GREEN ACRES EDUCATIONAL TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 412/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2893 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 30-05-2016
• Assessment Year: misc
• Appeal Filed On: 14-01-2013
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Keywords: Charitable institution; Benefit of exemption
• Section: 12A; 12AA; 11

Judgement Text

, , G , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.412/MUM/2013 ASSESSMENT YEAR: 2013-14 GREEN ACRES EDUCATIONAL TRUST, B-16 SINGH ESTATE, 3 RD FLOOR, DADASAHEB PHALKE RD, DADAR(E) MUMBAI-400014 / VS. DCIT, 5(2)(2) 567, AAYAKAR BHAVAN, M.K. RD MUMBAI-400020 (ASSESS EE ) (REVENUE) P.A. NO. AABTG7340J APPELLANT BY SHRI MADHUR AGARWAL ( A R) RESPONDENT BY SHRI GOLI SRINIWAS RAO ( CIT - DR) / DATE OF HEARING: 30/05/2016 / DATE OF ORDER: 24/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTI ON) MUMBAI DATED 29.11.2012, U/S 12AA(1)(B)((II) R.W. S ECTION 12A OF THE ACT, ON THE FOLLOWING GROUNDS: GREEN ACRES EDUCATION TRUST 2 1.THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTIONS), MUMBAI (DIT) ERRED IN PASSING AN ORDER UNDER SECTIO N 12AA READ WITH SECTION 12A REJECTING APPELLANT'S APPLICATION FOR GRANT OF REGISTRATION. 2.THE DIT ERRED IN HOLDING THAT THE APPELLANT IS RU NNING THE PRE-SCHOOL ESSENTIALLY AS A BUSINESS OR COMMERCIAL ACTIVITY RATHER THAN AS A CHARITABLE ONE. 3.THE APPELLANT SUBMITS THAT THE DIT FAILED TO APPR ECIATE THE OBJECTS OF THE APPELLANT TRUST INCLUDING EDUCAT IONAL OBJECT FOR RUNNING EDUCATIONAL INSTITUTES WHILE REJ ECTING ITS APPLICATION FOR GRANT OF REGISTRATION. 4.THE DIT ERRED IN TAKING A VERY NARROW MEANING OF 'NORMAL SCHOOLING' IN REJECTING ITS APPLICATION FOR GRANT OF REGISTRATION. THE APPELLANT SUBMITS THAT THE DIT OU GHT TO HAVE TAKEN A BROAD MEANING OF THE TERM 'EDUCATION' CONTAINED IN SECTION 2(15) WHILE CONSIDERING ITS AP PLICATION FOR GRANT OF REGISTRATION. 5.THE APPELLANT SUBMITS THAT MERELY BECAUSE PRE- SCHOOLING IS NOT RECOGNIZED OR REGULATED BY ANY AUTHORITY WOULD NOT IMPLY THAT THE RELEVANT ACTIVIT Y CANNOT BE REGARDED AS 'EDUCATION' WITHIN THE MEANIN G OF SECTION 2(15). 6. THE APPELLANT SUBMITS THAT IT HAD FILED FULL DET AILS AND EXPLANATION BEFORE THE DIT IN SUPPORT OF ITS APPLICATION FOR GRANT OF REGISTRATION INCLUDING THE CHARITABLE NATURE OF ITS OBJECTS AND THE DIT ERRED IN REJECTING ITS APPLICATION. 7. THE APPELLANT SUBMITS THAT THE ORDER OF THE DIT REJECTING ITS APPLICATION FOR REGISTRATION BE SET ASIDE AND T HE DIT BE DIRECTED TO GRANT REGISTRATION TO THE APPELLANT TRU ST. 8.EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPENDE NT AND WITHOUT PREJUDICE TO EACH OTHER. 9.THE APPELLANT CRAVES LIBERTY TO ADD, ALTER AND/OR AMEND THE GROUNDS OF APPEAL AS AND WHEN NECESSARY. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI MADHUR AGARWAL, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI GOLI SRINIWAS RA O, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE. GREEN ACRES EDUCATION TRUST 3 3. THE BRIEF FACTS AND BACKGROUND OF THIS CASE AS CULL ED OUT FROM THE ORDERS OF THE LOWER AUTHORITIES AND EVIDEN CES PRODUCED BEFORE US ARE THAT THE ASSESSEE IS A TRUST AS ITS NAME SUGGEST, WHICH HAS BEEN CONSTITUTED BY THE TRUST DE ED DATED 10 TH DAY OF FEBRUARY 2012, WITH THE FOLLOWING OBJECTS A S MENTIONED AT PARA 3 OF THE TRUST DEED: OBJECTS OF THE TRUST THE SETTLER HEREBY DECLARES AND IRREVOCABLY CONSTIT UTES THE TRUST FOR THE PURPOSE OF IMPARTING HIGH QUALITY EDU CATION TO STUDENTS OF ALL CASTES, CREEDS AND COMMUNITIES BY W AY OF SETTING-UP SCHOOLS (INCLUDING PRE-PRIMARY SCHOOLS), COLLEGES, AND EDUCATIONAL AND VOCATIONAL TRAINING INSTITUTES IN INDIA. 3.1. THE ASSESSEE TRUST FILED AN APPLICATION U/S 12A IN FORM NO.10A DATED 29.05.2012 WITH THE DIRECTOR OF INCOME TAX (EXEMPTION)-MUMBAI FOR THE PURPOSE OF SEEKING REGIS TRATION U/S 12A. IT IS NOTED THAT THE AFORESAID TRUST DEED WAS DULY REGISTERED WITH THE CHARITY COMMISSIONER OF MUMBAI ON 17.05.2012. THE LD. DIT REJECTED THE APPLICATION F OR GRANT OF REGISTRATION ON FOLLOWING TWO REASONS: (I). THE ASSESSEE IS RUNNING THE PRE-SCHOOL WHICH IS ST AGE PRIOR TO NORMAL SCHOOLING, AND THEREFORE, ITS ACTIVITIES CANNOT BE TREATED AS FALLING WITHIN THE GAMUT OF EDUCATION AS PER SECTION 2(15) OF THE ACT. THE JUSTIFICATION GIVEN B Y THE LD. DIT IS THAT AS COMPARED TO FORMAL EDUCATION IMPARTED IN COURSE OF NORMAL SCHOOLING, PRE-SCHOOLING IS A KIND OF INFORM AL EDUCATION WHICH IS NOT RECOGNIZED OR REGULATED BY T HE STATE GOVERNMENT/EDUCATION BOARD/ BMC. (II). THE ASSESSEE TRUST IS CHARGING FEES FOR ISSUE OF P ROSPECTS, ADDITIONAL FEES ON ACCOUNT OF SUPPLY OF SCHOOL KIT, ADMISSIONS GREEN ACRES EDUCATION TRUST 4 FEES ETC. AND ON THE BASIS OF THE SAME LD. DIT CONC LUDED THAT ASSESSEE TRUST WAS ENGAGED IN THE BUSINESS OF COMME RCIAL ACTIVITY WHILE RUNNING THE PRE-SCHOOL. 3.2. THUS, ON BOTH THESE REASONS, LD. DIT REFUSED THE B ENEFIT OF REGISTRATION TO THE ASSESSEE TRUST. 3.3. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE TRIBUNAL. 3.4. DURING THE COURSE OF HEARING, LD. COUNSEL VEHEMENT LY AND EXHAUSTIVELY MADE HIS ARGUMENTS TO ASSAIL THE R EASONING GIVEN BY THE LD. DIT FOR DENYING THE BENEFIT OF REG ISTRATION. IT HAS BEEN SUBMITTED BY THE LD. COUNSEL THAT LD. DIT HAS IGNORED THE OBJECT MENTIONED IN THE TRUST DEED WHER EIN IT IS SPECIFICALLY PROVIDED THAT THE TRUST HAS BEEN CONST ITUTED FOR THE PURPOSE OF IMPARTING HIGH QUALITY EDUCATION TO ALL TYPES OF STUDENTS FROM ANY BACKGROUND BY WAY OF SETTING UP S CHOOLS, COLLEGES AND VOCATIONAL TRAINING INSTITUTES IN INDI A. THE PRE- SCHOOL IS JUST ONE OF THE ACTIVITIES; WHICH HAS BEE N TAKEN UP JUST IN THE BEGINNING OF THE ACTIVITIES BECAUSE, ON LY LITTLE TIME HAD PASSED SINCE DATE OF CONSTITUTION OF TRUST WHEN THE APPLICATION FOR REGISTRATION WAS FILED. IT WAS FURT HER SUBMITTED ON WITHOUT PREJUDICE BASIS THAT IN ANY CASE PRE-S CHOOLING WAS ALSO INTEGRAL PART OF EDUCATION AND CANNOT BE AND COULD NOT BE SEEN IN ISOLATION FROM IT. LD. COUNSEL ALSO RELI ED UPON THE JUDGMENT OF CHENNAI BENCH OF THE TRIBUNAL IN THE CA SE OF LIFE SHINES EDUCATIONAL & CHARITABLE TRUST VS. ACIT IN I TA GREEN ACRES EDUCATION TRUST 5 NO.2818 AND 2819 (MDS) OF 2014 60 TAXMANN.COM 155 F OR THE PROPOSITION THAT ACTIVITY OF RUNNING A PRE-SCHOOL A ND COLLECTING THE FEE FOR IMPARTING EDUCATION TO CHILDREN SHALL B E COVERED WITHIN THE MEANING OF THE TERM EDUCATION AS ENVIS AGED U/S 2(15). 3.5. FURTHER, WITH REGARD TO THE SECOND REASON GIVEN BY LD. DIT, OUR ATTENTION WAS DRAWN UPON THE INCOME AND EXPENDITURE ACCOUNT OF THE TRUST SHOWING THAT AN AG GREGATE AMOUNT OF EXPENSES OF RS.53 LAKHS WERE INCURRED AS PER INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING ON 31 ST MARCH 2013, WHEREAS THE RECEIPT OF THE TRUST AGGREG ATED TO RUPEES NOT MORE THAN 12 LAKHS AND THEREFORE, THERE WAS A DEFICIT (I.E. EXCESS OF EXPENSES OVER RECEIPTS) AMO UNTING TO RS.41.50 LAKHS. IT WAS SUBMITTED THAT THE ASSESSEE IS REQUIRED TO MAINTAIN APPROPRIATE INFRASTRUCTURE & ESTABLISHM ENT AS WELL AS ARRANGEMENT OF COMPETENT FACULTIES SO AS TO PROV IDE GOOD QUALITY OF EDUCATION FOR THE STUDENTS. THEREFORE, A LL THE FACTS SHOULD BE SEEN IN TOTALITY AND NOT IN ISOLATION. IT WAS LASTLY SUBMITTED BY HIM THAT IN ANY CASE IT WAS BEYOND THE JURISDICTION OF LD. DIT TO EXAMINE THESE FACTS AT T HIS STAGE. IT WOULD BE DOMAIN OF THE AO TO EXAMINE WHETHER THE RE CEIPTS FROM EDUCATION ACTIVITY HAVE BEEN APPLIED SOLELY IN THE ACTIVITY OF EDUCATION OR NOT. IN CASE THE AO IS NOT SATISFIE D, THEN THE LEGISLATURE HAS PROVIDED ALL THE POWERS TO THE AO T O DENY THE BENEFIT OF EXEMPTION AT THE TIME OF ASSESSMENT ALSO . THUS, THE LD. DIT HAS GONE WRONG AS PER LAW AND FACTS WHILE D ENYING GREEN ACRES EDUCATION TRUST 6 BENEFIT OF REGISTRATION TO THE ASSESSEE AND HIS ORD ER MAY BE REVERSED AND REGISTRATION SHOULD BE GRANTED. 3.6. PER CONTRA, LD. DR RELIED UPON THE ORDER OF LD. DI T AS WELL AS CASES RELIED UPON BY LD DIT IN HIS ORDER. 3.7. WE HAVE GONE THROUGH THE FACTS OF THIS CASE AND EV IDENCES BROUGHT BEFORE US AND WE DO NOT AGREE WITH EITHER O F THE REASONS GIVEN BY THE LD. DIT FOR REFUSING THE BENEF IT OF REGISTRATION TO THE ASSESSEE TRUST, IN VIEW OF OUR OBSERVATIONS AND DISCUSSION MADE IN FOLLOWING PARAS. 3.8. WHETHER PRE-SCHOOL WOULD FALL IN THE TERM EDUCATIO N AS ENVISAGED U/S 2(15): WE HAVE GONE THROUGH THE REASONING GIVEN BY THE LD. DIT AND WE FIND THAT THE VIEW ADOPTED BY HIM IS NOT ONLY CO NTRARY TO LAW AND FACTS, BUT WE ALSO FIND IT TO BE HIGHLY MYO PIC AND REGRESSIVE. IN TODAYS WORLD THE EDUCATION HAS AT TAINED ITS UNPRECEDENTED DIMENSIONS. WITH THE ADVANCEMENT OF TECHNOLOGIES AND EVOLUTION OF MULTI CULTURAL SOCITI ES, THE COMPLEXITIES IN BUSINESS AND REAL LIFE SITUATIONS H AVE GROWN MANY FOLDS. UNDER SUCH CIRCUMSTANCES, NEED FOR APPR OPRIATE EDUCATION FOR EACH AND EVERY PERSON RIGHT FROM ITS CHILDHOOD CAN NEVER BE OVER EMPHASIZED. THE EDUCATION HAS GOT DIFFERENT MEANING, PURPOSE OR OBJECT FOR EACH PERSON DEPENDIN G UPON ITS POSITION AND BACKGROUND. WE HAVE EDUCATION OF V ARIOUS TYPES E.G. PRE-SCHOOLING, SCHOOLING, HIGHER EDUCATI ON, PROFESSIONAL EDUCATION, VOCATIONAL TRAINING, PROFES SIONS TRAINING ETC ETC. GREEN ACRES EDUCATION TRUST 7 AFTER COMPLETING THE SCHOOL EDUCATION, STUDENTS GO FOR HIGHER EDUCATION WHICH MAY BE OBTAINED THROUGH COLLEGE, UN IVERSITY OR THEY MAY CHOOSE TO GO FOR A PROFESSIONAL COURSE EVEN AFTER COMPLETING THE PROFESSIONAL QUALIFICATION. THERE AR E MANY POST QUALIFICATION COURSES. THAT IS TO CONVEY THAT ED UCATION MAY BEGIN AT ANY STAGE AND IT MAY GO ON THROUGHOUT THE LIFE OF A PERSON. UNDER THESE CIRCUMSTANCES, ONE CANNOT ISOLA TE EDUCATION GIVEN AT ONE OF THE STAGES TO SAY THAT IT SHOULD NOT BE TREATED AS PART OF EDUCATION. THE PRE-SCHOOLIN G HAS BECOME TODAY A MANDATORY PRELUDE TO SCHOOL EDUCATIO N. IT IS LIKE STEP NUMBER ONE IN THE LADDER. IF STEP NUMBER ONE IS TAKEN PROPERLY, THEN OTHER HIGHER STEPS WOULD BE AC HIEVABLE MORE EFFICIENTLY AND EFFECTIVELY. THAT IS THE PURP OSE AS HAS BEEN UNDERSTOOD BY THE PARENTS WHO SEND THEIR KIDS TO PRE- SCHOOLS AND IT HAS BECOME A MANDATORY REQUIREMENT T ODAY FOR ALL THE SCHOOLS IMPARTING QUALITY EDUCATIONS. I T IS BECAUSE SENDING A CHILD TO PRE-SCHOOL IS LIKE PREPARING A S APLING OF THE TREE TO BE PLANTED IN THE FIELDS. RECENTLY, MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ADIT (EXEMPTION) VS JEEVAN VIDYA MISSION (ITA NN 770/M/2014 DT 30-09-2015 ANALYSED S COPE OF THE TERM EDUCATION AS ENVISAGED BY THE LEGISLA TURE WHILE MENTIONING IT U/S 2(15). OBSERVATION GIVEN IN THE O RDER MAY BE USEFUL HERE AND THEREFORE REPRODUCED HEREUNDER: 8.1 IN OUR CONSIDERED OPINION, BASED UPON ANALYSIS OF THE FACTS OF THIS CASE, THE ASSESSEE TRUST IS ENGAGED I N THE FIELD OF EDUCATION. IN OUR CONSIDERED VIEW, BASED UPON OUR UNDERSTANDING OF LAW, THERE IS NO MERIT IN THE ORDER OF ASSESSING OFFICER TO GIVE A RESTRICTED MEANING TO T HE GREEN ACRES EDUCATION TRUST 8 SCOPE OF MEANING OF TERM EDUCATIONAL ACTIVITIES . IT IS NOT NECESSARY THAT THERE SHOULD BE HOLDING OF REGUL AR CLASSES OR WHOLESOME EDUCATIONAL ACTIVITIES TO BE O NLY ELIGIBLE TO BE CALLED EDUCATIONAL ACTIVITIES ELIGIB LE FOR BENEFITS UNDER SECTION 11 AND 12. AS PER OUR UNDERSTANDING, THE TERM EDUCATION IS OF WIDE SCOP E AND AMPLITUDE, ESPECIALLY IN THE CONTEXT OF SECTION 2(1 5). IN THIS FAST EVOLVING SOCIETY, THE TERM EDUCATION HA S ASSUMED GREATER ROLE AND SIGNIFICANCE, THEN EVER. EDUCATION HAS GOT PIVOTAL ROLE IN EVOLUTION OF A SO CIETY. THEREFORE, KEEPING THIS CRUCIAL ASPECT IN MIND, THE LEGISLATURE IN ITS WISDOM HAD DECIDED TO PLACE THIS ACTIVITY WITHIN THE DEFINITION CLAUSE OF THE TERM CHARITABL E PURPOSE, AS PER SECTION 2(15) OF THE INCOME-TAX AC T, WHEREIN IT HAS BEEN SPECIFICALLY MENTIONED THAT THE TERM CHARITABLE PURPOSE INCLUDES . EDUCATION . THU S, THE VERY ACTIVITY OF EDUCATION ITSELF HAS BEEN INCLUDED WITHIN THE MEANING OF THE TERM CHARITABLE PURPOSE. IT MA Y FURTHER BE SEEN THAT ACTIVITY OF IMPARTING EDUCATI ON HAS BEEN SPECIFICALLY INCLUDED IN THE DEFINITION, THUS SHOWING THAT THE INTENTION OF THE LEGISLATURE, VERY CLEARLY , IS TO PROMOTE EDUCATION, WHICH IS FURTHER FORTIFIED BY TH E FACT THAT WHEN THE FIRST PROVISO WAS INSERTED TO SECTION 2(15), THE ACTIVITY OF EDUCATION WAS NOT COVERED THEREIN AND ONLY OTHER OBJECT OF GENERAL PUBLIC UTILITY ALONE WAS CO VERED THEREIN. THE FIRST PROVISO WAS BROUGHT IN TO CURTAI L THE SCOPE OF CHARITABLE PURPOSE WITH RESPECT TO THE A CTIVITIES OF GENERAL PUBLIC UTILITY, BY EXCLUDING THE SAME FR OM THIS GREEN ACRES EDUCATION TRUST 9 DEFINITION, IF IT INVOLVED CARRYING ON OF ANY ACTIV ITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. FURTHER, EVE N AFTER HUGE LITIGATION WITH RESPECT TO BLANKET EXEMPTION T O EDUCATIONAL INSTITUTIONS, WHEN THE AMENDMENT WAS MA DE BY THE FINANCE ACT, 2009, THE ACTIVITY OF THE EDUCA TION WAS KEPT OUTSIDE THE PURVIEW OF NEWLY INSERTED PROVISO. THUS, IMPLIEDLY, IT CAN BE SAID THAT, IT IS CLEAR THAT TH E LEGISLATURE HAS GIVEN GREAT SIGNIFICANCE TO THE UTILITY OF EDU CATION IN OUR COUNTRY. 