M/s Shaheed udham singh Educatyional Society, Moga V. Income Tax Officer, (Exemptions), Jalandhar

ITA 562/ASR/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7676 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Keywords: Business income; Search and seizure; Charitable institution; TDS; Set aside
• Section: 143(3); 12A; 147; 148

Judgement Text

P A G E | 1 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 562/ASR./2016 (ASSESSMENT YEAR: 2011-12) SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY, 171/6, SHAHEED BHAGAT SINGH COLONY BASTI GOBINDGARH, MOGA. VS. INCOME TAX OFFICER (EXEMPTIONS) , WARD JALANDHAR, JALANDHAR. PAN AAITS0997C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUDHIR SEHGAL, A.R. RESPONDENT BY: SHRI BHAWANI SHANKAR, D.R DATE OF HEARING: 07.01.2019 DATE OF PRONOUNCEMENT: 05.04.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE SOCIETY FO R A.Y. 2011-12 IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- 4, LUDHIANA, DATED 31.08.2016, WHICH IN TURN ARISES FROM THE ORDER PAS SED BY THE A.O UNDER SEC. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT IT ACT), DATED 03.03.2015. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 19 61 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FAC TS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSIN G OFFICER IN RESTRICTING THE CLAIM WITH REGARD TO DONATIONS TO 50% OF THE GROSS TOTAL INCOM E P A G E | 2 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO UPHOLD TH E ACTION OF THE LD. ASSESSING OFFICER IN COMING TO THE CONCLUSION THAT THE APPELLANT HAD NOT BEEN GRANTED EXEMPTION U/S 80G. FURTHER, THE ASSESSEE HAS ALSO RAISED BEFORE US THE FOLLOWING ADDITIONAL GROUND OF APPEAL: 1. THAT THE LD. ASSESSING OFFICER HAVING NOT MADE ANY AD DITION ON ACCOUNT OF THE FACTS AS STATED IN THE REASONS SO RECORDED FOR THE PURPOSE OF ISSUING NOTIC E U/S 148 OF THE INCOME TAX ACT, 1961 AND THEREFORE, THE ASSESSING OFFICER CO ULD NOT HAVE THE JURISDICTION TO MAKE OTHER ADDITIONS, HAVING NOT MADE TH E ADDITION ON THE BASIS OF WHICH, THE REOPENING HAD BEEN DONE. HENCE THE ASSESSMENT AS FRAMED BY THE LD. ASSESSING OFFICER IS BAD IN LAW. AS THE ASSESSEE HAS ASSAILED THE VALIDITY OF THE AS SESSMENT BY WAY OF RAISING THE AFOREMENTIONED ADDITIONAL GROUND OF APP EAL, WHICH INVOLVES PURELY A LEGAL ISSUE BASED ON THE FACTS AVAILABLE O N RECORD, THEREFORE, THE SAME IS BEING ADMITTED. 2. BRIEFLY STATED, THE ASSESSEE SOCIETY WHICH IS STATE D TO BE RUNNING AN EDUCATIONAL INSTITUTION HAD FILED ITS RETURN OF INCOME FOR A.Y. 2011- 12 ON 30.09.2011, DECLARING NIL INCOME. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1 ) OF THE IT ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED THAT THE ASSESSEE SOCIETY HAD MADE A CASH DEPOSIT OF RS. 34,64,975/- IN ITS BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION, ITS CA SE WAS REOPENED UNDER SEC. 147 OF THE IT ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE IN REPLY TO THE QUERY RAISED BY THE A.O AS REGARDS THE SOURCE OF THE CASH DEPOSITS IN ITS BANK ACCOUNT, SUBMITTED THAT THE SA ME WAS THE FEES DEPOSITED BY THE STUDENTS. IT WAS OBSERVED BY THE A .O THAT THE ASSESSEE WHICH WAS AN EDUCATIONAL INSTITUTION HAD F ILED ITS RETURN OF INCOME CLAIMING ITS INCOME AS EXEMPT AS PER THE PRO VISIONS OF SEC. 10(23C)(IIIAD) OF THE IT ACT. ON THE BASIS OF NECES SARY VERIFICATIONS, IT WAS GATHERED BY THE A.O THAT THE ASSESSEE DURING TH E YEAR HAD CLAIMED TO HAVE RECEIVED A GROSS AMOUNT OF RS. 22,1 1,779/- FROM P A G E | 3 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) PUNJAB TECHNICAL UNIVERSITY (FOR SHORT PTU) AND O THER MISCELLANEOUS RECEIPTS OF RS. 19,218/-. IT WAS NOTICED BY THE A.O THAT THE ASSESSEE HAD CLAIMED THE SURPLUS/EXCESS OF INCOME OF RS. 12, 36,369/- AS EXEMPT UNDER SEC. 10(23C)(IIIAD). ON A PERUSAL OF T HE DETAILS PERTAINING TO THE AMOUNT RECEIVED BY THE ASSESSEE F ROM PTU, IT WAS DISCERNIBLE FROM THE FORM 16A THAT THE SAME WAS IN THE NATURE OF PAYMENTS TOWARDS COMMISSION OR BROKERAGE WHICH HAD BEEN SUBJECTED TO DEDUCTION OF TAX AT SOURCE UNDER SEC. 194H. IN T HE BACKDROP OF THE AFORESAID FACTS, THE A.O WAS OF THE VIEW THAT THOUG H THE ASSESSEE SOCIETY WAS ENGAGED IN IMPARTING EDUCATION AS A LEA RNING CENTRE OF PTU, HOWEVER, THE COMMISSION RECEIPTS WHICH HAD BEE N SUBJECTED TO TDS IN ITS HANDS UNDER SEC. 194H WERE IN THE NATURE OF BUSINESS, TRADE AND COMMERCE AND WERE NOT ELIGIBLE FOR EXEMPT ION UNDER SEC. 10(23C)(IIIAD). APART THERE FROM, THE A.O HELD A CO NVICTION THAT EVEN OTHERWISE THE OBJECTS OF THE ASSESSEE SOCIETY DID N OT RENDER IT ELIGIBLE FOR THE EXEMPTION UNDER SEC. 10(23C)(IIIAD). IN FAC T, THE A.O WAS OF THE VIEW THAT AS A PERUSAL OF THE MEMORANDUM OF ASSOCI ATION OF THE ASSESSEE SOCIETY AND ITS AIMS AND OBJECTIVES CLEARL Y REVEALED THAT THE ASSESSEE SOCIETY WAS NOT EXISTING SOLELY FOR EDUCAT IONAL PURPOSES, THEREFORE, IT WAS NOT ELIGIBLE FOR CLAIM OF EXEMPTI ON UNDER SEC. 10(23C)(IIIAD). IN ORDER TO FORTIFY HIS AFORESAID C ONVICTION, IT WAS OBSERVED BY THE A.O THAT AS PER THE AIMS AND OBJECT S OF THE ASSESSEE SOCIETY IT WAS PROPOSED TO CARRY OUT OTHER ACTIVITI ES OTHER THAN EDUCATION, THEREFORE, IT COULD SAFELY BE CONCLUDED THAT IT WAS NOT EXISTING SOLELY FOR EDUCATION PURPOSES WHICH WAS TH E BASIC REQUIREMENT FOR CLAIM OF EXEMPTION UNDER SEC. 10(23 C)(IIIAD). ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE A.O WAS OF THE VIEW THAT THE ACTIVITIES OF THE ASSESSEE WERE IN THE NATURE OF B USINESS WITH A PROFIT MOTIVE AND NOT FOR A CHARITABLE PURPOSE AS DEFINED IN SEC. 2(15) OF THE IT ACT. IN THE BACKDROP OF HIS AFORESAID OBSERVATIO NS THE A.O DECLINED P A G E | 4 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) TO ALLOW THE CLAIM OF EXEMPTION RAISED BY THE ASSES SEE UNDER SEC. 10(23C)(IIIAD) AND BROUGHT THE AMOUNT OF SURPLUS OF RS. 12,66,771/- TO TAX AS ITS BUSINESS INCOME. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING AT LENGTH ON THE CONTENTIONS ADVANCED BY THE ASSESSEE AS REGARDS ITS ENTITLEMENT TOWARDS CLAIM OF EXEMPTION UNDER SEC. 10(23C)(IIIAD), WAS HOWEVER NO T PERSUADED TO ACCEPT THE SAME. THE CIT(A) OBSERVED THAT THE ASSES SEE SOCIETY WHICH WAS NOT RUNNING ITS OWN EDUCATIONAL INSTITUTION BUT WAS RUNNING A LEARNING CENTRE ON BEHALF OF PTU WAS ENGAGED IN TRA DE, COMMERCE OR BUSINESS ON COMMISSION BASIS. IN FACT, THE CIT(A) W AS OF THE VIEW THAT THE WORKING OF THE ASSESSEE SOCIETY WAS MORE OR LES S AS THAT OF AN EDUCATIONAL VISA CONSULTANCY FIRM FOR EARNING MAXIM UM PROFITS. ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE CIT(A) UPHELD THE VIEW TAKEN BY THE A.O AND CONCLUDED THAT THE LATTER HAD RIGHTLY DECLINED THE CLAIM OF EXEMPTION OF RS. 12,66,771/- RAISED BY THE ASSESSEE UNDER SEC. 10(23C)(IIIAD) AND BROUGHT THE SAME TO T AX IN ITS HANDS. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF T HE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUT HORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION WHICH HAS BE EN IN OPERATION SINCE THE YEAR 2009. IT WAS SUBMITTED BY THE LD. A. R THAT THE ASSESSEE WHICH WAS INVOLVED IN THE SOLE PURPOSE OF IMPARTING EDUCATION AS PER THE GUIDELINES OF THE PTU DISTANCE EDUCATION PROGRA MME, HAD BEEN CLAIMING EXEMPTION UNDER SEC. 10(23C)(IIIAD) IN THE PRECEDING YEARS. FURTHER, IT WAS SUBMITTED BY THE LD. A.R THAT THE A SSESSEE HAD BEEN GRANTED REGISTRATION UNDER SEC. 12A OF THE IT ACT, VIDE ORDER DATED 30.06.2011. IT WAS AVERRED BY THE LD. A.R THAT NOW WHEN THE CIT (EXEMPTIONS) HAD HIMSELF GRANTED THE REGISTRATION T O THE ASSESSEE P A G E | 5 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) SOCIETY UNDER SEC. 12A, THEREFORE, THE OBJECTS OF T HE ASSESSEE SOCIETY COULD NOT BE HELD TO BE NOT CHARITABLE IN NATURE. T HE LD. A.R EXPLAINING THE MODUS OPERANDI OF THE WORKING OF THE ASSESSEE WHICH WAS ONE OF THE 2100 LEARNING CENTRES OF PTU SPREAD ALL OVER THE COUNTRY, SUBMITTED THAT THE ASSESSEE SOCIETY AS A L EARNING CENTRE HAD PROVIDED FOR THE INFRASTRUCTURE AND FACULTY AS SPEC IFIED BY THE UNIVERSITY. IT WAS FURTHER AVERRED BY THE LD. A.R T HAT THE ASSESSEE AS A LEARNING CENTRE WOULD DESIGN PRESENTATIONS, PROJECT S, ASSIGNMENTS AND CONDUCT INTERNAL EXAMS AND PROVIDE INTERNAL ASSESSM ENT. IT WAS THE CONTENTION OF THE LD. A.R THAT THE ASSESSEE AS A LE ARNING CENTRE WAS RESPONSIBLE FOR EDUCATION DELIVERY AND WOULD CONDUC T SEMINARS, OPEN HOUSE DISCUSSIONS FROM TIME TO TIME, AS WELL AS FOL LOW GUIDELINES, FORMATS AND INSTRUCTIONS ISSUED BY PTU. IN ORDER TO BUTTRESS HIS AFORESAID CONTENTION THAT THE ASSESSEE AS A LEARNIN G CENTRE WAS PROVIDING EDUCATION, THE LD. A.R DREW OUR ATTENTION TO THE INFRASTRUCTURE DETAILS WHICH WAS ESSENTIALLY TO BE PROVIDED BY EVERY LEARNING CENTRE AS PER THE REQUIREMENT OF PTU. THE LD. A.R SUBMITTED THAT ALL SEMESTER AND EXAM FEE WERE TO BE COLLECTED FROM THE STUDENTS ONLY IN THE NAME OF REGISTRAR, PTU PAYABLE AT JALAN DHAR, EXCEPT FOR THE LIBRARY FEE OF RS. 1,000/- (REFUNDABLE SECURITY ). THE LD. A.R SUBMITTED THAT FROM THE SEMESTER FEE COLLECTED PTU WOULD PAY 45% TOWARDS THE SHARE OF THE LEARNING CENTRE AFTER SEPA RATING THE EXAM FEE. APART THERE FROM, IT WAS SUBMITTED BY THE LD. A.R T HAT THE LAB CHARGES FOR THE APPLIED TECHNOLOGY COURSES COULD BE CHARGED BY THE LEARNING CENTRE FROM THE STUDENTS PROVIDED THE SAME WAS APPR OVED BY THE UNIVERSITY. IN SUM AND SUBSTANCE, IT WAS THE CONTEN TION OF THE LD. A.R THAT THE ASSESSEE AS A LEARNING CENTRE OF PTU WAS R UNNING A DISTANCE LEARNING EDUCATION PROGRAMME, AND HAD PROVIDED FOR THE SPECIFIED INFRASTRUCTURE AS PER THE REQUIREMENTS OF THE UNIVE RSITY, AS WELL AS WAS RESPONSIBLE FOR THE EDUCATION DELIVERY TO THE S TUDENTS BY P A G E | 6 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) APPOINTING A FACULTY AS SPECIFIED BY THE UNIVERSITY ; DESIGN PRESENTATIONS, PROJECTS, ASSIGNMENTS AND CONDUCT IN TERNAL EXAMS AND PROVIDE INTERNAL ASSESSMENTS; CONDUCT SEMINARS AND OPEN HOUSE DISCUSSIONS ETC. IT WAS THE CONTENTION OF THE LD. A .R THAT AS PER THE CONTRACT OF THE ASSESSEE AS A LEARNING CENTRE WITH THE UNIVERSITY I.E. PTU THERE WAS AN ARRANGEMENT FOR SHARING OF THE SEM ESTER FEES THAT WOULD BE COLLECTED BY THE UNIVERSITY. ON THE BASIS OF THE AFORESAID ARRANGEMENT 45% OF THE SEMESTER FEES WOULD FALL TO THE SHARE OF THE ASSESSEE IN ITS STATUS AS THAT OF A LEARNING CENTRE . THE LD. A.R IN ORDER TO FORTIFY HIS AFORESAID CONTENTION TOOK US THROUGH PAGE 62 OF THE ASSESSES PAPER BOOK (FOR SHORT APB), WHEREIN THE AFORESAID SHARING OF THE SEMESTER FEE BETWEEN THE UNIVERSITY AND THE LEA RNING CENTRE WAS CLEARLY PROVIDED. IT WAS THE CONTENTION OF THE LD. A.R THAT THE FACT THAT PTU HAD DEDUCTED TDS UNDER SEC. 194H WOULD NOT CONC LUSIVELY SUPERSEDE THE AFORESAID REVENUE SHARING ARRANGEMENT BETWEEN THE ASSESSEE AND THE PTU. IN SUPPORT OF HIS CONTENTION THAT DISTANCE EDUCATION PROGRAMME PROVIDED BY THE ASSESSEE FALLS WITHIN THE DEFINITION OF EDUCATION AS ENVISAGED IN SEC. 2(15 ) OF THE IT ACT, THE LD. A.R RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEM ENTS : (I) VENU CHARITABLE SOCIETY AND ANR. VS. DIT (2017) 393 ITR 63 (DEL) (II) SOORYA EDUCATIONAL TRUST VS. ITO [ITA NO. 579 (MDS) OF 2012; DATED 31.05.2012] (ITAT , CHENNAI) 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT AS THE ASSESSEE WAS NOT RUNNING ITS OWN EDUCATIONAL INSTITUTION, THEREFORE, THE LOWER AUTHORITIES HAD R IGHTLY CONCLUDED THAT IT WAS NOT ENTITLED FOR CLAIM OF EXEMPTION UNDER SE C. 10(23C)(IIIAD) OF THE IT ACT. IT WAS THE SUBMITTED BY THE LD. D.R THA T AS THE LOWER P A G E | 7 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) AUTHORITIES HAD RIGHTLY DECLINED TO ALLOW THE CLAIM OF EXEMPTION RAISED BY THE ASSESSEE UNDER SEC. 10(23C)(IIIAD), THEREFOR E, THE APPEAL OF THE ASSESSEE WAS DEVOID OF ANY MERITS AND WAS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIE S AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE IS AN AUTHORIZED LEARNING CENTRE OF PTU UNDER THE DISTANCE EDUCATION PROGRAMM E. AS PER THE MODULE OF OPERATION, THE ASSESSEE AS A LEARNING CEN TRE AFFILIATED WITH PTU IS OBLIGATED TO CARRY OUT EDUCATIONAL PROGRAMME S AS PRESCRIBED BY THE UNIVERSITY AND MAKE NECESSARY PROVISIONS VIZ . (I) INFRASTRUCTURE AS SPECIFIED BY THE UNIVERSITY; (II) FACULTY AS SPE CIFIED BY THE UNIVERSITY; (III) LOCAL MARKETING FOR PROMOTION OF COURSES AS S PECIFIED BY THE REGIONAL CENTRE; (IV) TIMELY COURSE COMPLETION; (V) MAINTENANCE OF RECORDS OF STUDENTS AND MIS; (VI) DESIGNING OF PRES ENTATIONS, PROJECTS, ASSIGNMENTS AND EXAMS; (VII) CONDUCTING INTERNAL EX AMS AND PROVIDING INTERNAL ASSESSMENT; (VIII) CONDUCTING SEMINARS AND OPEN HOUSE DISCUSSIONS FROM TIME TO TIME; (IX) FOLLOW GUIDELIN ES, FORMAT AND INSTRUCTION ISSUED BY PTU AND REGIONAL CENTRE FROM TIME TO TIME; (X) MAINTAIN THE VIABILITY OF PTU PROJECT AT THE LEARNI NG CENTRE; AND (XI) RESPONSIBILITY FOR EDUCATION DELIVERY. THE ASSESSEE SOCIETY BEING AN AUTHORIZED LEARNING CENTRE HAS TO HONOUR THE OBLIGA TIONS SET OUT BY PTU FOR PROVIDING EDUCATION TO ENROLLED STUDENTS AN D HAS TO EMPLOY TEACHERS FOR TAKING CLASSES OF ENROLLED STUDENTS. I N FACT, THE ASSESSEE WHICH IS AN EDUCATIONAL INSTITUTION IS IMPARTING ED UCATION THROUGH DISTANCE LEARNING ROUTE IN THE SOCIETY BY RUNNING A LEARNING CENTRE AFFILIATED TO PTU. WE HAVE GIVEN A THOUGHTFUL CONSI DERATION TO THE ISSUE BEFORE US AND ARE UNABLE TO PERSUADE OURSELVE S TO SUBSCRIBE THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE DIST ANCE LEARNING PROVIDED BY THE ASSESSEE TO THE STUDENTS IN ITS CAP ACITY AS A LEARNING P A G E | 8 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) CENTRE OF PTU WOULD NOT FALL WITHIN THE REALM OF TH E DEFINITION OF THE TERM EDUCATION AS ENVISAGED IN SEC. 2(15) OF THE IT ACT. AS PER THE LITERAL MEANING EDUCATION IS A PROCESS FOR FACILI TATING LEARNING OR THE ACQUISITION OF KNOWLEDGE, SKILLS, VALUES AND HABITS . INSOFAR THE ACTIVITIES OF THE ASSESSEE SOCIETY IN ITS STATUS AS THAT OF A LEARNING CENTRE ARE CONCERNED, WE FIND THAT THE ASSESSEE IN ORDER TO FACILITATE DELIVERY OF EDUCATION PROVIDES THE INFRASTRUCTURE A LONG WITH THE FACULTY AS SPECIFIED BY THE UNIVERSITY; CARRIES OUT TIMELY COMPLETION OF THE COURSES; MAINTAINS RECORDS OF THE STUDENTS; DESIGNS PRESENTATIONS, PROJECTS, ASSIGNMENTS; CONDUCTS INTERNAL EXAMS AND PROVIDE INTERNAL ASSESSMENT; CONDUCT SEMINARS AND OPEN HOUSE DISCUSS IONS FROM TIME TO TIME AND DOES ALL NECESSARY ACTS AS REQUIRED BY THE UNIVERSITY, THEREIN RENDERING IT RESPONSIBLE FOR DELIVERY OF ED UCATION TO THE STUDENTS. WE ARE UNABLE TO COMPREHEND AS TO WHY THE AFOREMENTIONED ACTIVITIES OF THE ASSESSEE SOCIETY WOULD NOT FALL W ITHIN THE REALM OF RENDERING OF EDUCATION. INSOFAR THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT AS PTU BY DEDUCTING TDS UNDER SEC. 194H ON THE AMOUNT PAID TO THE ASSESSEE SOCIETY HAD CHARACTERIZ ED THE SAME AS PAYMENT TOWARDS COMMISSION OR BROKERAGE, THEREFORE, THE SAME WOULD BE IN THE NATURE OF BUSINESS RECEIPTS OF THE ASSESS EE, WE ARE AFRAID DOES NOT FIND FAVOUR WITH US. IN FACT, A PERUSAL OF SECTION 8.1 OF THE PTU DISTANCE EDUCATION PROGRAMME (PAGE 62 OF APB ) CLEARLY REVEALS THAT AS PER THE ARRANGEMENT BETWEEN PTU AND THE ASS ESSEE LEARNING CENTRE, THE SEMESTER FEE COLLECTED BY THE UNIVERSIT Y I.E. PTU IS TO BE SHARED WITH THE ASSESSEE LEARNING CENTRE AFTER SEPA RATING THE EXAM FEE. IT IS CLEARLY MENTIONED IN THE SAID ARRANGEMENT THA T THE ASSESSEE WOULD BE ENTITLED TO A SHARE OF 45% OF THE SEMESTER FEE (AFTER SEPARATING EXAM FEE). ADMITTEDLY, PTU WHILE MAKING THE PAYMENT TO THE ASSESSEE IN ITS STATUS AS THAT OF LEARNING CENT RE HAD DEDUCTED TAX AT SOURCE UNDER SEC. 194H, WHICH AT THE FIRST BLUSH WOULD GIVE AN P A G E | 9 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) IMPRESSION THAT THE SAME IS IN THE NATURE OF COMMIS SION OR BROKERAGE PAID BY PTU TO THE ASSESSEE LEARNING CENTRE. HOWEVE R, WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN AS PER THE PTU DISTAN CE EDUCATION PROGRAMME/ARRANGEMENT BETWEEN PTU AND THE ASSESSEE LEARNING CENTRE, IT HAS BEEN SPECIFICALLY STATED THAT THE AS SESSEE WOULD BE ENTITLED TO THE SHARE OF 45% OF THE SEMESTER FEE CO LLECTED BY THE UNIVERSITY (AFTER SEPARATING EXAM FEE), THEREFORE, THE MERE FACT THAT PTU HAD DEDUCTED TDS UNDER SEC. 194H WHILE MAKING T HE SAID PAYMENT TO THE ASSESSEE WOULD IN NO WAY LEAD TO REC HARACTERIZATION OF THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE. IN SU M AND SUBSTANCE, THE NATURE OF RECEIPT/AMOUNT IN THE HANDS OF THE AS SESSEE LEARNING CENTRE WOULD CONTINUE TO BE GOVERNED AND REGULATED AS PER ITS ARRANGEMENT WITH THE UNIVERSITY, AND NOT BY THE NOM ENCLATURE GIVEN BY THE UNIVERSITY I.E. PTU WHILE MAKING THE SAID PA YMENT. WE MAY HEREIN OBSERVE THAT A SIMILAR ISSUE WAS INVOLVED IN THE CASE BEFORE A COORDINATE BENCH OF THE TRIBUNAL I.E. ITAT, CHENNAI BENCH B IN SOORYA EDUCATIONAL TRUST VS. ITO [ITA NO. 579 (MDS) OF 2012; DATED 31.05.2012]. AS IN THE CASE BEFORE US, IN THE AFORE MENTIONED CASE ALSO THE ASSESSEE WAS ENTITLED FOR A SHARE OF FEES COLLE CTED BY THE UNIVERSITY I.E. ANNAMALAI UNIVERSITY. THE ASSESSEE IN THE SAID CASE WOULD BE IMPARTING ORAL EDUCATION TO THE STUDENTS BY THE TEA CHERS WHO WOULD BE EMPLOYED BY THE ASSESSEE. APART THERE FROM, THE ASS ESSEE WAS MAINTAINING THE ATTENDANCE OF THE STUDENTS IN ORDER TO RENDER THEM ELIGIBLE TO WRITE THE EXAMINATION. FURTHER, THE CUR RICULAM AND CONDUCT OF PROGRAMMES AS IN THE CASE BEFORE US WAS THE RESP ONSIBILITY OF THE ASSESSEE IN THE AFOREMENTIONED CASE. INTERESTINGLY, IN THE AFOREMENTIONED CASE ALSO THE UNIVERSITY I.E. ANNAMA LAI UNIVERSITY HAD IN THE TDS CERTIFICATES MENTIONED THAT FEES PAID TO THE ASSESSEE WAS FOR PROFESSIONAL AND TECHNICAL SERVICES. THE TRIBUN AL AFTER DELIBERATING AT LENGTH ON THE AFORESAID FACTS OBSERVED THAT THE LOWER AUTHORITIES P A G E | 10 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) HAD ERRED IN CONCLUDING THAT THE SERVICES RENDERED BY THE ASSESSEE WERE TO BE EQUATED WITH THAT OF A COACHING INSTITUT E. IN FACT, IT WAS OBSERVED BY THE TRIBUNAL THAT AS THE ASSESSEE WAS R ENDERING FORMAL EDUCATION, THEREFORE, IT CLEARLY FELL WITHIN THE RE ALM OF CHARITABLE ACTIVITIES AS DEFINED UNDER SEC. 2(15) OF THE IT AC T. 8. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS A RE OF THE CONSIDERED VIEW THAT AS THE ASSESSEE IN THE CASE BE FORE US WAS PROVIDING FORMAL EDUCATION, THEREFORE, THE LOWER AU THORITIES HAD ERRED IN TAKING A CONTRARY VIEW AND HAD WRONGLY CONCLUDED THAT THE SURPLUS OF RS. 12,66,771/- SHOWN BY THE ASSESSEE WAS NOT EL IGIBLE FOR EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF THE IT ACT. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS SET ASIDE THE ORDER OF T HE CIT(A) AND DELETE THE ADDITION OF RS. 12,66,771/- MADE IN THE HANDS O F THE ASSESSEE. 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/04/2019 SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL ME MBER PLACE : CHANDIGARH; DATED 05.04.2019 PS. ROHIT P A G E | 11 ITA NO. 562/ASR./2016 A.Y. 2011-12 SHAHEED UDHAM SINGH EDUCATIONAL SOCIETY VS. ITO (E XEMPTIONS) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. DR, ITAT, CAMP BENCH, JALANDHAR 6. / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) & ' /ITAT, CAMP. BENCH, JALANDHAR