The Income tax Officer, Jammu V. M/s. Vivekanand Society of Education & Research, Jammu

ITA 305/ASR/2010

• Counselvise Citation: 30520914 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Competent authority
• Section: 143(3); 131; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 PAN: NIL THE INCOME TAX OFFICER VS. M/S VIVEKANAND SOCIETY OF WARD- 2(3), JAMMU EDUCATION AND RESEARCH, KACHI CHAWNI, JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY: SH. MAHAVIR SINGH, SR. DR RESPONDENT BY: SH. P.N. ARORA, ADVOCATE DATE OF HEARING: 28.01.2014 DATE OF PRONOUNCEMENT: 13.02.2014 ORDER PER BENCH 1. THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 26.04.2010 PASSED BY LEARNED CIT(A), BA THINDA, FOR THE ASSESSMENT YEAR 2005-06. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITY IN THEIR ORDERS ARE THAT THE ASSESSING OFFICER RECEIVED THE CASE OF THE ASSESSEE FROM INCOME TAX OFFICER, KATHUA. AS PER THE REASONS RECORDED BY THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY DATED 10.01.2008, TH E GROSS RECEIPTS OF THE SOCIETY EXCEEDED RS. 1 CRORE IN THE ASSESSMENT YEAR 2005-06 ON ACCOUNT 2 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 OF RUNNING OF DIFFERENT EDUCATIONAL COURSES BY ITS TWO UNITS, NAMELY, VIVEKANANDA COLLEGE OF EDUCATION AND VIVEKANANDA IN STITUTE OF EDUCATION TRAINING AND RESEARCH. THE TOTAL RECEIPT IN THE RELEVANT PERIOD WAS RS. 1,62,04,513/-. THE SOCIETY IS AN EDUCATIONA L INSTITUTION AND IT HAS A SURPLUS OF RS. 69,27,948/- DURING THE RELEVANT P ERIOD. IT HAS NOT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06. THE A SSESSING OFFICER OBTAINED THE ABOVE INFORMATION FROM THE RECORDS OF AFORESAID TWO UNITS OF THE SOCIETY AND ISSUED NOTICE, DATED 10.01.2008, UN DER SECTION 148 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) TO THE AS SESSEE SOCIETY FOR THE ASSESSMENT YEAR 2005-06. THE SOCIETY FILED ITS RETU RN OF INCOME ON 26.12.2008 DECLARING NIL INCOME DURING THE LAST LEG OF ASSESSMENT PROCEEDINGS. NOTICES UNDER SECTIONS 143(2)/142(1) O F THE ACT ALONG WITH A QUESTIONNAIRE WERE ISSUED AND OTHER QUERIES WERE RAISED BY THE ASSESSING OFFICER. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND PRODUCED BOOK S OF ACCOUNT. THE ASSESSEE ALSO FILED ITS WRITTEN REPLY 3. THE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTI ON 131 OF THE ACT, DATED 12.12.2008 TO THE MEMBER OF THE ASSE SSEE SOCIETY AT HIS OFFICE KACHI CHHAWNI, JAMMU, FIXING THE CASE FOR 17 .12.2008. IN 3 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 RESPONSE TO THESE SUMMONS, DR. SUDARSHAN GUPTA, GEN ERAL SECRETARY OF THE SOCIETY ALONG WITH HIS COUNSEL APPEARED. THE A SSESSING OFFICER RECORDED THE STATEMENT OF DR. SUDARSHAN GUPTA, IN T HE PRESENCE OF HIS COUNSEL, WHEREIN HE HAS ADMITTED THAT BOTH THE INST ITUTIONS AT LAKHANPUR, KATHUA ARE UNDER THE SOCIETY AND ITS HEAD OFFICE IS AT KACHI CHHAWNI, JAMMU. COUNSEL FOR THE ASSESSEE REQUESTED FOR A COP Y OF THE REASONS RECORDED WHICH WAS SUPPLIED TO HIM AND