The Income Tax Officer, (Exemption), Jalandhar V. K.M.V. Collegiate Sr. Sec. School, Jalandhar

ITA 623/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5718 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISRA LD
• Assessee Lawyers: Y K SUD LD
• Keywords: Reopening of assessment; Benefit of exemption
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NOS.622 & 623(ASR)/2017 ASSESSMENT YEARS:2010-11 & 20 11-12 ITO, (EXEMPTION), WARD, JALANDHAR VS. K.M.V. COLLEGIATE, SR. SECONDARY SCHOOL, JALANDHAR PAN:AACAK8863C (APPELLANT) (RESPONDENT) APPELLANT BY: SH. A.N. MISRA (LD. DR) RESPONDENT BY: SH. Y.K. SUD (LD. CA) DATE OF HEARING: 25.01.2018 DATE OF PRONOUNCEMENT: 16.03.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEALS HAVE BEEN PREFERRED BY THE REVE NUE DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE ORDERS DATED 03.07.2017 IN RESPECT OF ASST. YEARS: 2010-11 & 2011-12 RESPECTIVELY, PASSED BY THE LD. CIT(A)-2, JALANDHAR BY RAISING THE FOLLOWING GROUNDS OF APPEAL. I. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.36, 99,026/- AND EXTENDING THE BENEFIT OF EXEMPTION TO AN ENTITY WIT HOUT HAVING APPROVAL FOR EXEMPTION U/S 10(23C)(VI) THAT BEING T HE STATUTORY REQUIREMENT. ITA NOS.622 & 623/ASR/2017 (A.YS.2010-11 & 2011-12) ITO VS. K.M.V COLLEGIATE, SR. SEC. SCHOOL, JAL. 2 II. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN CONSIDERING THE REASSESSMENT PR OCEEDINGS AS INVALID BY RELYING ON THE JUDGMENT REPORTED IN 376 ITR 110 WHICH IS DISTINGUISHABLE TO THE FACTS OF THE PRESENT CASE . III. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN NOT CONSIDERING THAT THE ASSESS EE DOES NOT EXISTS SOLELY FOR EDUCATIONAL PURPOSE AS THE AIMS A ND OBJECTS OF THE INSTITUTION ARE PARTLY RELIGIOUS IN NATURE. IV. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN NOT CONSIDERING THAT THE WORTHY CCIT, LUDHIANA HAD REJECTED THE CLAIM OF ASSESSEE FOR APP ROVAL U/S 10(23C)(VI) AS THE INSTITUTION IS NOT EXISTING 'SOLELY FOR EDUCATIONAL PURPOSES'. V. THAT THE APPELLANT CRAVES TO LEAVE, ADD OR AMEN D THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL HEARD AND DISPOSE D OFF. 2. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF THE PARTIES AND MATERIA L PLACED ON RECORD, SPECIFICALLY THE ORDER DATED 15.07.2016 PASSED BY THE CO-ORDINATION BENCH OF ITAT, AMRITSAR, IN ITA NOS.154 & 155(ASR)/2016 QUA A.Y.2007-08 AND 2008-09, ON SIMILAR AND IDENTICAL GROUNDS AND CIRCUMSTANCES, ON WHICH OUR ATTENTION WAS DRAWN BY THE LD. AR. THE LD. CIT(A) WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE, RESPECTFULLY FOLLOWED THE AFORESAID ORDER PASSED B Y THE CO-ORDINATION BENCH OF ITAT AT AMRITSAR. THE OPERATI VE PART OF THE ORDER IS REPRODUCED HEREIN BELOW. 4.9 HAVING CONSIDERED THE MATERIAL AVAILABLE O N RECORD INCLUDING A COPY OF THE JUDICIAL DECISIONS WHICH HAS BEEN CITED BY THE APPELLANT, I FIND THAT HONOURABLE ITAT AMRITSAR BENCH WHILE ITS ORDER DATE D 15. 07. 2016 IN THE CASE ITA NOS.622 & 623/ASR/2017 (A.YS.2010-11 & 2011-12) ITO VS. K.M.V COLLEGIATE, SR. SEC. SCHOOL, JAL. 3 OF KMV HAVE CONSIDERED THE ISSUE OF REOPENING OF AS SESSMENT UNDER SECTION 147/148 OF THE IT ACT AND ALSO OF DENIAL OF EXEMPTI ON UNDER SECTION 10(23C)(IIIAD) TO THE APPELLANT INSTITUTION. HONOUR ABLE TRIBUNAL HAVE DISCUSSED THE ISSUE OF REOPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE IT ACT IN DETAIL IN ITS ORDER AND AFTER CONSIDERING THE DECISION OF HONOURABLE PUNJAB AND HARYANA HIGH COURT REPORTED IN 376 ITR 110 DECIDED THAT NOTICE ISSUED UNDER SECTION 147 OF THE IT ACT WAS INVALID AND THEREFORE THE OTHER GROUND OF APPEAL DOES NOT SURVIVE FOR ADJUDICATION. 4.10 SINCE THE FACTS IN THE PRESENT CASE ARE IDEN TICAL AND THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF THE HONOURABLE ITAT, THE REA SSESSMENT PROCEEDINGS INITIATED BY THE AO UNDER SECTION 147 OF THE IT ACT ARE HELD TO BE INVALID. FURTHER, IT IS SEEN FROM THE RECORD THAT EVEN ON ME RITS, THE CLAIM OF EXEMPTION U/S 10(23 C)(VI) OF THE IT ACT HAS BEEN ALLOWED BY THE HONBLE ITAT TO THE APPELLANT IN ITS ORDER DATED 22.02.2017 IN ITA NO. 523/ASR/20 16. THEREFORE, APPEAL FILED ON THE OTHER GROUNDS BECOMES IN-FRUCTUOUS. 5. IN THE RESULT, APPEAL IS ALLOWED. ALTHOUGH THE APPEAL WAS HEARD AS A COVERED MATTER IN REFERENCE TO THE CASE DECIDED BY THE CO-ORDINATE BENCH IN THE CASE OF KVM COLLEGIATE SR. SECONDARY SCHOOL VS. ITO, IN ITA NO.154 AND 155(ASR)/2016 DATED 15.07.2016 IN WHICH, IT WAS OBSERVED THAT EVEN IF SOME OF THE OBJECTS DOES NOT FALL STRICTLY WITHIN THE PURVIEW OF EDUCATION, THEN THE SAME COULD B E DISREGARDED, IF NOT PERSUADED, THEREFORE, IN THE INSTA NT CASE, IT WAS ARGUED BY THE LD. AR THAT THE OBJECT OF TEACHING V EDIC DHARMA, BRAHAMCHARIYA, ARYAN CULTURE, CLASSICAL SANSKR IT AND VEDAS DOES NOT BAR IN TREATING THE ASSESSEES INSTITUTION A S EXISTING SOLELY FOR THE PURPOSE OF EDUCATION WHICH QUAL IFIES THE PARAMETERS OF SEC.10(23C)(VI) OF THE ACT. WE REMIND OU RSELVES TO THE OBJECT CLAUSE OF THE INSTITUTION WHICH DEFINED ITS CHARACTER AND TO PURSUE WHICH IT STANDS FORMED AND THE APPROVAL U/S 10(23C)(VI) NECESSITATES THAT INSTITUTION MEANS EXISTS SOL ELY FOR ITA NOS.622 & 623/ASR/2017 (A.YS.2010-11 & 2011-12) ITO VS. K.M.V COLLEGIATE, SR. SEC. SCHOOL, JAL. 4 THE PURPOSE OF EDUCATION AND SOLELY IN ANY SENSE CANNOT BE OVERLOOKED BECAUSE EXISTENCE OF THE POWER IS MORE RELEV ANT RATHER THAN ITS ACTUAL EXERCISE. THE PRIMACY OF THE OBJE CT CLAUSE WAS ALSO REITERATED BY THE APEX COURT IN THE CASE OF CI T VS. PALGHAT SHADI MAHAL TRUST [2002] 254 ITR 212 (SC), T HEREFORE, THE ARGUMENT OF THE LD. AR BASED ON THE DECISION FOLL OWED BY THE TRIBUNAL NOT SUSTAINABLE, WHERE THE OBJECT CLAUSE O THER THAN THE EDUCATION ALSO FORM PART OF ITS CONSTITUTING CHARTE R, HOWEVER, CONSIDERING THE OBJECT OF THE VEDIC DHARMA, BRAHAMCHAR IYA, ARYAN CULTURE, CLASSICAL SANSKRIT AND VEDAS, IN OUR CONSI DERED VIEW COULD BE REGARDED AS AN OBJECT OF EDUCATION, IN TH E FORM OF IMPARTING OF SYSTEMATIC UNDERSTANDING ON ANY ASPECT OF LIFE AND FIELD OF HUMAN ENDEAVOUR AND ANY PHENOMENON OF NATU RE ETC. IS ALL EDUCATION IN VIEW OF EXPLANATION PROPOUNDED BY T HE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOKA SIKSHAHANA TRUST V S. CIT[1975] 101 ITR 234 (SC). EDUCATION HAS TO BE UND ERSTOOD AS SYSTEMATIC EDUCATION, SCHOOLING OR TRAINING IMPARTED T O THE YOUNG GENERATION IN PREPARATION FOR THE WORK OF LIK E WHICH INCLUDES WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON RECEIVES. IN OUR CONSIDERED VIEW IF THE OBJECT OF EDUCATION IS TO PRODUCE AN INFORMED PERSON, AWARE OF HIS OWN SELF, HIS R OLE AND RESPONSIBILITY TOWARD HIMSELF AND THE SOCIETY AT LARGE, SHAPE HIS MORAL FIBRE, WHAT BETTER THAN THE SUBLIME VEDAS, SHEDD ING LIGHT ON EVERY ASPECT OF HUMAN EXISTENCE AND WHOSE BENIGN PRESE NCE HAS SHOWN THE MANKIND THE WAY FOR A HAPPY AND PEACEFUL ITA NOS.622 & 623/ASR/2017 (A.YS.2010-11 & 2011-12) ITO VS. K.M.V COLLEGIATE, SR. SEC. SCHOOL, JAL. 5 COEXISTENCE, IN HARMONY SELF WITH EACH OTHER AND THE NA TURE, THROUGH THE AGES. ON THE AFORESAID ANALYSIS, CONSIDERATION, OBSERVATION A ND REASONS, WE DO NOT HAVE ANY HESITATION TO UPHOLD THE ASSESSEES CLAIM OF EXISTING SOLELY FOR THE EDUCATION PURPOSES, SATI SFYING THE MANDATE OF SECTION 10(23C)(VI). ACCORDINGLY, WE ARE IN CLINED TO UPHOLD THE IMPUGNED ORDER. 3. IN THE RESULT, THE APPEALS FILED BY THE REVENUE DEPA RTMENT UNDER CONSIDERATION STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.03.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED:16.03.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) K.M.V. COLLEGIATE SR. SEC. SCHOOL, JALANDHAR (2) THE ITO, WARD JALANDHAR (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED. (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER