Dy.DIT, (Exemptions)-I, Hyderabad V. Chaitanya Memorial Education Society, Hyderabad

ITA 268/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74429 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: C SURESH
• Keywords: Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 268/HYD/2013 ASSESSMENT YEAR: 2009-10 DY. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABAD. VS. CHAITANYA MEMORIAL EDUCATION SOCIETY, HYDERABAD. PAN AAATC2521L APPELLANT RESPONDENT APPELLANT BY: SRI D. SUDHAKAR RAO RESPONDENT BY: SRI C. SURESH DATE OF HEARING: 02/01/2014 DATE OF PRONOUNCEMENT: 02/01/2014 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE CIT(A)-IV, HYDERABAD DATED 06/12/2012 FOR THE ASSESSMENT YEAR 2009-10 WHEREIN THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSE E WOULD BE ELIGIBLE FOR EXEMPTION U/S 11 OF THE ACT, EVEN IN A BSENCE OF APPROVAL UNDER SUB-CLAUSE (VI) TO SECTION 10(23C) O F THE IT ACT, 1961. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T APPROVAL UNDER SUB-SECTION (VI) TO SECTION 10(23C) IS DISTINCT FROM REGISTRATION U/S 12A OF THE IT ACT. 4. THE LD. CIT(A) WHILE HOLDING THAT THE ASSESSEE W OULD BE ELIGIBLE FOR CLAIM OF EXEMPTION U/S 11 EVEN IF COND ITIONS U/S I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 2 10(23C)(VI) HAVE NOT BEEN COMPLIED WITH, SUBJECT TO FULFILMENT OF CONDITIONS U/S 11 TO 13 AND DIRECTING THE ASSESS ING OFFICER TO VERIFY THIS ASPECT, WHILE GIVING EFFECT TO THE A PPELLATE ORDER, THEREBY IN FACT, HAS SET ASIDE THE ASSESSMENT TO TH E FILE OF THE ASSESSING OFFICER, WHEN, AS PER THE AMENDED PROVISI ONS OF THE ACT, THE CIT(A) HAS NO POWER TO SET ASIDE AN AS SESSMENT TO THE FILE OF THE ASSESSING OFFICER. 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASS ESSEE IS ENTITLED TO THE EXEMPTION U/S 11 OF THE IT ACT, WH EN THERE IS CLEAR VIOLATION OF THE PROVISIONS OF SECTION 13(1)( C) R.W.S. 13(3)(A) OF THE IT ACT AS HELD IN THE ASSESSMENT OR DER. 6. THE ACTIVITY OF LETTING OUT AUDITORIUM (FUNCTION AL HALL) ON RENT FOR MARRIAGES AND SOCIAL FUNCTIONS, BEING NOT INCIDENTAL TO THE MAIN OBJECTS OF THE SOCIETY, BUT BEING COVERED UNDER THE RESIDUAL OBJECT I.E., ADVANCEMENT OF ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY, HAVING REGARD TO THE AMOUNT OF RECEIPTS SHOWN FROM HALL CHARGES (RS. 13,95,000/- AND FROM COMMISSION FROM FURNITURE SUPPLIERS (RS. 12,07,500) BOTH AGGREGATING TO MUCH MORE THAN RS. 10 LAKHS DURING T HE PREVIOUS YEAR 2008-09, UNDER THAT CIRCUMSTANCES, HA VING REGARD TO THE PROVISIONS OF THE PROVISO TO SECTION 2(15) OF THE IT ACT AND ALSO THE NEWLY INSERTED SECTION 13(8) OF THE IT ACT, INSERTED VIDE FINANCE ACT, 2012, W.E.F. 01/04/2009, THE ASSESSEE SOCIETY IN THIS CASE IS NOT AT ALL ELIGIBL E FOR EXEMPTION U/S 11 OF THE ACT. HENCE, ON THE FACTS AN D IN CIRCUMSTANCES OF THE CASE, THE LD CIT(A) ERRED IN H OLDING THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 11 OF TH E ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME ON 14/09/2009 FOR THE YEAR UNDER C ONSIDERATION DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 1 1 OF THE IT ACT. THE ASSESSEE SOCIETY IS REGISTERED U/S 12A OF THE I T ACT VIDE ORDER NO. HQRS.II/12A & 80G/102/91-92, DATED 09/11/1992. THE ASSESSING OFFICER REJECTED THE CLAIM OF EXEMPTION U/S 11 SINC E THE ASSESSEE WAS NOT NOTIFIED U/S 10(23C)(VI) AND SINCE THE ASSE SSEE HAD AMENDED ITS BYE-LAWS WITHOUT AN APPROVAL FROM THE C IT. HE ALSO HELD THAT THE HONORARIUM OF RS. 2,30,000/- PAID TO SMT. J. JYOTHI RAO AND OF RS. 60,000/- PAID TO MS. J. APARNA RAO W AS IN VIOLATION OF SECTION 13(3). THE ASSESSING OFFICER, THEREFORE, ASSESSED THE EXCESS OF INCOME OVER EXPENDITURE OF RS. 1,30,09,58 0/- TO TAX. I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 3 3. ON APPEAL, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: 5.0 I FIND THAT SIMILAR ISSUES HAD BEEN ADJUDICATED UPON BY MY PREDECESSOR IN THE CASE OF THE APPELLANT FOR THE AY 2008- 09 VIDE HIS ORDER IN ITA NO. 470/ADIT(E)-I/CIT(A)-I V/2010-11, DATED 29/12/2011. 6.0 WITH REGARD TO THE ALTERNATE APPLICABILITY OF S ECTION 10(23C)(VI) AND SECTION 11, IT WAS HELD, RELYING ON THE DECISIONS IN THE CASES OF ST. THERESA CONVENT SOCIE TY, AND IN THE CASE OF AP SOCIETY FOR KNOWLEDGE, THAT THE APPE LLANT WOULD BE ELIGIBLE FOR THE CLAIM OF EXEMPTION U/S 11 , EVEN IF THE CONDITIONS U/S 10(23C)(VI) HAD NOT BEEN COMPLIE D WITH, SUBJECT TO THE FULFILMENT OF THE CONDITIONS U/S 11 TO 13. THOUGH IT IS SEEN THAT THERE IS NO FINDING OF ANY CHARGING OF DONATION ETC. IN THE CASE OF THE APPELLANT BY THE ASSESSING OFFICER, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THIS ASPECT WHILE GIVING EFFECT TO THIS ORDER. SUBJECT TO SUCH VERIFICATION, THE GROUND NO. 1 & 2 ARE ALLOWED IN FAVOUR OF THE APPELLANT. 7.0 WITH REGARD TO THE ISSUE OF VIOLATION OF SEC. 1 3(2)(C) THROUGH PAYMENTS TO SMT. J. JYOTHI RAO AND TO MS. J . APARNA RAO, THE CIT(A) IN HIS ORDER CITED ABOVE HAD HELD O N IDENTICAL FACTS THAT THERE WAS NO EVIDENCE THAT THE SALARY/RE MUNERATION PAID TO THESE PERSONS WAS NOT COMMENSURATE TO THE S ERVICES RENDERED BY THEM AND IN THE ABSENCE OF ANY EVIDENCE OF VIOLATION OF SECTION 13, THE EXEMPTION U/S 11 COULD NOT BE DENIED TO THE APPELLANT. RESPECTFULLY FOLLOWING THE DECISION IN THE APPELLANTS OWN CASE FOR THE PRECEDING YEAR, TH E THIRD GROUND OF APPEAL IS ALLOWED. 8.0 WITH REGARD TO THE AMENDMENT TO THE BYE-LAWS OF THE SOCIETY, THE CIT(A) HAD HELD IN HIS ORDER CITED ABO VE THAT THE APPELLANT HAD OBTAINED A CERTIFICATE IN THIS REGARD FROM THE REGISTRAR OF SOCIETY, THAT THE APPELLANT HAD FILED AN APPLICATION BEFORE THE DIT(EXEMPTION), AND THAT THE RE WAS NO EVIDENCE TO SHOW THAT THE CIT(E) HAD DISAPPROVED TH E PROPOSED AMENDMENTS IN THE BYE-LAWS. UNDER THE CIRCUMSTANCES, THE CIT(A) HAD DECIDED THE ISSUE IN FAVOUR OF THE APPELLANT. FOLLOWING MY PREDECESSOR, THE FOURTH , FIFTH AND SIXTH GROUNDS ARE ALLOWED. 9.0 IN VIEW OF THE ABOVE, IT IS HELD THAT THERE IS NO BASIS FOR THE DENIAL OF EXEMPTION U/S 11 FOR THE APPELLANT FO R THE REASONS MENTIONED IN THE ASSESSMENT ORDER. THE ASSE SSING OFFICER IS DIRECTED TO RECOMPUTED THE INCOME OF THE APPELLANT ALLOWING THE EXEMPTION U/S 11, SUBJECT TO THE DIREC TIONS IN PARA 6 ABOVE. I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 4 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION B EFORE THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 2008 -09 IN ITA NO. 440/HYD/2012 VIDE ORDER DATED 22/03/2013 WHEREIN TH E COORDINATE BENCH HELD AS FOLLOWS: 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE FIRST OBJECTION IN THIS CASE BY THE DEPARTMENT IS WITH REGARD TO NON OBTAINING OF APPROVAL U/S. 10(23 C)(VI) OF THE ACT. IN OUR OPINION, OBTAINING APPROVAL U/S. 10(23 C)(VI) IS NOT MANDATORY. THIS TRIBUNAL AGAIN AND AGAIN HELD IN V ARIOUS CASES THAT ASSESSEE COULD CLAIM EXEMPTION EITHER U/S. 10( 23C)(VI) OR U/S. 11 OF THE ACT. IT IS LEFT TO THE ASSESSEE TO OPT EITHER 10(23C)(VI) OR SECTION 11 OF THE ACT. THE ASSESSI NG OFFICER CANNOT FORCE THE ASSESSEE TO OPT FOR PARTICULAR DED UCTION OR EXEMPTION. IN THE PRESENT CASE, THE ASSESSEE OPTED FOR EXEMPTION U/S. 11 OF THE ACT. BEING SO, IT IS NOT NECESSARY TO THE ASSESSEE TO OBTAIN APPROVAL U/S. 10(23C)(VI) OF THE ACT. FOR THIS PURPOSE WE PLACE RELIANCE ON THE JUDGEMENT OF CO-OR DINATE BENCH IN THE CASE OF ST. THERESA CONVENT SOCIETY IN ITA N O. 844/HYD/2008 AND ALSO IN THE CASE OF ADIT (EXEMPTIO NS) VS. RAJASTHANI SIKSHA SAMITHI (23 SOT 124) (HYD) WHEREI N HELD THAT INSTITUTIONS FALLING U/S. 10(23C)(VI) ARE ELIGIBLE FOR EXEMPTION U/S. 11 ALSO. MERELY BECAUSE SECTION 10(23C)(VI) OF THE ACT PROVIDES FOR EXEMPTION OF THE INCOME OF AN EDUCATIONAL INSTI TUTION IT DOES NOT FOLLOW THAT SUCH INSTITUTION CANNOT AVAIL EXEMP TION U/S. 11 SUBJECT TO FULFILMENT OF THE CONDITIONS LAID DOWN. 3. THE NEXT OBJECTION OF THE DEPARTMENT IS WITH REG ARD TO CARRYING ON THE BUSINESS OF LETTING OUT OF FUNCTION AL HALL IN A COMMERCIAL MANNER AND THE ASSESSEE NOT MAINTAINED S EPARATE BOOKS OF ACCOUNT FOR THIS ACTIVITY. AS SUCH THE AS SESSEE IS NOT ENTITLED FOR EXEMPTION U/S. 11 OF THE ACT ALSO. THE RE IS NO DISPUTE THAT THE ASSESSEE IS CARRYING ON THE LETTING OUT OF FUNCTION HALL ON RENTAL BASIS. THE ASSESSEE CONTENDED BEFORE THE LO WER AUTHORITIES THAT THE BUSINESS CARRIED ON IS INCIDE NTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST AND THE A SSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNT IN TERMS OF SE CTION 11(4A) OF THE ACT. THE ASSESSING OFFICER STRONGLY OPPOSED IN HIS REMAND REPORT THAT THE ASSESSEE FAILED TO PRODUCE S EPARATE BOOKS OF ACCOUNT FOR LETTING OUT BUSINESS OF THE AS SESSEE. HOWEVER, THE ASSESSEE TAKEN A PLEA BEFORE THE ASSES SING OFFICER VIDE LETTER DATED 2.8.2011 THAT SEPARATE BOOKS OF A CCOUNT ARE BEING MAINTAINED IN RESPECT OF LETTING OUT AND PROD UCED THE SAME I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 5 FOR ASSESSING OFFICER'S VERIFICATION AND STATED THA T PROVISIONS OF SECTION 11(4A) ARE COMPLIED WITH AND CITED VARIOUS DECISIONS BEFORE HIM CONTENDING THAT LETTING OUT ACTIVITY IS INCIDENTAL AND SUBSERVIENT TO THE PRIMARY OF EDUCATION AND CARE OF UNDERPRIVILEGED, FOR WHICH SEPARATE BOOKS OF ACCOUN T ARE MAINTAINED AND NET SURPLUS THEREFROM HAS BEEN UTILI SED ONLY FOR THE CHARITABLE OBJECT OF THE TRUST. 4. HOWEVER, THE FACT REMAINS THAT SEPARATE BOOKS OF ACCOUNT FOR LETTING OUT OF FUNCTION HALL WERE NOT MADE AVAI LABLE TO THE ASSESSING OFFICER. HOWEVER, THE CIT(A) NOT ACCEPTE D THE OBJECTION OF THE ASSESSING OFFICER. ACCORDING TO T HE CIT(A), THE ASSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNT F OR EDUCATIONAL ACTIVITIES AND LETTING OUT OF FUNCTION HALL AND, THEREFORE, ALLOWED THE CLAIM OF THE ASSESSEE. IN O UR OPINION, THE FINDINGS OF THE CIT(A) ARE NOT BASED ON THE ACTUAL FACTS. IT IS MANDATORY ON THE PART OF THE ASSESSEE IN TERMS OF S ECTION 11(4A) OF THE ACT TO MAINTAIN SEPARATE SET OF BOOKS OF ACC OUNT FOR LETTING OUT OF FUNCTION HALL. THE ASSESSEE TAKEN A PLEA TH AT THE ASSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNT. HOWEVER, THE ASSESSING OFFICER OBSERVED IN HIS REMAND REPORT THAT THE ASSESSEE HAS NOT PRODUCED THE SAME. IN OUR OPINION , IF THE ASSESSEE MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR L ETTING OUT THE FUNCTION HALL IT HAS TO BE PRODUCED BEFORE THE ASSESSING OFFICER. WE, THEREFORE, REMIT THIS ISSUE TO THE FI LE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER GIVING REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 5. THE NEXT OBJECTION OF THE DEPARTMENT IS WITH REG ARD TO COLLECTION OF FEES FROM STUDENTS IN EXCESS OF PRESC RIBED LIMIT BY THE STATE AUTHORITIES. IN OUR OPINION, THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL CO-ORDINATE BE NCH IN THE CASE OF VODITHALA EDUCATION SOCIETY (SUPRA) WHEREIN HELD THAT ASSESSEE HAD COLLECTED MONEY OVER AND ABOVE PRESCRI BED BY CONCERNED AUTHORITY FOR ADMISSION OF STUDENT, SUCH AN AMOUNT WAS TO BE CLASSIFIED AS CAPITATION FEE AND IT COULD BE SAID THAT ASSESSEES CASE WAS A CLEAR CASE OF SALE OF EDUCATI ON BY ASSESSEE AND, THEREFORE, IT COULD NOT BE CONSIDERED AS CHARITABLE INSTITUTION UNDER SECTION 2(15) OF THE ACT BECAUSE THE PURPOSE OF THE ORGANISATION AS A WHOLE WAS TO MAKE PROFIT. 6. SIMILAR VIEW WAS TAKEN BY THIS TRIBUNAL IN THE C ASE OF VASAVI ACADEMY OF EDUCATION, HYDERABAD IN ITA NO. 1794/HYD/ 2008 DATED 4 TH FEBRUARY, 2010 WHICH APPLIES SQUARELY TO THE FACTS OF THE PRESENT CASE WHEREIN T HE TRIBUNAL IN PARAS 3 AND 4 OBSERVED AS FOLLOWS: I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 6 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRI BUNAL VIDE ITS ORDER DATED 29.1.2009 IN ASSESSEES OWN CASE FO R THE ASSESSMENT YEAR 2005-06 IN ITA NO.1120/HYD/2009 BY HOLDING AS FOLLOWS: WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE COVERED IN FAVOU R OF THE ASSESSEE BY THE ORDER OF THE HYDERABAD BENCH A OF THE TRIBUNAL