Church Educatinal Society , Hyderabad V. Pr. Commissioner of Income Tax, Central, Hyderabad

ITA 319/Hyd/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6312 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 17-02-2021
• Assessment Year: misc
• Appeal Filed On: 24-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Unexplained cash credit; Benefit of exemption
• Section: 12A; 10B; 13; 22; 10(23C); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. APPELLANT RESPONDENT 318/HYD/2020 AURORA EDUCATIONAL SOCIETY, HYDERABAD [PAN: AAATA8751C] THE PR.COMMISSIONER OF INCOME TAX (CENTRAL), HYDERABAD 319/HYD/2020 CHURCH EDUCATIONAL SOCIETY, HYDERABAD [PAN: AAALC0017F] 320/HYD/2020 KARSHAK VIDYA PARISHAD, HYDERABAD [PAN: AAATK5390S] 321/HYD/2020 TARAKARAMA EDUCATIONAL SOCIETY, HYDERABAD [PAN: AAAAT6566H] FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR DATE OF HEARING : 17-02-2021 DATE OF PRONOUNCEMENT : 20-04-2021 O R D E R PER S.S.GODARA, J.M. : THESE FOUR ASSESSEES APPEALS ARISE AGAINST THE PR.CIT(CENTRAL), HYDERABADS SEPARATE ORDERS; ALL DATE D 26-12- 2019 WITHDRAWING THEIR RESPECTIVE APPROVALS IN PROCEE DINGS U/S.10(23C)(VI) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 2 -: HEARD ALL ASSESSES AS WELL AS THE DEPARTMENT THROUGH MR.MURALI MOHANA RAO AND LEARNED CIT-DR. CASE FILES PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT ALL THESE ASSESSES APPE ALS SUFFER FROM IDENTICAL 121 DAYS DELAY IN FILING STATED TO BE ATTRIBUTABLE TO VARIOUS MISCELLANEOUS REASONS OF COMMUNICATION GAP AND OTHER SIMILAR FACTORS ON ACCOUNT OF THE CIRCUMSTANCES BEYOND THEIR CONTROL. ALL THESE CONDONATI ON AVERMENTS HAVE GONE UN-REBUTTED FROM THE REVENUES SID E. AS PER THE HON'BLE APEX COURTS LANDMARK DECISION IN COL LECTOR, LAND ACQUISITION VS. MST.KATIJI & ORS [167 ITR 471] (S C) AND UNIVERSITY OF DELHI VS. UNION OF INDIA, CIVIL APPEA L NOS.9488 & 9489/2019, DT.17-12-2019 HOLDING THAT SUCH A TECHNICAL ASPECT MUST MADE WAY FOR THE CAUSE OF SUBSTANTIAL JUSTICE , THE IMPUGNED IDENTICAL DELAY STANDS CONDONED. ALL THESE C ASES ARE NOW TAKEN UP FOR HEARING ON MERITS. 3. BOTH THE LEARNED REPRESENTATIVES INFORM US AT THE OUTSE T THAT ALL THESE ASSESSES APPEALS CHALLENGE CORRECTNESS OF THE PR.CITS ORDER WITHDRAWING THEIR RESPECTIVE SECTION 10( 23C)(VI) APPROVALS. AND THAT WE OUGHT TO TAKE UP ITA NO.320/HYD/2020 IN THE CASE OF KARSHAK VIDYA PARISHA D AS THE LEAD CASE FOR THE SAKE OF CONVENIENCE AND BREVI TY. WE THUS TREAT THE ABOVE CASE AS THE LEAD ONE RAISING THE F OLLOWING SUBSTANTIVE GROUNDS: 1.THE ORDER OF THE PR.CIT (CENTRAL), WITHDRAWING T HE EXEMPTION GRANTED U/S.10(23C)(VI), IS ARBITRARY, ERRONEOUS, W ITHOUT PROPER REASONS AND BAD IN LAW. 2.THE LEARNEDPR.CIT (CENTRAL) ERRED IN ISSUING COMM ON SHOW CAUSE NOTICE FOR BOTH 12A AND 10(23C)(VI) WHICH IS BAD IN LAW. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 3 -: 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.PR.CIT HAS ERRED IN CANCELLING THE APPROVAL MADE U/S.10(23C) O F THE ACT., WITH EFFECT FROM 2009 (DATE OF ORIGINAL SANCTION OF APPR OVAL), WHILE THE SHOW CASUE NOTICES MENTIONED ONLY SOME POINTS FOR O NE YEAR. 4.THE PR.CIT SHOW CAUSE NOTICE FOR REASONS AND YEAR S ARE NOT MATCHING WITH WITHDRAWING ORDER PASSED U/S. 10(23C) (VI). 5.THE LD.PR.CIT OUGHT TO HAVE APPRECIATE THAT FACT THAT TO WITHDRAW EXEMPTION U/S.10(23C) SEPARATE SHOW CASUE NOTICE TO BE ISSUED FOR EACH YEAR SEPARATELY BUT WITH ONE NOTICE MENTIONING SOME POINTS CANNOT BE CORRECT. 6. THE LD.PR.CIT WITHOUT EXAMINING THE INFORMATION FROM THE ASSESSEE AND EVEN BEFORE COMPLETING THE ASSESSMENT WITHDRAWI NG EXEMPTION U/S.10(23C) IN INVALID. 7.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.PR.CIT HAS MENTIONED ONE YEAR IN SHOW CASUE NOTICE GIVEN AND W ITHOUT ANALYZING THE REPLIES GIVEN, PR.CIT HAS ERRED IN PA SSING ORDER U/S.10(23C)(VI) CANCELLING FOR ALL THE YEARS IN SIX DAYS IS NOT CORRECT. 8. THE LD.PR.CIT HAS GROSSLY ERRED IN WITHDRAWING T HE APPROVAL U/S.10(23C) OF THE ACT, WITHOUT JUDICIOUSLY APPRECI ATING THE SUBMISSIONS AND EXPLANATIONS MADE. 9.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE REVOCATION ORDER PASSED BY THE PR.CIT, WITHDRAWING THE APPROVA L ALREADY GRANTED U/S.10(23C) IN THE YEAR 2009 BY THE THEN CC IT IS ERRONEOUS. 10.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.PR.CIT HAS GROSSLY ERRED IN WITHDRAWING THE APPROVAL U/S.1 0(23C) OF THE ACT, ALREADY ACCORDED BY THEN CCIT IN 2009 ITSELF, ESPEC IALLY WITH RETROSPECT EFFECT, WITHOUT FOLLOWING THE LEGAL PREC EDENCE AND WITHOUT FAIRLY APPRECIATING THE SUBMISSIONS AND EXPLANATION S MADE BY THE APPELLANT-SOCIETY IN RESPONSE TO THE NOTICES ISSUED . 11.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.PR.CIT HAS GROSSLY ERRED IN WITHDRAWING THE APPROVAL U/S.1 0(23C) OF THE ACT, WITHOUT FAIRLY APPRECIATING THE FACTUAL MATRIX THAT THE SOCIETY IS A GENUINE CHARITABLE ORGANIZATION RUNNING EDUCATIONAL INSTITUTIONS, REPUTED COLLEGES AND THAT IT HAS BEEN REGISTERED AN D CONTINUES TO BE REGISTERED U/S.12AA OF THE IT ACT AS ON DATE. 12.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, INCOME TAX AMENDMENT CAME W.E.F.15-11-2014 TO GIVE POWER TO PR .CIT TO APPROVE OR REJECT EXEMPTION U/S.10(23C) BUT PR.CIT HAS ERRE D IN RESCINDING THE ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 4 -: ORDER OF APPROVAL ALREADY GRANTED IN 2009 BY THE CC IT, WITHOUT PROPER AUTHORITY AND FINDING ANY DEFECTS FROM THE Y EAR 2009 ONWARDS. 13.WITHOUT PREJUDICIAL TO THE ABOVE GROUNDS ON WITH DRAWAL OF APPROVAL, WE STRONGLY OBJECT FOR WITHDRAWING THE AP PROVAL U/S.10(23C) (VI) OF THE ACT, RETROSPECTIVELY WITH E FFECT FROM THE DATE OF ITS SANCTION IN 2009, WHICH IS AGAINST THE LEGAL PR ECEDENCE ON THE ISSUE. 14.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD.PR.CIT WAS UNDER MISCONCEOPTION WHILE HOLDING THAT THE APPELLA NT HAS DONE REAL EATATE BUSINESS, WHEN, IN FACT, THE APPELLANT HAS J UST SOLD OUT ITS AGRICULTURAL LANDS, DESPERATELY, ONLY TO DISCHARGE ITS PRESSING BANK LIABILITY, WHICH WAS TAKEN FOR THE PURPOSE OF THE T RUST AND IN THE INTEREST OF CONTINUING THE CHARITABLE ACTIVITY IN R UNNING EDUCATION INSTITUTES WITHOUT ANY HINDERANCE. 