ITO, Madurai V. M/s. Pimasugam Educational Trust, Virudhunagar

ITA 2825/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3953 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 29-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S NATARAJA
• Assessee Lawyers: M MUTHUSUBRAMANIAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2825/MDS/2016 & '& / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER (EXEMPTIONS), NO.2, V.P. RATHINASAMY NADAR ROAD, BIBIKULAM, MADURAI. V. M/S PIMASUGAM EDUCATIONAL TRUST, NO.15, R.R. NAGAR, KUMARASWAMY RAJA NAGAR POST, RAJAPALAYAM 626 117. PAN : AABTP 5206 A ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI S. NATARAJA, JCIT +,)* - . / RESPONDENT BY : SHRI M. MUTHUSUBRAMANIAN, CA / - 0' / DATE OF HEARING : 04.07.2017 12' - 0' / DATE OF PRONOUNCEMENT : 27.07.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 2, MADUR AI, DATED 30.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI S. NATARAJA, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 10(23C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDING 2 I.T.A. NO.2825/MDS/16 TO THE LD. D.R., THE ASSESSEE IS AN EDUCATIONAL INS TITUTION. FOR THE PURPOSE OF CLAIMING EXEMPTION UNDER SECTION 10(23C) OF THE ACT, THE ASSESSEE HAS TO ESTABLISH THAT THE EDUCATIONAL INSTITUTION EXISTS SOLELY FOR EDUCATIONAL ACTIVITIES AND NOT FOR PROFI T. IN THIS CASE, ACCORDING TO THE LD. D.R., THE EDUCATIONAL INSTITUT ION DOES NOT EXIST FOR EDUCATIONAL ACTIVITY ONLY. THE OTHER ACTIVITIE S CARRIED ON BY THE ASSESSEE ARE BROUGHT ON RECORD BY THE ASSESSING OFF ICER AT PARA 7.4 OF HIS ORDER. ACCORDING TO THE LD. D.R., THE A SSESSEE HAS DISTRIBUTED SAREES TO THE SO-CALLED POOR, COMPUTERS WERE SAID TO BE GIVEN TO SCHOOL CHILDREN. THE ASSESSEE HAS CLAIMED THAT IT DISTRIBUTED 3-WHEELER CYCLE TO HANDICAPPED PEOPLE. ACCORDING TO THE LD. D.R., THESE ACTIVITIES OF THE ASSESSEE ARE NOT EDUCATIONAL ACTIVITIES, THEREFORE, THE ASSESSEE DOES NOT SOLELY EXIST FOR EDUCATIONAL ACTIVITIES. THEREFORE, ACCORDING TO TH E LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI M. MUTHUSUBRAMANIAN, THE L D. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT ONE OF THE OBJECTS OF THE ASSESSEE-SOCIETY IS TO ESTABLISH AND RUN EDUCAT IONAL INSTITUTION. ON A QUERY FROM THE BENCH WHAT ARE THE OBJECTS OF T HE ASSESSEE- SOCIETY? THE LD. REPRESENTATIVE SUBMITTED THAT THE RE ARE SEVERAL 3 I.T.A. NO.2825/MDS/16 OBJECTS INCLUDING ESTABLISHMENT OF EDUCATIONAL INST ITUTION, DISTRIBUTION OF FREE FOOD AND CLOTHING TO THE POOR AND NEEDY, ESTABLISHMENT OF LIBRARIES, ESTABLISHMENT OF HOSTEL FOR THE STUDENTS, EXTENDING HELP TO POOR PEOPLE AFFECTED BY NATURAL C ALAMITY, ETC. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSES SEE HAS ESTABLISHED A NURSING COLLEGE IN THE NAME AND STYLE OF SURAN COLLEGE OF NURSING AT VIRUDHUNAGAR DISTRICT. THIS COLLEGE IS AFFILIATED TO TAMIL NADU DR. M.G.R. MEDICAL UNIVERS ITY, CHENNAI. THEREFORE, THE INSTITUTION IS SOLELY EXISTING FOR E DUCATIONAL ACTIVITIES. ON A QUERY FROM THE BENCH WHEN THE ASSESSEE HAS SEV ERAL OBJECTS APART FROM EDUCATION, CAN IT BE SAID THAT IT WAS EX ISTING SOLELY FOR EDUCATIONAL PURPOSE? THE LD. REPRESENTATIVE SUBMIT TED THAT THE CIT(APPEALS) BY REFERRING TO THE JUDGMENT OF BOMBAY HIGH COURT IN CHIEF COMMISSIONER OF INCOME TAX V. VANITA VISHRAM TRUST (2010) 192 TAXMAN 389 AND THE JUDGMENT OF ALLAHABAD HIGH C OURT IN UNION OF INDIA V. C.P. VIDYA NIKETAN INTER COLLEGE SHIKSHAN SOCIETY (2013) 40 TAXMANN.COM 76, HAS ALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT IT WAS EXISTING SOLELY FOR EDUCATIONAL ACTIVITIES EVEN 4 I.T.A. NO.2825/MDS/16 THOUGH IT ENGAGED IN OTHER ACTIVITIES OF EXTENDING HELP TO POOR PEOPLE, DISTRIBUTION OF SAREES TO THE POOR, COMPUTE RS TO THE STUDENTS, ETC. HOWEVER, THE REVENUE CLAIMS THAT WHEN THE ASS ESSEE IS ENGAGED IN OTHER ACTIVITIES, THE ASSESSEE IS NOT EL IGIBLE FOR EXEMPTION UNDER SECTION 10(23C) OF THE ACT. THE CI T(APPEALS) BY PLACING RELIANCE ON THE JUDGMENT OF BOMBAY HIGH COU RT IN VANITA VISHRAM TRUST (SUPRA) AND ALLAHABAD HIGH COURT IN C .P. VIDYA NIKETAN INTER COLLEGE SHIKSHAN SOCIETY (SUPRA), ALL OWED THE CLAIM OF THE ASSESSEE WITHOUT ANY DISCUSSION IN THE ORDER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) IS BOUND TO DISCUSS THE MATTER AND BRING ON RECORD HOW THE JUDGMENTS OF BOMBAY HIGH COURT AND ALLAHABAD HIGH COURT ARE APPLICABLE TO TH E FACTS OF THE CASE. SINCE SUCH AN EXERCISE WAS NOT BY THE CIT(AP PEALS), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF THE AUTHO RITIES BELOW ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FIL E OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE TH E MATTER IN THE LIGHT OF THE MATERIAL THAT MAY BE AVAILABLE ON RECO RD AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW, AFTER GIVING A REASON ABLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO.2825/MDS/16 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 27 TH JULY, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 27 TH JULY, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-2, MADURAI 4. / 80 / CIT(EXEMPTION), CHENNAI 5. 69 +0 /DR 6. :& ; /GF.