DATED 15.4.2009 IN ASSESSEES OWN CASES IN ITA NO.1133/HYD/2006 FOR THE ASSESSMENT YEARS 2003-04 A ND ORDER DATED 17.4.2009 IN ITA NO.1206/HYD/2007 FOR THE ASSESSMENT YEAR 2004-05. HOWEVER, WE FIND THAT T HE CONSTITUTIONAL BENCH OF APEX COURT IN THE CASE OF T.M.A. PAI FOUNDATIONS AND OTHERS VS. STATE OF KARNATAKA & OTH ERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COLLECTION OF CAPITATION FEES FOR THE ADMISSION OF STUDENTS OVE R AND ABOVE FEES PRESCRIBED BY THE PRIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPITATION FEES FO R ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESCRIBED CANN OT BE CONSTRUED AS CHARITABLE/EDUCATION INSTITUTION. APEX COURT FURTHER OBSERVED THAT THE FEES COLLECTED OVER AND A BOVE THE PRESCRIBED FEE FOR ADMISSION OF THE STUDENT HAS TO BE CONSTRUCTED AS CAPITATION FEE. THE APEX COURT, FUR THER OBSERVED THAT THE CONCERNED UNIVERSITY AND REGULATE D BODY HAS TO TAKE ACTION FOR WITHDRAWAL OF THE RECOGNITIO N IN CASE IT IS FOUND THAT THE EDUCATIONAL INSTITUTION RECEIVED ANY MONEY OVER AND ABOVE THE FEES PRESCRIBED FOR THE COURSES. SAME VIEW WAS TAKEN BY APEX COURT IN THE CASE OF ISLAMIC ACAD EMY OF EDUCATION AND ANOTHER VS. STATE OF KARNATAKA & ANOT HER (2003) 6 SCC 697. IF THE DONATIONS WERE RECEIVED C OMPULSORILY FOR ADMISSION OF STUDENTS, THE ASSESSEE IS NOT ENTI TLED FOR EXEMPTION EITHER U/S 10(23C) OR U/S 11 OF THE IT AC T. SINCE THE LOWER AUTHORITIES WERE NOT EXAMINED THE COLLECT ION OF CAPITATION FEES IN THIS CASE, IN OUR OPINION, THE M ATTER REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER WHETHER THE ASSESSEE IS COLLECTING THE CAPITATION FEES FROM STUDENTS OR NOT AND IT IS NECESSARY FOR BRINGING THE ACTUAL FACTS ON RECORD F OR DECIDING THE ISSUE EFFECTIVELY. SIMILAR VIEW WAS TAKEN BY U S IN THE CASE OF M/S. JAMIA NIZAMIA IN ITA NO.763/HYD/2007 DATED 30.6.2008, IN THE CASE OF INTERNATIONAL EDUCATIONAL ACADEMY, HYDERABAD IN ITA NO.494/HYD/2007 AND 518/HYD/2008 F OR THE ASSESSMENT YEARS 2002- 2003 AND 2004-05 AND SR I SAI SUDHIR EDUCATIONAL SOCIETY, HYDERABAD IN ITA NO.999 /HYD/20- 06 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, W E SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT BACK THE MATTER I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 7 TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION T O ASSESSING OFFICER THAT HE SHALL RECONSIDER THE ENTIRE ISSUE I N THE LIGHT OF JUDGEMENT OF SUPREME COURT IN THE CASE OF M/S ISLAM IC ACADEMY OF EDUCATION & ANOTHER VS. STATE OF KARNATA KA AND ANOTHER (SUPRA), AND IN THE CASED OF T.M.A. PAI FOU NDATION AND OTHERS VS. STATE OF KARNATAKA AND OTHERS (SUPRA ), AND FIND OUT WHETHER THE ASSESSEE HAS RECEIVED ANY MONE Y OVER AND ABOVE THE FEES PRESCRIBED AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING REASONAB LE OPPORTUNITY OF HEARING TO THE ASSESSEE . WE MAKE I T CLEAR THAT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITHER U /S 11 OR U/S 10(23C) IN CASE IT COLLECTED ANY MONEY BY WHATEVER NAME IT IS CALLED I.E., DONATION, BUILDING FUND, AUDITORIUM FU ND ETC. ETC., OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSION OF STUDENTS. 4. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY T HE TRIBUNAL IN THE ABOVE ORDER, WE SET ASIDE THE ISSUE IN DISPUTE TO THE FILE OF ASSESSING OFFICER ON SIMILAR DIRECTI ONS FOR FRESH CONSIDERATION. 7. IT IS WORTHWHILE TO NOTE THAT THE ORDER OF THE T RIBUNAL DATED 29.1.2009 IN THE CASE OF VASAVI ACADEMY OF EDUCATIO N, HYDERABAD FOR ASSESSMENT YEAR 2005-06 IN ITA NO. 11 20/HYD/ 2009, WHICH HAS BEEN RELIED UPON BY THE TRIBUNAL IN ITS ORDER DATED 4.2.2010, IN ITA NO. 1794/HYD/2008, HAS BEEN RECALLED, WHILE DECIDING UPON ON THE MISCELLANEOUS APPLICATIO NS OF BOTH THE PARTIES IN ITA NO. 1120/HYD/2009 AND 1794/HYD/2 008, VIDE CONSOLIDATED ORDER OF THIS TRIBUNAL DATED 20.1 0.2011 IN MA NO. 130/HYD/2011. HOWEVER, AS IN ITS ORDER DATED 4 .2.2010 IN ITA NO. 1794/HYD/2008, SINCE THE TRIBUNAL HAS NOT M ERELY FOLLOWED THE REASONING GIVEN IN ITS ORDER DATED 29. 1.2009 IN ITA NO. 1120/HYD/2009, BUT ADOPTED THE SAME, AS MAY BE SEEN FROM PARA 4 OF THE ORDER DATED 4.2.2010 EXTRACTED A BOVE, THE SAID REASONING FORMS PART AND BECOMES THE REASONING FOR THE DECISION RENDERED IN ITA NO. 1794/HYD/2008 IN ITS O RDER DATED 4.2.2010. IN THAT VIEW OF THE MATTER RECALL OF THE ORDER IN ITA NO. 1120/HYD/2009 DOES NOT INVALIDATE EITHER THE REASON ING OR THE DIRECTIONS GIVEN BY THE TRIBUNAL IN THE ORDER DATED 4.2.2010 IN ITA NO. 1794/YD/2008. 8. IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINED TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. H E SHALL CONSIDER THE ENTIRE FACTS AND VERIFY THE RECORDS WHETHER THE ASSESSEE COLLECTED CAPITATION FEES FROM STUDENTS FOR THE PUR POSE OF GIVING ADMISSION. IF SO, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S. 11 OF THE ACT. I.T.A. NO.268/HYD/2013 CHAITANYA MEMORIAL EDUCATION SOCIETY 8 9. COMING TO THE LAST OBJECTION OF THE DEPARTMENT, I.E., WITH REGARD TO PAYMENT MADE AS SALARY TO SMT. JYOTI RAO AND SMT. APARNA RAO. WE ARE OF THE OPINION THAT THE PAYMENT TO THESE PERSONS CANNOT BE CONSIDERED AS FOR THEIR PERSONAL BENEFIT AND IT HAS BEEN PAID FOR THEIR SERVICES. ACCORDINGLY, THI S OBJECTION IS OVERRULED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. SINCE THE ISSUE UNDER CONSIDERATION IS MATERIALLY I DENTICAL TO THAT OF THE CASE DECIDED BY THE COORDINATE BENCH IN ASSESSE ES OWN CASE FOR AY 2008-09, RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE ASSESSING OFFICER TO PASS A CONSEQUENTIAL ORDER TO THIS ASSESSMENT YEAR ALSO IN CONFIRMITY WITH TRIBUNAL ORDER CITED S UPRA. 6. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 02/01/2014. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 02/01/2014. KV COPY FORWARDED TO: 1. DDIT(EXEMPTIONS)-!, HYDERABAD 2. CHAITANYA MEMORIAL EDUCATION SOCIETY, 4-1-630, MAHABHUPAL MANZIL, HYDERABAD 95. 3. DIT(E)-IV, HYDERABAD 4 THE DR, ITAT, HYDERABAD