ITO (Exemptions)-1, Hyd, Hyderabad V. Chaitanya Memorial Educational Society, Hyd, Hyderabad

ITA 333/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6099 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: C SURESH
• Keywords: Benefit of exemption
• Section: 11

Judgement Text

1 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B BENCH : HYDERABAD BEFORE : SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA.NO.333/HYD/2016 ASSESSMENT YEAR 2011-2012 THE INCOME TAX OFFICER (EXEMPTIONS)-I, HYDERABAD-001 TELANGANA STATE. VS. CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD 500 012 PAN AAATC2521L (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.J. RAO FOR ASSESSEE : SHRI C. SURESH DATE OF HEARING : 13.03.2017 DATE OF PRONOUNCEMENT : 13.03.2017 ORDER PER D. MANMOHAN, V.P. THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED B Y THE CIT(A)-9, HYDERABAD AND IT PERTAINS TO THE A.Y. 2011-20 12. THE FOLLOWING GROUNDS WERE URGED BEFORE THE TRIBUNAL. 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH ON F ACTS AND IN LAW. 2. THE LD. CIT(A) ERRED ON FACTS IN SO MUCH AS THE COL LECTION OF INFRASTRUCTURE & DEVELOPMENT FEE DURING THE A.Y. 20 11-12 IN DIFFERENCE TO THE FEE COLLECTED FOR THE A.Y. 2008-0 9 & 2009-10, AS ADMISSION FEE. 3. THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE THOUGH THE ASSESSEE IS NOT ELIGIBLE FOR THE EXEMPTI ON U/S.11 OF THE ACT AS THE SOCIETY HAS CHARGED THE INFRASTRUCTU RE AND 2 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. DEVELOPMENT FEE OVER AND ABOVE THE NORMAL FEE, THUS COLLECTING DONATION/CAPITATION FEE. 4. THE LD. CIT(A) ERRED IN LAW IN ALLOWING THE APPEAL OF THE ASSESSEE DESPITE THE ORDER OF THE JURISDICTIONAL IT AT IN FAVOUR OF REVENUE ON SIMILAR FACTS IN THE CASE OF M/S. EXHIBI TION SOCIETY, HYDERABAD. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING. 2. FACTS NECESSARY FOR THE DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. THE ASSESSEE IS AN EDUCATIONAL SOCIETY AND RE GISTERED UNDER THE A.P. (TELANGANA AREA) PUBLIC SOCIETIES REGISTRATION AC T WHICH WAS TO IMPART EDUCATION OF ALL LEVELS, BOTH RESIDENTIAL AND NO N-RESIDENTIAL. FOR THE YEAR UNDER CONSIDERATION, IT DECLARED NIL INCOME A FTER CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT. ACCORDING TO THE A.O. THE ASSESSEE SOCIETY CHARGED INFRASTRUCTURE AND DEVELOPM ENT FEES, OVER AND ABOVE THE OTHER FEES, AND THEREFORE, IT IS NOT ENTITLED TO EXEMPTION. 2.1. THE PLEA OF THE ASSESSEE WAS THAT IT COLLECTED ON LY ADMISSION FEES OF RS.25000 PER STUDENT AND SIMILAR FEES WAS COL LECTED IN EARLIER YEARS ALSO WHERE NO SUCH ADDITION WAS MADE AND IN F ACT, IT DOES NOT PARTAKE THE CHARACTER OF DONATION OR CAPITATION FEE. THE A.O. HOWEVER, RELIED UPON THE DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF M/S. EXHIBITION SOCIETY, HYDERABAD FOR THE A.Y. 2003-04 (ITA.NO.2074/HYD/2011 DATED 22.03.2012) WHICH INTURN , WAS BASED UPON THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF VASAVI ACADEMY OF EDUCATION, HYDERABAD ETC., THE RELEVANT