ITO VI(2), Lucknow V. M/s M.G.Convent School Samiti, Lucknow

ITA 498/LKW/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5755 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-12-2013
• Assessment Year: misc
• Appeal Filed On: 18-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 498 & 499/LKW/2011 ASSESSMENT YEAR S : 2008 - 09 & 2007 - 08 INCOME TAX OFFICER VI(2) LUCK NOW V. M/S M. G. CONVENT SCHOOL SAMITI 56/21, SUJAN PURA, ALAMBAGH LUCKNOW PAN: AAHTS1060P (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. Y. P. SRIVASTAVA, D.R. RESPONDENT BY: SHRI. SUBHAM RASTOGI DATE OF HEARING: 18.12.2013 DATE OF PRONOUNCEMENT: 07.03.2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) ON COMMON GROUNDS THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN FAILING TO APPRECIATE THAT TH E ASSESSEE INSTITUTION HAS BEEN SET UP TO EARN PROFITS AND THEREFORE IT CANNOT BE SAID TO BE EXIST ING SOLELY FOR EDUCATIONAL PURPOSES AND HAS WRONGLY ALLOWED EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 10(23C)(II I AD) OF THE INCOME - TAX ACT, 1961 (HEREIN AFTER REFERRED IN SHORT 'THE ACT'). 2 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE SOCIETY IS ENGAGED IN IMPARTING EDUCATION FROM CLASS NURSERY TO 10 TH : - 2 - : STANDARD AND DULY REGISTERED WITH THE CBSE BOARD. THOUGH REGISTRATION UNDER SECTION 12A OF THE ACT WAS DENIED BY THE LD. COMMISSIONER OF INCOME - TAX, BUT THE ASSESSEE HAS CLAIMED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT WHICH WERE DENIED BY THE ASSESSING OFFICER HAVING OBSERVED THAT THE ASSESSEE SOCIETY IS UTILIZING ITS FUNDS FOR THE PURPOSES OTHER THAN CHARITABLE AND H ENCE IT CANNOT BE TERMED THAT THE FUNDS OF THE ASSESSEE SOCIETY HAS EXCLUSIVELY BEEN UTILIZED FOR THE EDUCATIONAL PURPOSES, THEREFORE, THE SOCIETY DOES NOT COME WITHIN THE PURVIEW OF SECTION 10(23C)(IIIAD) OF THE AC T. 3 . AGAINST THE DENIAL OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT COMPLETE DETAILS OF THE EDUCATIONAL INSTITUTION WERE FILED BEFORE THE ASSESSING OFFICER AND THE ASSE SSING OFFICER HAS MERELY CONSIDERED THE DISALLOWANCES MADE BY HIMSELF AND DID NOT ALLOW DEDUCTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT . HE HAS NOT POINTED OUT ANY ACTIVITY OTHER THAN CHARITABLE NOR DID HE BRING ANY COGENT EVIDENCE FOR DENYING DEDUCTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT . IT WAS FURTHER CONTENDED THAT THE ACTION OF THE ASSESSING OFFICER IS ARBITRARY AND AGAINST THE FACTS OF THE CASE AND PROVISIONS OF THE LAW. THE ASSESSEE HAS ALSO PLACED RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMEN TS. 4 . THE LD. CIT(A) HAS EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE MATERIAL PLACED BEFORE HIM AND BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) HAS ALLOWED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT HAVING OBSERVED THAT THE APPELLANT IS RUNNING A SCHOOL/COLLEGE IN AFFILIATION WITH CBSE, NEW DELHI AND IS EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT. HE HAS ALSO MADE AN OBSERVATION THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING THA T THE SURPLUS HAS BEEN USED FOR THE BENEFIT OF ANY INDIVIDUAL. : - 3 - : WHILE ADJUDICATING THE ISSUE , THE LD. CIT(A) HAS ALSO PLACED RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS. 5 . AGAINST THE FINDINGS OF THE LD. CIT(A), THE REVENUE HAS PREFERRED AN APPEAL BEFORE T HE TRIBUNAL AND PLACED HEAVY RELIANCE UPON THE ASSESSMENT ORDER. 6 . THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSING OFFICER HAS DENIED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT WITHOUT POINTING OUT ANY DEFECT IN T HE FUNCTIONING OF THE ASSESSEE SOCIETY OR ANY COGENT MATERIAL IN ORDER TO ESTABLISH THAT THE ASSESSEE SOCIETY WAS ENGAGED IN THE ACTIVITIES OTHER THAN EDUCATIONAL . BESIDES, HE HAS ALSO PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 7 . HAVING CAREFULLY EXA MINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER IN THE LAST FEW LINES OF HIS ORDER HAS OBSERVED THAT THE ASSESSEE SOCIETY WAS UTILIZING ITS FUNDS FOR THE PURPOSE OTHER THAN CHARITABLE. ON THE BASIS OF THIS OBSERVATION HE DENIED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANYTHING ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN THE ACTIVITIES OTHER THAN EDUCATIONAL AND ITS FUNDS WERE UTILIZED FOR ANY OTHER PURPOSES EXCEPT EDUCATIONAL PURPOSE , W HEREAS THE LD. CIT(A) HAS ESTABLISHED THE FACT THAT THE ASSESSEE SOCIETY HAS SET UP AN EDUCATIONAL INSTITUTION IN THE FORM OF SCHOOL/COLLEGE FROM NURSERY CLASS TO 10 TH STANDARD AND WAS DULY RE G I STERED WITH THE CBSE BOARD, NEW DELHI. IT WAS ALSO STATED BY THE ASSESSEE THAT ALL THE DETAILS WERE AVAILABLE WITH THE ASSESSING OFFICER, BUT HE DID NOT APPRECIATE THE FACT. IT WAS ALSO CONTENDED BEFORE THE LD. CIT(A) THAT THE SURPLUS FUNDS WERE UTILIZED FOR EDUCATIONAL PURPOSES. THEREFORE, THERE IS NO MATERIAL , ON RECORD ON THE BASIS OF WHICH IT CAN BE PRESUMED OR ASSUMED THAT THE ASSESSEE SOCIETY WAS ENGAGED IN ANY OTHER ACTIVITY EXCEPT EDUCATIONAL ONE . : - 4 - : THE LD. CIT(A) HAS EXAMINED THE ISSUE IN DETAIL IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS AND HAS NARRATED THE SAME IN PARA 5 OF HIS ORDER. SINCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER S OF THE LD. CIT(A), WE CONFIRM THE SAME. 8 . IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDE R PRONOUNCED IN THE OPEN COURT ON 07.03.2014 SD/. SD/. [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/03/2014 JJ: 0403 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR