The Deputy Commissioner of Income-tax, Bathinda V. M/s. Malout Institute of Management &, Malout

ITA 350/ASR/2012

• Counselvise Citation: 35020914 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA ADVOATE
• Keywords: Gift; Business income; Charitable institution; Assessment record; Revenue expenditure; Capital expenditure
• Section: 143(3); 142(1); 12AA; 263; 15

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. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 PAN: AAALM0207B THE DEPUTY COMMISSIONER VS. M/S MALOUT INSTITUTE OF OF INCOME TAX, CIRCLE-II, BATHINDA MANAGEMEN T & INFORMATION TECHNOLOGY, NGM COMPLEX GT ROAD, MALOUT (APPELLANT) (RESPONDENT) APPELLANT BY: SH. MAHAVIR SINGH, SR. DR RESPONDENT BY: SH. P.N. ARORA, ADVOATE DATE OF HEARING: 23.01.2014 DATE OF PRONOUNCEMENT: 28.01.2014 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 21.06.2012 PASSED BY LEARNED CIT(A), BATHINDA, FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) HAS ERRED IN ACCEPTING THE CLAIM OF THE ASSE SSEE U/S 10(23C)(IIIAB) OF THE IT ACT, EVEN THOUGH THE ASSES SEE WAS NOT WHOLLY AND SUBSTANTIALLY FINANCED BY THE GOVT. BUT WAS RUNNING THE INSTITUTE BY CHARGING FEES FROM STUDENTS AND SURPLU S WAS PARKED WITH THE BANKS IN THE SHAPE OF FDRS AND THEREBY DEL ETING THE 2 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 ADDITION OF RS. 3,67,47,180/-, WITHOUT APPRECIATING THE FACTS OF THE CASE. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) HAS ERRED IN ACCEPTING THE CLAIM OF THE ASSE SSEE U/S 10(23C)(IIIAB) OF THE IT ACT BY HOLDING THAT THE IS SUE OF ALLOWANCE OF CLAIM U/S 10(23C)(IIIAB) HAD ALREADY BEEN SETTLE D BY THE CIT, BATHINDA AS PER ORDER U/S 263 DATED 23.03.2012 WHER EIN THE CIT HAS DROPPED THE PROCEEDINGS INITIATED U/S 263 FOR T HE A.Y. 2007- 08; WITHOUT DECIDING THE CASE ON MERITS. 2. FACTS NARRATED BY THE REVENUE AUTHORITY ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 10.09.2009 DECLARING INCOME AT RS. NIL WHICH WAS PROCESSED BY THE ASSESSING OFFICER UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON TH E SAME FIGURE. THE CASE OF THE ASSESSEE WAS SELECTED FOR COMPULSORY SC RUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 24.09 .2010 WHICH WAS DULY SERVED UPON THE ASSESSEE. SUBSEQUENTLY, NOTICE S UNDER SECTIONS 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAI RE WERE ISSUED AND DULY SERVED ON THE ASSESSEE. IN RESPONSE TO THE SAM E, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FILED WRITTEN SUBMISSIONS/DETAILS AND ALSO PRODUCED BOOKS OF ACCOUNT, WHICH WAS EXAMINED BY THE ASSESSING OFFICER. 3. THE ASSESSEE DERIVES INCOME FROM RUNNING AN EDUC ATIONAL INSTITUTE IN THE NAME AND STYLE OF MALOUT INSTITUTE OF MANAGEMENT & 3 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 INFORMATION TECHNOLOGY AT MALOUT AND IT IS ESTABLIS HED BY GOVERNMENT OF PUNJAB AS PER MEMORANDUM OF ASSOCIATION AND THE RULES RELATING THERETO. THE INSTITUTE IS REGISTERED UNDER THE SOCI ETIES REGISTRATION ACT, 1860 AND AS AMENDED BY PUNJAB AMENDMENT ACT, 1957, VIDE NO. 643 OF 1998-99 DATED 11.08.1998. 4. KEEPING IN VIEW THE STATEMENT OF INCOME FILED BY THE ASSESSEE WITH THE RETURN OF INCOME, THE ASSESSING OFFICER FO UND THAT THE ASSESSEE HAS CLAIMED ITS INCOME AS APPLIED TOWARDS CHARITABL E PURPOSE AND HENCE, IT HAS DEDUCTED 15% OF ITS RECEIPTS DEEMING THE SAM E AS TO HAVE BEEN APPLIED AS PER SECTION 11(1)(A) OF THE ACT. AT THE SAME TIME THE ASSESSEE HAS CLAIMED ITS BALANCE INCOME I.E. RS. 2,54,79,295 .53 AS EXEMPT UNDER SECTION 10(23C)(IIIAB) OF THE ACT. AFTER PERUSING T HE STATEMENT OF INCOME FILED ALONG WITH RETURN OF INCOME, THE ASSESSING OF FICER ASKED THE ASSESSEE TO JUSTIFY THE EXEMPTION CLAIMED BY THE AS SESSEE. IN RESPONSE TO THE SAME, THE ASSESSEE FILED ITS REPLY, WHICH IS RE PRODUCED AS UNDER: THAT THE COPY OF GAZETTE OF PUNJAB GOVT. IN WHICH THE INSTITUTE IS APPROVED AS THE 100% GOVT. AUTONOMOUS BODY (COPY OF LETTER ATTACHED). THAT THE GOVERNMENT HAVE NOT FINANCED ANY PAISA TO THE INSTITUTE IN LAST 5 YEARS BECAUSE THE INSTITUTE IS ALREADY HA VING A GOOD AMOUNT LYING IN FIXED DEPOSITS WITH BANKS. AT TIME THE INSTITUTE IS REQUIRED ANY AMOUNT, THEN THE INSTITUTE WILL BE SUB STANTIALLY FINANCED 4 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 BY THE GOVT. WHENEVER IT IS NEEDED. FURTHER, IT IS STATED THAT THE INSTITUTE IS MEETING THE EXPENSES FROM THE RECEIPTS /FEES FIXED BY THE GOVT. ITS OWN. THE GOVT. IS RESPONSIBLE TO FINANCE THE INSTITUTE IN CASE IT IS NOT MEETING THE EXPENSES AND IS RUNNING IN DE FICIT BUDGET OR IN LOSSES. 5. THE ASSESSING OFFICER CONSIDERED THE REPLY FILED BY THE ASSESSEE AND FOUND THAT THE ASSESSEE-SOCIETY IS NEITHER REGI STERED UNDER SECTION 12AA OF THE ACT NOR HAS BEEN GRANTED EXEMPTION UNDE R SECTION 10(23C)(VI) OF THE ACT. THEREFORE, THE CONTENTION O F THE ASSESSEE THAT IT IS AN INSTITUTE APPROVED BY THE PUNJAB GOVERNMENT AND IS 100% FUNDED GOVT. AUTONOMOUS BODY IS NOT CORRECT IN TOTO. 6. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE I NSTITUTE GOT REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 18 60 ON 11.08.1998 WHICH CLEARLY INDICATES THAT THE ASSESSEE INSTITUTE IS NOT GOVERNMENT BODY FOR THE PURPOSE OF EXEMPTION UNDER SECTION 10( 23C)(IIIAB) OF THE ACT AT ALL BECAUSE ANY EDUCATIONAL INSTITUTION WHIC H IS ESTABLISHED FOR EDUCATIONAL PURPOSE AND NOT FOR PURPOSE OF PROFIT C AN BE CONSIDERED FOR EXEMPTION UNDER THAT SECTION, BUT THE CONDITION FOR SUCH EXEMPTION IS THAT THE INSTITUTION MUST BE WHOLLY OR SUBSTANTIALLY FIN ANCED BY THE GOVERNMENT. IN THE INSTANT CASE, IT IS CLEAR THAT THE GOVERNME NT OF PUNJAB HAS ESTABLISHED THE ASSESSEE-INSTITUTE AND F URTHER ALLOWED TO GET 5 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 18 60 ONLY, BUT DID NOT FINANCE THE INSTITUTE DURING THE YEAR UNDER CONSIDE RATION OR EVEN IN LAST 5 YEARS AT ALL, AS ADMITTED BY THE ASSESSEE-INSTITUT E IN ITS REPLY. THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT THE ASS ESSEE HAS SHOWN RECEIPT OF RS. 6,71,72,043/- AGAINST WHICH IT HAS C LAIMED VARIOUS EXPENSES AS PER INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.03.2009 AND THEREBY HAS DECLARED NET INCOME OF R S. 2,27,57,756/- AND HAS ALSO CLAIMED MAJOR EXPENSES, WHICH THE ASSESSI NG OFFICER HAS MENTIONED AT PAGE NOS. 5 AND 6 OF THE ASSESSMENT OR DER. THE ASSESSING OFFICER ALSO MENTIONED THE FEE STRUCTURES FOR MBA, B.TECH AND B. PHARMA AS FURNISHED BY THE ASSESSEE AT PAGE NO. 6 O F THE ASSESSMENT ORDER. AFTER EXAMINING THESE EXPENSES AND FEE STRUC TURE, HE WAS OF THE VIEW THAT THE ASSESSEE IS CHARGING FEE PER ANNUM AB OUT MORE THAN 50,000/- FROM EACH STUDENT WHICH IS NOT MEAGER AMOU NT, THEREFORE IT IS CRYSTAL CLEAR THAT THE ASSESSEE NEITHER IMPARTED ED UCATION FREE OF COST NOR THE GOVERNMENT OF PUNJAB FINANCED THE ASSESSEE-INST ITUTE FOR IMPARTING EDUCATION TO THE STUDENTS/PUBLIC AT LARGE. THEREFOR E, THE ACT OF THE ASSESSEE CANNOT BE CONSIDERED AS CHARITABLE AT ANY STRETCH OF IMAGINATION 6 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 INASMUCH AS THE ASSESSEE COLLECTS FEES FROM THE STU DENTS AND PROVIDES SERVICES TO THEM IN LIEU THEREOF. . 7. AFTER CONSIDERING ALL THE DOCUMENTARY EVIDENCES, THE ASSESSING OFFICER WAS ALSO OF THE VIEW THAT THE ASSESSEE HAS INCURRED ALL THE EXPENSES INCLUDING SALARIES TO THE TEACHING STAFF A ND OTHER EMPLOYEES, OUT OF THE COLLECTION MADE DURING THE YEAR FROM THE STU DENTS. EVEN THEN, THE ASSESSEE HAS GOT EXCESS OF INCOME OVER EXPENDITURE AS STATED EARLIER. RESULTANTLY, THE ASSESSEE HAS BEEN ACCUMULATING FUN DS YEAR AFTER YEAR, WHICH ARE PARKED WITH THE BANKS IN THE FORM OF FDRS , AS IS EVIDENT FROM ITS BALANCE SHEET AUDITED AS ON 31.03.2009, TOTAL F DRS WITH BANK ARE OF RS. 11,27,93,116/- WHICH IS AN APPARENTLY A HUGE AM OUNT. SIMILARLY, FDRS AS ON 31.03.2008 WERE SHOWN BY THE ASSESSEE WI TH BANKS TO THE TUNE OF RS. 8,85,53,194/- BESIDES ACCRUED INTEREST OF RS. 35,46,306/-. THIS SHOWS THAT THE ASSESSEE IS DERIVING INCOME/SURPLUS PROFIT FROM RUNNING OF EDUCATIONAL INSTITUTION YEAR AFTER YEAR AND THE SAM E IS BEING INVESTED IN THE FORM OF FDRS WITHOUT INCURRING EXPENDITURE TOWA RDS THE AIMS AND OBJECTS OF THE INSTITUTE. 8. THE ASSESSING OFFICER ALSO FOUND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE FUNDS WILL BE 7 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 UTILIZED FOR EXTENSION OF HOSTEL BUILDINGS IN SUBSE QUENT YEARS FOR WHICH NECESSARY APPROVAL OF THE GOVERNMENT OF PUNJAB HAS BEEN SOUGHT. HE WAS OF THE VIEW THAT THIS IS NOT A CASE OF REGISTRA TION UNDER SECTION 12AA OF THE ACT IN WHICH FUNDS ARE ACCUMULATED/SET APART FOR FUTURE EXPENDITURE AS PER PROVISIONS OF SECTION 11(2) OF T HE ACT BY GIVING NOTICE TO THE ASSESSING OFFICER. 9. KEEPING IN VIEW THE AFORESAID INSTANCE EXPLAINED ABOVE, THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE FAILED TO SUBSTANTIATE OR JUSTIFY ITS CLAIM FOR EXEMPTION UNDER SECTION 10(23 C)(IIIAB) OF THE ACT, THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR THE EXE MPTION UNDER SECTION 10(23C)(IIIAB) OF THE ACT FOR THE FOLLOWING REASONS , WHICH THE ASSESSING OFFICER HAS MENTIONED AT PAGE NOS. 7 AND 8 OF THE A SSESSMENT ORDER AND THE SAME ARE REPRODUCED AS UNDER: I. THE INSTITUTE IS CHARGING FEES FROM THE STUDENTS AT IMPUGNED PRESCRIBED RATES AS STATED EARLIER, OUT OF WHICH IT INCURS EXPENDITURES FOR ITS DAY TO DAY AFFAIRS INCLUDING S ALARY PAYMENTS TO THE TEACHING STAFF. II. THE INSTITUTE IS RUNNING COLLEGES AND IS EARNING SY STEMATIC PROFITS WHICH ARE ACCUMULATED YEAR AFTER YEAR. III. THE SURPLUS FUNDS HAVE NOT BEEN UTILIZED FOR THE DE VELOPMENT OF INFRASTRUCTURE NEEDED FOR THE STUDENTS WHOSE PARENT S/GUARDIANS HAVE PAID THEIR HARD EARNED MONEY 8 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 IV. THE INSTITUTE HAS PARKER ITS SURPLUS PROFITS IN FDR S WITH BANKS WHICH IS IN CRORES I.E. RS. 11,27,93,116/- AS ON 31 .03.2009. V. AS PER SUB-CLAUSES (VI) & (XIV) OF CLAUSE -2 OF THE MEMORANDUM OF THE INSTITUTE, THE INTENTION OF THE A SSESSEE WAS TO COLLECT FEES AND OTHER CHARGES, TO RECEIVE GRANT S, GIFTS, DONATIONS, BENEFACTIONS, BEQUESTS OR TRANSFER AND A LL MONEYS IN ANY OTHER MANNER OR FROM ANY OTHER SOURCE AUTHORITI ES BELOW AUTHORITIES AB-INITIO I.E. AT THE TIME OF INCEPTION OF THE SOCIETY. VI. THE ASSESSEE HAS NOT RECEIVED ANY PENNY FROM THE GO VERNMENT DURING LAST 5 YEARS, WHEREAS IN ORDER TO CLAIM EXEM PTION U/S 10(23C)(IIIAB) IT MUST BE FINANCED WHOLLY OR SUBSTANTIALLY BY THE GOVERNMENT. 10. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFICER ALSO NOTICED THAT ADVANCES WERE MADE TO ONE SH. PREM SINGH ON CERTAIN INTERVALS WHO SUBMITTED BILLS OF PETROL AND REPAIRS TO VEHICLE. ON BEING ASKED, THE ASSESSEE STATED THAT THESE AMOUNTS WERE GIVEN AS ADVANCE TO SH. PREM SINGH FOR FUEL ETC. OF CAR WHEN THE CAR WAS SENT TO DEPUTY COMMISSIONER-CUM-DISTRICT MAGISTRATE, MUKTSA R ON HIS REQUISITION OR USED BY THE PRINCIPAL OF INSTITUTE. AFTER PERUSING THE LOG BOOK MAINTAINED BY THE ASSESSEE IN RESPECT OF RUNNI NG OF CAR, IT WAS FOUND THAT THE CAR WAS USED ON VVIP DUTIES AS REQUISITION ED BY THE DC, MUKTSAR, WHO IS ALSO A MEMBER OF THE BOARD OF GOVE RNORS OF THE SOCIETY AS APPOINTED BY THE STATE GOVERNMENT. ON ASKING FRO M THE ASSESSEE FOR THE PURPOSE OF UTILIZATION OF CAR, THE ASSESSEE FAI LED TO EXPLAIN THE PURPOSE 9 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 OF UTILIZATION OF THE CAR, WHICH WAS SAID TO BE USE D ON THE DUTIES OF VVIPS. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AS WELL AS THE EXPLANATION GIVEN BY THE ASSESSEE, THE ASSESSING OF FICER WAS OF THE VIEW THAT THE CAR WAS UTILIZED FOR THE PURPOSE OF INSTIT UTE TOWARDS ITS AIMS AND OBJECTS AND HE DISALLOWED 1/3 RD OF TOTAL EXPENSES CLAIMED ON THIS VEHICLE(CAR) I.E. RS. 2,98,130/- AND ITS DEPRECIATI ON I.E. RS. 28,474/-, AGGREGATING TO RS. 3,26,604/-, WHICH COMES TO RS. 1 ,08,868/- AND THE SAME IS ADDED BACK TO THE INCOME OF THE ASSESSEE. 11. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS FILED A COPY OF AUDIT REPORT SEPARATELY IN RESPECT OF DEVELOPMENT FUND OF THE IN STITUTE, AS PER WHICH IT HAS RECEIVED A SUM OF RS. 1,18,09,000/- DURING THE YEAR ON THIS ACCOUNT BESIDES ACCRUED INTEREST ON FDRS OF RS. 20,71,559/- UNDER THIS HEAD. AS PER BALANCE OF THIS FUND, THE ASSESSEE HAS MADE FIX ED DEPOSITS OF RS. 4,84,61,296/- APART FROM THE MAIN ACCOUNT. THE ASSE SSEE WAS ASKED TO EXPLAIN THE REASONS FOR NON-INCLUSION OF RECEIPTS R ECEIVED UNDER THIS HEAD WHEREAS THE SAME IS NOT PART OF STUDENTS FUNDS. IN RESPONSE TO THE SAME, THE ASSESSEE HAS FILED ITS REPLY AND STATED THAT TH E DEVELOPMENT FUND IS COLLECTED FROM THE STUDENTS AS PER NORMS OF THE PUN JAB TECHNICAL 10 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 UNIVERSITY, JALANDHAR AS APPROVED BY THE GOVT. OF P UNJAB AND UTILIZED FOR THE UTILIZED FOR THE DEVELOPMENT OF THE CAMPUS FOR THE STUDENTS, IF ANY. REST OF THE FUNDS ARE KEPT IN BANK(S) SEPARATE FROM OTHER RECEIPTS. AFTER CONSIDERING THE REPLY FILED BY THE ASSESSEE, THE AS SESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE CANNOT SHOW THIS FUND SE PARATELY FOR THE PURPOSE OF TOTAL RECEIPTS RECEIVED BY IT DURING THE YEAR AND THIS FUND IS NOT CONTROLLED BY THE STUDENTS LIKE STUDENT FUNDS, AND THE STATEMENT OF THE ASSESSEE IS MISLEADING ONE BECAUSE EVERY DEVELOPMEN T IS MEANT TO IMPART EDUCATION TO THE STUDENTS WHICH IS MAIN OBJECT OF T HE INSTITUTE. THE ASSESSEE CANNOT SHOW THIS FUND SEPARATELY FOR THE P URPOSE OF TOTAL RECEIPTS RECEIVED DURING THE YEAR. THEREFORE, THE TOTAL RECE IPT OF RS. 1,18,09,000/- UNDER THE HEAD DEVELOPMENT FUND RECEIVED DURING THE YEAR IS ADDED TO THE RECEIPTS OF THE ASSESSEE AND SIMILARLY THE AMOU NT OF ACCRUED INTEREST OF RS. 20,71,559/- ON FDRS FOR THE YEAR UNDER CONSI DERATION, WHICH HE ALSO ADDED TO THE INCOME OF ASSESSEE AND FINALLY HE COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON THE T OTAL INCOME OF RS. 3,67,47,183/- BY PASSING THE IMPUGNED ORDER ON 29.0 7.2011. 12. AGGRIEVED WITH THE ASSESSMENT ORDER, THE ASSESSE E FILED AN APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY , WHO VIDE IMPUGNED 11 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 ORDER DATED 21.06.2012, ALLOWED THE APPEAL OF THE A SSESSEE AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN THE A SSESSMENT ORDER. NOW, BEING AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENU E FILED THE PRESENT APPEAL. 13. LEARNED DR RELIED UPON THE ORDER PASSED BY THE A SSESSING OFFICER AND STATED THAT LEARNED FIRST APPELLATE AUT HORITY HAS PASSED THE IMPUGNED ORDER ON THE BASIS OF ORDER OF WORTHY CIT, BATHINDAS DROPPING THE PROCEEDING UNDER SECTION 263 OF THE AC T, WHICH IS CONTRARY TO THE LAW AND FACTS ON THE FILE. HE FURTHER STATED THAT LEARNED CIT(A) HAS NOT GIVEN ANY CLEAR FINDINGS AS TO UNDER WHICH SECT ION THE ASSESSEES CASE IS COVERED I.E. WHETHER SECTION 10(23C)(IIIAB) OR S ECTION 10(23C)(VI) OF THE ACT AND WITHOUT GIVING ANY CATEGORICAL FINDING AS SUCH, HOW COULD THE LEARNED CIT(A) ALLOW THE APPEAL OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FULFILL THE CONDITIONS OF THE PROVISIONS OF SECTION 10(23C)(IIIAB) NOR SECTION 10(23C)(VI) OF THE ACT. THUS, SECTION 10(23C)(IIIAB) IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE ASSESSEE IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVE RNMENT. HE FURTHER STATED THAT THE ASSESSING OFFICER HAS PASSED A WELL REASONED ORDER ON THE BASIS OF RECORDS, WHICH DESERVES TO BE UPHELD AND T HE IMPUGNED ORDER 12 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 DESERVES TO BE CANCELLED BECAUSE THE ASSESSEE HAS N EITHER SOUGHT NOR WAS GRANTED ANY REGISTRATION UNDER SECTION 12AA OF THE ACT FOR WHICH THE ASSESSEE IS CLAIMING THE EXEMPTION IN DISPUTE. 14. ON THE CONTRARY, LEARNED COUNSEL FOR THE ASSESSE E CONTROVERTED THE ARGUMENTS ADVANCED BY LEARNED DR AND RELIED UPO N THE ORDER PASSED BY LEARNED FIRST APPELLATE AUTHORITY. IN SUPPORT OF HIS ARGUMENT, HE HAS ALSO FILED TWO SMALL PAPER BOOKS AND IN THE 1 ST PAPER-BOOK CONTAINING PAGES FROM 1 TO 10, HE HAS ATTACHED THE COPY OF WRI TTEN SUBMISSION FILED BEFORE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), BATHINDA; COPY OF NOTICE DATED 31.10.2011 ISSUED BY THE COMMISSION ER OF INCOME TAX, BATHINDA, U/S 263(1) OF THE IT ACT, 1961, RELATING TO ASSESSMENT YEAR 2007-08; COPY OF REPLY FILED BEFORE THE COMMISSIONE R OF INCOME TAX, BATHINDA, IN RESPONSE TO NOTICE ISSUED U/S 263(1) R ELATING TO ASSESSMENT YEAR 2007-08; AND COPY OF ORDER U/S 263 DATED 23/03 /2012 PASSED BY COMMISSIONER OF INCOME TAX, BATHINDA RELATING TO AS SESSMENT YEAR 2007-08. IN THE 2 ND PAPER BOOK, CONTAINING PAGES FROM 11 TO 23, HE HAS ATTACHED COPY OF NOTICE DATED 16.10.2012 ISSUED BY THE COMMISSIONER OF INCOME TAX, BATHINDA, UNDER SECTION 263(1) OF THE I T ACT, 1961, RELATING TO ASSESSMENT YEAR 2008-09; COPY OF REPLY FILED BEF ORE THE COMMISSIONER 13 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 OF INCOME TAX, BATHINDA IN RESPONSE TO NOTICE ISSUE D U/S 263(1) RELATING TO ASSESSMENT YEAR 2008-09; COPY OF ORDER U/S 263 D ATED 15/11/2012 PASSED BY COMMISSIONER OF INCOME TAX, BATHINDA RELA TING TO ASSESSMENT YEAR 2008-09, COPY OF ASSESSMENT ORDER U/S 143(3) D ATED 15.03.2013 PASSED BY THE ACIT, CIRCLE-I, BATHINDA IN THE CASE OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2010-11; AND COPY OF DE CISION OF SUPREME COURT OF INDIA IN THE CASE OF CIT VS. EXCEL INDUSTR IES LTD, REPORTED IN 358 ITR 295. HE FURTHER STATED THAT THE DOCUMENTS C ONTAINED IN THE PAPER BOOKS HAVE ALREADY BEEN FILED BEFORE LEARNED CIT(A) AND LEARNED CIT(A) HAS PASSED A WELL REASONED ORDER, THEREFORE, HE REQ UESTED THAT THE IMPUGNED ORDER MAY BE UPHELD BY DISMISSING THE APPE AL FILED BY THE REVENUE. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER PASSED BY T HE REVENUE AUTHORITY AND THE RELEVANT DOCUMENTS FILED BY THE PARTIES AND WE ARE OF THE VIEW THAT IT IS A MATTER OF FACT AND RECORD THAT THE ASS ESSEE DERIVES INCOME FROM RUNNING AN EDUCATIONAL INSTITUTE IN THE NAME AND ST YLE OF THE MALOUT INSTITUTE OF MANAGEMENT AND INFORMATION TECHNOLOGY AT MALOUT WHICH WAS ESTABLISHED BY GOVERNMENT OF PUNJAB AS PER MEMO RANDUM OF 14 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 ASSOCIATION AND RULES AND UNDER THE SOCIETIES REG ISTRATION ACT, 1860 AS AMENDED BY PUNJAB AMENDMENT ACT, 1947, VIDE NO. 643 OF 1998-99 DATED 11.08.1998. AS PER CLAUSE -2 OF THE MEMORANDU M, THE OBJECTS AND THE FUNCTIONS OF THE SOCIETY INSTITUTE ARE AS UNDER : I. TO ESTABLISH AND TO CARRY ON THE ADMINISTRATION AND MANAGEMENT OF THE MALOUT INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY, MALOUT PUNJAB. II. TO TAKE ALL STEPS OF NECESSARY FOR PROVIDING INSTRU CTIONS, RESEARCH IN SUCH BRANCHES OF MANAGEMENT AND DISSEMI NATION AND ENGINEERING AS THE INSTITUTE MAY THINK FIT AND FOR THE ADVANCEMENT OF LEARNING AND DISSEMINATION OF KNOWLE DGE IN SUCH BRANCHES. III. TO PRESCRIBE RULES AND REGULATIONS FOR AND TO HOLD THE TEST AND EXAMINATIONS & DECLARE THE RESULTS AND GIVE AWARDS FOR COURSE OTHER THAN THOSE FOR UNIVERSITY DEGREES AND IN RESP ECT OF THE LATTER TO MAKE ARRANGEMENTS IN ACCORDANCE WITH THE STATUTES AND REGULATIONS OF THE UNIVERSITY TO WHICH THE INSTITUT E IS AFFILIATED. IV. TO INSTITUTE AND AWARD FELLOWSHIPS SCHOLARSHIPS PRI ZES AND MEDALS IN ACCORDANCE WITH THE RULES AND BY-LAWS. V. TO CONFER HONORARY AWARD OR OTHER DISTINCTIONS. VI. TO FIX AND DEMAND SUCH FEES AND OTHER CHARGES AS MA Y BE LAID DOWN IN THE BYE-LAWS MADE UNDER THE RULES OF THE SO CIETY. VII. TO ESTABLISH, MAINTAIN AND MANAGE HALLS, HOSTEL & O THER BUILDINGS FOR FURTHERANCE OF THE OBJECTIVES OF THE SOCIETY. VIII. TO PROVIDE FOR THE MAINTENANCE OF UNITS OF THE NATI ONAL CADET CORPS NSS AND OTHER SIMILAR INSTITUTIONS FOR THE ST UDENTS OF THE INSTITUTE. IX. TO CREATE TEACHING, ADMINISTRATIVE, TECHNICAL, MINI STERIAL AND OTHER POSTS UNDER THE SOCIETY AND TO MAKE APPOINTME NTS THERETO IN ACCORDANCE WITH RULES AND BYE-LAWS. X. TO CO-OPERATE AND COLLABORATE WITH EDUCATIONAL OR O THER INSTITUTE IN ANY PART OF THE WORLD HAVING OBJECTS WHOLLY OR P ARTLY SIMILAR TO THOSE OF THE SOCIETY BY EXCHANGE OF TEACHERS, SC HOLARS AND 15 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 GENERALLY IN SUCH MANNER AS MAY BE CONDUCIVE TO THE IR COMMON OBJECTS. XI. TO TAKE STEPS NECESSARY FOR TAKING UP CONSULTANCIES , ORGANIZING SHORT TERM TRAINING COURSES, SEMINARS, WORKSHOPS ET C. IN THE AREAS MENTIONED IN 2(II) IN THE FURTHERANCE OF THE OBJECTIVES OF THE SOCIETY. XII. TO ACQUIRE AND HOLD PROPERTY IN THE INTEREST OF THE SOCIETY. XIII. TO DEAL WITH OR DISPOSE OFF OR WRITE OFF ANY PROPER TY OR LOSS THEREIN BELONGING TO OR VESTED IN THE SOCIETY IN SU CH MANNER AS THE SOCIETY MAY DEEM FIT FOR ADVANCING ITS OBJECTS. XIV. TO GENERATE FUNDS FOR THE SOCIETY THROUGH GOVERNMEN T GRANTS ALL FEES AND OTHER CHARGES RECEIVED BY THE SOCIETY, ALL MONEYS RECEIVED BY THE SOCIETY BY WAY OF GRANTS, GIFTS, DO NATIONS, BENEFACTIONS, BEQUESTS OR TRANSFER AND ALL MONEYS R ECEIVED BY THE SOCIETY IN ANY OTHER MANNER OR FROM ANY OTHER S OURCE. XV. TO MEET THE EXPENSES OF SOCIETY INCLUDING EXPENSES INCURRED IN THE EXERCISE OF ITS POWERS AND DISCHARGE OF ITS FUN CTIONS OUT OF ITS FUNDS. XVI. TO DO ALL OTHER LEGAL THINGS CONSIDERED NECESSARY T O ACHIEVE THE AIMS AND OBJECTS OF THE SOCIETY. 16. THE ASSESSEE HAS ALSO FILED STATEMENT OF INCOME WITH THE RETURN OF INCOME AND IT IS VERY MUCH NECESSARY TO REPRODUC E THE COMPUTATION OF INCOME OF THE ASSESSEE, WHICH THE ASSESSING OFFICER HAS MENTIONED AT PAGE NOS. 3 & 4, FOR THE SAKE OF CONVENIENCE THE SA ME ARE REPRODUCED AS UNDER: 1. BUSINESS INCOME RS. (FEE AS PER INCOME & EXPENDITURE ACCOUNT ATTACHED) 53527500.00 2. INCOME FROM OTHER SOURCES: (A) FEE RECEIVED FROM RIGHT TO INFORMATION ACT 586.00 16 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 (B) HOUSE RENT RECEIVED 250169.17 (C) HOSTEL CHARGES 1669004.00 (D) INTEREST INCOME FROM BANK 9578470.00 (E) MISC. INCOME 2146313.00 136445430.17 67172043.17 LESS: AMOUNT APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR: (A) REVENUE EXPENDITURE 26968265.54 (B) CAPITAL EXPENDITURE 4648675.63 31616941.17 BALANCE 35555102.00 LESS: AMOUNT DEEMED TO BE APPLIED @ 15% OF RS. 67172043/17 10075806.47 BALANCE 25479295.53 LESS: INCOME CLAIMED EXEMPT U/S 10(23C)(IIIAB) 25479295 .53 TAXABLE INCOME NIL 17. AFTER EXAMINING THE AFORESAID COMPUTATION OF INC OME, IT IS APPARENT THAT THE ASSESSEE HAS CLAIMED ITS INCOME A S APPLIED TOWARDS CHARITABLE PURPOSE AS PER SECTION 11(1)(A) OF THE A CT. AT THE SAME TIME, THE ASSESSEE HAS CLAIMED ITS BALANCE INCOME OF RS. 2,54,79,295.53 AS EXEMPT UNDER SECTION 10(23C)(IIIAB) OF THE ACT. IT IS OBVIOUS THAT A QUESTION HAD ARISEN IN THE MIND OF THE ASSESSING OF FICER THAT HOW THE ASSESSEE IS CLAIMING UNDER TWO PROVISIONS OF THE AC T I.E. SECTION 11(1)(A) AND SECTION 10(23C)(IIIAB) OF THE ACT. THE ASSESSIN G OFFICER ASKED THE ASSESSEE TO JUSTIFY ITS CLAIM AND IN RESPONSE TO TH E SAME, THE ASSESSEE 17 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 STATED THAT ITS INSTITUTE IS APPROVED AS 100% GOVT. AUTONOMOUS BODY AND THE GOVERNMENT HAS NOT FINANCED ANY PAISA TO THE IN STITUTE IN LAST 5 YEARS BECAUSE THE INSTITUTE IS ALREADY HAVING A GOOD AMOU NT LYING IN FIXED DEPOSITS WITH BANKS. THIS VERY REPLY OF THE ASSESSE E IS AGAINST THE ASSESSEE WHICH IS CONTRARY TO THE PROVISIONS OF SEC TION 10(23C)(IIIAB) OF THE ACT. ACCORDING TO THE PROVISION OF SECTION 10(2 3C)(IIIAB) ONE CAN ONLY GET EXEMPTION, IF IT FULFILLS THE CONDITIONS O F THIS SECTION. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF SECTION 10(2 3C)(IIIAB) OF THE ACT, WHICH THE ASSESSING OFFICER HAS REPRODUCED AT PAGE 5, IS REPRODUCED AS UNDER: 10. IN COMPUTING THE TOTAL INCOME OF PREVIOUS YEA R OF ANY PERSON, ANY INCOME FALLING WITH IN ANY OF THE FOLLOWING CLA USES SHALL NOT BE INCLUDED- (1) ... .. (23C) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF- (I) . (IIIAB) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTIT UTION EXISTING SOLELY FOR EDUCATIONAL PURPOSE AND NOT FOR PURPOSE OF PROFIT, AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GO VERNMENT OR 18 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 18. KEEPING IN VIEW THE PROVISIONS OF SECTION 10(23C )(IIIAB) OF THE ACT AS WELL AS THE REPLY FILED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS RIGHTLY HELD THAT ANY EDUCATI ONAL INSTITUTE WHICH IS ESTABLISHED FOR EDUCATIONAL PURPOSE AND NOT FOR PUR POSE OF PROFIT CAN BE CONSIDERED FOR EXEMPTION UNDER THAT SECTION, BUT TH E CONDITION FOR SUCH EXEMPTION IS THAT THE INSTITUTION MUST BE WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. IN THE INSTANT CASE, IT IS CLEAR THAT THE GOVERNMENT OF PUNJAB HAS ESTABLISHED THE ASSESSEE-I NSTITUTE AND FURTHER ALLOWED TO GET REGISTERED UNDER SOCIETIES REGISTRAT ION ACT, 1860 ONLY, BUT DID NOT FINANCE THE INSTITUTE DURING THE YEAR UNDER CONSIDERATION OR EVEN IN LAST 5 YEARS AT ALL AS ADMITTED BY THE ASSESSEE- INSTITUTE IN ITS REPLY, MENTIONED ABOVE. BUT THE LEARNED FIRST APPELLATE AU THORITY HAS WRONGLY ALLOWED THIS EXEMPTION TO THE ASSESSEE ON THE BASIS OF PREVIOUS YEAR AS WELL AS ON THE BASIS OF ORDER PASSED BY CIT, BATHIN DA, UNDER SECTION 268 OF THE ACT, DATED 23.03.2012. IN OUR CONSIDERED VIE W, THE LEARNED FIRST APPELLATE AUTHORITY HAS PASSED THE IMPUGNED ORDER B Y ALLOWING THE EXEMPTION UNDER SECTION 10(23C) (IIIAB) OF THE ACT ON THE BASIS OF PREVIOUS YEAR AS WELL AS THE ORDER PASSED UNDER SEC TION 263 OF THE ACT, DATED 23.03.2012 PASSED BY LEARNED CIT, BATHINDA, W HEREIN HE HAS 19 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 DROPPED THE PROCEEDINGS INITIATED UNDER SECTION 263 OF THE ACT FOR THE YEAR 2007-08. 19. IT IS VERY MUCH NECESSARY FOR THE ASSESSEE TO FU LFILL ALL THE CONDITIONS FOR EXEMPTION UNDER SECTION 10(23C)(IIIA B) OF THE ACT. IN OUR CONSIDERED VIEW THE ASSESSEE DID NOT FULFILL THE RE QUIRED CONDITIONS AS MENTIONED UNDER SECTION 10(23C)(IIIAB) OF THE ACT A ND THE LEARNED FIRST APPELLATE AUTHORITY HAS WRONGLY DELETED THE ADDITIO NS IN DISPUTE WITHOUT ANY BASIS AS WELL WITHOUT GOING THROUGH THE RELEVAN T PROVISIONS OF LAW. 20. AFTER THOROUGHLY GOING THROUGH THE REPLY FILED B Y THE ASSESSEE ALONG WITH THE ORDERS PASSED BY THE REVENUE AUTHORI TY, WE ARE OF THE VIEW THAT NO DOUBT THE ASSESSEE-INSTITUTE IS AN EDU CATIONAL INSTITUTE BUT THE MAIN MOTO OF THE ASSESSEE INSTITUTION IS PROFIT AS ESTABLISHED ON THE PERUSAL OF COMPUTATION OF INCOME REPRODUCED ABOVE. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE ITSELF ADMITTED BEFORE THE ASSESSING OFFICER IN ITS REPLY WHICH WE HAVE REPRODUCED ABOVE THAT THE INSTI TUTE IS APPROVED AS THE 100% GOVT. AUTONOMOUS BODY AND THE GOVERNMENT H AS NOT FINANCED ANY PAISA TO THE INSTITUTE IN THE LAST 5 YEARS BECA USE THE INSTITUTE IS ALREADY HAVING A GOOD AMOUNT LYING IN FIXED DEPOSITS WITH B ANKS. WE ARE OF THE 20 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 VIEW THAT THE ASSESSEE IS ALSO NOT FULFILLING THE C ONDITIONS REGARDING THE INSTITUTE MUST BE WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. 21. LEARNED COUNSEL FOR THE ASSESSEE HAS FILED THE W RITTEN SUBMISSION WHICH HE HAS FILED BEFORE THE LEARNED FI RST APPELLATE AUTHORITY ALONG WITH THE NOTICE ISSUED BY LEARNED C IT, BATHINDA, REPLY OF THE ASSESSEE, AND THE ORDER OF LEARNED CIT, BATHIND A, PASSED UNDER SECTION 263 OF THE ACT DATED 23.03.2012. THESE DOCU MENTARY EVIDENCES ARE NOT HELPFUL TO THE ASSESSEE BECAUSE NOTICE UNDE R SECTION 263 OF THE ACT AND ITS REPLY THERETO, AND THE ORDER DATED 23.0 3.2012 HAVE NO RELEVANCE WITH THE EXEMPTION CLAIMED BY THE ASSESSE E. 22. LEARNED FIRST APPELLATE AUTHORITY HAS DELETED TH E ADDITION IN DISPUTE BY PASSING AN UNREASONABLE ORDER ONLY ON TH E BASIS OF THE ORDER DATED 23.03.2012 PASSED BY LEARNED CIT, BATHINDA. T HE RELEVANT PORTION OF THE IMPUGNED ORDER AT PAGES 6 & 7, ARE REPRODUCE D AS UNDER: I HAD CAREFULLY EXAMINED THE ASSESSMENT ORDER PASS ED BY THE A.O., GROUNDS OF THE APPEAL AND WRITTEN SUBMISSION FILED BY THE ASSESSEE. AS PER ASSESSMENT ORDER AND GROUNDS OF APPEAL, I FIND THAT ISSUE INVOLVED IN THIS CASE IS ONLY WHETHER THE INSTITUTION IS COV ERED BY THE PROVISIONS OF SECTION 10(23C)(IIIAB) OR COVERED BY THE PROVISI ONS OF SECTION 10(23C)(VI) OR SECTION 11, SECTION 12 OF THE ACT. A S PER SUBMISSIONS, I FOUND THAT THE INSTITUTION HAS COME INTO EXISTENCE IN 1998 AND TILL ASSESSMENT YEAR 2008-09 THE EXEMPTION TO THE INSTIT UTION IS BEING GRANTED UNDER SECTION 10(23C)(IIIAB) OF THE ACT. IN THE ASSESSMENT YEAR 2009-10 THE ASSESSING OFFICER IS OF THE VIEW T HAT THE INSTITUTION 21 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 HAS NOT RECEIVED ANY GRANT FROM THE GOVERNMENT DURI NG THE LAST 5-6 YEARS. HENCE, IT IS NOT TREATED TO BE FINANCED BY T HE GOVERNMENT. DURING THE APPELLATE PROCEEDINGS THE LEARNED COUNSE L OF THE APPELLANT BROUGHT TO MY NOTICE THAT FOR THE ASSESSMENT YEAR 2 007-08 THE NOTICE U/S 263 HAS BEEN GIVEN ON THE SIMILAR GROUND ON WHI CH EXEMPTION WAS DISALLOWED BY THE A.O. FOR THE ASSESSMENT YEAR 2009 -10 THAT SINCE THE INSTITUTION HAS NOT BEEN FINANCED BY THE STATE GOVE RNMENT DURING THE YEAR UNDER CONSIDERATION AS WELL AS DURING THE PREC EDING YEARS, THE INSTITUTION IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE STATE GOVERNMENT, HENCE INSTITUTION IS NOT ENTITLED TO CL AIM ITS INCOME AS EXEMPT U/S 10(23)(IIIAB) OF THE INCOME TAX ACT. IN RESPONSE TO THE PROCEEDINGS U/S 263, THE APPELLANT HAS FILED THE SU BMISSIONS BEFORE THE LEARNED CIT ALONG WITH NECESSARY PAPER BOOK AND CAS E LAW TO PROVE THAT THE CASE OF THE ASSESSEE APPELLANT IS DULY COV ERED BY EXEMPTION U/S 10(23C)(IIIAB) OF THE ACT. AFTER CONSIDERING TH E EXPLANATION OF THE ASSESSEE APPELLANT THE LEARNED COMMISSIONER OF INCO ME TAX PASSED ORDER U/S 263 OF THE INCOME TAX ACT, 1961 VIDE ORDE R F. NO. IT/BTI/SG/2011-12/3746 DATED 23.03.2012 REPRODUCED BELOW:- AFTER DUE PERUSAL OF THE ASSESSMENT RECORDS AND TH E CAREFUL EXAMINATION OF THE REPLIES FILED BY THE AR, SHRI P. K. SINGLA, ADVOCATE ON BEHALF OF THE ASSESSEE DATED 03.02.2012 AND 23.03.2012 ALONGWITH DOCUMENTARY EVIDENCES BROUGHT ON RECORD BY HIM, ALL THE FACTS AND EVIDENCES ON RECOR D DO NOT WARRANT ANY ACTION U/S 263 OF THE IT ACT, 1961 AND THEREFORE, THE CASE BEING UNFIT FOR SUCH ACTION, THE PROCEEDIN GS INITIATED UNDER THAT SECTION ARE DROPPED. THEREFORE, THE ISSUE WHETHER THE INSTITUTION IS COV ERED BY THE PROVISIONS OF SECTION 10(23C)(IIIAB) OF THE ACT OR 10(23C)(VI) OF THE ACT HAS ALREADY BEEN SETTLED BY THE COMMISSIONER OF INCOME TAX, BATHINDA. AS SUCH, DISALLOWANCES MADE BY THE ASSESS ING OFFICER THAT THE INSTITUTION IS NOT COVERED BY THE PROVISIONS OF SECTION 10(23C)(IIIAB) IS NOT CORRECT. THEREFORE, ADDITION MADE AT RS. 3,67,47,180/- IS UNJUSTIFIED. THE SAME IS DELETED. 22 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 23. AFTER GOING THROUGH THE AFORESAID ORDER PASSED B Y THE LEARNED FIRST APPELLATE AUTHORITY, WHICH IS CHALLENGED BEFO RE US, LEARNED FIRST APPELLATE AUTHORITY HAS ALLOWED THE EXEMPTION ON TH E BASIS THAT TILL THE ASSESSMENT YEAR 2008-09, THE EXEMPTION TO THE INSTI TUTE IS BEING GRANTED UNDER SECTION 10(23C)(IIIAB) OF THE ACT AND ON THE BASIS OF ORDER PASSED UNDER SECTION 263 OF THE ACT DATED 23.03.2012 WHERE IN LEARNED CIT, BATHINDA, HAS DROPPED THE PROCEEDINGS INITIATED UND ER SECTION 263 OF THE ACT. IN OUR CONSIDERED VIEW, THE LEARNED FIRST APPE LLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE CONTRARY TO THE LAW AND FACTS AND ON THE FILE AND WITHOUT GOING THROUGH THE PROVISIONS OF LA W AS WELL AS DOCUMENTARY EVIDENCE ESTABLISHING THAT THE ASSESSEE IS ENTITLED FOR THE EXEMPTION CLAIMED UNDER SECTION 12(23C)(IIIAB) OR S ECTION 11 AND 12 OF THE ACT. 23.1 AS REGARDS TO THE DELETION OF ADDITION IN DI SPUTE ON THE BASIS THAT THE SAME EXEMPTION HAS BEEN ALLOWED BY THE REV ENUE AUTHORITY IN THE EARLIER YEAR AND THE LEARNED FIRST APPELLATE AU THORITY HAS GRANTED THE SAME IN THE YEAR IN DISPUTE ALSO, WE ARE OF THE VIE W THAT EVERY ASSESSMENT YEAR IS AN INDEPENDENT ASSESSMENT YEAR. IN THE INCO ME TAX PROCEEDING, THERE CAN BE NO QUESTION OF RES-JUDICATA . THE DECISION GIVEN BY ONE 23 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 ASSESSING OFFICER FOR ONE ASSESSMENT YEAR CANNOT AF FECT OR BIND HIS DECISION FOR ANOTHER YEAR. THIS VIEW IS SUPPORTED B Y VARIOUS JUDGMENTS RENDERED BY HON'BLE SUPREME COURT OF INDIA, WHICH I NCLUDES IN THE CASE OF NEW JEHANGIR VAKIL MILLS CO. LTD. VS. COMMISSION ER OF INCOME TAX, BOMBAY NORTH, KUTCH AND SAURASHTRA, REPORTED IN (19 63) 49 ITR 137 (SC); COMMISSIONER OF INCOME TAX, WEST BENGAL VS. B RIJ LAL LOHIA AND MAHABIR PRASAD KHEMKA, REPORTED IN (1972) 84 ITR 27 3 (SC); AND RADHASOAMI SATSANG VS. COMMISSIONER OF INCOME TAX, REPORTED IN (1992) 193 ITR 321(SC). 24. IT IS A MATTER OF RECORD THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER, LEARNED CIT(A) AND EVEN BEFORE US, PROVING THAT THE ASSESSEE HAS GOT A PPROVAL FROM THE PRESCRIBED AUTHORITY FOR THE EXEMPTION UNDER SECTIO N 10(23C)(IIIAB) OF THE ACT. SECONDLY, AS REGARDS TO THE EXEMPTION CLAI MED BY THE ASSESSEE UNDER SECTION 11(1)(A) OF THE ACT, AS MENTIONED IN THE COMPUTATION OF INCOME REGARDING, ITS INCOME APPLIED TOWARDS CHARIT ABLE PURPOSE AND HENCE DEDUCTED 15% OF ITS RECEIPTS DEEMING THE SAME AS TO HAVE BEEN APPLIED AS PER SECTIONS 11(1)(A) OF THE ACT. FOR CL AIMING THE EXEMPTION, UNDER SECTION 11(1)(A) OF THE ACT, THE ASSESSEE REQ UIRED REGISTRATION UNDER 24 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 SECTION 12AA OF THE ACT. THE SAME HAS ALSO NOT BEEN PRODUCED BY THE ASSESSEE BEFORE ANY AUTHORITIES BELOW AND EVEN NOT BEFORE US. THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR ANY EXEMPTION UNDE R SECTION 11(1)(A) OF THE ACT. 25. KEEPING IN VIEW THE INCOME AND EXPENDITURE ACCOU NT AS WELL AS THE FEE STRUCTURE OF THE ASSESSEE, WE ARE OF THE VI EW THAT THE ASSESSEE IS NOT CHARITABLE INSTITUTION AND IT IS DOING BUSINESS FOR PROFIT AND THE ASSESSEE-INSTITUTE HAS BEEN ACCUMULATING FUNDS YEAR AFTER YEAR, WHICH ARE PARKED WITH THE BANKS IN THE FORM OF FDRS, AS IS EV IDENT FROM ITS BALANCE SHEET AS ON 31.03.2009, TOTAL FDRS WITH THE BANK AR E OF RS. 11,27,93,116/-. THEREFORE, THE ASSESSEE HAS NOT REC EIVED ANY PENNY FROM THE GOVERNMENT FOR THE LAST 5 YEARS AS ADMITTED BY THE ASSESSEE. 26. KEEPING IN VIEW THE AFORESAID DISCUSSION, WE ARE OF THE VIEW THAT LEARNED FIRST APPELLATE AUTHORITY HAS WRONGLY ALLOWED THE EXEMPTION TO THE ASSESSEE WITHOUT APPLYING ITS MIND TO THE RELEVANT PROVISION OF LAW AS WELL AS LACK OF DOCUMENTARY EVI DENCE, WHICH ARE REQUIRED FOR GRANTING EXEMPTION IN DISPUTE. THEREFO RE, THE IMPUGNED ORDER PASSED LEARNED CIT(A), BATHINDA, DESERVES TO BE CANCELLED AND ACCORDINGLY WE CANCEL THE IMPUGNED ORDER DATED 21.0 6.2012 AND UPHOLD 25 I.T.A. NO. 350(ASR)/2012 ASSESSMENT YEAR: 2009-10 THE ASSESSMENT ORDER DATED 29.07.2011 PASSED UNDER SECTION 143(3) OF THE ACT AND ALLOW THE APPEAL FILED BY THE REVENUE. 27. IN THE RESULT, THE APPEAL FILED REVENUE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH JANUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S MALOUT INSTITUTE OF MANAGEMENT & INFORMATION TECHNOLOGY, NGM COMPLEX, GT ROAD, MALOUT 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-II, B ATHINDA 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.