PO RTION OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. EXHIBITION SOCIET Y WAS EXTRACTED BY THE A.O. WHICH READS AS UNDER : THE MAIN ISSUE INVOLVED IN THIS APPEAL RELATES TO ASSESSEES CLAIM FOR EXEMPTION OF ITS INCOME UNDER SECTION 11 OF THE ACT. WE FIND THAT THIS MAIN ISSUE INVOLVED IN THE ABOVE GROUNDS IS CO VERED BY THE 3 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. ORDER OF THE HYDERABAD BENCH A OF THE TRIBUNAL DA TED 15.04.2009 IN THE CASES OF VASAVI ACADEMY OF EDUCATION, HYDERA BAD IN ITA.NO.1133/HYD/2006 FOR THE A.Y. 2003-04 AND ORDER DATED 17.04.2009 IN ITA.NO.1206/HYD/2007 FOR THE A.Y. 200 4-05, WHEREIN IT WAS HELD THAT IF DONATIONS ARE RECEIVED COMPULSORILY FOR THE ADMISSION OF STUDENTS, BY WHATEVER NAME IT MAY BE CALLED I.E., DONATION, BUILDING FUND, AUDITORIUM FUND, ETC., OVE R AND ABOVE THE PRESCRIBED FEES, FROM THE STUDENTS, THE ASSESSEE WO ULD NOT BE ENTITLED FOR EXEMPTION EITHER U/S.10(23C) OR UNDER SECTION 11 OF THE ACT. 2.2. ACCORDING TO THE A.O, IT IS IN THE NATURE OF DON ATION AND THEREFORE, CLAIM OF EXEMPTION WAS DENIED. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE APPELLATE AUTHORITY WHEREIN IT WA S CONTENDED THAT THE UNDERSTANDING AND INTERPRETATION BY THE LD. A.O. IS E RRONEOUS AND CONTRARY TO THE FACTS ON RECORD SINCE IT WAS BASED ON A SSUMPTION THAT THE FEE RECEIVED WAS OF THE NATURE OF DONATION. 3. DURING THE COURSE OF APPEAL PROCEEDINGS, THE ASSE SSEE SUBMITTED THAT THE FEES OF RS.25000 PER STUDENT IS COLLECT ED ONLY AT THE TIME OF ADMISSION AND THAT A SIMILAR AMOUNT WAS COLLECT ED IN THE PREVIOUS YEAR RELEVANT TO THE A.YS. 2008-09 AND 2009-1 0 ALSO. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT FOR THE A.YS. 2008-09 AND 2009-10 THE ITAT HAS DIRECTED THE A.O TO VERIFY AS TO WHETHER THE AMOUNT COLLECTED CAN BE TERMED AS CAPITATION FEE OR NO T, BY OBSERVING IN PARA-18 THEREOF AS UNDER : 18. IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLI NED TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. HE SHALL CONSIDER THE ENTIRE FACTS AND VERIFY THE RECORDS WHETHER THE ASS ESSEE COLLECTED CAPITATION FEES FROM STUDENTS FOR THE PURPOSE OF GI VING ADMISSION. IF SO, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S. 11 OF THE ACT. 4. THE BENCH HAD TAKEN NOTE OF ALL THE EARLIER JUDGME NTS ON THIS ISSUE, DELIVERED BY THE ITAT, HYDERABAD BENCHES , BUT SET ASIDE THE 4 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. MATTER TO DECIDE ON FACTS AS TO WHETHER THE ASSESSEE HAS COLLECTED CAPITATION FEES OR NOT. 5. THE LD. CIT(A) NOTICED THAT THE A.O, WHILE PASSING AN ORDER UNDER SECTION 143 (3) R.W.S. 254 ON 02.03.2015, EXAM INED THE RECORD AND GAVE A FACTUAL FINDING THAT THE ASSESSEE DID NOT CH ARGE ANY DONATION OTHER THAN NORMAL FEES. LD. CIT(A) ALSO OBSERVED THAT TH E FACTS ARE IDENTICAL EVEN FOR THE A.Y. 2011-2012. SINCE THE A.O. VERIFIED THE RECORD AND CATEGORICALLY STATED THAT THE ASSESSEE-SOCIETY DID NO T CHARGE ANY DONATION OR CAPITATION FEES, THE LD. CIT(A) ACCEPTED TH E CONTENTION OF THE ASSESSEE BY HOLDING THAT THE DENIAL OF EXEMPTION UN DER SECTION 11 OF THE ACT IS NOT IN ACCORDANCE WITH LAW AND INTURN, DI RECTED THE A.O. TO ALLOW THE ASSESSEE THE BENEFIT OF EXEMPTION. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. AS COULD BE NOTICED FROM THE GROU NDS OF APPEAL, THE A.O. AS WELL AS THE COMMISSIONER MENTIONS THAT THE LD. C IT(A) ERRED IN ACCEPTING THE CLAIM OF THE ASSESSEE IN DIFFERENCE TO THE FEES COLLECTED FOR THE A.YS. 2008-09 AND 2009-10. WE ASSUME THAT THE EXPRESSION SOUGHT TO BE USED BY THE COMMISSIONER AND THE A.O. WAS DEFERENCE WHICH MEANS BY YIELDING TO THE JUDGMENT OR OPINION, IM PLIEDLY INDICATING THAT THE FACTS OBTAINED IN THE A.YS. 2008-09 AN D 2009-10 WERE IDENTICAL. 7. GROUND NO.3 IS GENERAL IN NATURE, REITERATING ITS STAND THAT FEE COLLECTED BY ASSESSEE IS OVER AND ABOVE NORMAL FEE, OVERLOOKING THE FACT THAT CONSEQUENT TO THE DECISION OF THE ITAT FOR THE A. Y. 2008-09 THE A.O. GAVE A FACTUAL FINDING THAT THE ASSESSEE HAS NOT RE CEIVED ANY DONATION. 8. GROUND NO.4 MERELY STATES THAT ORDER OF CIT(A) IS C ONTRARY TO THE ORDER OF THE JURISDICTIONAL ITAT IN THE CASE OF M /S. EXHIBITION 5 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. SOCIETY WHEREAS THE UNDISPUTED FACT IS THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER YEAR SET ASIDE THE ISSUE, WITH OUT CONTRADICTING THE EARLIER JUDGMENTS ON THIS ISSUE, ONLY TO VERIFY THE FACTUAL POSITION, AND THE LD. CIT(A) HAS MERELY FOLLOWED THE FACTUAL FIN DING GIVEN BY THE A.O. WHILE GIVING EFFECT TO THE DIRECTION OF THE TRIBUNA L WHILE THE STAND OF ASSESSEE IS THAT THE A.O. CANNOT TAKE A STAND THAT THE F ACTS ARE SIMILAR IN THE CASE OF M/S. EXHIBITION SOCIETY. 9. AT THE TIME OF HEARING, LD. D.R. COULD NOT PLACE AN Y MATERIAL TO SUPPORT THE STAND TAKEN IN THE GROUNDS OF APPEAL. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT FOR THE A.YS. 2008-09 AND 2009-10 FACTUAL FINDING IS GIVEN BY THE A.O. WHICH W AS ACCEPTED BY THE DEPARTMENT AND FOR THE NEXT YEAR I.E., A.Y. 2010-2011 A SSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF THE ACT WHICH IS ALS O AGREED BY THE TAX AUTHORITIES. IN SUM AND SUBSTANCE, THE FACTUAL FIND ING OF THE A.O. THAT THE ASSESSEE COLLECTS RS.25000 PER STUDENT WHICH IS NOT IN THE FORM OF DONATION WAS ACCEPTED FROM YEAR TO YEAR. 10. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) DOES NOT CALL FOR ANY INTERFERENC E. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.03.2017. SD/- SD/- (G. MANJUNATHA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 13 TH MARCH, 2017 VBP/- 6 ITA.NO.333/HYD/2016 CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, HYDERABAD. COPY TO 1. THE INCOME TAX OFFICER (EXEMPTIONS)-1, POSNETT BHAV AN, 5 TH FLOOR, TILAK ROAD, HYDERABAD 500 001, TELANGANA S TATE. 2. CHAITANYA MEMORIAL EDUCATIONAL SOCIETY, 4-1-690, M AHABOOBPAL MANZIL, JAMBAGH, HYDERABAD 500 012. TELANGANA STAT E. 3. CIT(A)-9, 2 ND FLOOR ANNEXE, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004. 4. CIT (EXEMPTIONS), HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE.