLEGE THAT THE COPIES OF HIS STATEMENT RECORDED UNDER SECTION 132(4) AND OF THE SEIZED DOCUMENTS WERE NOT SUPPLIED TO HIM. IN ANOTHER LETT ER DATED 24.09.2008, WHICH WAS RECEIVED IN THE OFFICE OF THE LD. CIT ON 26.09.2008, AFTER THE ORDER WAS PASSED BY THE CIT ON 24.09.2008, THE ISSUE RAIS ED BY THE LD. CIT IN HIS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 5 SHOW CAUSE NOTICE DATED 05.09.2008 WERE FURTHER EXP LAINED, BUT THERE WAS NOT A WHISPER ABOUT THE NON-AVAILABILITY OF THE COP IES OF THE STATEMENT AND OF THE SEIZED DOCUMENT. MANIFESTLY, THE ABOVE GROUND/A RGUMENT APPEARS TO BE AN AFTERTHOUGHT. ULTIMATELY, THE TRIBUNAL HAS FURTH ER HELD THAT BY REFUSING THE GRANT OF APPROVAL UNDER SECTION 80G(5)(VI), THE LD. CIT HAS NOT DENIED ANY BENEFIT DIRECTLY AVAILABLE TO THE TRUST. THE EFFECT OF THE IMPUGNED ORDER WILL BE TO DENY THE BENEFIT OF DEDUCTION UNDER SECTION 80G TO THE PARENTS, IN RESPECT OF THE PAYMENTS MADE BY THEM FOR SECURING ADMISSION S FOR THEIR CHILDREN. THE PROVISIONS OF SECTION 80G ARE MEANT FOR VOLUNTA RY PAYMENTS REPRESENTING DONATIONS AND NOT FOR PAYMENTS MADE FO R SUCH MATERIAL GAINS. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE WAS D ISMISSED. 5. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE HONBLE HIGH COURT. THE HONBLE JURISDICTIONAL HIGH COURT VIDE T AX CASE (APPEAL) NO. 131 OF 2010 VIDE ORDER DATED 03.06.2013, CONSIDERED THE ISSUE IN APPEAL AND OBSERVED THAT THE LEARNED SENIOR COUNSEL APPEAR ING FOR THE ASSESSEE HAS SUBMITTED THAT AFTER THE REJECTION OF THE APPRO VAL UNDER SECTION 80G(5)(VI) OF THE ACT, THE PETITIONER WAS ISSUED WI TH SEIZED MATERIALS OF DOCUMENTS ON 19.11.2009, THE ASSESSEE IS STATED TO HAVE SUCCEEDED IN THE SUBSEQUENT APPEAL BEFORE THE INCOME TAX APPELLATE T RIBUNAL. THE HONBLE HIGH COURT HAS FURTHER OBSERVED THAT THERE IS NO MA TERIAL TO CONTROVERT THE ALLEGATION OF THE ASSESSEE ABOUT THE NON-FURNISHING OF THE COPIES OF THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 6 STATEMENT RECORDED AS WELL AS THE RECORDS SEIZED AN D IN FACT, IT IS A MATTER OF RECORD THAT THE INCOME TAX APPELLATE TRIBUNAL ITSEL F HAS POINTED OUT ABOUT THE NON-FURNISHING OF THE COPIES OF THE SEIZED RECO RDS TO THE ASSESSEE-TRUST. CONSIDERING THE FACTS THAT THE ORDER OF REJECTION R ESTED ON THE SEIZED MATERIALS AND NON-FURNISHING OF THE COPIES OF THE S AME TO THE ASSESSEE RELATING TO THE SEARCH UNDER SECTION 132 OF THE ACT ON 13.08.2007, IN FAIRNESS TO THE CONTENTION OF THE ASSESSEE WITH REGARD TO NO N-COMPLIANCE OF THE PRINCIPLES OF NATURAL JUSTICE, THE HONBLE HIGH COU RT HAS REMANDED THE MATTER BACK TO THE COMMISSIONER OF INCOME TAX, CENTRAL III , CHENNAI FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW. 6. IN PURSUANCE OF ORDER OF THE HONBLE JURISDICTI ONAL HIGH COURT VIDE ITS ORDER DATED 03.06.2013, THE ASSESSEE TRUST ADDRESSE D A LETTER TO THE LD. CIT DATED 01.11.2013 IN ORDER TO GIVE EFFECT TO THE ORD ER OF THE HONBLE HIGH COURT. THEREAFTER, THE ASSESSEE WAS CALLED UPON TO FILE DETAILS. THE ASSESSEE TRUST HAS SUBMITTED ITS WRITTEN SUBMISSION S DATED 08.11.2013 BEFORE THE LD. CIT CENTRAL III, CHENNAI FOR GRANT O F APPROVAL UNDER SECTION 80G(5) OF THE ACT. THE