HE FILED HIS REPLY STATING THEREIN THAT NO PARTICULARS OF INCOME HAD ESCAPED ASSESSMEN T, AS PER SECTION 10(23C)(IIIAD) OF THE ACT READ WITH SECTION 139 THA T INCOME OF ANY UNIVERSITY OR EDUCATIONAL INSTITUTION EXISTING SOLE LY FOR EDUCATIONAL PURPOSES BEING EXEMPT FROM TAX IF ITS GROSS RECEIPT S DOES NOT EXCEEDS RS. 1 CRORE AND IN SUCH CASE THE INSTITUTION NOR REQUIR ED TO FILE RETURN OF INCOME U/S 139. THE ASSESSEE IN ITS REPLY FURTHER S TATED THAT BOTH VIVEKANANDA COLLEGE OF EDUCATION (TERMED AS B.ED.) AND VIVEKANANDA INSTITUTE OF EDUCATION TRAINING & RESEARCH (TERMED AS ETT) ARE ONE EDUCATIONAL INSTITUTION AND EACH HAS TO BE CONSIDER ED INDEPENDENTLY TO EACH OTHER, EVEN INDEPENDENT TO THE TRUST/SOCIETY A S THESE EDUCATIONAL INSTITUTES HAVE BEEN MANAGED BY DIFFERENT AUTHORITI ES AND MANAGED ACCORDING TO THESE AUTHORITIES. BOTH THE COLLEGES A RE RUNNING DIFFERENT 4 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 COURSES AND MANAGED BY DIFFERENT MANAGEMENT COMMITT EES AND APPROVED BY THE DIFFERENT AUTHORITIES. THE SOCIETY HAS NO CO NTROL OVER THE RECEIPTS OF THE COLLEGES AND EVEN THE INDIVIDUAL COLLEGES HA VE NO CONTROL OVER THEIR RECEIPTS, AS THEY WERE NOT ALLOWED TO ADMIT THE STU DENTS AND COLLECT THE FEES ON THEIR OWN. IN THE REPLY, THE ASSESSEE SOCIE TY FURTHER STATED THAT THE RECEIPTS HAVE EXCEEDED RS. 1 CRORE IN THE FINANCIAL YEAR 2004-05 RELEVANT TO ASSESSMENT YEAR 2005-06. IN SUPPORT OF THIS HE H AS REFERRED A CIRCULAR NO. 712 DATED 25.07.1995. 4. THE ASSESSING OFFICER CONSIDERED THE REPLY OF TH E ASSESSEE ALONG WITH THE DOCUMENTARY EVIDENCE AND WAS OF THE VIEW THAT BOTH THE INSTITUTIONS ARE INDEPENDENT OF EACH OTHER AND EVEN INDEPENDENT OF THE TRUST/SOCIETY. THIS VIEW STANDS FURTHER CONFIRMED T HROUGH VARIOUS JUDGMENTS AND BY THE ACT ITSELF. THE WORD USED IN T HE SECTION 10(23C)(IIIAD) IS EDUCATIONAL INSTITUTION AND NOT E DUCATIONAL INSTITUTIONS. THE SOCIETY ITSELF IS NOT AN INDEPENDENT INSTITUTIO N. THE SOCIETY TERMED AS AN EDUCATIONAL INSTITUTION ONLY IF IT RUNS AN EDUCA TIONAL INSTITUTION. THIS VIEW STANDS JUSTIFIED BY THE ORDERS/PRONOUNCEMENTS OF THE VARIOUS COURTS WHICH ARE REPRODUCED BELOW:- COMMISSIONER OF INCOME TAX VS. RAI BAHADUR BISSWESH WARLAL MOTILAL KALWASLYA TRUST (ITR 2001) 5 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 IN THE ABOVE REFERRED CASE IT WAS OBSERVED THAT THE TRUST & INSTITUTION REFERRED TO IN SECTION 13 ARE NOT ONE & THE SAME TH ING AS THEY ARE DIFFERENT ENTITIES. IN THE PRESENT CASE IT WAS OBSE RVED THAT EXEMPTION TO THE TRUST IS NOT DENIED ON THE GROUNDS THAT SOME OF THE VIOLATION OF THE ACT IS BEING DONE BY THE INSTITUTION. IN THE PRESENT CA SE THE DECISION OF THE TRIBUNAL IS UPHELD BY THE COURT THAT THE TRUST & IN STITUTION REFERRED TO IN SECTION 13 IS INDEPENDENT OF EACH OTHER. KATRA EDUCATIONAL SOCIETY VS. INCOME TAX OFFICER 11 1-ITR 420 (ALL.) IN THE ABOVE REFERRED CASE IT WAS OBSERVED THAT TH E WORD INSTITUTION WITHIN THE MEANING OF SECTION 10(22) IS NOT NARROW IN ITS SCOPE AND INCLUDES SOCIETY WHICH IS RUNNING AN EDUCATION INST ITUTION. THE SOCIETY IS TERMED AS AN EDUCATION INSTITUTION ONLY IF RUNS AN EDUCATIONAL INSTITUTION. IN VIEW OF THIS THE WORD USED IN THE SOCIETY 10(23C ) (IIIAD) IS EDUCATIONAL INSTITUTION & NOT REFERRED TO AS PERSON IN RECEIPT OF THE RECEIPTS EXCEEDING 1 CRORE. THE INSTITUTION REFERRED THERE IS INDIVIDU AL INSTITUTION & NOT THE SOCIETY AS A WHOLE. DIRECTOR OF INCOME TAX VS. A.M.M. MEDICAL FOUNDATIO N (2002) 257 ITR 292. THE EXEMPTION U/S 10(22A) IS NOT DENIED TO THE MEDICAL FOUNDATION RUNNING A HOSPITAL ON THE GROUNDS THAT THE MEDICAL FOUNDATION WAS ITSELF NOT RUNNING THE HOSPITAL. ADDL. CIT VS. SURAT ART & SILK & CLOTH MANUFACTURIN G ASSOCIATION (1980) 121-ITR (SC) BIRLA VIDHYA VIHAR TRUST VS. CIT (1982) 136 ITR 445 (CAL) IN THE ABOVE REFERRED TWO CASES IT WAS OBSERVED AS UNDER:- EXEMPTION UNDER SECTION 10(22) CANNOT BE RESTRICTED TO COVER EDUCATIONAL INSTITUTION OR UNIVERSITY ALONE BUT ALS O TO BE EXTENDED TO TRUSTS ESTABLISHED FOR CHARITABLE & RELIGIOUS PURPO SES WHICH RUN EDUCATION INSTITUTION NOT FOR PROFIT WHETHER AN EDU CATIONAL INSTITUTION EXISTS OR EXISTING SOLELY FOR ONE PARTICULAR PURPOS E OR CANNOT BE JUDGED ONLY BY THE FACTS OF ONE YEAR. BUT ALL CUMULATIVE F ACTORS WILL HAVE TO BE TAKEN INTO CONSIDERATION. 6 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 5. THE ASSESSING OFFICER DISCUSSED THE CASE WITH TH E AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AND VIDE ORDER SHEET ENTRY DATED 23.12.2008, ASKED THE ASSESSEES COUNSEL TO SHOW CA USE AS TO WHY THE SURPLUS OF INCOME OVER EXPENDITURE MAY NOT BE ASSES SED IN THE HANDS OF THE SOCIETY, TREATING THE INCOME OF THE SOCIETY, BY CLUBBING THE RECEIPTS OF BOTH THE INSTITUTIONS RUN BY THE SOCIETY AND AS TO WHY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT MAY NOT BE INITIATED A ND FURTHER ASKED TO FILE OBJECTIONS, IF ANY, AND THE CASE WAS ADJOURNED FOR 26.12.2008. ON 26.12.2008, COUNSEL FOR THE ASSESSEE APPEARED AND F ILED WRITTEN REPLY REPEATING HIS EARLIER CONTENTION AND ALSO FILED THE RETURN OF THE SOCIETY ON 26.12.2008 DECLARING INCOME AT NIL. THE ASSESSING O FFICER ISSUED NOTICES UNDER SECTIONS 143(2)/142(1) DATED 26.12.2008 FIXIN G THE CASE FOR 30.12.2008. THE COUNSEL OF THE ASSESSEE SOCIETY ATT ENDED THE PROCEEDING AND FILED WRITTEN REPLY STATING THEREIN THAT THE RE PLIES FILED EARLIER MAY BE CONSIDERED. 6. THE ASSESSING OFFICER CONSIDERED THE REPLY OF TH E ASSESSEE AND WAS OF THE VIEW THAT THE ASSESSEE SOCIETY IS RUNNIN G TWO EDUCATIONAL INSTITUTIONS AND THE RECEIPTS OF BOTH THE INSTITUTE S EXCEEDED RS. 1 CRORES AND THE SAID SOCIETY IS LIABLE TO FILE ITS RETURN O F INCOME. NEITHER THE 7 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 SOCIETY HAS OBTAINED EXEMPTION CERTIFICATE FOR EXEM PTION U/S 10(23C)(VI) NOR REGISTERED U/S 12A(A) TILL 31.03.2005. THE INST ITUTIONS ARE RUN BY THE ASSESSEE TRUST AND THEY ARE PART OF ASSESSEE TRUST/ SOCIETY. IN OTHER WORDS THE INSTITUTIONS ARE NOT DIFFERENT FROM ASSESSEE SO CIETY. TO PUT IT DIFFERENTLY THERE IS A FUSION OF IDENTITY OF THE CO LLEGES WHICH ARE ADMITTEDLY INSTITUTIONS AND THE ASSESSEE TRUST/SOCI ETY. THE ASSESSING OFFICER SUPPORTED HIS VIEW BY VARIOUS DECISIONS REN DERED BY HON'BLE HIGH COURTS, WHICH INCLUDES THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SINDHU VIDYA MANDAL TRUST, R EPORTED IN 142 ITR 633 (GUJ.). SO THE CLAIM OF THE ASSESSEE THAT RECEI PT OF INDIVIDUAL INSTITUTION IS TO BE TAKEN INTO CONSIDERATION FOR A PPLYING FOR EXEMPTION U/S 10(23C) OF THE ACT IS GROSSLY INCORRECT IN VIEW OF THE CASE LAWS, NAMELY, KATRA EDUCATION SOCIETY VS. ITO REPORTED IN 111 4 20 (ALLAHABAD HIGH COURT) AND CIT VS. AMM MEDICAL FOUNDATION 257 ITR 2 92 (2002) (MADRAS). LASTLY, THE ASSESSING OFFICER HAS HELD TH AT THE RECEIPTS OF BOTH THE INSTITUTES RUN BY THE ASSESSEE SOCIETY SHOULD H AVE BEEN CLUBBED AND THE SOCIETY, WHICH IS THE EDUCATIONAL SOCIETY WAS R EQUIRED TO FILE ITS RETURN BY CLUBBING THE RECEIPTS OF BOTH THE INSTITU TES AND TO CLAIM EXEMPTION OF INCOME OVER EXPENDITURE, THE SOCIETY M UST HAVE OBTAINED 8 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 EXEMPTION CERTIFICATE U/S 10(23C)(VI) OF THE ACT FR OM THE PRESCRIBED AUTHORITY UNDER THE I.T. ACT. THEREFORE, THE RECEIP TS OF THE EDUCATIONAL SOCIETY, NAMELY, M/S VIVEKANAND SOCIETY OF EDUCATIO N AND RESEARCH (REGD.), KACHI CHHAWNI, JAMMU AND SURPLUS OF INCOME OVER EXPENDITURE OF RS. 69,27,948/- FOR THE ASSESSMENT YEAR 2005-06 IS ASSESSED AS INCOME OF THE SOCIETY IN THE STATUS OF AOP. NO EXEMPTION I S ALLOWED AS THE SOCIETY HAS NOT BEEN GOT REGISTERED UNDER SECTION 1 2A OF THE ACT AND NO EXEMPTION CERTIFICATE HAS BEEN OBTAINED FROM THE PR ESCRIBED AUTHORITIES UNDER THE INCOME TAX ACT. PENALTY PROCEEDINGS UNDE R SECTION 271(1)(C) OF THE ACT HAS ALSO BEEN INITIATED IN THE CASE OF T HE ASSESSEE WHILE COMPLETING THE ASSESSMENT FOR THE ASSESSMENT YEAR I N DISPUTE VIDE ORDER DATED 31.12.2008 PASSED BY THE ASSESSING OFFICER UN DER SECTION 143(3) OF THE ACT AND MADE ADDITION OF RS. 69,27,948/-. 7. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 31.12. 2008, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED FIRST A PPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 26.04.2010, PARTLY ALLOWE D THE APPEAL OF THE ASSESSEE AND MAINLY HELD THAT THE ASSESSEE IS AN ED UCATIONAL INSTITUTION, WHICH IS ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23 C)(IIIAD) OF THE ACT AND DELETED THE ADDITION MADE BY THE ASSESSING OFFI CER AMOUNTING TO RS. 9 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 69,27,948/-. NOW, THE REVENUE BEING AGGRIEVED WITH THE IMPUGNED ORDER, FILED THE PRESENT APPEAL. 8. AT THE TIME OF HEARING, LEARNED DR RELIED UPON T HE ORDER PASSED BY THE ASSESSING OFFICER AND STATED THAT LEARNED CI T(A) HAS WRONGLY DELETED THE ADDITION OF RS. 69,27,948/- MADE BY TH E ASSESSING OFFICER IN SPITE OF THE FACT THAT THE GROSS RECEIPTS OF THE AS SESSEE SOCIETY HAS BEEN EXCEEDED RS. 1 CRORE. HE FURTHER STATED THAT THE A SSESSEE SOCIETY HAS NO APPROVAL FROM THE PRESCRIBED AUTHORITY FOR THE EXEM PTION OF ITS INCOME UNDER SECTION 12(23C)(VI) OF THE ACT NOR REGISTERED UNDER SECTION 12A(A) OF THE ACT TILL 31.03.2005. FINALLY, LEARNED THE LE ARNED DR STATED THAT THE ASSESSEE HAS SHOWN ITS NIL INCOME IN ITS RETURN INS PITE OF THE FACT THAT THE GROSS RECEIPTS OF THE ASSESSEE WERE RS. 1,62,04,513 /- IN RESPECT OF ITS TWO UNITS, AS MENTIONED WHILE RECORDING THE REASONS BY THE ASSESSING OFFICER AND ON THE BASIS OF ACCOUNTS OF THESE TWO UNITS, NA MELY, VIVEKANANDA COLLEGE OF EDUCATION AND VIVEKANANDA INSTITUTE OF EDUCATION, TRAINING & RESEARCH. 9. ON THE CONTRARY, LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE IMPUGNED ORDER PASSED BY LEARNED CIT(A) AND STA TED THAT THERE ARE TWO SEPARATE INSTITUTIONS, NAMELY, VIVEKANANDA COL LEGE OF EDUCATION 10 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 AND VIVEKANANDA INSTITUTE OF EDUCATION TRAINING & R ESEARCH. AS PER SECTION 10(23C)(IIIAD) READ WITH SECTION 139., THE INCOME OF ANY UNIVERSITY OR EDUCATIONAL INSTITUTION EXISTING SOLE LY FOR EDUCATIONAL PURPOSES BEING EXEMPT FROM TAX, IF ITS GROSS RECEIP TS DOES NOT EXCEEDS RS. 1 CRORE, AND IN SUCH A CASE THE INSTITUTE IS NOT RE QUIRED TO FILE ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06. IN THE PRES ENT CASE THE INDIVIDUAL RECEIPTS OF THE EDUCATIONAL INSTITUTIONS IS LESS THAN RS. 1 CRORE. THE ASSESSING OFFICER HAS MISINTERPRETED THE LANGUA GE OF SECTION 10(23C)(IIIAD) AND EXEMPTION UNDER SECTION 10(23C)( IIIAD) IS ALLOWABLE TO THE INCOME OF AN EDUCATIONAL INSTITUTION AND NOT ALLOWABLE TO A PARTICULAR PERSON. HE FURTHER STATED THAT LEARNED F IRST APPELLATE AUTHORITY HAS GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSING O FFICER AND PASSED THE IMPUGNED ORDER UNDER THE LAW. HE HAS ALSO FILED THR EE SMALL PAPER BOOKS. IN THE FIRST PAPER BOOK, CONTAINING PAGES FROM 5 TO 35, HE HAS ATTACHED COPY OF REPLY FILED BY THE ASSESSEE BEFORE ITO, WAR D 2(3), JAMMU ON 23.12.2008; COPY OF REPLY FILED BY THE ASSESSEE BEF ORE ITO, WARD 2(3), JAMMU ON 26.12.2008; COPY OF THE ASSESSMENT ORDER U /S 143(3) DATED 31.12.2008 PASSED BY ITO, WARD 2(3), JAMMU IN THE C ASE OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2005-2006; COPY OF ORDE R OF COMMISSIONER 11 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 OF INCOME TAX (APPEALS), BATHINDA, DATED 26.04.2010 IN THE CASE OF THE ASSESSEE IN APPEAL NO. 866/08-09 RELATING TO ASSESS MENT YEAR 2005-2006; AND COPY OF THE CHIEF COMMISSIONER OF INCOME TAX, A MRITSAR, THEREBY GRANTING EXEMPTION U/S 10(23C) TO TYNDALE BISCOE & MALLINSON GIRLS SCHOOL, SHEIKH BAGH, SRINAGAR VIDE ORDER DATED 28. 01.2008 RELATING TO ASSESSMENT YEAR 2006-07. IN THE 2 ND PAPER BOOK, CONTAINING PAGES FROM 40 TO 47, HE HAS ATTACHED COPY OF DEMAND NOTICE U/S 156 DATED 08.02.2013 ALONG WITH ASSESSMENT ORDER U/S. 143(3) PASSED BY INCOME TAX OFFICER WARD 2(3)- JAMMU, IN THE CASE OF VIVEKA NANDA SOCIETY OF EDUCATION & RESEARCH, KACHI CHAWANI, JAMMU RELATING TO ASSESSMENT YEAR 2010-11; COPY OF DEMAND NOTICE U/S 156 DATED 3 1.01.2013 ALONG WITH ASSESSMENT ORDER U/S 143(3) PASSED BY INCOME TAX OFFICER WARD 2(3)-JAMMU IN THE CASE OF VIVEKANANDA COLLEGE OF ED UCATION, KACHI CHAWANI, JAMMU RELATING TO ASSESSMENT YEAR 2010-11; AND COPY OF DEMAND NOTICE U/S 156 DATED 31.01.2013 ALONGWITH AS SESSMENT ORDER U/S 143(3) PASSED BY INCOME TAX OFFICER WARD 2(3)-JAMMU IN THE CASE OF VIVEKANANDA INSTITUTION OF EDUCATION, TRAINING & RE SEARCH, KACHI CHAWANI, JAMMU RELATING TO ASSESSMENT YEAR 2010-11. AND IN THE 3 RD PAPER BOOK, CONTAINING PAGES FROM 1 TO 27, HE HAS A TTACHED SOME 12 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 JUDGMENTS/DECISIONS OF HON'BLE SUPREME COURT, HON'B LE HIGH COURT AND I.T.A.T. ASSESSEES COUNSEL LASTLY REQUESTED THAT T HE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITY AND THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE AND WE ARE OF THE VIEW THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS PASSED THE IMPUGNED ORDER ONLY BY REPRODUCING THE GROUNDS OF APPEAL, WR ITTEN SUBMISSION OF THE ASSESSEE AND THE COMMENTS OF THE ASSESSING OFFI CER ON THE WRITTEN SUBMISSION AND HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE ASSESSEE AS AOP AND THE ASSESSING OFFI CER HAS NO POWER TO CHANGE THE STATUS OF THE ASSESSEE. SECONDLY, THE LE ARNED FIRST APPELLATE AUTHORITY HAS ALSO HELD THAT THE ASSESSEE SOCIETY I S AN EDUCATIONAL INSTITUTION, THEREFORE, IT IS ELIGIBLE FOR EXEMPTIO N UNDER SECTION 10(23C)(IIIAD) OF THE ACT. IN OUR CONSIDERED VIEW, THE FINDINGS OF THE LEARNED FIRST APPELLANT AUTHORITY IS CONTRARY TO LA W AND FACTS ON THE FILE AND THE SAME DESERVES TO BE CANCELLED ON THE GROUND THAT THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN DELETING TH E ADDITION MADE BY THE ASSESSING OFFICER IN SPITE OF THE FACT THAT THE GRO SS RECEIPTS OF THE SOCIETY 13 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 EXCEEDS RS. 1 CRORE AS ADMITTED IN THE AFORESAID PA RAGRAPHS AT THE TIME OF ISSUING NOTICE UNDER SECTION 148 OF THE ACT WHICH W AS NOT VERIFIED BY THE ASSESSEE TILL DATE. SECONDLY, THE LEARNED FIRST APP ELLATE AUTHORITY IS ALSO NOT JUSTIFIED UNDER THE LAW THAT THE ASSESSEE-SOCIE TY IS ENTITLED FOR EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT O NLY BECAUSE THE ASSESSEE IS AN EDUCATIONAL INSTITUTION IGNORING THE FACT THAT AS AND WHEN THE GROSS RECEIPTS OF THE SOCIETY EXCEEDS RS. 1 CRO RES, THE ASSESSEE SOCIETY REQUIRES APPROVAL FROM THE PRESCRIBED AUTHORITY FOR EXEMPTION OF ITS INCOME UNDER SECTION 10(23C)(IV) OF THE ACT WHICH N EITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE HAS PRODUCED BEFO RE ANY REVENUE AUTHORITY NOR BEFORE US TILL THE CLOSING OF HEARING . FOR THE SAKE OF CONVENIENCE, THE RELEVANT PROVISION APPLICABLE TO T HE PRESENT CASE I.E. RULE 2BC AND 2C OF THE INCOME TAX RULES, 1962 ARE R EPRODUCED AS UNDER: [AMOUNT OF ANNUAL RECEIPTS FOR THE PURPOSES OF SUB- CLAUSES (IIIAD) AND (IIIAE) OF CLAUSE (23C) OF SECTION 10. 2BC. (1) FOR THE PURPOSES OF SUB-CLAUSE (IIIAD) OF CLAU SE (23C) OF SECTION 10, THE AMOUNT OF ANNUAL RECEIPTS ON OR AFT ER THE 1 ST DAY OF APRIL, 1998, OF ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION, EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT, SHALL BE ONE CRORE RUPEES. (2) FOR THE PURPOSES OF SUB-CLAUSE (IIIAE) OF CLAUS E (23C) OF SECTION 10, THE AMOUNT OF ANNUAL RECEIPTS ON OR AFTER THE 1 ST DAY OF APRIL, 1998, OF ANY HOSPITAL OR OTHER INSTITUTION FOR THE RECEPTION AND 14 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 TREATMENT OF PERSONS SUFFERING FROM ILLNESS OR MENT AL DEFECTIVENESS OR FOR THE RECEPTION AND TREATMENT OF PERSONS DURING C ONVALESCENCE OR OF PERSONS REQUIRING MEDICAL ATTENTION OR REHABILITATI ON, EXISTING SOLELY FOR PHILANTHROPIC PURPOSES AND NOT FOR PURPOSES OF PROFIT, SHALL BE ONE CRORE RUPEES.] [APPLICATION UNDER SECTION 10(23) AND UNDER SUB-CLA USES (IV) AND (V) OF SECTION 10(23C). 2C. (1) THE PRESCRIBED AUTHORITY UNDER CLAUSE (23) AND SUB-CLAUSES (IV) AND (V) OF CLAUSES (23C) OF SECTION 10 SHALL B E THE DIRECTOR GENERAL (INCOME-TAX EXEMPTIONS), TO WHOM THE APPLIC ATIONS SHALL BE MADE AS PROVIDED IN SUB-RULES (2) AND (3). (2) THE FORM IN WHICH AN APPLICATION IS TO BE FURNI SHED UNDER CLAUSE (23) OF SECTION 10 BY A SPORTS ASSOCIATION OR INSTI TUTION SHALL BE IN FORM NO. 55. (3) THE FORM OF APPLICATION TO BE FURNISHED UNDER S UB-CLAUSES (IV) AND (V) OF CLAUSE (23C) OF SECTION 10 BY A FUND, TR UST OR INSTITUTION SHALL BE IN FORM NO. 567.] 11. WE HAVE THOROUGHLY GONE THROUGH THE ORDERS PAS SED BY THE REVENUE AUTHORITY AND WE ARE OF THE VIEW THAT THE A SSESSEE-SOCIETY, NAMELY, M/S VIVEKANANDA SOCIETY OF EDUCATION AND RE SEARCH, KACHI CHAWNI, JAMMU, RUNNING ITS TWO UNITS, NAMELY, VIVEK ANANDA COLLEGE OF EDUCATION AND VIVEKANANDA INSTITUTE OF EDUCATION TR AINING & RESEARCH AND THE TOTAL RECEIPT IN THE RELEVANT PERIOD WERE R S. 1,62,04,513/-, HAVING SURPLUS OF RS. 69,27,948/- DURING RELEVANT PERIOD. INSPITE OF THESE FACTS, THE ASSESSEE SOCIETY HAS NOT FILED ANY RETURN OF IN COME FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSING OFFICER HAS OBTAINED TH ESE INFORMATION FROM 15 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 THE RECORDS OF ABOVE TWO UNITS OF THE ASSESSEE SOCI ETY AND AFTER RECORDING THE REASONS, HE ISSUED NOTICE TO THE ASSESSEE UNDER SECTION 148 OF THE ACT, DATED 10.01.2008, DECLARING NIL INCOME DURING THE L AST LEG OF ASSESSMENT PROCEEDINGS. 12. AS A MATTER OF RECORD, THE ASSESSING OFFICER ISS UED SUMMONS UNDER SECTION 131 OF THE ACT, DATED 12.12.2008 TO T HE MEMBER OF THE ASSESSEE SOCIETY AND IN RESPONSE TO SAME, DR. SUDAR SHAN GUPTA, GENERAL SECRETARY OF THE SOCIETY APPEARED ALONG WITH HIS CO UNSEL. THE ASSESSING OFFICER RECORDED THE STATEMENT OF DR. SUDARSHAN GUP TA IN THE PRESENCE OF HIS COUNSEL, IN WHICH HE HAS ADMITTED THAT BOTH THE INSTITUTIONS AT LAKHANPUR, KATHUA ARE UNDER THE SOCIETY AND ITS