3.9. FURTHER, IT IS NOTED IN THE CASE OF LIFE SHINES ED UCATIONAL & CHARITABLE TRUST (SUPRA) CHENNAI BENCH OF THE TRI BUNAL HELD THAT PRE-SCHOOLING SHALL FALL WITHIN MEANING AND SCOPE OF THE EDUCATION AS USED U/S 2(15). THUS, IN VIEW OF T HE AFORESAID DISCUSSION AND FACTS OF THIS CASE, WE DO NOT FIND A NY JUSTIFICATION IN THE VIEW ADOPTED BY THE LD. DIT TH AT PRE- SCHOOLING IS NOT PART OF EDUCATION ACTIVITY. IN OUR CONSIDERED VIEW PRE-SCHOOLING IS VERY MUCH INTEGRAL PART OF TH E TERM EDUCATION AS HAS BEEN ENVISAGED U/S 2(15) OF THE ACT AND WE HOLD SO. 3.10. WHETHER CHARGING OF FEE AND RETAINING SURPLUS AMOUNTS TO COMMERCIAL ACTIVITY, DISENTITLING AN ASS ESSEE FROM THE BENEFIT OF EXEMPTION U/S 11 AND 12: IT HAS BEEN MENTIONED BY THE LD. DIT THAT SINCE THE SCHOOL IS CHARGING FEE FOR ISSUE OF PROSPECTUS, SCHOOL UNIFOR MS, KITS AND ADMISSION FEES ETC., AND THUS, THE PRE-SCHOOL IS BE ING RUN LIKE A COMMERCIAL ACTIVITY AND THEREFORE, THE ASSESSEE S HOULD BE GREEN ACRES EDUCATION TRUST 10 REFUSED THE BENEFIT OF REGISTRATION. WE FIND THAT H ERE ALSO, LD. DIT HAS GONE WRONG ON LAW AS WELL AS ON FACTS. IT H AS NOT BEEN STIPULATED UNDER THE STATUTE THAT FOR THE PURPOSE O F GETTING THE BENEFIT OF EXEMPTION U/S 11 AND 12 BY THE EDUCATION AL INSTITUTIONS, THE ASSESSEE MUST CARRY OUT ALL ITS A CTIVITIES FREE OF COST I.E. WITHOUT CHARGING ANYTHING FROM ANYONE. RATHER AS PER SECTION 2(15), THE TERM CHARITABLE PURPOSE IN CLUDES INTER- ALIA EDUCATION. THUS THE INTENTION OF THE LEGISLATURE IS UNAMBIGUOUSLY CLEAR THAT CARRYING OUT THE ACTIVITY OF EDUCATION ITSELF IS CHARITABLE. THUS, WHEN THE CA RRYING OUT OF THE ACTIVITY OF EDUCATION ITSELF IS A CHARITABLE PURPOSE, THEN AT THE STAGE OF GRANTING REGISTRATION U/S 12A, LD. DIT IS REQUIRED TO EXAMINE ONLY THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. THUS, THE DIT MAY EXAMINE AT THIS STAGE THAT ACTIVI TIES OF THE TRUST ARE AS PER THE OBJECTS CONTAINED IN THE TRUST DEED OR ITS MEMORANDUM. HE IS NEITHER PERMITTED NOR OBLIGED UND ER THE LAW, TO GO BEYOND THAT AT THE STAGE OF REGISTRATION . 3.11. THE SECOND ASPECT TO BE EXAMINED IS WHETHER THE AMOUNT RECEIVED OR INCOME EARNED BY THE ASSESSEE FR OM CARRYING OUT OF THE EDUCATION ACTIVITIES ARE APPLIE D SOLELY FOR THE PURPOSE OF EDUCATION OR NOT. BUT, SINCE THE REG ISTRATION IS GRANTED AT THE VERY INCEPTION OF AN INSTITUTION, TH EREFORE THE LAW HAS NOT PUT THIS DUTY UPON THE SHOULDERS OF THE LD. CIT/DIT. THIS OBLIGATION HAS BEEN PUT BY THE LEGISL ATURE UPON THE SHOULDERS OF THE AO WHO SHALL EXAMINE THESE FAC TS AT THE STAGE OF ASSESSMENT OF THE TRUST AND IN CASE HE IS NOT SATISFIED WITH THIS ASPECT AND FIND THAT THE INCOME OF THE TR UST HAS BEEN GREEN ACRES EDUCATION TRUST 11 APPLIED FOR ACTIVITIES WHICH ARE NOT PERMITTED UNDE R THE LAW, AND THE SAME HAS NOT BEEN APPLIED FOR THE ACTIVITIE S FOR WHICH REGISTRATION HAS BEEN GRANTED, THEN THE BENEFIT OF EXEMPTION CAN BE DENIED BY THE AO IN ACCORDANCE WITH LAW. IT IS FURTHER NOTED BY US THAT THIS CONTROVERSY HAD BEEN ARISING EARLIER BECAUSE OF THE JUDGMENT OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF QUEENS EDUCATIONAL SOCIETY OF INDIA W HEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT IF AN EDU CATIONAL INSTITUTE EARNS ANY SURPLUS I.E. IF RECEIPTS OF THE INSTITUTE ARE MORE THAN IT EXPENDITURE THEN THE INSTITUTE SHALL L OOSE THE BENEFIT OF EXEMPTION UNDER THE INCOME TAX ACT. VARI OUS HIGH COURTS HAD TAKEN A CONTRARY VIEW. FINALLY THIS CONT ROVERSY HAS BEEN PUT TO REST BY HONBLE SUPREME COURT IN THE CA SE OF QUEENS EDUCATIONAL SOCIETY OF INDIA V. CIT 372 ITR 699(SC) WHEREIN HONBLE APEX COURT HAS NOT AGREED WITH THE JUDGMENT OF HONBLE UTTARAKHAND HIGH COURTS AND AGREED WITH THE JUDGMENTS OF OTHER HIGH COURT AND HELD THAT MERELY BECAUSE AN EDUCATIONAL INSTITUTE HAPPENS TO EARN SURPLUS TH EN BY THAT FACTS ITSELF IT WOULD NOT BE HELD THAT EDUCATIONAL INSTITUTE IS NOT CHARITABLE AND WILL NOT LOOSE THE BENEFIT OF EXEMP TION UNDER THE LAW BY THAT FACT ALONE. 3.12. THUS, KEEPING IN VIEW TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE FIND THAT LD. DIT HAD GONE WRONG ON LAW AS WELL AS FACTS, ON BOTH OF THE ABOVE ASPECTS. IN OUR VIEW, THE ASSESSEE TRUST IS CARRYING OUT THE ACTIVITY OF EDUC ATION AND IS THEREFORE ENTITLED FOR BENEFIT OF REGISTRATION U/S 12A AND WE DIRECT THE DIT TO GRANT THE BENEFIT OF REGISTRATION U/S 12A. GREEN ACRES EDUCATION TRUST 12 ACCORDINGLY, THE ASSESSEE IS HEREBY GRANTED THE BEN EFIT OF U/S 12A WITH EFFECT FROM THE DATE WHEN THE APPLICATION WAS FILED BY THE ASSESSEE. THE AO IS AT LIBERTY UNDER THE LAW TO EXAMINE THE ASPECT OF APPLICATION OF INCOME SOLELY FOR THE PURP OSE OF EDUCATION AND ALSO TO EXAMINE THAT THE ASSESSEE IS CARRYING OUT THE ACTIVITY OF EDUCATION ONLY AND AO IS ALSO P ERMITTED TO EXAMINE COMPLIANCE OF OTHER PROVISIONS OF THE LAW I N THIS REGARD AND ACCORDINGLY HE MAY DECIDE ABOUT THE GRAN TING OF BENEFIT OF EXEMPTION AT THE TIME OF ASSESSMENT IN D IFFERENT YEARS. IN VIEW OF THE SAME, APPEAL OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 24/06/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI