DDIT, Hyderabad V. Sri Gowtham Academy of Gen & Technical education, Hyderabad

ITA 526/HYD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3223 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARI LAL NAIK
• Assessee Lawyers: C N PRASAD
• Keywords: Tax effect
• Section: 260A; 195; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.526/HYD/2009 : ASSESSMENT YEAR 2006-07 DY. DIRECTOR OF INCOME TAX(EXEMPTION)-I, HYDERABAD VS M/S. SRI GOWTHAM ACADEMY OF GEN. & TECHNICAL EDUCATION, HYDERABAD (PAN AADTS 7203 A ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARILAL NAIK RESPONDENT BY : SHRI C.N.PRASAD O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2007-08 IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME- TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- (I) THE ORDER OF THE CIT(A) IS NOT ACCEPTABLE AS I T IS ERRONEOUS ON FACTS AND IN LAW. (II) THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT OBTAINING APPROVAL OF THE PRESCRIBED AUTHORITY IS MANDATORY AS PER THE PLAIN MEANING OF THE PROVISION S OF 10(23C)(VI) OF THE I.T. ACT AND IT DOES NOT CALL FO R ANY INTERPRETATION. (III) THE CIT(A) FAILED TO APPRECIATE THAT SECTION 10(23C) AS SUCH IS NOT A REPLACEMENT OF SECTION 10(22) AND (22 A) AS STATED IN THE APPELLATE ORDER BUT ONLY SUB-CLAUS ES (III)(AD) AND (III AC) ARE REPLACEMENTS OF THE ERST WHILE SEC.10(22) AND 10(22A) RESPECTIVELY. ITA NO.526/H/2009 M/S. SRI GOWTHAM ACADEMY OF GEN. & TECHNICAL EDUCATION, HYDERA BAD 2 (IV) THE CIT(A) OUGHT TO HAVE CONSIDERED THE FACT T HAT SUB CLAUSE (IV) AND (VIA) ARE ENTIRELY NEW PROVISIONS M EANT TO PROVIDE THE MONITORING MECHANISM THAT WAS LACKIN G IN THE EARLIER PROVISIONS. (V) THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT T HAT IT WAS SECTION 10(22) THAT PROVIDED FOR EXEMPTION OF T HE EDUCATIONAL INCOME OF THE TRUSTS, SOCIETIES ETC. AN D NOT SECTION 11. (VI) THE CIT(A) ERRED IN OBSERVING THAT SECTION 11 PROVIDES SUFFICIENT MONITORING MECHANISM TO CHECK THE ASSESSEES ACTIVITIES AND CONDITION OF SECTION 11 A RE AS THE CONCLUSION OF THE CIT(A) IS NOT FOUNDED ON SOUN D REASONING AND EVEN THE CITATION OF SUPREME COURT IN 195 ITR 8, IN FACT, PURPORTS JUST THE OPPOSITE VIEW . (VII) THE DECISION OF THE ITAT IN RAJASTHAN SIKSHA SAMITHI HAS NOT BEEN ACCEPTED IN PRINCIPLE BUT THE APPEAL H AS NOT BEEN PREFERRED BEFORE THE HIGH COURT U/S. 260A DUE TO THE FACT THAT THE TAX EFFECT IS BELOW THE MONETA RY LIMITS. (VIII) IN THE CASE OF ST. THERASAS SOCIETY, THE D ECISION OF THE ITAT HAS NOT BEEN ACCEPTED AND APPEAL HAS BEEN FILE D BEFORE THE HIGH COURT. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE DECISION OF THE TRIBUNAL IN ST. THERASAS SOCIE TYS CASE, RELIED UPON BY THE CIT(A), HAS NOT BEEN ACCEPTED BY THE DE PARTMENT AND AN APPEAL UNDER S.260A OF THE ACT HAS BEEN PREFERRE D BEFORE THE HON'BLE A.P. HIGH COURT. HE SUBMITTED THAT THE ASS ESSEE HAS NOT OBTAINED THE NOTIFICATION UNDER S.10(23C)(VI) OF TH E ACT AND THEREFORE, THE EXCESS OF INCOME OVER EXPENDITURE WA S RIGHTLY BROUGHT TO TAX BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER OF THE DDIT(E). THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A) AND HAS REFERRED TO THE RELEVAN T PORTIONS OF THE APPELLATE ORDER OF THE CIT(A) IN SUPPORT OF HIS SUB MISSIONS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CARE FULLY. WE FIND THAT IT IS NOW SETTLED WITH SERIES OF DECISION S OF THE HYDERABAD ITA NO.526/H/2009 M/S. SRI GOWTHAM ACADEMY OF GEN. & TECHNICAL EDUCATION, HYDERA BAD 3 BENCHES OF THE TRIBUNAL, AS IN THE CASE OF NATIONAL INSTITUTE OF TOURISM & HOSPITALITY (ITA NO.1203/HYD/2010) DATED 11 TH MARCH, 2011; IN THE CASE OF VARDHAMAN COLLEGE OF ENGINEERING, HYDERABAD(ITA NO.741/HYD/2009) DATED 8.4.2011; AND IN THE CASES OF RAVI RISHI EDUCATIONAL SOCIETY, HYDERABAD AND OTHERS (ITA NO.1289 TO 1291/HYD/2010 AND CROSS-OBJECTIONS THEREIN AND OTHERS) DATED 13.4.2011; THAT AN ASSESSEE CAN MAKE ALTERNATIVE CLAIM UNDER S.11 OF THE ACT AND IT IS N OT MANDATORY FOR THE ASSESSEE TO OBTAIN A NOTIFICATION UNDER S.10(23C)(V I) OF THE ACT. THE ISSUE BEING COVERED IN FAVOUR OF THE ASSESSEE WITH SERIES OF DECISIONS OF THE TRIBUNAL, WE HOLD THAT THE ASSESSEE CAN MAKE ALTERNATIVE CLAIM FOR EXEMPTION UNDER S.11 OF THE ACT AND THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A), ON THIS ISSUE, WE HOLD THA T NO INTERFERENCE WITH HIS ORDER IS CALLED FOR. 5. WE HOWEVER, FIND THAT THE HYDERABAD BENCH OF T HE TRIBUNAL IN DIRECTOR OF INCOME-TAX(EXEMPTION) V/S. VASAVI ACADEMY OF EDUCATION IN ITA NO.1449/HYD/2008, VIDE ORDER DA TED 4.2.2010, HAS HELD THAT AN EDUCATIONAL INSTITUTION IS ENTITLE D FOR EXEMPTION UNDER S.10(23C) OR UNDER S.11, IF NO DONATION WAS C OLLECTED FROM THE STUDENTS. WE BEING IN AGREEMENT WITH THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VASAVI ACADEM Y OF EDUCATION (SUPRA), DIRECT THE ASSESSING OFFICER TO VERIFY THE ASPECT OF DONATION, CAPITATION FEE ETC. IF ANY COLLECTED BY THE ASSESSE E, AND FURTHER DIRECT THAT IF IT IS FOUND THAT BESIDES FULFILLING OTHER P REREQUISITES FOR EXEMPTION UNDER S.11, THE ASSESSEE HAS NOT CHARGED ANY MONEY BY WHATEVER NAME IT IS CALLED, I.E. DONATION, BUILDING FUND, AUDITORIUM FEE ETC, OVER AND ABOVE THE PRESCRIBED FEE FOR THE ADMISSION OF ITA NO.526/H/2009 M/S. SRI GOWTHAM ACADEMY OF GEN. & TECHNICAL EDUCATION, HYDERA BAD 4 STUDENTS, THE ASSESSEE WOULD BE ENTITLED FOR EXEMPT ION UNDER S.11, EVEN THOUGH THE NOTIFICATION UNDER S.10(23C)(VI) OF THE ACT HAVE NOT BEEN RECEIVED BY IT. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 8.7.2011 SD/- SD/- (CHANDRA POOJARI) ( G.C. G UPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED THE COPY FORWARDED TO: 1. M/S. SRI GOWTHAM ACADEMY OF GEN. & TECHNICAL EDUCAT ION, 3 - 6 - 198 VASAVI SREEMUKH, HIMAYATNAGAR, HYDERABAD 2. DY. DIRECTOR OF INCOME TAX(EXEMPTION) I, HYDERABAD 3. CIT (A) - IV , HYDERABAD. 4. COMMISSIONER OF INCOME-TAX III, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S