LD. CIT, AFTER CONSIDERING T HE EXPLANATION OF THE ASSESSEE, HAS OBSERVED THAT AS PER THE DECISION OF THE HONBLE MADRAS HIGH COURT SETTING ASIDE THE ORDER OF THE LD. CIT FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW, OPPORTUNITY WAS GIVEN TO THE A SSESSEE VIDE LETTER IN C.NO. 80G/C-III/2013-14 DATED 05.11.2013. THEREAFT ER, THE ASSESSEE HAS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 7 FURNISHED WRITTEN SUBMISSIONS DATED 08.11.2013 AND THE C.A. OF THE ASSESSEE APPEARED BEFORE THE LD. CIT AND OFFERED EX PLANATION. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE LD . CIT HAS OBSERVED THAT THE ORDER OF THE ITAT DATED 05.04.2011 REFERRED TO BY THE TRUST HAS BEEN PRONOUNCED IN THE CONTEXT OF ASSESSMENT ORDERS PASS ED IN THE CASE OF THE TRUST, WHEREAS, IN THE INSTANT CASE, THE MATTER IN QUESTION INVOLVES APPROVAL UNDER SECTION 80G OF THE ACT. THE INCOME TAX ACT HA S PROVIDED A SEPARATE SET OF CONDITIONS UNDER SECTION 80G(5) ON THE FULFI LMENT OF WHICH ALONE, THE APPROVAL UNDER SECTION 80G CAN BE GRANTED OR RENEWE D. SEPARATE RULES HAVE ALSO BEEN PROVIDED IN THIS REGARD VIZ. RULE 11 AA. THUS, THE LD. CIT HAS THE POWER TO ASCERTAIN THE FULFILMENT OF THESE SPEC IFIC CONDITIONS LAID DOWN UNDER SECTION 80G(5) AND RULE 11AA IN ORDER TO ADJU DICATE ON THE CONTINUATION OR OTHERWISE OF APPROVAL UNDER SECTION 80G. 7. IT IS PERTINENT THAT THE CIT VIDE HIS ORDER DAT ED 24.9.2008 HAS HIGHLIGHTED CERTAIN SPECIFIC FINDINGS OF THE SEARCH AND COME TO THE CONCLUSION THAT SECTIONS 80G(5)(I)&(IV) HAVE BEEN VIOLATED BY THE TRUST AND THAT RULE 11AA(5) IS APPLICABLE TO THE FACTS OF THE TRUST. EV EN IF THE ASSESSEE'S CONTENTIONS WERE TO BE ACCEPTED, THE ORDER OF THE I TAT DATED 11.9.2009 RENDERED IN A TOTALLY DIFFERENT CONTEXT, IS THE LAT TER ORDER OF THE ITAT. FINALLY, THE SPECIFIC FINDINGS GIVEN BY THE ITAT, VIZ., 24. IT IS NECESSARY TO POINT OUT HERE THAT BY REFU SING TO GRANT APPROVAL U/S. 80G(5)(VI), THE CIT HAS NOT DENIED ANY BENEFIT DIRECTLY AVAILABLE TO I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 8 THE TRUST. THE EFFECT OF THE IMPUGNED ORDER WILL BE TO DENY THE BENEFIT OF DEDUCTION U/S. 80G TO THE PARENTS, IN RESPECT OF TH E PAYMENTS MADE BY THEM FOR SECURING ADMISSIONS FOR THEIR CHILDREN. TH E PROVISIONS OF SECTION 80G ARE MEANT FOR VOLUNTARY PAYMENTS REPRES ENTING 'DONATIONS' AND NOT FOR PAYMENTS MADE FOR SUCH MATERIAL GAINS.' ARE TOTALLY RELEVANT TO THE FACTS OF THE ASSESSEES CASE AND REJECTED THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 80G OF THE ACT. 8. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE PR ESENT APPEAL BEFORE THE TRIBUNAL. 9. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT INITIALLY REJECTED GRANT OF APPROVAL UNDER SECTION 80G (5) BY ORDER DATED 24.09.2008 ON THE BASIS OF SEARCH AND ALSO SEIZED D OCUMENTS. HOWEVER, BASED ON THE SEARCH AND SEIZED DOCUMENTS, NO ADDITI ON WAS MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IS ENJOYING 12A REGISTRATION EVEN TODAY. THEREFORE, DENIAL OF THE BENEFIT UNDER SECTI ON 80G TO THE ASSESSEE IS NOT JUSTIFIED. 10. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL WITH REGARD TO NON-SUPPLY OF SEIZED DOCUMENTS AND C OPY OF THE SWORN STATEMENT RECORDED BY THE DEPARTMENT, THE TRIBUNAL, WHILE DISMISSING THE APPEAL FILED BY THE ASSESSEE, HAS OBSERVED THAT THE DENIAL OF APPROVAL UNDER SECTION 80G HAS NOT EFFECT TO THE ASSESSEE. WHEN TH E ASSESSEE CARRIED THE MATTER IN APPEAL AGAINST THE ORDER OF THE TRIBUNAL, THE HONBLE JURISDICTIONAL HIGH COURT HAS CONSIDERED THE ISSUE AND STATED THAT THERE IS NO MATERIAL TO I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 9 CONTROVERT THE ALLEGATION OF THE ASSESSEE ABOUT THE NON-FURNISHING OF THE COPIES OF THE STATEMENT, ETC. BEFORE PASSING THE OR DER BY THE TRIBUNAL AND DIRECTED THE LD. CIT TO CONSIDER THE ISSUE DE NOVO. IT IS FURTHER SUBMITTED THAT INSPITE OF DIRECTION GIVEN BY THE HONBLE HIGH COUR T WITH SPECIFIC DIRECTION ON PRINCIPLES OF NATURAL JUSTICE, THE LD. CIT, WITHOUT CONSIDERING THE JUDGEMENT OF THE HONBLE HIGH COURT, SIMPLY RELYING ON THE ORDER OF THE TRIBUNAL DATED 11.09.2009, AGAIN DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ORDER PASSED BY THE TRIBUNAL VIDE ORDER DATED 05.04 .2011 IN I.T.A. NOS. 1476 TO 1482/MDS/2010 REFERRED BY THE TRUST WAS PRO NOUNCED IN THE CONTEXT OF THE ASSESSMENT ORDERS PASSED IN THE CASE OF THE TRUST, WHEREAS, IN THE INSTANT CASE, THE MATTER IN QUESTION INVOLVES APPRO VAL UNDER SECTION 80G OF THE ACT, IN FACT, IT IS NOT CORRECT. THE LD. CIT, W ITHOUT APPLICATION OF MIND, SIMPLY REJECTED THE CLAIM OF THE ASSESSEE TO GRANT APPROVAL UNDER SECTION 80G OF THE ACT. 11. ON THE OTHER HAND, THE LD. DR SUPPORTED THE OR DER PASSED BY THE LD. CIT. 12. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS EE SRI BALAJI EDUCATIONAL AND CHARITABLE PUBLIC TRUST WAS REGISTERED AS PUBLI C CHARITABLE TRUST IN THE REGISTRAR, PONDICHERRY. THE TRUST WAS REGISTERED UN DER SECTION 12A(A) OF THE INCOME TAX ACT, DATED 13.02.1998. THE ASSESSEE TRUS T WAS APPROVED UNDER I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 10 SECTION 80G(5) OF THE INCOME TAX ACT BY THE LD. CIT , PONDICHERRY VIDE ORDER DATED 14.12.2004 FROM 01.04.2001 TO 31.03.2006. THE REAFTER, THE AFORESAID APPROVAL WAS RENEWED VIDE ORDER DATED 22.11.2006 FO R A PERIOD 01.04.2007 TO 31.03.2008. 13. THEREAFTER, THE TRUST MADE AN APPLICATION IN F ORM NO. 10G DATED 03.04.2008 SEEKING APPROVAL UNDER SECTION 80G(5) OF THE ACT WITH EFFECT FROM 01.04.2008. THE CLAIM OF THE ASSESSEE UNDER SE CTION 80G OF THE ACT WAS DENIED BY THE LD. CIT BY ORDER DATED 24.09.2008 FOR THE FOLLOWING REASONS: ACCORDING TO THE LD. CIT, MANY OF THE CHARITABLE IN STITUTIONS IMPARTING MEDICAL AND ENGINEERING EDUCATIONS ARE ACTUALLY RUN NING THEM FOR PROFIT BY COLLECTING CAPITATION FEES IN THE NAME OF VOLUNTARY DONATIONS. WITH THIS BACKGROUND, A SEARCH UNDER SECTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THIS CASE ON 13.08.2007. VARIO US BOOKS OF ACCOUNTS AND DOCUMENTS WERE SEIZED. IN THE COURSE O F THE SEARCH EVIDENCES WERE GATHERED TO ESTABLISH THE FACT THAT THE TRUST HAD COLLECTED CAPITATION FEES FROM STUDENTS ADMITTED FO R VARIOUS COURSES IN VARIOUS COLLEGES IN MANAGEMENT QUOTA. SHRI M.K.RAJA GOPALAN, CHAIRMAN OF THE TRUST HAS DISCLOSED AN ADDITIONAL I NCOME OF . 3 CRORES TOWARDS INCREASE IN THE FORM OF JEWELLERY, A DDITION TO HOME FURNITURE AND OTHER ASSETS AND ALSO TOWARDS SOME OT HER UNDISCLOSED I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 11 EXPENDITURE IN HIS OWN HAND. THE LD. CIT HAS ALSO O BSERVED THAT BASED ON THE SEIZED DOCUMENT THE TOTAL VALUE OF LAN D AND BUILDING OWNED BY SHRI M.K. RAJAGOPALAN AS ON 31.03.2006 IS .601.63 LAKHS, WHEREAS, AS PER THE INCOME TAX RETURN FOR THE ASSES SMENT YEAR 2006- 07 THE VALUE IS .357.12 LAKHS. AS PER THE SEIZED DOCUMENT AND HE HAS FAILED TO PROVIDE ANY MATERIALS EVIDENCE IN SUP PORT OF HIS CLAIM. THE LD. CIT HAS FURTHER OBSERVED THAT THERE IS AN I NCREASE IN ASSETS TO THE TUNE OF .78 CRORES IN THE LAST 6 YEARS. IN HIS LETTER DATED 14.11.2007 AND 23.11.2007 SHRI RAJAGOPALAN HAS STAT ED THAT THE FIXED ASSET OF THE TRUST HAS INCREASED TO .67.68 CRORES INSTEAD OF .78.81 CRORES. EVEN IF HIS CONTENTION IS ACCEPTED, THERE I S STILL A DIFFERENCE OF .12.74 CRORES, WHICH IS NOT EXPLAINED. 14. THEREAFTER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE RIBUNAL AND HE HAS RAISED THE OBJECTION THAT THE 80 G WAS CANCELLED BASED ON THE SEIZED MATERIAL AND THAT THE COPIES OF THE SEIZ ED MATERIAL WAS NOT SUPPLIED TO THE ASSESSEE. HOWEVER, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAS NOT RAISED ANY OBJECTION WITH REGARD TO NON-AVA ILABILITY OF SEIZED MATERIAL BEFORE THE LD. CIT AND IT IS ONLY RAISED BEFORE THE TRIBUNAL. THEREFORE, IT IS AN AFTERTHOUGHT AND THE TRIBUNAL HAS FURTHER OBSERVED THAT 80G(5) BENEFIT ONLY AVAILABLE TO THE PARENTS OF THE STUDENTS AND DENIAL OF 80G(5) HAS NO CONSEQUENTIAL BENEFITS. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 12 15. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFO RE THE HONBLE HIGH COURT BY RAISING VARIOUS GROUNDS. THE HONBLE HIGH COURT VIDE ITS ORDER DATED 03.06.2013, DIRECTED THE LD. CIT FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW. 16. AFTER THE JUDGEMENT PASSED BY THE HONBLE HIGH COURT, THE ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS BEFORE THE L D. CIT, CENTRAL III, CHENNAI. THE LD. CIT, AFTER CONSIDERING THE WRITTEN SUBMISSI ONS AND ALSO JUDGEMENT OF THE HONBLE HIGH COURT, OBSERVED THAT THE ORDER PAS SED BY THE ITAT IN I.T.A. NOS. 1476 TO 1482/MDS/2010 DATED 05.04.2011 AS REFE RRED TO BY THE TRUST HAD BEEN PRONOUNCED IN THE CONTEXT OF THE ASSESSMEN T ORDER PASSED IN THE CASE OF THE TRUST, WHEREAS, THE INSTANT CASE, THE M ATTER IN QUESTION INVOLVES GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT. IN THIS CONTEXT, IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS RAISED VARIOUS GROUND S BEFORE THE HONBLE HIGH COURT IN RESPECT OF NON-GRANTING OF APPROVAL U NDER SECTION 80G AND ALSO RAISED A GROUND BEFORE THE HONBLE HIGH COURT THAT NON-GRANTING OF APPROVAL UNDER SECTION 80G IS BASED ON THE MATERIAL COLLECTED BEHIND THE BACK OF THE ASSESSEE AND THE COPIES OF WHICH ARE NO T FURNISHED TO THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT OB JECTED TO THE SAME AT ANY STAGE AND ALSO SUBMITTED THAT IT IS VIOLATION O F PRINCIPLES OF NATURAL JUSTICE. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 13 17. THE HONBLE HIGH COURT, AFTER CONSIDERING THE GROUNDS RAISED BY THE ASSESSEE WITH REGARD TO DENIAL OF APPROVAL UNDER SE CTION 80G, WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE I.E., COPIES OF SEIZED MATERIALS, HAS SPECIFICALLY OBSERVED THAT THE PETITIONER WAS ISSUED WITH SEIZE D MATERIALS OF DOCUMENTS ON 19.11.2009, THE ASSESSEE SHOULD HAVE SUCCEEDED I N THE SUBSEQUENT APPEAL BEFORE THE TRIBUNAL. FURTHER, THERE IS NO MA TERIAL TO CONTROVERT THE ALLEGATION OF THE ASSESSEE ABOUT THE NON-FURNISHING OF THE COPIES OF THE STATEMENT RECORDED AS WELL AS THE RECORDS SEIZED AN D IN FACT, IT IS A MATTER OF RECORD THAT THE TRIBUNAL ITSELF HAS POINTED OUT ABO UT THE NON-FURNISHING OF THE COPIES OF THE SEIZED RECORDS TO THE ASSESSEE-TRUST. 18. ONCE THE HONBLE HIGH COURT HAS CONSIDERED THE ENTIRE ISSUE OF NON- SUPPLY OF RELEVANT SEIZED MATERIALS BEFORE PASSING THE ORDER, NOW THE LD. CIT SAYS THAT THE ORDER PASSED BY THE TRIBUNAL IS DIFFE RENT I.E. IN THE CASE OF THE TRUST, WHERE THE ISSUE IN QUESTION INVOLVED APPROVA L OF 80G IS DIFFERENT. FROM THE OBSERVATION OF THE LD. CIT, IT IS VERY CLEAR TO SAY THAT THE LD. CIT HAS NOT UNDERSTOOD THE JUDGEMENT OF THE HONBLE HIGH COURT IN PROPER PERSPECTIVE. ONCE THE HONBLE HIGH COURT HAS DIRECTED THE LD. CI T TO DECIDE THE ISSUE DE NOVO, THE LD. CIT, REJECTING 80G ON THE GROUND THAT THE ASSESSEE HAS NOT BROUGHT ANY FRESH SUBMISSIONS TO CONTROVERT THE FIN DINGS OF THE LD. CIT IN HIS ORDER DATED 24.09.2008 IS NOT CORRECT AND JUSTIFIED . THE LD. CIT FURTHER OBSERVED THAT THE ORDER OF THE TRIBUNAL IN I.T.A. N O. 2127/MDS/2008 DATED I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 14 11.09.2009 HAS ALREADY CONSIDERED THE ISSUE AND DEN IAL OF 80G HAS NO EFFECT TO THE TRUST. THE HONBLE HIGH COURT HAS ALR EADY CONSIDERED THE ORDER PASSED BY THE LD. CIT DATED 24.09.2008 AND ALSO THE ORDER OF THE TRIBUNAL DATED 11.09.2009 AND DIRECTED THE LD. CIT TO DECIDE THE ISSUE DE NOVO. THE LD. CIT, INSTEAD OF DECIDING THE ISSUE DE NOVO, HE DENIED THE CLAIM OF THE ASSESSEE AGAIN BASED ON THE ORDER PASSED BY THE TRI BUNAL IN I.T.A. NO. 2127/MDS/2008 DATED 11.09.2009 AND ALSO THE ORDER O F THE LD. CIT DATED 24.09.2008. WHEN THE ASSESSEE HAS SPECIFICALLY RAIS ED THE ISSUE OF NON- SUPPLY OF SEIZED MATERIALS TO THE ASSESSEE, THE SAM E WAS ACCEPTED BY THE HONBLE HIGH COURT. THE LD. CIT, WITHOUT CONSIDERIN G THE DIRECTION OF THE HONBLE HIGH COURT, REJECTING THE CLAIM OF THE ASSE SSEE IS NOT JUSTIFIED. THAT APART, WHEN THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL IN RESPECT OF THE SO CALLED SEARCH AND SEI ZURE ACTION CARRIED OUT BY THE DEPARTMENT, THE TRIBUNAL VIDE ITS ORDER DATED 0 5.04.2011 HAS CONSIDERED THE ISSUE AND DISCUSSED ELABORATELY IN I.T.A. NO. 1 476 TO 1482/MDS/2010. 19. THE TRIBUNAL HAS CONSIDERED THE ENTIRE ISSUE O F SEARCH CONDUCTED BY THE DEPARTMENT ON 13.08.2007 AND OBSERVED THAT IN R ESPECT OF NON- MAINTENANCE OF BOOKS OF ACCOUNTS THAT EVEN IN THE C OURSE OF SEARCH OPERATIONS, THE LD. CIT HAS NO CASE THAT PROPER ACC OUNTS WERE NOT MAINTAINED BY THE ASSESSEE TRUST EXCEPT THE ALLEGAT ION REGARDING THE NATURE OR CERTAIN SEIZED DOCUMENTS RELATING TO THE REFUND OF FEES MADE TO THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 15 STUDENTS, WHO WERE NOT GIVEN ADMISSION IN THE COLLE GES OF THE ASSESSEE TRUST, WE DO NOT FIND ANY REASON TO ENDORSE THE ABO VE ALLEGATION MADE OUT BY THE REVENUE, WHICH IS WITHOUT ANY BASIS. THE TRIBUN AL, AFTER CONSIDERING ALL THE DETAILS, ARGUMENTS OF BOTH SIDES AND FINALLY HE LD THAT THE ASSESSEE IS CARRYING ON GENUINE EDUCATIONAL ACTIVITIES ENTITLED TO BE TREATED AS CHARITABLE ACTIVITIES AND THERE IS NO EVIDENCE ON RECORD TO SH OW THAT THE ASSESSEE HAD ACCEPTED CAPITATION FEE AGAINST ALLOTMENT OF SEATS. 20. WHEN THE MATTER WAS CARRIED IN APPEAL, THE HON BLE HIGH COURT HAS CONSIDERED EACH AND EVERY ASPECT OF THE ISSUE RAISE D BY THE REVENUE AND OBSERVED THAT THE ASSESSEE TRUST IS RUNNING ABOUT E IGHT EDUCATIONAL INSTITUTIONS, THE TRIBUNAL, BASED ON THE VARIOUS D OCUMENTS FILED BY THE ASSESSEE I.E. THE PERMISSION BY THE DEPUTY DIRECTOR OF PUBLIC HEALTH, GOVERNMENT OF PUDUCHERRY TO UTILIZE THE FACILITIES OF THE GOVERNMENT HOSPITALS; THE CONSTITUTION OF PERMANENT ADMISSION COMMITTEE UNDER THE CHAIRMANSHIP OF HONBLE JUSTICE A. RAMAMURTHY (RETD .), ETC. RENDERED A CATEGORIC FINDING ON FACT THAT THE ASSESSEE IS RUNN ING A NUMBER OF EDUCATIONAL INSTITUTIONS RECOGNIZED BY LAW AND ITS CHARITABLE ACTIVITIES BY WAY OF EDUCATION ARE BONAFIDE. THE DEPARTMENT HAS NOT P RODUCED ANY EVIDENCE TO REBUT THE SAID FINDING RENDERED BY THE TRIBUNAL AND FIND ANY REASON TO UPSET THE SAID FINDINGS. SO FAR AS REFUND OF FEE CO LLECTED BY THE ASSESSEE, THE HONBLE HIGH COURT HAS OBSERVED THAT IN RESPECT OF REFUND OF FEES, IT IS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 16 ALSO NOT DISPUTED THAT THESE DETAILS HAVE BEEN BROU GHT OUT IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE TRUST. THE DEPARTMENT HA S NOT CONTROVERTED THIS FINDING OF FACT. IT ESTABLISHES THE ASSESSEES CASE OF BONAFIDE REFUND. NOTHING MATERIAL TURNS ON THIS FACT TO HOLD AGAINST THE ASS ESSEE. IN SO FAR AS CASH SEIZED BY THE DEPARTMENT DURING THE SEARCH IN THE H ANDS OF THE CHAIRMAN OF THE ASSESSEE TRUST, IN OUR CONSIDERED OPINION, BAS ED ON THE LOOSE SHEETS AND CASH SEIZED, WHICH HAVE BEEN HELD AS IRRELEVANT TO THE PRESENT ISSUE, IT CANNOT BE HELD THAT FOR ALL THE ASSESSMENT YEARS TH E ASSESSEE RECEIVED CAPITATION FEE FOR ADMISSION OF STUDENTS IN THE MAN AGEMENT QUOTA. THIS IS A PERVERSE INFERENCE. WITHOUT CONDUCTING ANY ENQUIRY IN THIS REGARD TO MAKE ALLEGATION IS UNSUSTAINABLE. THE HONBLE HIGH COURT HAS ALSO CONSIDERED THE GENUINENESS OF THE DONATIONS FROM PAGE 51 TO 52 AT PARA 7.10 THAT IF THE DEPARTMENT WANTED TO MAKE OUT A CASE OF VIOLATION O F SECTION 13 OF THE ACT BY THE TRUST, IT CANNOT BE BASED ON THE PERCEPTION OF THE ASSESSING OFFICER THAT DONATIONS TO THE TRUST ARE NOT VOLUNTARY. WE H ASTEN TO ADD THAT THERE IS NO MATERIAL TO SUPPORT THE PLEA THAT THE DONATIONS ARE NOT VOLUNTARY. IN SO FAR AS SEIZED CASH AND LOOSE SHEETS ARE CONCERNED, THE HONBLE HIGH COURT HAS OBSERVED AS UNDER: 7.12. WE DO NOT FIND ANY REASON TO COME TO A DIFFE RENT CONCLUSION ON FACTS, AS HAS BEEN ADDRESSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE TRIBUNAL ON THESE TWO ISSUES RELATING TO SEIZURE OF CASH AND LOOSE SHEETS. APPARENTLY, THERE IS NO DISPUTE ON THAT FACT. ALL T HAT THE DEPARTMENT IS TRYING TO SHOW IS THAT THERE IS SOMET HING IMPROPER IN THE MANNER IN WHICH THE DONATIONS ARE HANDLED. B OTH THESE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 17 FACTORS CLEARLY ESTABLISH THAT THE ALLEGATIONS HAVE NOTHING TO DO WITH THE TRUST AND ITS ACTIVITIES IN RELATION TO TH E CHARITABLE OBJECTS. 