15. LD.PR.CIT HAS ERRED IN CANCELLING THE APPROVAL U/S.10(23C) OF ACT, DRAWING INFERENCE THAT THE BOOKS OF ACCOUNT ARE NOT PROPER, WITHOUT PREPERLY AND JUDICIOUSLY APPRECIATING THAT THE SOCI ETY HAS MAINTAINED BOOKS OF ACCOUNT, GOT THEM AUDITED U/S. THE ACT, AU DIT REPORT WAS SUBMITTED AND MERELY SUBMISSION OF EXPLANATION TO A O WITH REGARDS TO INCOME AND EXPENDITURE STATEMENT CANNOT BE A REA SON FOR WITHDRWING THE ALREADY GRANTED BENEFIT U/S.10(23C) OF THE ACT. 16.THE ASSESSEE MAY ADD, ALTER OR MODIFY ANY OTHER POINTS TO THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF THE HEARING. 4. COUPLED WITH THIS, ASSESSEE/APPELLANT HAS FILED ITS PETITION ON 16-10-2020 SEEKING TO RAISE ADDITIONAL GR OUNDS. LEARNED CIT-DR HAS VEHEMENTLY OPPOSED ASSESSEES AD DITIONAL GROUNDS PETITION AT THIS ALLEGED BELATED STAGE. HIS CAS E IS THAT THE ASSESSEE HAS TRIED TO MAKE OUT ALTOGETHER A NEW CASE CHALLENGING THE PR.CITS JURISDICTION WHICH DOES NOT D ESERVE TO BE ADMITTED. HE HAS ALSO TAKEN PAINS TO FILE A BRIEF NO TE OBJECTING ASSESSEES ADMISSION OF ADDITIONAL GROUNDS AS UNDER: THE FOLLOWING SYNOPSIS OF ARGUMENTS MADE DURING HE ARING BEFORE THE HON'BLE ITAT ON 17/02/2021 IS FILED AS DIRECTED BY THE HON'BLE ITAT ON THE DATE OF HEARING. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 5 -: 1. IN ALL THE ABOVE CASES, SEARCH & SEIZURE OPERATI ON CONDUCTED BY THE DEPARTMENT REVEALED THAT THERE IS ADEQUATE EVID ENCE OF THE ASSESSEE'S DOING REAL ESTATE BUSINESS WHICH IS BEYO ND THE SCOPE OF CHARITABLE ACTIVITY. 2. IN THIS REGARD, A DETAILED PROPOSAL WAS SUBMITTE D BY THE ACIT, CENTRAL CIRCLE-2(4), HYDERABAD TO THE 'PR.COMMISSIO NER OF INCOME TAX(CENTRAL), HYDERABAD FOR CANCELLATION OF REGISTR ATION U/S 10(23C) GRANTED TO THE ASSESSEE (THE DETAILS ARE FILED AT P AGES 1-81 OF PAPER- BOOK FILED BY THE DEPARTMENT ON 4.2.2021). AS THERE IS CLEAR-CUT VIOLATION OF THE PROVISIONS OF SEC.10(23C) OF THE I NCOME TAX ACT BY THE ASSESSEE WARRANTING REVOCATION OF EXEMPTION U/S 10( 23C) OF THE INCOME TAX ACT, THE PR.CIT(CENTRAL), HYDERABAD HAS ISSUED SHOW- CAUSE NOTICE TO THE ASSESSEE. IT IS SUBMITTED THAT EVEN BEFORE THE HON'BLE ITAT, THE ASSESSEE COULD NOT REBUT THE CLIN CHING EVIDENCE IN THE FORM OF INCRIMINATING MATERIAL SEIZED DURING TH E COURSE OF SEARCH& SEIZURE PROCEEDINGS U/S 132 CONDUCTED BY TH E DEPARTMENT. THEREFORE, THIS IS A CLEAR CASE FOR REVOCATION OF A PPROVAL GRANTED IS U/S 10(23C) OF THE INCOME TAX 3. WITH REGARD TO THE ISSUE OF JURISDICTION OF THE PCIT FOR REVOCATION OF THE APPROVAL GRANTED U/S10(23C) OF THE INCOME TAX A CT, IT IS SUBMITTED THAT AS PER DIRECTIONS OF THE HON'BLE ITA T, A CLARIFICATION WAS OBTAINED FROM THE PR.COMMISSIONER OF INCOME TAX (CENTRAL) AND THE LETTER DATED 6.11.2020 OF THE PCIT(CENTRAL). TH E CLARIFICATION IS AVAILABLE AT PAGES 144-147 OF THE PAPER BOOK FILED BY THE UNDERSIGNED. IT IS ALSO SUBMITTED THAT AS PER NOTIF ICATION NO.SO 3215(E)[NO.60/2019](F.NO.370142/ 14/20 18-TPL] (DAT ED 5.9.2019, ISSUED WITH REGARD TO AMENDMENT OF RULES 2C AND 2CA OF THE INCOME TAX RULES, THE PCIT HAS JURISDICTION FOR REVOCATION OF APPROVAL GRANTED IX] S 10(23C) OF THE INCOME TAX ACT. IT IS HUMBLY SUBMITTED THAT THE ASSESSEE HAS NOT RAISED THE ISSUE OF JURIS DICTION BEFORE THE PCIT AND THE SAME IS RAISED FOR THE FIRST TIME BEFO RE THE HON'BLE ITAT AND THE ASSESSEE WAS NOT PREVENTED BY ANY SUFFICIEN T CAUSE IN NOT RAISING THE SAID GROUND BEFORE THE PCIT. 4. IN LIGHT OF THE ABOVE , THE APPEALS MAY KINDLY B E DISMISSED AND THE ORDER OF THE PCIT MAY KINDLY BE SUSTAINED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIV AL PLEADINGS REGARDING ASSESSEES PETITION DT.16-10-2020 SEEKING TO ADMIT ITS ABOVE STATED ADDITIONAL GROUNDS. THERE COUL D BE HARDLY ANY DISPUTE THAT THE VERY QUESTION OF PR.CIT(CE NTRAL)S JURISDICTION HEREIN TO WITHDRAW SECTION 10(23C)(VI) AP PROVAL ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 6 -: GOES TO ROOT OF THE MATTER. THAT BEING THE CASE, WE QUOTE HONBLE APEX COURTS LANDMARK DECISION IN NATIONAL TH ERMAL POWER CO. LTD., VS., CIT [229 ITR 383] (SC) AND ALL CARGO GLOBAL LOGISTICS LTD., VS. DCIT (2012) [137 ITD 217] (SB) (MUMBAI) THAT - THIS PURELY LEGAL IN NATURE TRIBUNAL CAN VERY WELL ENTERTAIN SUCH AN ADDITIONAL GROUND SO AS TO D ETERMINE THE CORRECT TAX LIABILITY OF AN ASSESSEE; PROVIDED, ALL THE RELEVANT FACTS ARE ALREADY ON RECORD . WE GO BY THE VERY ANALOGY AND ADMIT THE ASSESSEES ADDITIONAL GROUNDS HEREIN ABOVE. 6. WE NEXT NOTICE THAT THE PR.CIT(CENTRAL)S ORDER UNDER CHALLENGE WITHDRAWING THE ASSESSEES APPROVAL CONTAINS THE FOLLOWING DETAILED DISCUSSION: 1. BACK GROUND: M/S. KARSHAK VIDYA PARISHAD WAS GRANTED APPROVAL U/ S.10(23C)(VI) OF THE I.T ACT, 1961 BY THE CCIT, HYDERABAD-1, VIDE PROCEEDINGS IN F.NO.CC/ TECH.-1/22B(62)1 2007-08, DATED 27.03.2008 . 1.2 SEARCH & SEIZURE OPERATIONS WERE CONDUCTED ON 2 3.03.2018 IN THE CASE OF THE ABOVE INSTITUTION AS BEING PART OF AURO RA GROUP OF CASES, DURING WHICH VARIOUS DOCUMENTS AND INCRIMINATING MA TERIAL WERE FOUND AND SEIZED. THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH REVEALED THAT THE SOCIETY WAS CARRYING ACTIVITIES W HICH ARE NOT IN ACCORDANCE WITH THE OBJECTS OF THE SOCIETY AS APPRO VED BY THE CHIEF COMMISSIONER. IT WAS ALSO REVEALED THAT THE ACTIVIT IES OF THE SOCIETY ARE NOT ENTIRELY GENUINE. 1.3 ON ANALYSIS OF BANK ACCOUNTS IT WAS OBSERVED TH AT THERE WERE UNEXPLAINED CASH CREDITS IN THE BANK ACCOUNTS OF TH E SOCIETY. ANOTHER FINDING OF THE SEARCH IS THAT THE SOCIETY DID NOT M AINTAIN REGULAR BOOKS OF ACCOUNTS BECAUSE OF WHICH THE RETURNS OF I NCOME FILED BY THE ASSESSEE AND THE RECEIPTS AND PAYMENT ACCOUNTS REMA IN UNSUBSTANTIATED. BESIDES THESE, THE SOCIETY HAS VIO LATED THE PROVISIONS OF SECTION 269SS, 269T AS WELL AS THE TD S PROVISIONS. THE. MAIN MEMBERS OF THE SOCIETY SRI RAMESH BABU.N, SRI RAJA BABU.N, WERE FOUND TO BE IN POSSESSION OF UNACCOUNTED CASH WHICH WAS SEIZED. CONSIDERING ALL THESE ASPECTS THE GROUP CAS ES WERE CENTRALIZED WITH ACIT, CC-2(4) TO CONDUCT COORDINAT ED INVESTIGATION. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 7 -: CIT(E) AMONGST OTHERS PCITS PASSED ORDER U/S.127 AS SIGNING THE CASES INCLUDING AURORA EDUCATIONAL SOCIETY TO ACIT, CC2(4), HYDERABAD. 1.4 APPROVAL U/S.10(23C)(VI) WAS GRANTED BY THE THE N CHIEF COMMISSIONER OF INCOME TAX, HYDERABAD-1 VIDE ORDER F.NO.CC/TECH.1/22B(62)/2007-08, DATED 27.03.2008 SU BJECT TO THE FOLLOWING CONDITIONS. I) THE ASSESSEE WILL APPLY ITS INCOME, OR ACCUMULAT E FOR APPLICATION, WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS ESTABLISHED; II) THE ASSESSEE WILL NOT INVEST OR DEPOSIT ITS FUN DS (OTHER THAN VOLUNTARY CONTRIBUTIONS RECEIVED AND MAINTAINED IN THE FORM OF JEWELLERY, FURNITURE) FOR ANY PERIOD DURING THE PRE VIOUS YEARS RELEVANT TO THE ASSESSMENT YEARS MENTIONED ABOVE OTHERWISE T HAN IN ANYONE OR MORE OF THE FORMS OR MODES SPECIFIED IN SUBSECTI ON (5) OF SECTION 11; III) THIS ORDER WILL NOT APPLY IN RELATION TO ANY I NCOME BEING PROFITS AND GAINS OF BUSINESS UNLESS THE BUSINESS IS INCIDE NTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE ASSESSEE AND SE PARATE BOOKS OF ACCOUNTS ARE MAINTAINED IN RESPECT OF SUCH BUSINESS ; IV) THE ASSESSEE WILL REGULARLY FILE ITS RETURN OF INCOME BEFORE THE INCOME TAX AUTHORITY IN ACCORDANCE WITH THE PROVISI ONS OF INCOME TAX ACT, 1961; V) THAT IN THE EVENT OF DISSOLUTION, ITS SURPLUS AN D THE ASSETS WILL BE GIVEN TO A CHARITABLE ORGANIZATIONS WITH SIMILAR OB JECTIVES AND NO PART OF THE SAME WILL GO TO ANY OF THE MEMBERS OF M/S. K ARSHAK VIDYA PARISHAD, HYDERABAD500013. VI) APPROVAL GRANTED BY THIS ORDER IS SUBJECT TO TH E FULFILMENT OF THE CONDITIONS CONTAINED IN THE PROVISIONS TO SECTION 2 3C AND ITS SUBJECT TO CANCELLATION IN TERMS OF PROVISO 13 TO SECTION 10(2 3C) 1.5 FROM THE ABOVE APPROVAL AND CONDITIONS THEREIN, IT IS SEEN THAT THE APPROVAL WAS GRANTED SUBJECT TO THE TERMS OF TH E THEN PROVISO 13 TO SECTION 10(23C). THE SUBJECT PROVISO IS EXTRACTE D HEREUNDER: 'PROVIDED ALSO THAT WHERE THE FUND OR INSTITUTION R EFERRED TO IN SUB- CLAUSE (IV) OR TRUST OR INSTITUTION REFERRED TO IN SUB-CLAUSE (V) IS NOTIFIED BY THE CENTRAL GOVERNMENT OR IS APPROVED BY THE PRE SCRIBED AUTHORITY, AS THE CASE MAY BE, OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION REFERRED TO IN SUB-CLAUSE (VI) OR ANY H OSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO IN SUB-CLAUSE (VIA) , IS APPROVED BY THE PRESCRIBED AUTHORITY AND SUBSEQUENTLY THAT GOVERNME NT OR \HE PRESCRIBED AUTHORITY IS SATISFIED THAT- ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 8 -: (1) SUCH FUND OR INSTITUTION OR TRUST OR ANY UNIVER SITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER ME DICAL INSTITUTION HAS NOT- (A) APPLIED ITS INCOME IN ACCORDANCE WITH THE PROVI SIONS CONTAINED IN CLAUSE (A) OF THE THIRD PROVISO; OR (B) INVESTED OR DEPOSITED ITS FUNDS IN ACCORDANCE W ITH THE PROVISIONS CONTAINED IN CLAUSE (B) OF THE THIRD PROVISO; OR (II) THE ACTIVITIES OF SUCH FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OT HER MEDICAL INSTITUTION- (A) ARE NOT GENUINE; OR . (B) ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH AL L OR ANY OF THE CONDITIONS SUBJECT TO WHICH IT WAS NOTIFIED OR APPR OVED; OR (III) SUCH FUND OR INSTITUTION OR TRUST OR ANY UNIV ERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER ME DICAL INSTITUTION HAS NOT COMPLIED WITH THE REQUIREMENT OF ANY OTHER LAW FOR THE TIME BEING IN FORCE, AND THE ORDER, DIRECTION OR DECREE, BY WH ATEVER NAME CALLED; HOLDING THAT SUCH NON-COMPLIANCE HAS OCCURRED, HAS EITHER NOT BEEN DISPUTED OR HAS ATTAINED FINALITY, IT MAY, AT ANY TIME AFTER GIVING A REASONABLE OPPOR TUNITY OF SHOWING CAUSE AGAINST THE PROPOSED ACTION TO THE CONCERNED FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INS TITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION, RESCIND THE NOTIFICATION OR, BY ORDER, WITHDRAW THE APPROVAL, AS THE CASE MAY BE, A ND FORWARD A COPY OF THE ORDER RESCINDING THE NOTIFICATION OR WI THDRAWING THE APPROVAL TO SUCH FUND OR INSTITUTION OR TRUST OR AN Y UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER ME DICAL INSTITUTION AND TO THE ASSESSING OFFICER:' 2. PROPOSAL FOR WITHDRAWAL OF APPROVAL: 2.1 DURING THE ASSESSMENT PROCEEDING IN CONSEQUENTI AL THE SEARCH, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE SOCI ETY ACTED IN VIOLATION OF THE CONDITIONS LAID DOWN FOR APPROVAL U/S.10(23C). THE ASSESSING OFFICE VIDE LETTER DATED 06.12.2019 SENT THE PROPOSAL FOR WITHDRAWAL OF APPROVAL U/S.10(23C). THE ASSESSING O FFICER IN HER DETAILED PROPOSAL CITED VARIOUS VIOLATIONS AS DETAI LED BELOW: I) NO PROPER BOOKS OF ACCOUNTS WERE FOUND DURING TH E SEARCH WHICH WOULD AUTHENTICATE THAT THE RECEIPTS OF THE INSTITU TION WERE APPLIED TO ITS STATED / APPROVED OBJECTIVES. II) THE SOCIETY WAS REQUIRED TO MAINTAIN REGULAR BO OKS OF ACCOUNTS, REFLECTING THE ACTUAL OPERATIONS OF THE SOCIETY. TH ESE BOOKS OF ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 9 -: ACCOUNTS ARE TO BE AUDITED AND FORM 10B IS REQUIRED TO BE FILED, ALONG WITH RETURN OF INCOME, CERTIFYING THE CORRECTNESS. OF BOOKS OF ACCOUNT. BUT IT IS FOUND THAT THE SOCIETY'S BOOKS OF ACCOUNT S ARE NOT REGULARLY MAINTAINED AND THE FINANCIAL STATEMENTS SUBMITTED A RE MANIPULATED AND UNSUBSTANTIATED. III) AS PER THE RECEIPTS AND PAYMENTS ACCOUNTS SUBM ITTED DURING THE ASSESSMENT PROCEEDINGS, HEAVY AMOUNTS WERE SHOWN AS PAYMENTS TOWARDS VARIOUS EXPENSES FOR WHICH THERE IS NO CORR ESPONDING PROOF SUBMITTED, DESPITE OPPORTUNITY GIVEN. IN THE ABSENC E OF RELEVANT PROOF THE RECEIPTS AND PAYMENT ACCOUNTS SUBMITTED ARE NOT AMENABLE TO ANY SCRUTINY AND HENCE, THE GENUINENESS OF THE PAYM ENTS REMAIN UNSUBSTANTIATED. IV) THE SOCIETY SOLD CERTAIN LANDS THE RECEIPTS OF WHICH WERE NOT FULLY REFLECTED IN THE RECEIPTS AND PAYMENTS ACCOUNTS FIL ED ALONG WITH THE RETURN. HOWEVER, SUBSEQUENTLY, THE RECEIPTS ARE INC LUDED AND THE PAYMENTS WERE CORRESPONDINGLY INCREASED TO BALANCE THE RECEIPTS. THE DIFFERENCE BETWEEN THE ORIGINAL PAYMENTS AS PER RETURNS AND THE REVISED PAYMENTS AS PER THE RECEIPTS AND PAYMENTS A CCOUNTS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS REMAIN UNSUBSTANTIATED DUE TO LACK OF EVIDENCE OF SUCH PAY MENTS. THEREFORE] THE GENUINENESS OF APPLICATION OF THE FUNDS TOWARDS THE APPROVED OBJECTS OF THE SOCIETY REMAINS UNSUBSTANTIATED. IN VIEW OF THESE VIOLATIONS AO STRONGLY RECOMMENDED FOR WITHDRAWAL OF APPROVAL U/S.10(23C). 3. SHOW CAUSE FOR WITHDRAWAL: 3.1 VIDE LETTER IN F.NO. PR.CIT(C)/10(23C)/20-19-20 DATED 10.12.2019 A DETAILED SHOW CAUSE WAS SENT TO THE ASSESSEE ASKI NG IT TO EXPLAIN WHY THE SOCIETY'S REGISTRATION U/S.12A SHOULD NOT B E CANCELLED AND ALSO WHY THE APPROVAL U/S.10(23C) SHOULD NOT BE WIT HDRAWN. THE REASONS SPECIFIED IN THE SHOW CAUSE ARE AS UNDER: 'THE SOCIETIES ARE REQUIRED TO MAINTAIN REGULAR BOO KS OF ACCOUNTS, REFLECTING THE ACTUAL OPERATIONS OF THE SOCIETIES. THESE BOOKS OF ACCOUNTS ARE TO BE AUDITED AND FORM 10B IS REQUIRED TO BE FILED, ALONG WITH RETURN OF INCOME, CERTIFYING THE CORRECTNESS O F BOOKS OF ACCOUNTS. BUT IT IS FOUND THAT THE SOCIETY'S BOOKS OF ACCOUNT S ARE NOT REGULARLY MAINTAINED AND THE FINANCIAL STATEMENTS SUBMITTED T O THE INCOME TAX DEPARTMENT ARE MANIPULATED AND FUDGED. EVEN AFTER G IVING SEVERAL OPPORTUNITIES TO PRODUCE BOOKS OF ACCOUNTS, ASSESSE E HAS FAILED TO PRODUCE THE SAME. IN ADDITION TO THE ABOVE, AS PER THE INCOME AND EXP ENDITURE STATEMENT AND THE COMPUTATION OF INCOME, THE ABOVE EDUCATIONAL SOCIETY HAS SHOWN HUGE EXPENDITURES TOWARDS SALARIE S, OUTSTANDING EXPENSES PAYABLE, OUTSTANDING SALARIES PAYABLE, HUG E FIXED ASSET ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 10 -: ADDITIONS. HOWEVER, NO DETAILS ABOUT THE TEACHING/ NON-TEACHING STAFF EMPLOYED, HOW MUCH SALARY WAS PAID TO WHOM, W HETHER THE SALARY WAS PAID THROUGH BANK/ CASH, NO PROOF OF ADD ITIONS MADE TO FIXED ASSETS, NO BILLS AND VOUCHERS AND LEDGER ACCO UNT COPIES PERTAINING TO THE SAID EXPENDITURE HAVE BEEN FURNIS HED EVEN AFTER SEVERAL QUESTIONNAIRES AND SHOW-CAUSE NOTICES. HENCE, WITHOUT SUFFICIENT EVIDENCE AND NON-SUBMISSI ON OF BOOKS OF ACCOUNTS FROM THE ASSESSEE-SOCIETIES, IT C ANNOT BE ESTABLISHED BEYOND DOUBT THAT THE QUANTUM AND NATUR E OF EXPENDITURE INCURRED BY THEM IS CORRECT.' 3.2 SUBSEQUENTLY ANOTHER SHOW CAUSE WAS ISSUED ON 2 0/12/2019 AS THERE IS A CHANGE OF INCUMBENT. THE ISSUES RAISED T HEREIN ARE AS UNDER. I) NO PROPER BOOKS OF ACCOUNTS WERE FOUND DURING TH E SEARCH WHICH WOULD AUTHENTICATE THAT THE RECEIPTS OF THE INSTITU TION WERE APPLIED TO ITS STATED / APPROVED OBJECTIVES. II) THE SOCIETY WAS REQUIRED TO MAINTAIN REGULAR BO OKS OF ACCOUNTS, REFLECTING THE ACTUAL OPERATIONS OF THE SOCIETY. TH ESE BOOKS OF ACCOUNTS ARE TO BE AUDITED AND FORM 10B IS REQUIRED TO BE FILED, ALONG WITH RETURN OF INCOME, CERTIFYING THE CORRECTNESS O F BOOKS OF ACCOUNT. BUT IT IS FOUND THAT THE SOCIETY'S BOOKS OF ACCOUNT S ARE NOT REGULARLY MAINTAINED AND THE FINANCIAL STATEMENTS SUBMITTED A RE MANIPULATED AND UNSUBSTANTIATED. III) AS PER THE RECEIPTS AND PAYMENTS ACCOUNTS SUBM ITTED DURING THE ASSESSMENT PROCEEDINGS, HEAVY AMOUNTS WERE SHOWN AS PAYMENTS TOWARDS VARIOUS EXPENSES. FOR WHICH THERE IS NO COR RESPONDINQ PROOF SUBMITTED, DESPITE OPPORTUNITY GIVEN. IN THE ABSENC E OF RELEVANT PROOF THE RECEIPTS AND PAYMENT ACCOUNTS SUBMITTED ARE NOT AMENABLE TO ANY SCRUTINY AND HENCE, THE GENUINENESS OF THE PAYM ENTS REMAIN UNSUBSTANTIATED. IV) THE SOCIETY SOLD CERTAIN LANDS THE RECEIPTS OF WHICH WERE NOT FULLY REFLECTED IN THE RECEIPTS AND: PAYMENTS ACCOUNTS FI LED ALONG WITH THE RETURN. HOWEVER, SUBSEQUENTLY, THE RECEIPTS ARE INC LUDED AND THE PAYMENTS WERE CORRESPONDINGLY INCREASED TO BALANCE THE RECEIPTS. THE DIFFERENCE BETWEEN THE ORIGINAL PAYMENTS AS PER RETURNS AND THE REVISED PAYMENTS AS PER THE RECEIPTS AND PAYMENTS A CCOUNTS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS REMAIN UNSUBSTANTIATED DUE TO LACK OF EVIDENCE OF SUCH PAY MENTS. THEREFORE, THE GENUINENESS OF APPLICATION OF THE FUNDS TOWARDS THE APPROVED OBJECTS OF THE SOCIETY REMAINS UNSUBSTANTIATED.' IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICES, THE SO CIETY FURNISHED REPLY VIDE LETTER DATED 24.12.2019. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 11 -: 4. RESPONSE OF THE ASSESSEE: 4.1 THE GIST OF THE SUBMISSIONS MADE BY THE ASSESSE E VIDE LETTER DATED 24-12-2019 AGAINST THE WITHDRAWAL OF APPROVAL U/S.10(23C) ARE AS UNDER: 4.2 DUE TO INTRODUCTION OF FEE REIMBURSEMENT SCHEME , THE INSTITUTION STARTED FACING FINANCIAL CRISIS BECAUSE OF NON-RECE IPT OF REIMBURSEMENT FEE FROM THE GOVERNMENT, BECAUSE OF T HIS FINANCIAL CRISIS THE BANK LOANS HAVE BECOME BAD AND BANKS TRI ED TO AUCTION THE LANDS BELONGING TO THE SOCIETY. UNDER THESE CIRCUMS TANCES, THE SOCIETY WAS LEFT WITH NO OTHER OPTION THAN TO DISTRESS SELL OF THE PROPERTIES. THE SOCIETY UTILIZED ALL THE SALE PROCEEDS FOR CLEA RING OF THE LOANS OF BANKS. 4.3 IT WAS SUBMITTED THAT IT IS NOT CORRECT TO SAY THAT NO PROPER BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE. ALL THE BOOKS ARE REGULARLY MAINTAINED AND AUDITED. THE AUDITED FINAN CIAL STATEMENTS ARE FILED ALONG WITH THE RETURN OF INCOME. IT IS AL SO STATED THAT THE SEARCH PARTY DIDN'T DRAW ANY ADVERSE INFERENCE AGAI NST THE ACTIVITIES OF THE ASSESSEE. IT IS FURTHER SUBMITTED THAT THE A SSESSEE HAS NOT BEEN 'PROVIDED SUFFICIENT OPPORTUNITY TO PRODUCE NE CESSARY INFORMATION. 4.4 IT IS SUBMITTED THAT THE CIT SHOULD HAVE BEEN S ATISFIED THAT THE INSTITUTION HAS NOT APPLIED ITS INCOME IN ACCORDANC E WITH THE PROVISIONS OF SECTION 10(23C) AND MERE SUSPICION CA NNOT FORM BASIS FOR WITHDRAWAL OF APPROVAL. AS A SOCIETY IS IN DEEP FINANCIAL TROUBLE THE LANDS HAD TO BE SOLD AND ALL THE SALE PROCEEDS WERE UTILIZED FOR THE PURPOSE OF STATED OBJECTIVES OF THE SOCIETY. TH EREFORE, IT IS SUBMITTED THAT THE FOUNDATION REQUISITE FOR THE WIT HDRAWAL OF APPROVAL U/S.10(23C) IS NOT FULFILLED IN ASSESSEE'S CASE AND, HENCE, IT IS REQUESTED TO DROP THE PROCEEDINGS. 5.ISSUES FOR CONSIDERATION: I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTA NCES OF THE CASE AND HAVE GONE THROUGH THE SUBMISSION MADE ON BEHALF OF THE SOCIETY. I HAVE ALSO CONSIDERED THE MATERIAL FOUND AND SEIZE D DURING THE SEARCH OPERATION AND ALSO STATEMENT RECORDED DURING SEARCH AND POST SEARCH INVESTIGATION. 5.1 NON MAINTENANCE OF BOOKS / FURNISHING WRONG FINANCIAL STATEMENTS TO THE DEPARTMENT 5.1.1 ON EXAMINATION OF ENTIRE FACTS, IT IS SEEN TH AT THE SOCIETY WHICH IS REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS W HICH WOULD REFLECT THE ACTUAL DAY TO DAY TO DAY OPERATIONS OF THE SOCI ETY, DID NOT DO SO. THESE BOOKS OF ACCOUNTS ARE ALSO REQUIRED TO BE AUD ITED AND FORM 10B NEEDS TO BE FILED ALONG WITH THE RETURN CERTIFY ING THE CORRECTNESS ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 12 -: OF THE BOOKS OF ACCOUNTS. DURING THE 'SEARCH IT CAM E TO THE NOTICE OF THE DEPARTMENT THAT THE SOCIETY WAS NOT MAINTAINING ANY REGULAR BOOKS OF ACCOUNTS AND THE FINANCIAL STATEMENTS SUBM ITTED TO INCOME TAX DEPARTMENT ALONG WITH THE RETURN ARE MANIPULATE D. THESE FACTS WERE CONFRONTED TO THE ASSESSEE DURING THE COURSE O F SEARCH AND POST SEARCH INVESTIGATIONS, BUT THE ASSESSEE ONLY COULD GIVE EVASIVE REPLIED WITHOUT ANY SUBSTANTIVE DOCUMENTARY EVIDENC E. 5.1.2 ALL THAT THE ASSESSEE HAD TO SAY WITH REGARD TO NON- MAINTENANCE OF BOOKS IS THAT THE BOOKS HAVE BEEN RE GULARLY MAINTAINED AND AUDITED. THE AUDITED FINANCIAL STATE MENTS WERE FILED ALONG WITH THE RETURN OF INCOME. HOWEVER, IT IS NOT SUBSTANTIATED BY THE ASSESSEE AS TO WHY REVISED RECEIPTS AND PAYMENT S HAD TO BE FILED IF THE ORIGINAL RECEIPTS AND PAYMENTS / FINANCIAL S TATEMENTS REFLECTED THE CORRECT AND ENTIRE ACTIVITIES OF THE ASSESSEE. THE STATEMENT THAT THE SEARCH PARTY DID NOT DRAW ANY INFERENCE AGAINST THE SOCIETY IS NOT CORRECT AS THE ASSESSEE DID NOT REPLY TO THE QUESTI ONS RAISED BY THE SEARCH PARTY PROPERLY. FURTHER, ADVERSE INFERENCES IF ANY WOULD BE DRAWN AND FINALIZED BY THE ASSESSING OFFICER AT THE TIME OF FINALIZING THE ASSESSMENT ORDER. IT IS ALSO NOT CORRECT THAT T HE ASSESSEE WAS NOT PROVIDED SUFFICIENT OPPORTUNITY IT IS A FACT ON REC ORD THAT THE ASSESSEE DID NOT RESPOND TO VARIOUS NOTICES AND SHOW CAUSE L ETTERS GIVEN DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE ASS ESSEE FAILED TO FURNISH THE COMPLETE DETAILS TO THE DEPARTMENT AND HAVE BEEN CHANGING ITS VERSION TIME AND AGAIN. 5.1.3 THE ASSESSEE DID NOT AT ANY STAGE SAY THAT FI NANCIAL STATEMENT SUBMITTED ALONG WITH THE RETURN OF INCOME REFLECT T HE TRUE AFFAIRS OF THE SOCIETY. THEREFORE, IT IS AN ADMITTED FACT THA THE ASSESSEE SOCIETY FURNISHED ITS INCOME TAX RETURNS BASED ON THE FINAN CIAL STATEMENTS WHICH DO NOT HAVE ANY SANCTITY. JUST BECAUSE AUDIT REPORT IN 10B WAS FURNISHED IT DOES NOT MEAN THAT THE ACTIVITIES OF THE4 SOCIETY ARE TRUE AND CORRECT. THE FACT THAT THE AUDITED ACCOUNT S OF THE ASSESSEE DO NOT REFLECT THE ASSESSEE'S SOCIETY'S REAL AFFAIR S AND COMPLETE TRANSACTIONS OF THE SOCIETY HAVE BEEN DELIBERATELY HIDDEN FROM THE DEPARTMENT. THIS IS A CLEAR VIOLATION OF CONDITIONS OF SECTION 10(23C). THE CHARITABLE NATURE AND EDUCATION PURPOSE OF AN INSTI TUTION IS REFLECTED THROUGH ITS BOOKS OF ACCOUNTS. IF THE BOOKS OF ACCO UNTS ARE NOT PROPERLY MAINTAINED AND THERE ARE FINANCIAL TRANSAC TIONS OUTSIDE THE BOOKS OF ACCOUNTS THEN THE STATEMENT THAT THE SOCIE TY'S ACTIVITIES ARE BEING CARRIED OUT AS PER THE OBJECTS REMAINS ONLY O N PAPER. NON- MAINTENANCE OF BOOKS IN ITSELF RELIECTS THE INTENTI ON OF THE SOCIETY MEMBERS I TRUSTEES TO HIDE THE ACTUAL TRANSACTIONS FROM THE EYES OF THE APPROVING AUTHORITY. THERE IS A CATENA OF DECIS ION THE NON_MAINTENANCE OF PROPER BOOKS OF ACCOUNTS AND CAR RYING OUT OF THE OPERATIONS I FINANCIAL TRANSACTIONS OUTSIDE THE BOO KS OF ACCOUNTS ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 13 -: CASTS THE SHADOW ON THE OBJECTIVES OF THE SOCIETY A ND HENCE THE GENUINENESS OF THE SOCIETY. 5.1.4 THE SEARCH REVEALED THE FACT THAT THE ASSESSE ES' BOOKS WERE NEVER REGULARLY MAINTAINED AND THERE HAVE ALWAYS BE EN TRANSACTIONS OUT OF THE BOOKS OF ACCOUNTS. EVIDENCE FOR TRANSACT IONS OUTSIDE BOOKS OF ACCOUNTS WERE FOUND DURING THE SEARCH. HAD THE S EARCH & SEIZURE OPERATION HAS NOT TAKEN PLACE THESE RECEIPTS WOULD NEVER HAVE BEEN BROUGHT TO THE NOTICE OF THE INCOME TAX DEPARTMENT. THE SOCIETY'S APPROVAL IS GRANTED SUBJECT TO THE CONDITIONS SPECI FIED THEREIN. THE ASSESSEE BY NOT REFLECTING THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS HAS CONVENIENTLY AVOIDED TO SHOW AS TO HOW THE RECE IPTS WERE USED. IT BECOMES NEXT TO IMPOSSIBLE TO EXAMINE WHETHER TH E AMOUNTS RECEIVED WERE UTILIZED TOWARDS ADVANCEMENT OF THE O BJECTS OF THE SOCIETY WHEN BOTH THE RECEIPT AS WELL AS THE EXPEND ITURE IS KEPT OUT OF THE BOOKS OF ACCOUNTS. SECTION 10(23C) LAYS HEAVY E MPHASIS ON THE APPLICATION OF INCOME AND / OR ITS ACCUMULATION FOR FUTURE APPLICATION WHEN THE INCOME ITSELF IS NOT REFLECTED IN THE BOOK S IT BECOMES IMPOSSIBLE TO THE TAXMAN TO EXAMINE WHETHER SUCH IN COME IS APPLIED FOR THE FURTHERANCE OF THE SOCIETY'S ACTIVITIES. ON CE THE RECEIPT ITSELF IS NOT SHOWN THE ASSESSEE EVEN NEED NOT EXPLAIN WHETHE R THE SURPLUS IS INVESTED AS PER THE PROVISIONS OF SECTION 10(23C). THEREFORE, NON_MAINTENANCE OF BOOKS OF ACCOUNT AND NON-INCLUSI ON OF ENTIRE RECEIPTS IN THE BOOKS IS THE WELL THOUGHT OF PLOY B Y THE ASSESSEE TO AVOID COMPLIANCE WITH PROVISIONS OF SECTION 10(23C) . 6. CONCLUSION: 6.1 ON PERUSAL OF VARIOUS MATERIALS FOUND AND SEIZE D, RESULTS OF POST SEARCH INVESTIGATIONS AND STATEMENTS RECORDED FROM VARIOUS PERSONS DURING THE SEARCH; IT IS OBSERVED THAT THE ASSESSEE SOCIETY HAS BEEN CONTINUOUSLY, TIME AND AGAIN VIOLATING THE CONDITIO NS LAID DOWN FOR APPROVAL OF THE SOCIETY U/S.10(23C). IT IS OBSERVE D THAT NO PROPER BOOKS OF ACCOUNTS WERE MAINTAINED FOR ANY OF ASSESS MENT YEARS, IN THE ABSENCE OF WHICH THE RECEIPTS AND PAYMENTS COUL D NOT BE AUTHENTICATED. THEREFORE IT IS NOT POSSIBLE FOR THE TAX AUTHORITIES TO EXAMINE WHETHER THE RECEIPTS OF TILE INSTITUTIONS W ERE APPLIED TO ITS STATED /APPROVED OBJECTIVES. IT IS ALSO SEEN THAT REVISED RECEIPTS AND PAYMENTS STATEMENTS WERE FILED DURING POST SEARCH P ROCEEDINGS, WHICH CLEARLY SHOWS THAT NEITHER THE RECEIPT PAYMEN T ACCOUNT FILED ALONG WITH RETURN NOR THE AUDIT REPORT UNDER FORM 1 0B REFLECT THE CORRECT POSITION OF AFFAIRS OF THE SOCIETY. THE AS SESSEE SOCIETY ENTERED INTO VARIOUS LAND TRANSACTIONS BOTH OF OUTRIGHT SAL E AS WELL AS DEVELOPMENT. LARGE AMOUNTS OF CASH HAVE CHANGED HA NDS IN THESE TRANSACTIONS IN FLAGRANT VIOLATION OF PROVISIONS OF INCOME TAX ACT AND ALSO STAMP DUTY ACT. THE ASSESSEE TILL DATE WAS NO T ABLE TO RECONCILE HOW THE ENTIRE RECEIPTS OF SALE OF LAND WERE UTILIZ ED. FURTHER, IT IS OBSERVED FROM THE MATERIAL SEIZED THAT THEE IS DIVE RSION OF FUNDS OF ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 14 -: THE SOCIETY FOR THE PERSONAL BENEFIT OF THE MEMBERS /TRUSTEES. THE REAL ESTATE TRANSACTIONS WERE ALSO STRUCTURED IN SUCH A WAY TO DIVEST THE SOCIETY LAND AT LESS THAN MARKET PRICE WITH OBVIOUS INTENTIONS. ABOVE ALL TILL DATE THE ASSESSEE SOCIETY IS NOT ABLE TO S UBMIT ITS CORRECT RECEIPTS AND PAYMENT ACCOUNT ALONG WITH RELEVANT PR OOF TO SHOW THAT THE SOCIETYS FUNDS HAVE BEEN UTILIZED FOR THE FURT HERANCE OF OBJECTIVE OF THE SOCIETY IN ACCORDANCE WITH THE APPROVAL GRAN TED BY THE PRESCRIBED AUTHORITY. 6.2. A PERUSAL OF PROVISIONS OF SEC 10(23C) CLEARLY SHOW THAT THE APPROVAL TO THE SOCIETY IS GRANTED SUBJECT TO THE C ONDITIONS LAID DOWN IN THE THEN PROVISO 13. THE RELEVANT PROVISIONS OF SECTION 10(23C) READS AS UNDER:- GOVERNMENT OR THE PRESCRIBED AUTHORITY IS SATISFIED THAT- (I) SUCH FUND OR INSTITUTION OR TRUST OR ANY UNIVER SITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER ME DICAL INSTITUTION HAS NOT- (A) APPLIED ITS INCOME IN ACCORDANCE WITH THE PROVI SIONS CONTAINED IN CLAUSE (A) OF THE THIRD PROUISO; OR (B) INVESTED OR DEPOSITED ITS FUNDS IN ACCORDANCE W ITH THE PROVISIONS CONTAINED IN CLAUSE (B) OF THE THIRD PROVISO ; OR (II) THE ACTIVITIES OF SUCH FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OT HER MEDICAL INSTITUTION- (A) ARE NOT GENUINE ;OR (B) ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH AL L OR ANY OF THE CONDITIONS SUBJECT TO WHICH IT WAS NOTIFIED OR APPR OVED, IT MAY, AT ANY TIME AFTER GIVING A REASONABLE OPPOR TUNITY OF SHOWING CAUSE AGAINST THE PROPOSED ACTION TO THE CONCERNED FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDUCATIONAL INS TITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION, RESCIND THE NOTIFICATION OR, BY ORDER, WITHDRAW THE APPROVAL, AS THE CASE MAY BE, A ND FORUIARD A COPY OF THE ORDER RESCINDING THE NOTIFICATION OR WI THDRAWING THE. APPROVAL TO SUCH FUND OR INSTITUTION OR TRUST OR AN Y UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER ME DICAL INSTITUTION AND TO THE ASSESSING OFFICER: 6.3 THUS, THE PRESCRIBED AUTHORITY IS ALLOWED TO WI THDRAW THE EXEMPTION GRANTED U/S 10(23C), IF THE PRESCRIBED AU THORITY IS SATISFIED THAT EDUCATIONAL INSTITUTION HAS NOT APPL IED ITS INCOME EXCLUSIVELY AND WHOLLY FOR EDUCATIONAL PURPOSES, OR INVESTED OR DEPOSITED FUNDS IN VIOLATION OF CLAUSE (B) OF THIRD PROVISO, OR THE ACTIVITIES OF THE EDUCATIONAL INSTITUTIONS ARE NOT GENUINE OR ARE NOT ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 15 -: BEING CARRIED OUT IN ACCORDANCE WITH ALL OR ANY OF THE CONDITIONS SUBJECT TO WHICH IT WAS APPROVED, THE PRESCRIBED AU THORITY MAY WITHDRAW THE APPROVAL, AFTER GIVING A REASONABLE OP PORTUNITY OF BEING HEARD. A COPY OF THE ORDER WILL BE SERVED ON THE ED UCATIONAL INSTITUTION AND TO THE ASSESSING OFFICER. 6.4 THE HON'BLE APEX COURT IN THE CASE OF MS.MOHINI JAIN V. STATE OF KARNATAKA & ORS. (1992) 3 SCC 666, HELD THAT CAPITA TION FEE WAS NOTHING BUT PRICE OF SELLING EDUCATION AND SUCH TE ACHING SHOPS WERE CONTRARY TO THE CONSTITUTIONAL SCHEME AND ABHOREENT TO OUR INDIAN CULTURE. HON'BLE SUPREME COURTS DECISIONS IN CASE OF TMA PAI FOUNDATION VS. STATE OF KARNATAKA (2002) (8 SCC 481 ), ISLAMIC ACADEMY OF EDUCATION VS. STATE OF KARNATAKA (2003) (6SCC697) AND P.A. INAMDAR VS. STATE OF MAHARASHTRA (2005) (6 SCC 537) ALSO SUPPORTS THE FACT THAT THE EDUCATION IS NOT A COMME RCIAL ACTIVITY AND HENCE THE EVIDENCES FOUND EDUCATION IS NOT A COMMER CIAL ACTIVITY AND HENCE THE EVIDENCES FOUND DURING THE COURSE OF SEAR CH SUPPORTS THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF LAW AND THE CONDITIONS PRESCRIBED WHILE GRANTING THE RECOGNITION. 6.5. EDUCATION WOULD REMAIN AS A CHARITY ONLY IN A CASE WHERE EDUCATION IS IMPARTED SYSTEMATICALLY FOR A FREE PRE SCRIBED BY GOVERNMENT. A PRIVATE AIDED OR UNAIDED PROFESSIONA L INSTITUTION OR ANY OTHER EDUCATIONAL INSTITUTION OF A STATE IS RE QUIRED TO COLLECT FEES WITH REGARD TO INFRASTRUCTURE AND BENEFIT OF STUDEN TS OF THAT EDUCATIONAL INSTITUTION. COLLECTION OF MONEY OVER AND ABOVE FEE PRESCRIBED BY COMMITTEE WOULD AMOUNT TO COLLECTION OF CAPITATION FEE AND SUCH AN INSTITUTION WOULD FACE LEGAL CONSEQEUNC ES FOR SAME (VODITHALA EDUCATION SOCIETY VS ADIT, [2008] 20 SOT 353 (HYD)]. 6.6 IN THE CASE OF SCIENTIFIC EDUCATIONAL ADVANCEME NT SOCIETY V. UNION OF INDIA AND ANOTHER [2010], 323 I TR 84 (P&H), THE HON'BLE HIGH COURT HELD THAT EDUCATIONAL INSTITUTION SHOULD EXIST SOLELY FOR PURPOSES OF EDUCATION AND IF IT IS NOT, THE SOCIETY IS NOT ELIGIBLE FOR EXEMPTION U/S.10(23C)(VI) OF THE ACT. 6.7 THE HON'BLE ITAT, HYDERABAD VIDE THEIR ORDERS O N 22.3.2012 IN THE CASE OF M/S.ISLAMIC EDUCATIONAL SOCIETY HAD OBS ERVED, AS UNDER: FURTHER, WE FIND THAT THE CONSTITUTIONAL BENCH OF APEX COURT IN THE CASE OF T.M.A.PAI FOUNDATIONS AND OTHERS VS STA TE OF KARNATAKA & OTHERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COL LECTION OF CAPITATION FEES FOR THE ADMISSION OF STUDENTS OVER AND ABOVE FEES PRESCRIBED BY THE PRIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPITATION FEES FOR ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESCRIBED CANNOT BE CONSTRUED A S CHARITABLE/EDUCATIONAL INSTITUTION.SAME VIEW WAS TAKEN BY APEX COURT IN THE CASE OF ISLAMIC ACADEMY OF EDU CATIONAL AND ANOTHER VS. STATE OF KARNATAKA & ANOTHER (2003) 6 S CC 697. IF THE ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 16 -: ADMISSIONS WERE RECEIVED COMPULSORILY FOR ADMISSION OF STUDENTS, THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION NEITHER U/S. 10(23C) OR U/S.11 OF THE IT ACT. 6.8 HON'BLE MADRAS HIGH COURT IN THE CASE OF PRATHY USHA EDUCATIONAL TRUST VS PRINCIPAL COMMISSIONER OF INCOME TAX VIDE ITS ORDER DT.27/06/2019 WHILE UPHOLDING THE ORDER OF WITHDRAW AL OF 10(23C) HELD AS UNDER: FURTHERMORE, WE FIND THAT THE ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT HAD HELD THAT THE FACTS CLEARLY PROVE THAT THE AFFAIRS OF THE ASSESSEE ARE MANAGED BY THE MANA GING TRUSTEE IN SUCH A MANNER THE FUNDS COLLECTED FROM SOME OF THE STUDENTS ADMITTED TO THE INSTITUTIONS RUN BY THE ASSESSEE AR E TAKEN AWAY OUTSIDE THE BOOKS OF ACCOUNTS OF THE ASSESSEE WITHO UT EVEN ISSUING RECEIPTS AND THEREBY SETTING APART THESE FUNDS OF T HE ASSESSEE FOR PURPOSES OTHER THAN THE OBJECTS OF THE TRUST. FURTH ER, THE ASSESSING OFFICER POINTED OUT THAT THE ASSESSEE HAS VIOLATED ITS OWN OBJECTIVES BY DIVERTING SUBSTANTIAL PORTION OF ITS FUNDS BY AN D TO THE MANAGING TRUSTEE WITHOUT TRULY RECORDING IN THE BOOKS OF ACC OUNTS MAINTAINED BY IT AND AS THESE FUNDS WERE DIVERTED OUTSIDE ITS BOCKS OF ACCOUNTS THE AUDIT REPORT FURNISHED DOES NOT REFLECT THE TRU E AND CORRECT AFFAIRE OF THE ASSESSEE. AFTER REFERRING TO THE FACTS DISCO VERED DURING THE COURSE OF SEARCH COUPLED WITH THE ADMISSION OF THE MANAGING TRUSTEE AND THE OFFICERS INCHARQE OF THE ACCOUNTS IN THEIR DEPOSITION, THE ASSESSING OFFICER HELD THAT SUCH A CONTUMACIOUS CON DUCT IN RUNNING THE AFFAIRS OF THE TRUST TO GO AGAINST THE BASIC TE NETS OF THE TRUST AND TRUSTEESHIP WARRANTS CANCELLATION OF THE APPROVAL. ALL THESE FACTUAL FINDINGS ARE PERFECTLY JUSTIFIED AND CONSEQUENTLY, APPROVED. (EMPHASIS SUPPLIED)' 6.9 THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF NAVODAYA EDUCATION TRUST VS UNION OF INDIA (405 ITR 0030) HE LD AS UNDER: 'THE PURPOSE OF EXEMPTING SUCH INSTITUTIONS FROM IN COME TAX WAS OBVIOUSLY TO RESTRICT SUCH EXEMPTION UPON A VERY ST RICT COMPLIANCE WITH THE PARAMETERS FOR THE SAME AND ONLY BONA FIDE , CHASTE AND PURE EDUCATIONAL INSTITUTIONS COULD EXPECT SUCH EXE MPTIONS FROM THE INCOME TAX WHICH AS PER THE SAID NORMS AND THE RULE S OF INTERPRETATION OF SUCH PROVISIONS OF EXEMPTION HAVE TO BE STRICTLY CONSTRUED BY THE COURTS OF LAW. ANY LIBERAL OR FLEX IBLE INTERPRETATION 'LOOKING OVER' THE STRICT COMPLIANCE OF THE CONDITI ONS IS LIKELY TO DEFEAT THE VERY PURPOSE OF GRANT OF SUCH EXEMPTION AND THE BUSINESS HOUSES WHICH ADDITIONALLY WANT TO RUN EDUCATIONAL INSTITUT IONS ALSO AS BUSINESS ENTERPRISES CANNOT BE ALLOWED TO TAKE THE BENEFIT OF EXEMPTION FROM INCOME TAX. UNDER THE COVER OF A REG ISTERED EDUCATIONAL TRUST THROUGH THE BOOKS OF ACCOUNTS OF THE TRUST, IN WHICH ALL KINDS OF OTHER BUSINESS ACTIVITIES MAY KE EP ON HAPPENING. ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 17 -: 24. IT IS ONLY AFTER THE SEARCH OPERATIONS UNDER SE CTION 132 OF THE ACT, WHICH IN THE PRESENT CASE REVEALED THE UGLY PART OF THE TRUST ACTIVITIES AND THE REASONS BASED ON SUCH MATERIAL GATHERED BY THE INCOME TAX. AUTHORITIES CANNOT BE BRUSHED ASIDE AND SUCH REASON S AS STATED IN THE IMPUGNED ORDER ARE FOUND TO BE SUFFICIENT FOR U PHOLDING THE CORRECTNESS OF THE IMPUGNED ORDER. .............................................. 29. THUS ON AN OVERALL ANALYSIS OF THE FACTS AND LE GAL POSITION, THIS COURT IS OF THE OPINION THAT THERE WAS AMPLE MATERI AL ON RECORD TO ESTABLISH THAT THE PETITIONER, TRUST HAD INDULGED I N ILLEGAL ACTIVITIES AND COULD NOT BE SAID TO BE EXISTING PURELY FOR EDU CATIONAL PURPOSES, AND RATHER VARIOUS OTHER BUSINESS ACTIVITIES OF THE SAID FAMILY OF TRUSTEES AND THEIR MONEY WAS PASSING THROUGH THE CO VER AND SHIELDS OF THE BOOKS OF ACCOUNTS OF THE PETITIONER - TRUST RENDERING IT AS MERELY A SKELETON FOR THE PURPOSE OF EXEMPTION TO E DUCATIONAL TRUST AND RATHER THAN A REAL EDUCATIONAL TRUST, SOLELY EX ISTING FOR THE PURPOSE OF EDUCATION. SUCH SHAM OR BOGUS TRUSTS CAN NOT BE HELD TO BE ENTITLED TO EXEMPTION UNDER THE PROVISIONS OF SE CTION 10(23-C) OF THE ACT AND THEREFORE THE RESPONDENT AUTHORITY HAS RIGHTLY WITHDRAWN THE APPROVAL OF THE PETITIONER - TRUST UN DER THE SAID PROVISION. 6.10 THEREFORE AFTER CAREFULLY CONSIDERING, THE FAC TS OF THE CASE AND THE DECISIONS OF VARIOUS JUDICIAL AUTHORITIES, I FI ND THAT THIS IS NOT A FIT CASE FOR CONTINUING THE EXEMPTION GRANTED U/S.10(23 C)(VI) OF THE INCOME-TAX ACT, 1961. FOR THE ABOVE REASONS, I HOL D THAT THE ASSESSEE SOCIETY IS NOT ELIGIBLE FOR EXEMPTION U/S. 10(23C)(VI) OF THE INCOME TAX ACT. THEREFORE, THE APPROVAL GRANTED U/ S.10(23C)(VI) OF THE IT ACT BY THE CHIEF COMMISSIONER OF INCOME-TAX, HYDERABAD IS HEREBY WITHDRAWN W.E.F. THE DATE OF ITS APPROVAL. 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE FOREGOING LEGAL ISSUE OF PR.CIT(CENTRAL)S JURISDICTI ON IN WITHDRAWING THE ASSESSEES APPROVAL WITH EFFECT FROM THE DATE THE SAME WAS GRANTED I.E., 27-03-2008. LEARNED CIT-D RS WRITTEN SUBMISSIONS (SUPRA) HAS RELIED UPON PR.CITS CLARIFICATION DT.06-11-2020 EXPLAINING THE ASSUMPTION OF JURISDICTION TO THIS EFFECT AS FOLLOWS: F.NO. PR.CIT(C)/HYD/ AURORA/2018-19 TO THE SR.AR-II, ITAT-II, BECH, HYDERABAD ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 18 -: SUB:- ASSESSEE'S APPEAL IN THE CASE OF CHURCH EDUCA TIONAL SOCIETY, AURORA EDUCATIONAL SOCIETY, TARAKARAMA EDUCATIONAL SOCIETY AND KARSHAK VIDYA PARISHAD- FURNISHING OF INFORMATION C ALLED FOR - REG REF: YOUR LETTER IN F.NO. SR.AR/ITAT/B-BENCH/2020-2 1 DATED 22.10.2020 ***** THE REPORT CALLED FOR IS SUBMITTED HEREUNDER: 2. THE CONDITIONAL APPROVAL U/S.10(23)(C)(VI) WAS O RIGINALLY GRANTED IN ALL THE FOUR CASES BY CHIEF COMMISSIONER OF INCOME TAX, HYDERABAD-I WHO WAS THE PRESCRIBED AUTHORITY DURING THAT PERIOD . CONSEQUENT TO SEARCH OPERATION, THE AFORESAID GROUP CASES WERE CE NTRALIZED WITH ACIT, CC-2(4), HYDERABAD UNDER THE ADMINISTRATIVE C ONTROL OF PCIT(CENTRAL), HYDERABAD. THE CIT(E) AMONGST OTHERS PCITS, ON RECOMMENDATION OF PCIT(CENTRAL) PASSED 127 ORDERS A SSIGNING THE CASES TO ACIT, CC-2(4), HYDERABAD. THE PROVISO TO SECTION 10(23)(C)(VI) OF THE INCOME TAX ACT, 1961 READ WITH RULE 2CA OF THE INCOME TAX RULES, 1962 EMPOWER S THE PRESCRIBED AUTHORITY UNDER THE ACT TO WITHDRAW THE APPROVAL GRANTED UNDER SUCH-SECTION AS PER THE PROVISIONS OF THE SEC TION10(23)(C)(VI) OF THE IT ACT, 1961. 4. BY AN EARLIER CBDT NOTIFICATIONS IN S.O.3026(E) AND 3027(E) BOTH DATED 1 ST DECEMBER, 2014, THE CBDT HAS AUTHORISED THE COMMISSIONERS OF INCOME TAX (EXEMPTIONS) TO ACT AS 'PRESCRIBED AUTHORITY' FOR THE PURPOSES OF SUBCLAUSE (VI) AND S UB-CLAUSE (VIA) OF CLAUSE (23C) OF SECTION 10. THUS, THE ROLE OF THE C HIEF COMMISSIONER FOR SUCH PURPOSES HAS BEEN ASSIGNED TO THE COMMISSI ONER OF INCOME TAX(EXEMPTION). THIS WAS, HOWEVER, OMITTED W.E.F. 05 NOVEMBER, 2019 VIDE CBDT NOTIFICATION NO.S03215(E)/NO.60/2019 IN F.NO.370142 /14/2018 - TPL. THE CBDT VIDE SUCH NOTIFICATION HAS AMENDED RU LES 2C AND 2CA. 5. THE AMENDED RULE 2C IS AS UNDER: '2C. (1) THE PRESCRIBED AUTHORITY UNDER SUB-CLAUSE( IV),SUB-CLAUSE(V), SUB-CLAUSE(VI) AND SUB-CLAUSE(VIA) OF CLAUSE (23C) OF SECTION 10 SHALL BE THE PRINCIPAL COMMISSIONER OF COMMISSIONER WHOM THE CENTRAL BOARD OF DIRECT TAXES MAY AUTHORISE TO ACT IN THIS BEHALF. 6. THUS, AS THINGS STOOD AS ON THE DATE OF ORDER, T HE CIT(EXEMPTION), WHO NO LONGER HOLDS THE JURISDICTION OVER THE CASE IN VIEW OF THE ORDER U/S 127, CANNOT BE TAKEN AS PRESCRIBED AUTHORITY FO R THE PURPOSE SECTION 10(23)(C)(VI) IN RESPECT OF AFORESAID CASES AS THE CASES ARE CENTRALISED WITH PCIT(CENTRAL), HYDERABAD AND THE P ERSON HOLDING ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 19 -: THAT CHARGE WILL BECOME THE PRESCRIBED AUTHORITY IN VIEW OF THE AFORE MENTIONED AMENDMENT. THIS IS FOR YOUR INFORMATION AND FURTHER NECESSARY ACTION. 8. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE FOREG OING FACTS ON RECORD, WE FIND THAT THE PR.CIT(CENTRAL)S CLAR IFICATION EXTRACTED IN PRECEDING PARAGRAPHS SEALS THE OUTCOME OF THE ASSESSEES GRIEVANCE. THIS TAXPAYERS DETAILED PAPER BOOK PGS. 1 TO 47 CONTAIN THE ACIT, CENTRAL CIRCLES PROPOSAL(S) DT.10-06- 2019 AND 12-06-2019 RECOMMENDING CANCELLATION OF ITS APPROVAL AT PGS.1 TO 77 SENT TO THE PR.CIT(CENTRAL CIRCL E), LATTER AUTHORITIES SHOW CAUSE NOTICE DT.16-09-2019 (PGS.82 TO 98) ISSUING SHOW CAUSE THEREBY ASSUMING JURISDICTION U/S.10(23C)(VI), REPLY DT.03-10-2019 PG.99 AND DT.04- 11-2019 (PAGES 100 TO 116) YET ANOTHER FRESH SHOW CAUSE NOTICE IN CONTINUATION TO THE EARLIER ONCE COMING FROM THE PR.CI TS OFFICE DT.20-12-2020 (PAGES NO.117 TO 121), ASSESSEES REPLY DT.24- 12-2009, PR.CITS ORDER SHEET ENTRIES (PAGES 139 TO 14 3) AND HIS CLARIFICATION DT.06-11-2020 (SUPRA); STAND PERUSED . ALL THIS DETAILED EVIDENCE MAKES IT CLEAR THAT THE PR.CIT(CENTRAL) S INITIAL SHOW CAUSE NOTICE DT.16-09-2019 ITSELF FORMING BASIS OF THE IMPUGNED ENTIRE EXERCISE TO WITHDRAW THE ASSESSEES APPROVAL SUFFERS FROM INHERENT LACK OF JURISDICTION A S PER HIS OWN CLARIFICATION THAT THE CBDTS NOTIFICATION (SUPRA) W AS ISSUED MUCH LATER I.E., ON 05-11-2019 ONLY. WE OBSE RVE IN THIS CLINCHING BACKDROP THAT THE PCIT(CENTRAL) HAS ERRED IN LAW AND ON FACTS NOT ONLY IN ASSUMING HIS SECTION 10(23C)(VI) JURISDICTION ON 16-09-2019 (BEFORE HAVING BEING CONF IRMED THE PRESCRIBED AUTHORITYS JURISDICTION TO THIS EFFECT ON 0 5-11-2019) BUT ALSO HE HAS WRONGLY WITHDRAWN THE ASSESSEES APPR OVAL ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 20 -: WITH EFFECT FROM THE DATE IT HAD BEEN GRANTED THE SAME ( SUPRA). AND THAT THE LATTER ACTION ALSO INVOLVED ILLEGALITY SIN CE THIS APPROVAL HAD COME WAY BACK IN THE YEAR 2009 AS AGAIN ST THE SEARCH CARRIED OUT ALMOST AFTER A DECADE I.E., 23-03-2 018. WE THUS ADOPT STRICT INTERPRETATION IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF RULE2CA OF TH E INCOME TAX RULES, 1962 AND GOING BY HONBLE APEX CO URTS CONSTITUTIONAL BENCH DECISION IN CCCE VS. DILIP KUMAR AND COMPANY (2018) [9 SCC 1 (SC)] AND CONCLUDE THAT THE IMPUGNED ORDER WITHDRAWING THE ASSESSEES APPROVAL I S NOT SUSTAINABLE FOR WANT OF THE PR.CIT(CENTRAL)S JURISDICTI ON. WE MAKE IT CLEAR THAT WE ARE DEALING WITH AN INSTANCE OF P ATENT LACK OF JURISDICTION AT THE THRESHOLD ITSELF WHICH CANN OT BE MADE GOOD IN LATTER STAGES. 9. THERE IS YET ANOTHER EQUALLY SIGNIFICANT ASPECT OF THE MATTER BEFORE US. THERE IS HARDLY ANY DISPUTE THAT THE P R.CITS ORDER; ASSUMING BUT NOT ACCEPTING IT AS CORRECT, HAS WIT HDRAWN THE ASSESSEES APPROVAL FROM THE DAY WHICH WAS GRANTED THE VERY RELIEF I.E., FROM 27-03-2008 TURNING OUT TO BE WE LL BEYOND THE PERIOD OF SHOW CAUSE NOTICE ITSELF. AND THAT TOO, W ITHOUT EVEN INDICATING AS TO HOW THE ASSESSEE HAD VIOLATED TH E CONDITIONS OF ITS APPROVAL GRANTED EARLIER IN ALL THES E INTERVENING ASSESSMENT YEARS WHEREIN IT HAD ALSO BEEN ASSESSED WITHOUT ANY VIOLATION OF THE APPROVALS CONDIT IONS. 10. WE THEREFORE RELY UPON OUR FOREGOING DETAILED DIS CUSSION AND HOLD THAT PR.CIT(CENTRAL) HEREIN HAS ERRED IN LAW AND AS ON FACTS IN WITHDRAWING THE ASSESSEES APPROVAL GRANTE D U/S.10(23C)(VI) OF THE ACT. THE ASSESSEE HAS ALSO FIL ED A ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 21 -: DETAILED CASE LAW PAPER BOOK AS WELL AS CITING VARIOU S JUDICIAL PRECEDENTS BUT WE DO NOT DEEM IT APPROPRIATE TO DEAL WITH ANY OF THEM SINCE IT IS AN INSTANCE OF THE PR.CIT(CENTRAL)S LACK OF JURISDICTION. THE IMPUGNED ORDER DT.26-12-2019 FORMIN G SUBJECT MATTER OF ITA NO.320/HYD/2020 STANDS REVERSED. THE ASSESSEES IMPUGNED APPROVAL IS RESTORED AS A NECES SARY COROLLARY. 11. SAME ORDER TO FOLLOW IN THE REMAINING THREE ASSE SSEES APPEALS ITA NOS.318/HYD/2020, 319/HYD/2020 AND 321/HYD/2020 AS BOTH THE LOWER REPRESENTATIVES ARE AD IDEM BEFORE US AS THERE IS NO DISTINCTION ON FACTS AND LAW TH EREIN. 12. TO SUM-UP, ALL THESE FOUR ASSESSEES APPEALS AR E ALLOWED IN ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH APRIL, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 20-04-2021 TNMM ITA NOS. 318, 319, 320 & 321/HYD/2020 :- 22 -: COPY TO : 1.AURORA EDUCATIONAL SOCIETY, C/O. P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.CHURCH EDUCATIONAL SOCIETY, C/O. P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 3.KARSHAK VIDYA PARISHAD, C/O. P.MURALI & CO., CHAR TERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 4.TARAKARAMA EDUCATIONAL SOCIETY, C/O. P.MURALI & C O., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 5.THE PR.COMMISSIONER OF INCOME TAX (CENTRAL), HYDERABAD. 6.D.R. ITAT, HYDERABAD. 7.GUARD FILE.