HEA D OFFICE IS AT KACHI CHAWNI, JAMMU. ASSESSEE ONLY PLEADED BEFORE THE REV ENUE AUTHORITY THAT THE INCOME OF ANY UNIVERSITY OR EDUCATIONAL INSTITU TION EXISTING SOLELY FOR EDUCATIONAL PURPOSES BEING EXEMPT FROM TAX, IF ITS GROSS RECEIPTS DOES NOT EXCEEDS RS. 1 CRORE, AND IN SUCH CASE THE INSTITUTI ON IS NOT REQUIRED TO FILE RETURN OF INCOME U/S 139. IN OUR CONSIDERED VIEW, T HE STAND OF THE ASSESSEE IS NOT TENABLE IN THE EYE OF LAW, AS DISCU SSED ABOVE, BECAUSE THE GROSS RECEIPTS OF THE ASSESSEE SOCIETY IS EXCEEDED RS. 1 CRORES WHICH REQUIRES APPROVAL FROM THE COMPETENT AUTHORITY. 16 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 13. KEEPING IN VIEW THE ADMITTED POSITION AS WELL AS THE STATEMENT OF DR. SUDARSHAN GUPTA, GENERAL SECRETARY OF THE AS SESSEE SOCIETY, WHO APPEARED BEFORE THE ASSESSING OFFICER ALONG WITH HI S COUNSEL, THAT BOTH THE INSTITUTIONS ARE UNDER THE SOCIETY AND ITS HEAD OFFICE IS AT KACHI CHAWNI, JAMMU, WE ARE OF THE VIEW THAT THE ASSESSIN G OFFICER HAS COMPLETED THE ASSESSMENT UNDER THE LAW AND RIGHTLY MADE THE TOTAL TAXABLE INCOME OF RS. 69.27,948/- AND RIGHTLY HELD THAT THE RECEIPTS OF BOTH THE INSTITUTIONS SHOULD HAVE BEEN CLUBBED AND THE SOCIETY, WHICH IS THE EDUCATIONAL SOCIETY, WAS REQUIRED TO FILE ITS R ETURN BY CLUBBING THE RECEIPTS OF BOTH THE INSTITUTES AND TO CLAIM EXEMPT ION OF INCOME OVER EXPENDITURE, THE SOCIETY MUST HAVE OBTAINED EXEMPTI ON CERTIFICATE U/S 10(23C)(IV) OF THE ACT FROM THE PRESCRIBED AUTHORIT Y UNDER THE I.T. ACT. 14. AS REGARDS TO THE DOCUMENTARY EVIDENCE FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE SHAPE OF PAPER BOOK , WE HAVE THOROUGHLY GONE THROUGH THE SAME AND FOUND THAT HE DID NOT FIL E EVEN A SINGLE DOCUMENT OR CASE-LAW SUPPORTING THE FACTS OF THE AS SESSEES CASE WHERE GROSS RECEIPTS OF THE ASSESSEE IS EXCEEDING RS. 1 C RORE AND NO EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT FROM THE PR ESCRIBED AUTHORITY ARE 17 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 REQUIRED. THEREFORE, THE CASE-LAWS RELIED UPON BY T HE LEARNED COUNSEL FOR THE ASSESSEE ARE NOT HELPFUL IN THE CASE OF THE ASS ESSEE. 15. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF THE VIEW THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS PASSED THE IM PUGNED ORDER CONTRARY TO THE LAW AND FACTS ON THE FILE WHICH IS NOT SUSTA INABLE IN THE EYE OF LAW. ACCORDINGLY, WE CANCEL THE IMPUGNED ORDER DATED 26. 04.2010 PASSED BY LEARNED CIT(A), BATHINDA, AND UPHELD THE ASSESSMENT ORDER DATED 31.12.2008 PASSED BY THE ASSESSING OFFICER UNDER SE CTION 143(3) OF THE ACT BY ACCEPTING THE APPEAL FILED BY THE REVENUE. 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH FEBRUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S VIVEKANAND SOCIETY OF EDUCATION AND RESEARCH, KACHI CHAWNI, JAMMU 2. ITO, WARD- 2(3), JAMMU 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 18 I.T.A. NO. 305(ASR)/2010 ASSESSMENT YEAR: 2005-06 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.