7.13. THERE APPEARS TO BE NO SECOND OPINION ON THI S FINDING BECAUSE THE SCOPE OF SECTIONS 11,12 AND 13, AS WE F IND IS IN RELATION TO APPLICATION OF INCOME AND THE UTILIZATI ON THEREON FOR CHARITABLE PURPOSE, AS DEFINED UNDER SECTION 2(15) OF THE ACT, WHICH READS AS UNDER: SECTION 2(15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND THE ADVANCEMENT OF AN Y OTHER OBJECT OF GENERAL PUBLIC UTILITY. THERE IS NOT EVEN AN IOTA OF MATERIAL TO COME TO A CONCLUSION TO A DIFFERENT CONCLUSION THAN WHAT HAS BEEN HELD BY THE CIT (APPEALS) AND THE TRIBUNAL. 7.15. WE FIND THAT THE DEPARTMENT HAS NOT MADE OUT A CASE OF COLLECTION OF CAPITATION FEE UNDER THE GUISE OF DON ATION AND IT HAS NOT ESTABLISHED A CASE OF INVOLUNTARY NATURE OF DON ATIONS. THEREFORE, THE QUESTIONS OF LAW (I) AND (II) ARE AN SWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 21. IN SO FAR AS VIOLATION OF SECTION 13 OF THE AC T IS CONCERNED, THE HONBLE HIGH COURT HAS HELD THAT THE DEPARTMENT HAS NOT PRO DUCED ANY MATERIAL TO ESTABLISH A CASE OF VIOLATION OF SECTION 13 OF THE ACT AND ULTIMATELY, THE HONBLE HIGH COURT HAS CONFIRMED THE ORDER OF THE T RIBUNAL AND DISMISSED THE APPEAL FILED BY THE REVENUE. IN VIEW OF THE ORD ER OF THE TRIBUNAL IN I.T.A. NOS. 1476 TO 1482/MDS/2010 DATED 05.04.2011 AND ALS O BY FOLLOWING THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT IN T.C.( A) NOS. 1052 TO 1058 OF 2014 DATED 24.03.2015 ALL THE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AND ADDITION MADE IN RESPECT OF SEARCH CONDUCTED UN DER SECTION 132 OF THE ACT ON 13.08.2007, ALL THE ADDITIONS ARE DELETED. I N SO FAR AS 12A(A) I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 18 REGISTRATION, THE TRIBUNAL, IN I.T.A. NO. 1884/MDS/ 2014 VIDE ORDER DATED 24.03.2015 HAS OBSERVED THAT IT IS EVIDENT THAT T HE ACTIVITIES CONDUCTED BY THE ASSESSEE TRUST ARE ONLY PROMOTING EDUCATION WIT HIN THE AMBIT OF SECTION 2(15) OF THE ACT. THE TRUST WAS NOT ENGAGED IN ANY OTHER ACTIVITY OTHER THAT PROMOTING EDUCATION. THE ALLEGATIONS THE REVENUE TH AT THE TRUST WAS COLLECTING CAPITATION FEES, DONATIONS SIPHONING OF UNDISCLOSED INCOME OF THE TRUST FOR THE BENEFIT OF THE TRUSTEES CAN AT THE MO ST BE TAXED IN THE HANDS OF THE TRUST OR THE TRUSTEES AS THE CASE MAY BE AND MA Y EVEN TRIGGER PENAL ACTION AGAINST THE TRUSTEES IN ACCORDANCE WITH LAW. MOREOVER, NO CONCLUSIVE FINDINGS BY COGENT EVIDENCE ARE ESTABLISHED BY THE REVENUE TO PROVE THAT THE TRUSTEES HAVE SIPHONED OUT UNDISCLOSED INCOME OF TH E TRUST. IT IS ALSO NOT ESTABLISHED BEFORE US BY THE REVENUE THAT THE TRUST EES WHO HAVE RECEIVED FUNDS BY SIPHONING THE UNDISCLOSED INCOME OF THE TR UST ARE BROUGHT TO TAX. BASED ON THESE FACTS AND THE CASE LAWS DISCUSSED HE REIN ABOVE, THE TRIBUNAL OBSERVED THAT THE LD. CIT IS NOT JUSTIFIED IN WITHDRAWING THE REGISTRATION UNDER SECTION 12A(A) OF THE ACT BY INV OKING THE PROVISIONS OF SECTION 12AA(3) OF THE ACT. WHEN THE ASSESSEE CARRI ED THE MATTER IN APPEAL AGAINST THE ORDER OF THE SEARCH, THE TRIBUNAL HAS D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND IT IS ALSO A FACT THAT THE STAT EMENT MADE BY THE ASSESSEE DURING THE SEARCH AND RETRACTED BY CHAIRMA N OF THE TRUST AND SAME WAS ACCEPTED BY THE TRIBUNAL AND THE HONBLE H IGH COURT. ONCE THE HONBLE HIGH COURT HAS SET ASIDE THE ORDER PASSED B Y THE TRIBUNAL DATED I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 19 11.09.2009 IN I.T.A. NO. 2127/MDS/2008 AND DIRECTIN G THE LD. CIT TO CONSIDER THE CASE OF THE ASSESSEE AND DECIDE DE NOVO, THE LD . CIT AGAIN BACK TO THE ORDER OF 2009 AND DENIED THE CLAIM OF THE ASSESSEE. FOR DENIAL OF BENEFIT UNDER SECTION 80G, THE LD. CIT HAS POINTED OUT THE ORDER OF THE TRIBUNAL AS A BASIS AGAIN. ONCE THE HONBLE HIGH COURT HAS SET AS IDE THE ORDER OF THE TRIBUNAL, THE LD. CIT OUGHT TO HAVE BEEN RELIED ON THE SAME. THE HONBLE HIGH COURT NOT ONLY CONSIDERED, BUT SET ASIDE THE O RDER OF THE TRIBUNAL DATED 11.09.2009 AND THE HONBLE HIGH COURT GAVE A CATEGO RICAL FINDING THAT THERE IS VIOLATION OF NATURAL JUSTICE. ULTIMATELY, THE TR IBUNAL HAS CONSIDERED THE ISSUE IN RESPECT OF SEARCH AND SEIZED MATERIAL AND NON-MAINTENANCE OF BOOKS OF ACCOUNTS, ALLOWABILITY UNDER SECTION 11,12 AND 13 OF THE INCOME TAX ACT, 1961 AND GAVE A FINDING THAT THE ASSESSEE IS CARRYING GENUINE EDUCATIONAL ACTIVITIES ENTITLED TO BE TREATED AS CH ARITABLE ACTIVITIES AND THERE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAS ACCEPT ED CAPITATION FEE AGAINST ALLOTMENT OF SEATS. THE VERY SAME ORDER OF THE TRIBUNAL IN TOTO ACCEPTED BY THE HONBLE HIGH COURT IN T.C.(A) NOS. 1052 TO 1058 OF 2014 VIDE ORDER DATED 24.03.2015. 22. THE ISSUE IN RESPECT OF GRANT OF APPROVAL UND ER SECTION 80G VIS-A-VIS 12A(A) REGISTRATION, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HIRALAL BHAGWATI V. CIT 246 ITR 0188 HAS CONSIDERED THE ISS UE IN DETAIL AND HELD THAT THE TRUST EXISTING FOR THE BENEFIT OF EMPLOYE ES OF VARIOUS INSTITUTIONS AND I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .260 260260 260/M/1 /M/1 /M/1 /M/14 44 4 20 WHICH HAS BEEN ACCORDED REGISTRATION UNDER SECTION 12A(A) COULD NOT BE DENIED EXEMPTION UNDER SECTION 80G ON THE GROUND TH AT ITS OBJECT WAS NOT OF GENERAL PUBLIC UTILITY. IN THE PRESENT CASE, THE A SSESSEE TRUST IS CARRYING CHARITABLE ACTIVITIES BY RUNNING VARIOUS EDUCATIONA L INSTITUTIONS AND THE ASSESSEE HAS BEEN DULY GRANTED REGISTRATION UNDER S ECTION 12A(A) OF THE INCOME TAX ACT AND IT IS NOT APPROPRIATE TO DENY GR ANT OF APPROVAL UNDER SECTION 80G OF THE ACT. 23. IN VIEW OF THE ABOVE DISCUSSIONS, WE FIND THAT THE LD. CIT IS NOT JUSTIFIED IN DENYING THE BENEFIT CLAIMED BY THE ASS ESSEE UNDER SECTION 80G OF THE ACT. WE THEREFORE, DIRECT THE LD. CIT TO GRANT APPROVAL UNDER SECTION 80G OF THE ACT. 24. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 24 TH OF JULY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 24.07.2015 VM/- / ) ''+01 21.+ /COPY TO: 1. %& / APPELLANT, 2. '(%& / RESPONDENT, 3. 3 ( ) /CIT(A), 4. 3 /CIT, 5. 14 ''+' /DR & 6. 5! 6 /GF.