DCIT, Exemptions, Hyderabad Circle, Hyd, Hyderabad V. St. Martin's Children's Education Society, Hyd, Hyderabad

ITA 348/HYD/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2312 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAJARAM
• Assessee Lawyers: K A SAI PRASAD
• Section: 11

Judgement Text

ITA NO 348 OF 2015 ST MARTINS CHIL DRENS EDN SOCIETY HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.348/HYD/2015 (ASSESSMENT YEAR: 2010-11) ASSTT. COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD VS ST. MARTINS CHILDRENS EDUCATION SOCIETY HYDERABAD PAN: AAAAS 7130 G (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI B. RAJA RAM, DR FOR ASSESSEE : SHRI K.A. SAI PRASAD O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2010-11 AGAINS T THE ORDER OF THE CIT (A)-9, HYDERABAD, DATED 9.1.20 15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I) THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS IN LAW. II) THE LEARNED CIT (A) ERRED IN ALLOWING EXEMPTION U/S 11 OF THE I.T. ACT WHEN THE ASSESSEE HAS COLLECTED FEE FROM STUDENTS, OVER AND ABOVE THE PRESCRIBED FEE BY THE GOVT. OF ANDHRA PRADESH, IN VIOLATION OF G.O. MS.NO.63 DATED 16.07.2009 OF GOVT. OF A.P . DATE OF HEARING : 06.07.2017 DATE OF PRONOUNCEMENT : 27.07.2017 ITA NO 348 OF 2015 ST MARTINS CHIL DRENS EDN SOCIETY HYDERABAD PAGE 2 OF 4 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO CIETY FILED ITS RETURN OF INCOME ON 11.02.2011 ADMITTING AN INCOME OF RS.NIL. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3 ) OF THE ACT, THE AO NOTICED THAT THE ASSESSEE IS RUNNING EDUCATI ONAL INSTITUTIONS AND HAS THUS CLAIMED EXEMPTION OF INCO ME U/S 11 TO 13 OF THE I.T. ACT. FROM THE INFORMATION FILED BY TH E ASSESSEE, THE AO NOTICED THAT THE MANAGEMENT OF THE ASSESSEES EN GINEERING COLLEGE WAS COLLECTING ADVANCE FEE AND FEES FOR ENT IRE FOUR YEARS IN A PACKAGE WHICH VARIES FROM STUDENT TO STUDENT AND ALSO IN EXCESS OF PRESCRIBED TUITION FEES OF RS.30,200 PER ANNUM FOR EACH STUDENT FOR CATEGORY A AND RS.91,700 PER ANNUM FO R CATEGORY B MANAGEMENT QUOTA STUDENT AS PER A.P. G.O NO.63 DATED 16.07.2009. OBSERVING THAT THE ASSESSEE IS COLLECTI NG FEE OVER AND ABOVE THE PRESCRIBED FEES, HE TREATED IT AS DONATIO N AND ACCORDINGLY DISALLOWED THE CLAIM OF EXEMPTION U/S 1 1 OF THE ACT AND BROUGHT IT TO TAX. THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE CIT (A) WHO GRANTED RELIEF TO THE ASSESSEE AND AGGR IEVED BY THE RELIEF GRANTED, THE REVENUE IS IN APPEAL BEFORE US. 3. THE LEARNED DR SUPPORTED THE ORDER OF THE AO WHI LE THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO, IN HIS OWN ORDER, HAS RECORDED THAT THE ASSESSEE HAS C OLLECTED ADVANCE FEES FOR THE ENTIRE FOUR YEARS OF THE DURAT ION OF THE COURSE WHICH AGGREGATES TO THE SUMS MENTIONED THEREIN AND THEREFORE, THERE WAS NO EXCESS OF FEE COLLECTED. HE DEMONSTRAT ED THAT IN RESPECT OF TWO STUDENTS WHERE THE AMOUNT IS SHOWN T O HAVE BEEN COLLECTED RS.3.00 LAKHS AND RS.1,89,400, IT IS EVID ENT THAT THE FEE IS COLLECTED FOR THE PURPOSE OF FOUR YEARS AND TWO YEARS RESPECTIVELY. ITA NO 348 OF 2015 ST MARTINS CHIL DRENS EDN SOCIETY HYDERABAD PAGE 3 OF 4 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE CIT (A) AT PARA 7.2 OF HIS ORDER HAS OBSERVED AS UNDER: 7.2 IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE AR SUBMITTED THAT THE AO HIMSELF HAD RECORDED IN HIS ORDER THAT THE APPELLANT HAD COLLECTED ADVANCE FEES FOR THE ENTIRE FOUR YEARS OF THE DURATION OF THE COURSE AND THAT THE FEES HAD BEEN COLLECTED FROM I. PREM SAGAR FOR FOUR YEAR @ 75,000 PER ANNUM AND FOR TWO YEARS @ 91,700 FROM B.V. PRASAD REDDY. IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAD COLLECTED FEES IN ADVANCE FOR MORE THAN ONE YEAR FROM SOME OF THE STUDENTS. THERE IS NO BAR AGAINST COLLECTION OF FEES IN THIS MATTER AND THIS CANNOT BE THE BASIS OF DENIAL OF EXEMPTION TO THE APPELLANT. THE FIFTH GROUND OF APPEAL IS, THEREFORE, ALLOWED. 5. EXCEPT FOR PLACING RELIANCE ON THE ASSESSMENT OR DER, THE LEARNED DR HAS NOT BEEN ABLE TO REBUT THE ABOVE FINDINGS OF THE CIT (A), AS, ADMITTEDLY THERE IS NO BAR AGAINST COLLECTION OF FEES FOR THE ENTIRE COURSE AT A TIME. IN VIEW OF THE SAM E, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT ( A). REVENUES APPEAL IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 27 TH JULY, 2017. ITA NO 348 OF 2015 ST MARTINS CHIL DRENS EDN SOCIETY HYDERABAD PAGE 4 OF 4 VINODAN/SPS COPY TO: 1 ASSTT. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), 2 ND FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 2 ST. MARTINS CHILDRENS EDUCATION SOCIETY, H.NO.4 -145 GEETHA NAGAR, FEROZGUDA, BALANAGAR, HYDERABAD 3 CIT (A)-9 HYDERABAD 4 CIT (EXEMPTIONS) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER