Board of Secondary Education, Cuttack V. ITO, Cuttack

ITA 601/CTK/2005

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3828 (ITAT-CUTTACK)
• Duration Of Justice: 11 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-05-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 23-12-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH CIT DR D K PRADHAN
• Assessee Lawyers: S K JENA
• Keywords: Reopening of assessment; Source of fund; Tangible material; Reassessment proceedings
• Section: 143(3); 142(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.269/CTK/2009: ASSE SSMENT YEAR: 2006-07 BOARD OF SECONDARY EDUCATION, CUTTACK VS. THE ITO, WARD-2(1), CUTTACK PAN/GIR NO. AAAJB 0510 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.JENA, AR REVENUE BY : SHRI KUNAL SINGH, CIT, DR/ D.K.PRADHAN, DR DATE OF HEARING : 15/05/ 2017 DATE OF PRONOUNCEMENT : 17 /05/ 2017 O R D E R PER BENCH THESE ARE THE APPEALS FILED BY TH E ASSESSEE AGAINST THE SEPARATE ORDERS OF CIT(A)-CUTTACK, FOR THE ASSESSMENT YEARS 1999-2000, 2000- 2001, 2001-02, 2002-03, 2003-04, 2005- 06 AND 2006-07, IN RESPECT OF ASSESSMENTS UNDER SECTION 143(3) AND 143(3)/147 OF THE INCOME TAX ACT, 1961. 2 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 2. SINCE THESE APPEALS PERTAIN TO SAME ASSESSEE AND THE GROUNDS RAISED THEREIN ARE IDENTICAL, THEY ARE HEARD TOGETHER AND DECIDED BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, WE TAKE UP ITA NO.601/CTK/2015 FOR THE ASSESSMENT YEAR 2002-03 AND FACTS NARRATED THEREIN FOR OUR ADJUDICATION AND THE DECISION WILL APPLY MUTATIS-MUTANDIS TO OTHER APPEALS OF THE ASSESSEE. 3. BEFORE WE PROCEED FOR HEARING, TH E LD AUTHORISED RE PRESENTATIVE OF THE ASSESSEE HAS FILED AN ADJOURNMENT A PPLICATION EXPLAINING THE FACTS THAT THE ASSESSEE HAS CHALLENGED THE RE JECTION OF GRANT OF EXEMPTION U/S.10(23C)(VI) OF THE ACT BY THE CHIEF COMMISSIONER OF INCOME TAX, BEFORE THE HONBLE HIGH COURT OF ORISSA IN A WRIT PETITION BEARING W.P.(C) NO.4777 OF 2008, WHICH HAS BEEN ADMITTE D AND PENDING FOR HEARING. THE LD A.R. OF THE ASSESSEE EMPHASIS ING FOR ADJOURNMENT FOR THE ABOVE AFORESAID CASES, IRRESPECTIVE OF THE FACT THAT IT PERTAINS TO ASSESSMENT YEARS 1999-2000, 2000-2001, 200 1-02, 2002-03, 2003- 04 , 2005-06 & 2006- 07 AND THE APPEALS WERE NUMBERED BY THE TRIBUNAL IN THE YEAR 2005, 2008 & 2009. WHEN THE BENCH ASKED TO LD A.R. OF THE ASSESSEE THAT SUFFICIENT TIME WAS PROVIDED TO THE ASSESSEE TO OBTAIN THE APPROVAL FROM THE CHIEF COMMISSIONER OF INCOME TAX U/S.10(23C (VI), THELD COUNSEL EXPLAINED THAT THE APPLICATIONS WERE REJECT ED AND AGAINST THE REJECTIO N OF APPLICATION, WRIT PETITION WAS FILED AND FURTHER AS ON DATE , NO ORDERS OF APPR OVAL IS AVAILABLE WITH THE ASSESSEE IN SPITE OF THE FACT THAT MORE THAN 10 YEARS HAVE PASSED 3 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 IN RESPECT OF AFORESAID ASSESSMEN T YEAR AND THE ASSESSEE COULD NOT ESTABLISH TO GET THE APPROVAL FROM THE CHIEF COMMISSIONER OF INCOME TAX OR FROM THE PRESCRIBED AUTHORITY EXCEPT MENTIONING THAT A WRIT PETITION HAS BEEN FILED BEFORE THE HONBLE HIGH COURT. 4. WE ALSO PERUSED THE ORDER SHEET NOTHINGS AND FIND THAT THESE APPEALS WERE POSTED FOR HEARING ON 17.1.2006 AN D ADJOURNMENT WA S SOUGHT BY THE ASSESSEE EXPLAINING THAT WRIT PETITION IS PENDING AND ALSO APPLICATION IS PENDING BEFORE THE PRESCRIBED AUTHORIT Y FOR APPROVAL. WHEN WE ASKED FOR COPY OF ANY APPROVAL OBTAINED TILL DA TE, LD A.R. OF THE ASSESSEE WAS NOT IN A POSITION TO OFFER A VALI D EXPLANATION, WHICH COULD CONVINCE US. WE ALSO PERUSED THE ORDER SHEET NOTINGS FROM 17.12006 TO 30.9.2013. THE APPEALS WERE NOT TAKEN UP FOR HEARING DUE TO EARLIER ADJOURNMENTS BY THE ASSESSEE AND EXPLANATION DISCUSSED ABOVE RECORDED IN THE ORDER SHEET. CONSIDERING THE GROUND OF ADJOURNMENT SOUGHT BY THE ASSESSEE AND THE APPEALS RELATING TO THE ASSESSMENT YEARS FOR MORE TH AN 10 YEARS OLD, WE CONSIDER IT APPROPRIATE TO REJECT THE ADJOURNMENT APPLICATION AND IN THE INTEREST OF JUSTICE, WE PROCEED TO DISPOSE OF THE APPEALS AFTER HEARING BOTH THE SIDES. 5. THE ASSESSEE HAS RAISED THE GROUNDS OF APPEAL AS UNDER: 1. THAT THE ORDER DATED 21.10.2005 OF LD. COMMISSIONER OF INCOME -TAX (APPEAL) IS UNJUSTIFIED, ARBITR ARY, CONTRARY TO FACTS AND BAD IN LAW. 2. THAT THE APPELLANT BEING AN INSTRUMENTALITY OF GOVERNMENT IS NOT COMING UNDER THE PURVIEW OF THE PR OVISIONS OF THE INCOME TAX ACT AND THE AUTHORITIES HAVE NO JURI SDICTION TO ASSESS THE APPELLANT. 4 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 THEREFORE THE ASSESSMENT ORDER PASSED BY THE LD.A.O. IS NON APPLICATION OF MIND, CONTRARY TO THE PROVISIONS LAID DOWN UNDER THE LAW, THEREFORE IS A BAD IN LAW. 3. THAT THE IMPUGNED ORDERS HA VE BEEN PASSED HURRIEDLY WITHOUT PROPER APPRECIATION OF FACTS AND IM PLICATION OF LAW AND SUFFERS FROM GIVING REASONABLE OPPORTUNITY TO THE APPELLANT, THEREFORE TOTALLY UNJUSTIFIED AND LIABLE TO BE QUASHED. 4. THAT THE LD. COMMISSIONER OF INCOME -TAX (APPEAL) SHOULD HAVE HELD THAT THE ASSESSEE BEING AN EDUCATIONAL INSTITUTION EXISTING SINCE SEVERAL DECADES SOLELY FOR EDUCAT IONAL PURPOSES COULD NOT HAVE EXISTED FOR CARRYING PROFIT SEPARATELY WHEN IT IS CREATED CONTROLLED AND SUPERVISED BY THE STATE GOVERNMENT. 5. THAT THE LD. COMMISSIONER OF INCOME -TAX (APPEAL) SHOULD HAVE GIVEN REASONABLE OPPORTUNITY TO EXPLAIN ITS CASE AND ,IN THE ABSENCE OF SUCH OPPORTUNITY, JUSTICE IN TH IS CASE HAVE GROSSLY MISCARRIED. 6. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONER OF INCOME -TAX (APPEAL) SHOULD HAVE ALLOWE D ALL THE EXPENSES CLAIMED AS ADMISSIBLE DEDUCTION. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, BOARD OF SECONDARY EDUCATION IS ESTABLISHED UNDER THE RISSA SECONDARY EDUCATION ACT, 1953AND THE MAIN OBJECT IS TO PROV IDE EDUCATION AND ESTABLISHMENT OF BOARD TO REGULATE, CONTROL AND DEVELOP SECONDARY EDUCATION IN THE STATE OF ORISSA AND ALSO TO PUBLISH AND SALE OF TEXTBOOKS FOR THE USE OF STUDENTS WITHOUT ANY PROFIT. THE BOARD CONSISTS OF OFFICE BEARER S AND THE MEMBERS OF THE COMMITTEE. THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 ON 31.3.2004 WITH A TOTAL INCOME RS. NIL. AND THE RETURN OF INCOME WAS PROCESSE D UNDER SECTION 143(1) OF THE ACT ACCEPTING THE RETURNED INCOME. SUBS EQUENTLY,THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER I SSUED NOTICES U/S.143(2) AND 142(1) 5 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 AND CALLED FOR INFORMATION. IN COMPLIANCE TO THE NOTICES, LD A.R. OF THE ASSESSEE APPEARED BEFORE THE ASSESSI NG OFFICER AND PRODUCED BOOKS OF ACCOUNT CONSISTING OF CASH BOOK, LEDGE R BOOKS, EXPENDITURE REGISTER AND COLLECTION REGISTER. THE ASSESSING OFFICER ON PERUSAL OF THE FINANCIAL STATEMENT AND WRITTEN SU BMISSIONS FILED BY THE ASSESSEE OBSERVED THAT THE ASSESSEE IS EMPHASISING THAT IT HAS OBTA INED APPROVAL UNDER THE PREVAILING LAW UNDER SECTION 10(22) OF THE ACT AND REFERRED TO THE DECISION OF HONBLE HIGH COURT OF ORISSA IN ASSESSEES OWN CASE REPO RTED IN (1972) 86 ITR 408 (ORI), WHEREIN, THE HONBLE HIGH COUR T CONSIDERED THE FA CTS AND OBJECTS OF THE ASSESSEE BOARD AND GAVE A FINDING TH AT ANY INCOME OF AN UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION, EXISTING FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSES OF PROFIT IS EXEMPTED FROM TAX U/S.10(22) OF THE ACT. THEREFORE, THE INCOME DERIVED BY THE A SSESSEE IS CLAIMED AS FULLY EXEMPT. THE ASSESSING OFFICER RAISED A VALID REASON TO THE LD A.R THAT THE PROVISIONS OF SECTION 10(22) HAVE BEEN OMITTE D W.E.F. 1999-2000 AND A NEW SECTION 10(23C) HAVE BEEN INSERTED FOR AVA ILING EXEMPTION FO R THE FOLLOWING CRITERIA: A) 10(23C) (IIIAB) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PU RPOSES AND NOT FOR PURPOSES OR PROFIT, AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT, OR B 10(23C) (IIIAD) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PU RPOSES AND NOT FOR PURPOSES OF PROFIT, IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVERSITY OR EDUCATIONAL INSTITUTION DO NO T EXCEED RS.1 CRORE, AND; 6 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 C. 10(23C) (VI) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT PURPOSES OF PROFIT, OTHER THAN THOSE MENTIO NED IN (A) AND (B) SUPRA AND WHICH MAY BE APPROVED BY THE PR ESCRIBED AUTHORITY I.E. CENTRAL BOARD OR DIRECT TAXES/CHIEF COMMISSIONER OF INCOME TAX. 7. THE ASSESSING OFFICER FOUND THAT ON THE SUBSEQUENT TO INSERTION OF SECTION 10(23C)(IIIAD), THE ANNUAL RECEIP TS SHOULD NOT EX CEED MORE THAN RS.1 CRORE, WHERE AS THE ASSESSEE IS HAVING INCOME FROM EXAMINATION FEES, PRINTING COMPILATION AND SALE OF TEXT BOOKS, INTEREST FROM FDR, BANK DEPOSITS, ETC AND THE RECEIPTS OF THE ASSESSEE HAS EXCEEDED MORE THAN RS.1 CRORE DURING THE SAID FINANCIAL YEAR . FINALLY, THE ASSESSEE SHOULD GET A CERTIFICATE OF APPROVAL BY THE PRESCRIBED AUTHORITY BEING CHIEF COMMISSIONER OF INCOME TAX AND AT TH E TIME OF ASSESSMENT, THE ASSESSE WAS NOT HAVING ANY CERTIFICATE OF APPR OVAL OF EXEMPTION FURTHER AND THE ASSESSEE COULD NOT SATISFY THE CONDITIONS PRESCRIBED UNDER THE PROVISIONS OF SECTION 10(23C)(IIIAD), THEREFORE, TH E ASSESSING OFFICER CONSIDERED THE PROVISIONS OF LAW AND THE FACTS TH AT THE ASSESSEE WAS NOT HAVING ANY CERTIFICATE DURING THE ASSESSMENT PROC EEDINGS FOR CLAIMING EXEMPTION, AND TREATED THE EXCESS OF INCOME OVER EXPENSES AS TOTAL INCOME AND ASSESSED INCOME AT RS.3,82,26,140/- AND PASSED ORDER U/S.143(3) DATED 31.3.2005, INTER ALIA, WITH OTHER ADDITIONS. 8. AGGRIEVED BY THE ORDER OF THE ASSE SSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE ARGUED THE GROUNDS AND RE ITERATED THE SUBMISSIONS MADE IN 7 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 THE ASSESSMENT PROCEEDINGS AND RELI ED ON THE JUDICIAL DECISION IN ASSESSEES OWN CASE. 9. THE LD CIT(A) HAVING CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND FINDINGS OF THE ASSESS ING OFFICER AND THE AMEN DED PROVISIONS OF LAW EFFECTIVE FROM 1999-2000 AND ALSO TH AT THERE IS NO PARAMETERIA OF EXEMPTION OF SECTION 10(22) SHALL CONTI NUE TO THE ASSESSEE, IRRESPECTIVE OF THE FACT THAT NO APPLICATION IS MADE UNDER THE NEW PROVISIONS OF SECTION 10(23C), OF THE ACT AND OBSERVED THAT AS ON DATE, THE ASSESSEE HAS NOT OBTAINED APPROVAL FROM THE PRESCR IBED AUTHORITY AND THE LD CIT(A) CONCURRED WITH THE FINDINGS OF THE ASSE SSING OFFICER, WHO HAS DEALT ON THE FACTS AND THE LEGAL PROVISIONS IN DENYING THE EXEMPTION AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIE VED BY THE ORDER OF THE CIT(A), THE ASSESSEE FILED AN APPEAL WITH THE TRIBUNAL. 10. BEFORE US, LD AUTHORISED REPR ESENTATIVE ARGUED THE GROUND AND SUBMITTED THAT THE CIT(A) HAS HURRI EDLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER AND ALSO NO PROPER OPPORTUNITY WAS PROVIDED. FURTHER, HE SUBMITTED THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION EXISTING FROM MORE THAN TWO DECADES AND CONTROLLED BY THE STATE GOVERNMENT. LD A.R. OF THE ASSESSEE EXPLAINED THAT APPLICATION MADE UNDER SECTION 10(23C)(IIIAB) WITH THE PRESCRIBED AUTHOR ITY HAS BEEN REJECTED BY AN ORDER DATED 18.1.2007 AND SIMILARLY FOR THE OTHER ASSESSMENT YEARS ALSO, SINCE APPLICATIONS ARE REJECTED, A WRIT PETITI ON HAS BEEN FILED BEFORE THE HONBLE HIGH COURT. 8 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 11. WE HAVE REJECTED THE ADJOURNMEN T APPLICATION AS WE ARE SATISFIED THAT SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE FROM 2006 TO 2013 AND THE ASSESSEE COULD NOT MAKE THE PROPER USE OF TIME AND PROCEDURES. LD A.R. RELIED ON THE DE CISION OF HONBLE JU RISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE(SUPRA) AN D ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPORATION LTD VS CIT, (2009) 319 ITR4 317 (SC) AMERICAN HOTEL AND LODGING ASSOCIATIO N EDUCATIONAL INSTITUTE VS CENTRAL BOARD OF DIRECT TAXES AND OTHERS ( 2008) 301 ITR 86 (SC) AND PRAYED FOR ALLOWING THE APPEALS. 12. CONTRA, LD D.R. SUPPORTED THE OR DERS OF THE LD CIT(A) AND FURTHER EMPHASISED THAT THE ASSESSEE WAS PROVID ED SUFFICIENT OPPORTUNITIES BY THE LOWER AUTHORITIES TO SUBSTANTIATE ITS CASE AND TO OBTAIN CERTIFICATE OF APPROVAL FROM THE PRESCRIBED AUTHORITY, WHICH, PRIMA FACIE, THE APPLICATION OF APPROVAL HAS BEEN REJECTED. 13. WE HAVE HEARD THE RIVAL SUBMIS SIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AV AILABLE ON RECORD AND JUDICIAL DECISIONS CITED. THE SOLE CRUX OF THE ISSUE RAISED BY LD A.R. THAT THE ASSESSEE IS A BOARD FORMED UNDER TH E GOVERNMENT STATUTE TO PROVIDE EDUCATION, THEREFORE, EXEM PT FROM FILING THE RETURN OF INCOME. LD A.R. 9 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 EMPHATICALLY RELIED ON THE ORDER OF THE HONBL E JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE, WHEREI N, THE HONB LE HIGH COURT HAS DIRECTED TOTAL INCOME OF THE BOARD IS EXEMPT FROM INCOME TAX UNDER SECTION 10(22) ACT, WHICH IS AS UNDER: WHERE THE LAW IS CLEAR AND THE ASSESSING AUTHORITIES HAVE NO POWER TO MAKE AN ASSESSMENT ON ACCOUNT OF EXEMPTION GIVEN UNDER THE INCOME TAX ACT, THERE IS NO REASON WHY THE HIGH COURT SHOULD NOT EXERCISE ITS POWER TO QUASH THE NOTICES ISSUED BY THE AUTHORITIES. UNDER THE ORISSA SECONDARY EDUC ATION ACT, 1953, THE SECONDARY BOARD OF EDUCATION, ORISSA, HAS A FUND. ONE OF THE SOURCES OF INCOME OF THE BOARD IS PROFITS FROM COMPILATION, PUBLICATION, PRINTING AND SALE OF TEXT BOOKS. THE PROFITS SO EARNED ENTER INTO THE BOARD FUND. THE INCOME AND EXPENDITURE OF THE BOARD IS CONTROLLED AND THE ENTI RE EXPENDITUR5E IS TO BE DIRECTED TOWARDS DEVELOPMENT AND EXPANSION OF ED UCATIONAL PURPOSES. EVEN IF THERE IS SOME SURPLUS, IF REMAINS AS A PART OF THE SINKING FUND TO BE DEVOTED TO THE CAUSE OF ED UCATION AS AND WHEN NECESSARY. THUS BEING THE OBJECTIVE AND THER E BEING VARIOUS WAYS OF CONTROL OF THE INCOME AND EXPENDITUR E, THE BOARD OF SECONDARY EDUCATION CANNOT BE SAID TO BE EXISTING FOR PURPOSES OF PROFIT. IT EXISTS SOLELY FOR PURPOSES OF EDUCATION. THE INCOME OF THE BOARD IS, THEREFORE, EXEMPT FR OM INCOME TAX UNDER SECTION 10(22) OF THE INCOME TAX ACT, 1961. 14. WE FIND PRIMA FACIE SECTION 10(22) OF THE AC T WAS OMITTED BY FINANCE NO.(2) ACT 1988 W.E.F. 1.4.1999 AND ALSO PERUSED SECTION 10(23C)(IIIAB), (IIIAD) AND (VI). ON PERUSAL OF THE PROVISIONS OF SECTION 10(23C)(VI) WE FIND THAT THE ASSESSEE HAS TO OBTAIN APPROVAL FROM THE PRESCRIBED AUTHORITY, AND AS PER THE RECORDS AND SUBMISSIONS OF THE LD A.R., THE ASSESSEE COULD NOT OBTAIN THE APPROVAL AND AGITATING FO R GRANTING OF APPROVAL BEFORE THE HONBLE HIGH COURT. THE TRIBUNAL IS FINAL FACT FINDING AUTHORITY AND WE 10 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 OBSERVE THAT THE ASSESSEE NEITHER IN TH E ASSESSMENT PROCEEDINGS OR BEFORE THE FIRST APPELLATE AUTHORITY AND EVEN BEFORE US, COULD NOT SUBMIT THE APPROVAL OF GRANT FOR EXEMPTION. THE LD A.R. TO SUPPORT HIS ARGUMENTS RELIED ON THE DECISIONS OF HONBLE SUPREME CO URT IN THE CASE OF AMERICAN HOTEL AND LODGING ASSOCIATION EDUCATIONAL IN STITUTE (SUPRA), WHICH WAS RENDERED IN RESPECT OF ASSESSMENT YEAR 1999-2000 AND ALSO GAVE THE FINDINGS ON THE PROVISIONS OF SECTION 10(23C) (VI) AS UNDER: WITH THE INSERTION OF THE PROVISIONS OF SECTION 10(23C)(VI) THE APPLICANT SEEKING APPROVAL HAS NOT ONLY TO SHOW THAT IT IS AN INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES BUT IT HAS GOT TO OBTAIN INITIAL APPROVAL FROM THE PRESCRIBED AUTHORITY IN TERMS OF SECTION 10(23C) (VI) BY MAKING AN APPLICATION IN THE STANDARDISED FORM AS MENTIONED IN THE FIRST PROVISO TO THAT SECTION. THIS CONDITION WAS INSERTED BECAUSE SECTION 10(22) WAS ABUSED BY SOME EDUCATIONAL IN STITUTIONS/UNIVERSITIES. THE PROVISO WAS INSERTED ALONGWITH OTHER PROVISIONS BECAUSE THERE WAS NO MONITORING MECHANISM TO CHECK ABUSE OF THE EXEMPTION PROVISION. WITH THE INSERTION OF THE FIRST PROVISO THE PRESCRIBED AUTHORITY IS REQUIRED TO VET THE APPLICATION. WHILE CONSIDERING THE APPROVAL APPLICATION THE PRE SCRIBED AUTHORITY IS EMPOWERED UNDER THE SECOND PROVISO BEFORE GI VING APPROVAL TO CALL FOR SUCH DOCUMENTS INCLUDING ANNUAL ACCO UNTS OR INFORMATION FROM THE APPLICANT TO CHECK THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT INSTITUTION. WHILE JUDGING THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT, THE PRESCRIBED AUTHORITY HAS, UNDER THE THIRD PROVISO, TO ASCERTAIN AS TO WHETHER THE APPLICANT APPLIES ITS INCOME WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS CONSTITUTED/ESTABLISHED. 15. WE FIND THE HONBLE APEX COURT HAS CONSIDERED THE FACTS OF GRANTING EXEMPTION U/S.10(22) AS WELL AS SECT ION 10(23C) AND PRIMA FACIE, DUE TO CHANGE IN THE POSITION OF LAW FROM ASSESSMENT YEAR 1999-2000, THE ASSESSEE IS REQUIRED TO OBTAIN THE APPR OVAL FROM THE PRESCR IBED AUTHORITY. 11 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 FURTHER, LD A.R.S RELIANCE ON THE DECI SION IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPOR ATION LTD(SUPRA), WHEREIN, THE FACTS ARE THAT THE MAIN OBJECT OF THE ASSE SSEE WAS TO DO RESEARCH, PRINTING AND PUBLISHING OF TEXT BOOK S FOR SCHOOL STUDENTS AS PER THE NORMS PRESCRIBED AND APPROVAL BY THE EDUCATION DEPART MENT OF THE STATE IN RESPECT OF ASSESSMENT YEARS 1981-82 TO 1988-89 AND 1990-91 TO 1996-97, WHERE THE PROVISIONS OF SECTION 10(23C) WERE NOT APPLICABLE AND THE ISSUE IN THE PRESENT CASE RELATE TO THE YEAR 1999-2000 ONWARDS . THE PROVISIONS OF SECTION 10(22) ARE ONLY APPLICABLE TO THE ASSESSMENT YEAR 1988-89 AND WERE OMITTED. THEREFORE, WE FIND THE ASSESSEE CANNOT RELY ON ABOVE DECISIONS AND WE SHALL FOLLOW THE LA W AND RULES IN FORC E FROM ASSESSMENT YEAR 1999-2000. CONSIDERING THE APPARE NT FACTS AND MATERIALS ON RECORD, AND THE JUDICIAL DECISIONS, WE ARE OF THE OPINION THAT THE CIT(A) HAS CONSIDERED THE FACTS, LEGAL PROVISIONS AND JUDICIAL DECISIONS AND THE WORKING OPERATIONS OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. ACCORDINGLY, WE ARE NOT INCLINED TO IN TERFERE WITH THE ORDER OF THE CIT(A) WHO HAD DEALT WITH THE ISSUE EXTENSIVELY AND VIS--VIS THE EXPLANATIONS OF THE ASSESSEE AND WE UPHOLD THE ACTI ON OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL. 16. SIMILARLY, THE ASSESSEE HAS FILE D APPEALS FOR THE ASSESSMENT YEARS 2003-04, 2005-06 AND 2006-07, WHEREIN, THE ISSUES ARE SIMILAR AND IDENTICAL, THEREFORE WE UPHOLD THE AC TION OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL. 12 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 17. IN ASSESSMENT YEAR 1999-2000, 2000-2001 AND 2001-02, THE ASSESSEE HAS ALSO CHALLENGED THE VALI DITY OF REASSESSMENT PROCEEDINGS AND THE PROVISIONS OF SECTION 10(23C) OF THE ACT, WHICH WAS DISMISSED BY THE CIT(A). 18. EVEN BEFORE US, THE ASSESSEE HAS ARGUED ON THE VALIDITY OF REASSESSMENT PROCEEDINGS. PRIMA FACIE, WE FIND THAT TH E REOPENING OF ASSESSMENT IS WITHIN A PERIOD OF FOUR YEARS AND WE ARE OF THE OPINION THAT THE PRESENT ASSESSING OFFICER HAS RELIED ON RECORDS AND TANGIBLE MATERIAL, WHICH THE PREDECESSOR HAS NO T VERIFIED AND, THEREFORE, BELIEVED THAT INCOME HAS ESCAPED ASSESSMENT. WHEN THE ASSESSING OFFICER HAS NOT EXAMINED THIS ASPECT IN THE EARLIE R ASSESSMENT, THE ASSESSING OFFICER IS JUSTIFIED IN REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. SO, CONSIDERING THE APPARENT FACTS, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER WAS CORRECT IN LAW IN MAKING RE-ASSESSMENT APPLYI NG THE PROVISIONS OF SECTION 147 OF THE ACT AS THE ASSESSEE WAS NOT HAVI NG APPROVAL FROM THE PRESCRIBED AUTHORITY AS ENVISAGED U/S. 10(23C) OF THE ACT. ACCORDINGLY, WE CONFIRM THE ORDERS OF THE CIT(A) AND DISM ISS THE APPEALS OF THE ASSESSEE. 19. IN THE RESULT, THE APPEALS FILE D BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN CO URT ON 17 /05/2017 IN THE PRESENCE OF PARTIES. SD/- SD/- (N.S SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 17 /05/2017 B.K.PARIDA, SPS 13 ITA NO.601/CTK/2005: ASSESSMENT YEAR :2002-03 ITA NO.602/CTK/2005: ASSESSMENT YEAR :2003-04 ITA NO.192/CTK/2008: ASSESSMENT YEAR :1999-2000 ITA NO.256/CTK/2008: ASSESSMENT YEAR :2000-2001 ITA NO.257/CTK/2008: ASSESSMENT YEAR :2001-2002 ITA NO.658/CTK/2008: ASSESSMENT YEAR :2005-2006 ITA NO.229/CTK/2009: ASSESSMENT YEAR: 2006-07 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : BOARD OF SECONDARY EDUCATION, CUTTACK 2. THE RESPONDENT. 3. THE CIT(A) CUTTACK 4. PR.CIT, CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//