IMC of ITI Dadri, Dadri V. ITO (Exemptuion) Ward, Ghaziabad

ITA 529/DEL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9626 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 24-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: ASHWINI GOYAL
• Keywords: Gift; Depreciation
• Section: 12AA; 201; 13; 101

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 529/DEL/2019 : ASSTT. YEAR : 2015-16 IMC OF ITI DADRI, C/O GOVERNMENT ITI DADRI, CHOULAS ROAD, DADRI, G.B. NAGAR, U.P.-203207 VS ITO (EXEMPTION) WARD, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. A A AAI5190A ASSESSEE BY : SH. ASHWINI GOYAL, CA REVENUE BY : SH. PRAKASH DUBEY, SR. DR DATE OF HEAR ING: 21 . 01 .20 2 1 DATE OF PRONOUNCEMENT: 10 .03 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), GHAZIABAD DATED 17.10. 2018. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE ASSESSEE HAS NOT GIVEN REASONABLE OPPORTUNITY FOR SHOWING THE CAUSE BEFORE THE LEARNE D ASSESSING OFFICER AND CIT(A). 2. THAT THE REASONABLE OPPORTUNITY TO HEARING OF TH E CASE WAS NOT GIVEN BY THE LEARNED APPELLATE AUTHORITY I.E. COMMISSIONER APPEAL IN THE CIRCUMSTANCES OFF THE CASE. THE LEARNED OFFICER HAV E RELIED THE BARE LANGUAGE OFF THE ACT AS WRITTEN IN THE INCOME TAX ACT, BUT A LARGER VIEW MAY BE TAKEN FOR GRANTING BENEFIT TO THE ASSESSEE. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 2 3. TO MAKE CONCISE THE APPEAL AND BETTER UNDERSTANDING, THE FACT OF THE CASE WHICH CONTAINS THE GROUNDS OF APPEAL HAS NOT BEEN REPRODUCED HERE AGAIN. 4. THAT THE ASSESSEE CRAVES INDULGENCE OF THE APPELLANT AUTHORITY TO URGE ANY FURTHER GROUNDS AT THE TIME OF HEARING. 5. THAT IT IS PRAYED AND REQUESTED THAT THE APPEAL MAY KINDLY BE ENTERTAINED FOR HEARING WITHOUT PAYMENT OFF DISPUTED DEMAND BECAUSE THE ASSESSEE HAS NOT BEEN GIVEN REASONABLE OPPORTUNITY OF HEARD. 3. THE ASSESSEE IS A REGISTERED SOCIETY UNDER U.P. SOCIETY REGISTRATION ACT VIDE REGISTRATION NO. 638 OF 2011- 12 DATED 29.08.2011 HAVING VALIDITY UPTO 28.08.2016. THE SOC IETY HAS BEEN GRANTED REGISTRATION U/S 12AA OF THE INCOME TA X ACT, 1961. 4. THE AIMS & OBJECTIVES OF THE SOCIETY ARE AS UNDE R: A. AIMS OF THE SOCIETY: (I) THE MAIN OF THE SOCIETY IS TO ASSIST IN IMPROVE MENT OF STANDARD OF VOCATIONAL TRAINING AND SKILL DEVELOPME NT IN THE COUNTRY AS A WHOLE. (II) THE SOCIETY HAS BEEN FORMED WITH THE SPECIFIC AIM OF UP GRADATION OF THE INDUSTRIAL TRAINING INSTITUTE (ITI ) DADRI INTO A CENTRE OF EXCELLENCE IN SUCH A WAY THAT THE TRAININ G PROVIDED IN THE ITI IS IMPROVED AND BECOMES DEMAND DRIVEN LEADI NG TO BETTER EMPLOYABILITY OF THE PASSING OUT GRADUATES. (III) IN GENERAL THE SOCIETY SHALL FUNCTION ON NO P ROFIT-NO PRINCIPLE. HOWEVER ITS AFFAIRS SHALL BE MANAGED IN SUCH A WAY ITA NO. 529/DEL/2019 IMC OF ITI DADRI 3 THAT IT BECOMES SELF SUPPORTING IN DUE COURSE AND I S ABLE TO MEET AIL ITS EXPENSES AND LIABILITIES ON ITS OWN. B. THE MAIN OBJECTS TO BE PURSUED BY THE SOCIETY AR E: (I) TO MANAGE AFFAIRS OF THE ITI DADRI ACCORDING TO THE TERMS AND CONDITIONS SET OUT IN A MEMORANDUM OF AGREEMENT TO BE SIGNED AMONG THE CENTRAL GOVERNMENT, STATE GOVERNME NT AND INDUSTRY PARTNER. THE REPRESENTATIVE OF THE INDUSTR Y PARTNER SHALL SIGN THIS MEMORANDUM OF AGREEMENT ON BEHALF O F THE SOCIETY ALSO AS ITS CHAIRMAN. (II) TO DEVELOPMENT AN INSTITUTE DEVELOPMENT PLAN ( IDP) FOR THE ITI DADRI. THE IDP SHALL, INTERLAID, DEFINE LONGS-T ERM GOALS OF THE INSTITUTE, THE ISSUES AND CHALLENGES FACING THE INSTITUTE AND THE STRATEGIES FOR DEALING WITH THEM. IT SHALL SET TARGETS FOR INSTITUTIONAL IMPROVEMENT, KEY PERFORMANCE INDICATO RS, AND DETAIL THE INFRASTRUCTURAL & FINANCIAL REQUIREMENT WITH YEAR WISE BREAK UP TO MEET THE NEEDS. (III) TO ASSESS EMERGING SKILL REQUIREMENT IN THE R EGION AND SUGGEST CHANGES IN THE TRAINING COURSES BEING RUN I N THE ITI. (IV) TO OBTAIN SHORT TERM, MEDIUM TERM AND LONG TER M REQUIREMENT OF SKILLED WORK FORCE AND TAKE STEPS TO PRODUCE GRADUATES IN THE ITI ACCORDINGLY. (V) TO IDENTIFY SHORT-TERM TRAINING COURSES, WHICH CAN BE OFFERED IN THE ITI, DEVELOP INFRASTRUCTURE FOR THE SAME, ORGANIZE AND RUN THE COURSES AND CHARGE SUITABLE FEES FOR TH E SAME. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 4 (VI) TO REVIEW TRAINING NEEDS OF INSTRUCTORS AND ADMINISTRATIVE/OFFICE STAFF OF THE ITI AND ARRANGE FOR THEIR TRAINING PROGRAM. (VII) TO PLAN & ESTABLISH SUCH PRODUCTION/SERVICE C ENTERS IN THE ITI WHICH HELP THE TRAINEES DEVELOP/LEARN THEIR SKI LLS AND ALSO GENERATE FUNDS FOR THE SOCIETY TO BE USED IN THE TA SK OF UP GRADATION. (VIII) TO ADOPT INNOVATIVE MEASURES LIKE PROVIDING CONSULTANCY/ ADVISORY SERVICES TO THE INDUSTRY SO AS TO GENERATE REVENUE WHICH CAN BE UTILIZED FOR DEVELOPMENT OF TRAINING A CTIVITIES IN THE ITI. (IX) TO APPOINT CONTRACT FACULTY AS PER NEED AS PER RULES REGULATIONS OF THE SOCIETY. (X) TO ASSESS THE REQUIREMENT OF FUNDS FOR THE ITI AND MAKE RECOMMENDATIONS TO THE STATE GOVERNMENT ON THE FUND S PROVIDED BY IT TO THE ITI OUT OF ITS ANNUAL BUDGET. XI) TO MAKE EXPENDITURE OUT OF THE FUNDS OF THE SOC IETY, INCLUDING INTEREST FREE LOAN RECEIVED FROM THE CENT RAL GOVERNMENT UNDER THE SCHEME UP GRADATION OF 1396 GOVERNMENT ITIS THROUGH PUBLIC PRIVATE PARTNERSHIP , AS PER PRESCRIBED TERMS AND CONDITIONS. (XII) TO SET UP PLACEMENT CELL IN THE ITI TO GUIDE /HELP THE GRADUATES IN EMPLOYMENT/SELF EMPLOYMENT. (XIII) TO NETWORK, INTERACT, ESTABLISH AND MAINTAI N WORKING RELATIONS WITH INSTITUTES WITHIN AND OUTSIDE VOCATI ON TRAINING ITA NO. 529/DEL/2019 IMC OF ITI DADRI 5 SYSTEM AND PARTICIPATE IN RELATED ACTIVITIES SO AS TO INCREASE AWARENESS IN TRAINEES AND TRAINERS IN THE AREA OF V OCATIONAL TRAINING. (XIV) TO NETWORK AND INTERACT WITH LOCAL INDUSTRY CHAMBERS, OTHER INDUSTRY ASSOCIATIONS, EMPLOYMENT EXCHANGES, LEAD BANKS, OTHER GOVERNMENT DEPARTMENT AND UNDERTAKE MEASURES, LIKE JOB FAIRS, SO AS TO INCREASE THE EMPLOYABILITY OF ITI G RADUATES. (XV) TO UNDERTAKE MEASURES TO ACHIEVE TARGET KEY P ERFORMANCE INDICATORS SET OUT THE TRIPARTITE MEMORANDUM OF AGR EEMENT AS REFERRED IN THE PARA (I) ABOVE. (XVI) TO ORGANIZE SKILL COMPLETIONS IN THE ITI, 'T AKE PART IN OTHER SKILL COMPETITIONS INCLUDING STATE/NATIONAL/WORLD S KILL COMPETITIONS. (XVII) TO UNDERTAKE PUBLICITY AND OTHER MEASURES, L IKE ORGANIZING SEMINARS IN SCHOOLS FOR POTENTIAL CANDID ATES FOR ITIS, TO INCREASE AWARENESS ABOUT VOCATIONAL TRAINING AND ALSO TO CREATE A BETTER IMAGE OF VOCATIONAL TRAINING COURSE S. (XVIII) TO PROMOTE MEASURES SO AS TO INCREASE THE CAPACITY ITI BY ORGANIZING SECOND & THIRD SHIFT IN THE ITI. (XIX)TO DETERMINE ADMISSION IN THE ITI IN THE TO TH E EXTENT PROVIDED IN THE MEMORANDUM OF AGREEMENT REFERRED TO IN PARA 3B(I) ABOVE. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 6 B. THE OBJECTS INCIDENTAL OR ANCILLARY TO ATTAINMEN T OF MAIN OBJECTS OF THE SOCIETY: (I) TO MAKE PROVISION IN THE ITI, SO THAT ANY OF TH E SERVICES AS MENTIONED IN THE MAIN OBJECTS MAY BE RENDERED. (II) TO SET UP SUITABLE MECHANISM OF GETTING INFORM ATION ON LONG TERM, MEDIUM TERM AND SHORT SKILL REQUIREMENT IN TH E REGION AND PROVIDE THE SAME TO THE STATE AND CENTRAL / GOV ERNMENT. (III) TO INSTITUTE AND AWARD PRIZES, MEDAL AND FELL OWSHIPS, IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SO CIETY. (IV) TO AWARD CERTIFICATES TO THOSE HAVING SUCCESSF ULLY COMPLETED THEIR RESPECTIVE TRAINING COURSES OTHER T HAN COURSES UNDER NCVT & SCVT. (V) TO MAINTAIN A FUND TO WHICH THE FUNDS PROVIDES BY CENTRAL GOVERNMENT / STATE GOVT. AND ANY OTHER AMOUNT RECEI VED IN THE FORM OF AIDS, GRANTS, AND GIFTS, DONATIONS, BENEFAC TIONS, BEQUEATH OR TRANSFERS, FEES, CHARGES WILL BE CREDIT ED IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SO CIETY. (VI) TO ENSURE IMPLEMENTATION OF VARIOUS ACTIVITIES OF THE SCHEME REFEREED IN PARA 3B(XI) IN TIME BOUND MANNER SO AS TO ADHERE TO THE TIME SCHEDULE AGREED IN THE IDP. (VII) TO MONITOR THE PROGRESS OF IMPLEMENTATION OF THE ABOVE SCHEME AT THE INSTITUTE LEVEL AND FURNISH PERIODICA L REPORTS TO THE AUTHORITIES AS PER THE DECIDED SCHEDULE. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 7 (VIII) TO SETUP SUITABLE MECHANISM TO OBTAIN REGUL AR FEEDBACK FROM TRAINEES AND INDUSTRY ABOUT QUALITY OF TRAININ G AND USING THE FEEDBACK FOR IMPROVEMENT IN THE TRAINING DELIVE RY. (IX) TO DEVELOP SUITABLE SUSTAINABLE MECHANISM TO TRACE THE CAREERS OF THE GRADUATES FOR AT LEAST THREE YEARS A FTER PASSING OUT. (X) TO ADVISE STATE GOVT. TO CREATE ADMINISTRATIVE , TECHNICAL, MINISTERIAL AND OTHER POSTS IN ACCORDANCE WITH THE AGREED INSTITUTE DEVELOPMENT PLAN. (XI) TO ARRANGE AND PROVIDE SUFFICIENT AMOUNT AS C ORPUS FUND SO THAT THE SOCIETY MAY PROCEED FOR ACHIEVING ITS A IMS AND OBJECTS CONFIDENTLY. (XII) TO SOLICIT, RECEIVE AND ACCEPT FUNDS, AIDS, GRANTS, SERVICES AND CONTRIBUTIONS IN KIND FROM INDIVIDUALS, COMPANI ES, FOUNDATIONS, GOVERNMENTAL DEPARTMENTS AGENCIES, OTH ER AGENCIES AND SOURCES AND IN ACCORDANCE WITH THE RUL ES AND REGULATIONS OF THE SOCIETY, IN FURTHERANCE OF THE A IMS AND OBJECTS OF THE SOCIETY, SUBJECT TO THE APPLICABLE L AWS. (XIII) TO ACQUIRE, PURCHASE, HEIR, TAKE ON LEASE, EXCHANGE, CONSTRUCT OR ACQUIRE IN ANY OTHER MANNER PROPERTY M OVABLE OR IMMOVABLE WHICH MAY BE NECESSARY OR CONVENIENT FOR THE OBJECTS OF THE SOCIETY. (XIV) TO BORROW AND RAISE MONIES ON MORTGAGES, PRO MISSORY NOTES OR OTHER SECURITIES FOUNDED OR BASED UPON ALL OR ANY OF THE PROPERTIES AND ASSETS OF THE SOCIETY OR WITHOUT ANY ITA NO. 529/DEL/2019 IMC OF ITI DADRI 8 SECURITIES PROVIDED THAT PRIOR APPROVAL IN WRITING OF THE STATE GOVERNMENT IS OBTAINED IN THAT BEHALF. (XV) TO OPEN AND OPERATE BANK ACCOUNTS IN PUBLIC S ECTOR BANK, DRAW, ACCEPT, ENDORSE, DISCOUNT AND NEGOTIATE CHEQU ES, BILLS OF EXCHANGES, PROMISSORY NOTES AND OTHER NEGOTIABLE IN STRUMENTS. (XVI) TO INVEST FUNDS OF THE SOCIETY IN SUCH MANNE R, AS PROPOSED BY THE SOCIETY AND IN ACCORDANCE WITH ITS RULES AND REGULATIONS. (XVII) TO CREATE DEPRECIATION FUND, SINKING FUND, I NSURANCE FUND, WHETHER FOR DEPRECIATION OR FOR REPAIRING, IMPROVIN G, REPLACING, RENEWING, FINANCING, EXTENDING, OR MAINTAINING ANY OF THE PROPERTIES OF THE SOCIETY OR FOR ANY OTHER PURPOSE WHAT SO EVER DEEMED BENEFICIAL TO THE SOCIETY AND AS PER RULES A ND REGULATIONS OF THE SOCIETY. (XVIII) TO PAY ALL EXPENSES PRELIMINARY OR INCIDENT AL TO FORMATION AND REGISTRATION OF THE SOCIETY AND FOR ITS MANAGEM ENT AND ADMINISTRATION OUT OF ITS FUND. (XIX) TO PAY OUT OF THE FUNDS OF THE SOCIETY OR OUT OF ANY PARTICULAR PART OF SUCH FUNDS ALL EXPENSES FOR CARR YING OUT ANY OF THE OBJECTS OF THE SOCIETY INCLUDING PAYMENTS OF SALARIES AND PAYMENTS TO PERSONS EMPLOYED OR HIRED, IF ANY. (XX) TO IMPOSE AND RECOVER FEES AND CHARGES FOR THE SERVICES RENDERED BY THE SOCIETY. (XXI) TO MEET EXPENSES OF THE SOCIETY OUT OF ITS F UNDS TO BUY MATERIALS/STORE THAT MAY BE REQUIRED TO MAINTAIN TH E SERVICES OF ITA NO. 529/DEL/2019 IMC OF ITI DADRI 9 THE SOCIETY AS MENTIONED IN THE MAIN OBJECTS AS WEL L AS BUILDING AND EQUIPMENT BELONGING TO THE SOCIETY. (XXII) TO NEGOTIATE AND ENTER INTO CONTRACT ON BEHA LF OF THE SOCIETY AND VERY OR RESCIND SUCH CONTRACTS AND SIGN , EXECUTE AND DELIVER SUCH CONTRACTS DEEDS AND INSTRUMENTS AS MAY BE NECESSARY. (XXIII) TO CONSTITUTE SUCH COMMITTEE OR COMMITTEES AS IT MAY DEEM FIT FOR THE DISPOSAL OF ANY BUSINESS OF THE SO CIETY AND TENDERING ADVICE IN ANY MATTER PERTAINING TO THE SO CIETY. (XXIV) TO DELEGATE ANY OF ITS POWERS TO THE GOVERNI NG COUNCIL OF THE SOCIETY ANY OF THE COMMITTEE OR COMMITTEES CONS TITUTED BY IT. (XXV) TO PROMOTE, SUPPORT, TAKE-OVER, AFFILIATE, AM ALGAMATE OR MERGE WITH ANY OTHER INSTITUTION OR BODY HAVING OBJ ECT WHOLLY OR IN PART SIMILAR TO THOSE OF THE SOCIETY, WITH THE P RIOR APPROVAL OF THE STATE GOVERNMENT. (XXVI) TO MAKE RULES AND REGULATIONS AND BYE-LAWS F OR THE CONDUCT OF THE AFFAIRS OF THE SOCIETY AND TO ADD, A MEND, VARY OR RESCIND THEM FROM TIME TO TIME. (XXVII) TO PRINT, PUBLISH; DISTRIBUTE REPORTS, STUD IES AND BROCHURES AND OTHER PUBLICATIONS PERTAINING TO THE ACTIVITIES O THE SOCIETY. (XXVIII) TO PROMOTE OR ASSOCIATE WITH ANY OTHER PER SON, AUTHORITY OR BODY WHETHER INCORPORATED OR OTHERWISE FOR ITA NO. 529/DEL/2019 IMC OF ITI DADRI 10 ATTAINMENT OF THE OBJECTS HEREIN STATED AND ON THAT BEHALF ALSO TO INVEST FUNDS OF THE SOCIETY. (XXIX) TO SUBSCRIBE MONEY FOR ANY NATIONAL, CHARITA BLE AND BENEVOLENT OBJECT USEFUL FOR GENERAL PUBLIC OR FOR ANY EXHIBITION TO ANY INSTITUTION, CLUB, SOCIETY OR FUND, BUT NOT INTENDED FOR ANY POLITICAL PARTY OR CLASS WITH PRIOR APPROVAL OF STATE GOVERNMENT. (XXX) TO INSTITUTE, CONDUCT, DEFEND OR COMPROMISE L EGAL PROCEEDINGS BY OR AGAINST THE SOCIETY OR ITS OFFICE RS OR EMPLOYEES IN RESPECT OF ANY MATTERS AFFECTING THE S OCIETY DIRECTLY INDIRECTLY. (XXXI) TO DO ALL SUCH OTHER LAWFUL THINGS AS ARE CO NDUCTIVE INCIDENTAL TO THE ATTAINMENT OF ANY OR ALL OF THE A BOVE OBJECTS AND FOR FURTHERING THE PURPOSES AND GROWTH OF THE S OCIETY OR ITS RESOURCES. 5. THE SOCIETY HAS RECEIVED INTEREST FREE LOAN OF R S.2.5 CRORES FROM THE MINISTRY OF LABOUR & EMPLOYMENT RE-PAYABLE FROM THE 11 TH YEAR AFTER RECEIPT OF THE LOAN. THE AMOUNT HAS BEE N KEPT IN THE BANK IN FORM OF FDS AND FIXED DEPOSIT ON WHICH THE ASSESSEE HAS EARNED INTEREST INCOME OF RS.23,67,659/-. THE A SSESSEE HAS CLAIMED THE INTEREST AMOUNT EXEMPT FROM TAX U/S 10(23C)(IIIAB). THE SAID INCOME HAS BEEN BROUGHT TO TAX BY THE ASSESSING OFFICER ON THE GROUNDS THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAB) AND ALSO HELD THAT THE EXPENSES INCURRED ARE NOT FOR THE PURPOSE OF THE AS SESSEE SOCIETY. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 11 6. THE LD. CIT (A) HELD THAT AS PER THE BARE READIN G OF THE PROVISIONS OF THE ACT AND THE AFFAIRS OF THE SOCIET Y, THE ASSESSEE IS NOT COVERED UNDER THE PROVISIONS OF SECTION 10(2 3C)(IIIAB). THE LD. CIT (A) HELD THAT THE ASSESSEE IS A SOCIETY ENGAGED IN IMPROVEMENT OF STANDARD OF VOCATIONAL TRAINING UNDE R PUBLIC PRIVATE PARTNERSHIP SCHEME BUT DO NOT FULFILL THE P RIMARY CONDITIONS FOR CLAIM U/S 10(23C)(IIIAB). 7. THE MAIN ARGUMENT TAKEN BEFORE US BY THE LD. COU NSEL THAT IMPARTING EDUCATION AND WORD EDUCATION HAS TO BE EX AMINED IN A BROADER SENSE CONSISTING OF ANY IMPROVEMENT IN TH E INTELLECTUAL AND ANALYTICAL ABILITIES. IT WAS ARGUE D THAT THE WORD EXISTING AS IMPARTING, THE SOCIETY ASSISTS FINA NCIALLY THE ITI DADRI FOR THE UP-GRADATION PROCESS UNDER THE CENTRA L GOVERNMENT SCHEME UP-GRADATION OF 1396 GOVERNMENT ITIS THROUGH PUBLIC PRIVATE PARTNERSHIP. IT WAS ARGUED THAT THE SOCIETY EXISTING FOR THE PURPOSE OF EDUCATION AND U P-GRADATION OF THE INSTITUTIONS ITIS HAS TO BE ALLOWED THE BENE FIT OF THE PROVISIONS OF SECTION 10(23C)(IIIAB) OF THE ACT. TH E LD. AR RELIED ON THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELO W AND ALSO ON THE PAPER BOOK PAGE NOS. 1 TO 236. THE MAIN ARGU MENTS OF THE LD. AR ARE AS UNDER: AS PER INCOME TAX ACT, SECTION 10(23C)(IIIAB) PROVIDES THAT ANY INCOME OF ANY INCOME OF ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXI STING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT IS ELIGIBLE FOR EXEMPTION, PROVIDED IT IS WHOLLY OR SUBSTANTIALLY F INANCED BY THE GOVERNMENT. ITA NO. 529/DEL/2019 IMC OF ITI DADRI 12 THE ABOVE SECTION MAY BE BIFURCATED INTO FOLLOWING TWO CONDITIONS, WHICH YOUR GOODSELF HAS BEEN CONSIDERED NAMELY, 1. ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE OF PRO FIT. 2. IT IS WHOLLY OR SUBSTANTIALLY FINANCED BY GOVER NMENT. THE CONDITION 1 WHICH IS STATED ABOVE WHICH YOUR GO ODSELF HAS BEEN INTERPRETED IN ONE WORD - IMPARTING OF EDUCATION MA Y NOT BE ACCEPTED. TO FURTHER ANALYZE, WE FURTHER DIVIDE THE CONDITION ONE INTO PARTS, THE TWO WORDS COMES WHICH HAVE VERY BIG IMPORTANCE, (I) EXISTING (II) EDUCATIONAL PURPOSE. THE WORD EXISTIN G DEFINE AS IN EXISTENCE OR OPERATION AT THE CURRENT TIME BY GOOGL E & SEVERAL DICTIONARIES. THE WORD EXISTING WHICH YOUR GOODSELF HAS BEEN CONS IDERED AND INTERPRETED AS IMPARTING WOULD ONLY LEAD TO A NARRO W SCOPE TO THE UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION AS A WH OLE, WHICH MAY THE PARLIAMENT NOT BEEN PRESUMED. IF THE PARLIAMENT HAD THOUGHT THE EXEMPTION TO BE LIMITED ONLY TO THE INSTITUTES WHO IMPART, BUT NOT TO THOSE WHICH NOT IMPART BUT SUPPORT OR IMPROVE THE I NSTITUTE, THE WORD EXISTING WOULD NOT BE PLACED IN SECTION BUT SO ME MORE SUITABLE WORK LIKE IMPARTING WOULD BE GIVEN. THUS IN THE LIGHT OF ABOVE, THE WORD EXISTING COULD NOT BE CURTAILED TO JUST IMPARTING BUT IT MEANS IN EXISTENCE. THE WORD EDUCATIONAL PURPOSE, WHICH YOUR GOODSELF HAS BEEN CONSIDERED & INTERPRETED AS ONLY EDUCATION MAY NOT BE ACCEPTED. THE ONLY WORD E DUCATION WHICH YOUR GOODSELF HAS BEEN CONSIDERED WOULD DEFEAT THE PURPOSE OF SECTION. THE PARLIAMENT HAD THOUGHT AND COVERED LAR GE SCOPE OF INSTITUTION, IT NOT ONLY COVER THOSE WHICH PROVIDE EDUCATION BUT ALSO TO THOSE WHICH EXIST FOR PURPOSE OF EDUCATION. SO I N THE LIGHT OF ABOVE, WE WANT TO SUBMIT THAT THE IMC OF ITI FULFIL LS BOTH THE ITA NO. 529/DEL/2019 IMC OF ITI DADRI 13 CONDITIONS OF SECTION 10(23C)(IIIAB). SO REQUESTED THAT EXEMPTION MAY BE ALLOWED. 8. WE HAVE GONE THROUGH THE ASSESSMENT ORDER, ORDER OF THE LD. CIT (A) AND THE PAPER BOOK FILED. WE HAVE ALSO GONE THROUGH THE BALANCE SHEETS, INCOME AND EXPENDITURE, STATEME NT OF THE ASSESSEE WHEREIN THE INCOME SHOWN IS FROM INTEREST RECEIVED ON SAVINGS, FIXED DEPOSITS AND FDS WHEREAS EXPENDITURE IS ON ACCOUNT OF EXPENSES VIZ. RS.2,00,000/- ON ACCOUNT O F GARDEN EXPENSES, RS.4,92,000/- ON FACULTY SALARY, RS.3,50, 000/- ON ACCOUNT OF PEON AND SECURITY ETC. THE EXPENSES ARE ON THE SIMILAR PROPORTION FOR THE YEAR ENDING 2016 AND 201 7. THE DETAILS FURNISHED BY THE ASSESSEE DO NOT MENTION ANYTHING ABOUT THE ACTUAL WORK UNDERTAKEN BY THE SOCIETY HOW AND WHAT ROLE HAS BEEN PLAYED BY THE SOCIETY IN IMPROVING TH E ITIS. 9. IN THE BACKGROUND OF THESE DETAILS, THE PROVISIO NS OF THE ACT ARE EXAMINED VIS--VIS THEIR APPLICABILITY TO T HE ASSESSEE BEFORE US. 10. SECTION 10(23C)(IIIAB) OF THE INCOME TAX ACT RE ADS AS UNDER: INCOMES NOT INCLUDED IN TOTAL INCOME: 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YE AR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOW ING CLAUSES SHALL NOT BE INCLUDED. 23C. ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF (IIIAB). ANY UNIVERSITY OR OTHER EDUCATIONAL INSTIT UTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT, ITA NO. 529/DEL/2019 IMC OF ITI DADRI 14 AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY TH E GOVERNMENT. 11. A) WHETHER THE ASSESSEE IS A UNIVERSITY WE FI ND THAT THE ASSESSEE IS NOT A UNIVERSITY RECOGNIZED /NOT RECOGN IZED BY THE UGC. B) WHETHER THE ASSESSEE IS AN EDUCATIONAL INSTITUTI ON WE FIND THAT THE ASSESSEE IS NOT AN EDUCATIONAL INSTIT UTION. C) WHETHER THE ASSESSEE IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT - THE ASSESSEE HAS RECEIVED INTER EST FREE LOAN WHICH IS REPAYABLE AFTER 10 YEARS. THE AS SESSEE HAS NOT RECEIVED ANY GRANT, GRANT IN AID OR FINANCI AL ASSISTANCE, HENCE IT CANNOT BE SAID THAT THE ASSESS EE IS FINANCED SUBSTANTIALLY BY THE GOVERNMENT AS THE FAC TS PROVED THAT THE ASSESSEE HAS GOT ONLY REPAYABLE LOA N FROM THE GOVERNMENT. 12. FURTHER, WE HAVE GONE THROUGH THE VARIOUS JUDGM ENTS TO EXAMINE WHETHER THE ASSESSEE IS AN EDUCATIONAL INST ITUTE WITH REGARD TO THE SECTION 10(23C)(IIIAB). 13. THE INTERPRETATION OF THE WORD EDUCATION BY H ONBLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE, LOKA SIK SHANA TRUST V CIT [1975] 101 ITR 234 - THE WORD EDUCATION H AS BEEN USED TO DENOTE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IN PREPARATION FOR THE WORK OF L IFE AND IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED, WHICH LED TO THE UNDERSTANDING THAT ONLY INSTITUTIONS AFFILIATED TO BOARDS AND UNIVERSITIES PROVIDING ITA NO. 529/DEL/2019 IMC OF ITI DADRI 15 SCHOOLING WHICH RESULTED IN A DEGREE OR DIPLOMA. TH E EDUCATION ALSO INCLUDED PRIMARY EDUCATION AS SUCH EDUCATION W AS A BACKWARD INTEGRATION TO NORMAL SCHOOLING. 14. THE CASE OF SOLE TRUSTEE, LOKA SIKSHANA TRUST V CIT (SUPRA) HAS BEEN THE YARDSTICK FOR INTERPRETATION O F THE WORD EDUCATION. THE RATIO BASICALLY BOILS DOWN TO (I) INSTITUTES AFFILIATED TO BOARDS AND UNIVERSITIES PROVIDING SCH OOLING WHICH RESULTED IN A DEGREE OR DIPLOMA. (II) PRIMARY EDUCA TION AS WAS A BACKWARD INTEGRATION TO NORMAL SCHOOLING. 15. THE HONBLE GUJARAT HIGH COURT CONSIDERED IDENT ICAL ISSUE IN THE CASE OF SAURASHTRA EDUCATION FOUNDATION V. C IT [2005] 273 ITR 139/[2004] 141 TAXMAN 26 (GUJ) AND HELD THA T ALL KINDS OF EDUCATION WOULD NOT FALL WITHIN THE MEANIN G OF SECTION 2(15) OF THE ACT, UNLESS THE TRAINING, INSTRUCTION, ETC. RESULTS IN GRANT OF A DIPLOMA OR DEGREE BY A UNIVERSITY OR A G OVERNMENTAL AGENCY. 16. VARIOUS COURTS HAVE HELD THAT INSTITUTIONS ALLI ED TO EDUCATIONAL INSTITUTIONS WHICH WERE PROVIDING NORMA L SCHOOLING WERE ALSO EDUCATIONAL IN NATURE. INSTITUTION CONDUC TING EXAMS FOR DIPLOMA AND DEGREE COURSES WERE ALSO TREATED AS EDUCATIONAL IN NATURE. IT HAS ALSO BEEN HELD THAT ADDITIONAL TR AINING OR COURSES SHALL ALSO BE HELD AS EDUCATION PROVIDED SU CH COURSES ARE CONDUCTING SOME PRIMARY EDUCATIONAL ACTIVITY WH EREAS STANDALONE SUCH COURSES CANNOT BE TREATED AS EDUCAT ION FOR THE PURPOSE OF INCOME TAX ACT. 17. WE FIND THAT THE SOCIETY HAS NOT BEEN REGISTERE D OR AFFILIATED TO ANY BOARD OR UNIVERSITY OR ANY ORGANI ZATION ITA NO. 529/DEL/2019 IMC OF ITI DADRI 16 IMPARTING EDUCATION AS DEFINED BY THE HONBLE SUPRE ME COURT. THERE IS A SWEEPING DIFFERENCE IN ACCORDING THE ANY ASSESSEE TO THE PROVISIONS OF SECTION 12AA AND SECTION 10(23C)( IIIAB). THE CONDITIONS AND REQUIREMENTS OF REGISTRATION UNDER S ECTION 12AA AND THE CONDITIONS AND PREREQUISITES FOR THE CLAIMI NG THE BENEFIT U/S 10(23C)(IIIAB) DIFFERS. WE ALSO FIND THAT THE A SSESSEE HAS BEEN GRANTED REGISTRATION U/S 12AA FROM THE PROVISI ONS OF THE ACT AND ON GOING THROUGH THE VARIOUS JUDGMENTS, WE HEREBY HOLD THAT THE ASSESSEE IS NOT ENTITLED TO THE BENEF IT OF SECTION 10(23C)(IIIAB). 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/03/2021. SD/- SD/- (BHAVNESH SAINI) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 10/03/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR