Sant Baba Bhag singh, Moga V. The Pr. Chief Commissioner of Income Tax, Ludhiana

ITA 624/ASR/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1116 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-06-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP C HAUHAN LD
• Assessee Lawyers: J R HIRA LD ITP
• Keywords: Charitable institution; Principle of natural justice
• Section: 10; 11

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 NO.624(ASR)/2015 ASSESSMENT YEAR: 2014-15 ST. BABA BHAG SINGH MEMORIAL GIRLS COLLEGE, V&OP:- SUKHANAND, MOGA PAN:AADAS 0571Q VS. PR. CIT (EXEMPTIONS), CHANDIGARH (HOLDING ADDITIONAL CHARGE OF CCIT, LUDHIANA) (APPELLANT) (RESPONDENT) ITA NO.718(ASR)/2017 ASSESSMENT YEAR: 2016-17 ST. BABA BHAG SINGH MEMORIAL GIRLS COLLEGE, V&OP:- SUKHANAND BHAGAR ROAD, DIST:- MOGA PAN:AADAS 0571Q VS. CIT (EXEMPTIONS), CHANDIGARH (APPELLANT) (RESPONDENT) ITA NO.719(ASR)/2017 ASSESSMENT YEAR: 2016-17 ST. BABA BHAG SINGH MEMORIAL SENIOR SECONDARY SCHOOL, V&OP:- SUKHANAND BHAGAR ROAD, DIST:- MOGA PAN:AAHTS 2361K VS. CIT (EXEMPTIONS), CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.R. HIRA (LD. ITP) RESPONDENT BY: SH. SANDEEP CHAUHAN (LD. DR) DATE OF HEARING: 28.06.2018 DATE OF PRONOUNCEMENT: 11.09.2018 ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 2 ORDER PER BENCH: THESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEES/APPEL LANTS, ON FEELING AGGRIEVED AGAINST THE ORDERS DATED 30.09. 2015, 28.09.2017 & 29.09.2017 PASSED BY THE PR. CIT (EXEMPT IONS), CHANDIGARH (HOLDING ADDITIONAL CHARGE OF CCIT, LUDHI ANA AND THE LD. CIT (EXEMPTIONS) RESPECTIVELY U/S. 10(23C)(VI) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2 . THE SIMILAR AND IDENTICAL ISSUE INVOLVED IN THE AF ORESAID APPEALS, THEREFORE, IT IS APPROPRIATE AND PROPER TO DECIDE TH E BOTH APPEALS SIMULTANEOUSLY BY A COMPOSITE ORDER. 3. IN ITA NO.624(ASR)/2015, THE ASSESSES HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT ORDER PASSED IS INVALID AND AGAINST THE L AW DUE TO THE FACT THAT DUE TO CHANGE OF INCUMBENT, A FRESH NOTICE WAS REQUIRED TO BE ISSUED BUT NO SUCH NOTICE SEEMS TO HAVE BEEN ISSUED AND IT IS INCORRECT THAT THE NOTICE WAS ISSUED ON 29.09.2015 AS MENTION ED IN PARA 6 OF THE ORDER BECAUSE NO SUCH NOTICE HAD BEEN SERVED ON THE APPELLANT TILL TODAY, EVEN IT WAS NOT POSSIBLE TO SERVE/COMPLY THE NOTICE DATED 29.09.2015 FOR HEARING ON 30.09.2015 AND THE ORDER WAS PASSED EX- PARTE STATING THAT NONE APPEARED ON THE GIVEN DATE. 2. THAT LD. PRESCRIBED AUTHORITY WAS NOT JUST IFIED BY REJECTING THE APPROVAL OF CLAIM OF EXEMPTION U/S 10(23C)(VI) OF T HE INCOME TAX ACT 1961 ON THE GROUND THAT NO AGREEMENT HAS BEEN SIGNE D WITH SANT BABA HAZURA SINGH OWNER OF LAND AS TO WHAT WOULD HA PPEN TO BUILDING IN CASE THE LAND IS TAKEN BACK BY SANT BAB A HAZURA SINGH AND HOW THE INVESTMENT OF APPLICANT WOULD BE SAFE. IT HAS ALSO BEEN STATED THAT FUNDS HAVE BEEN UTILIZED FOR CONSTRUCTI ON IN THE NAME OF SANT BABA HAZURA SINGH.LD. PRESCRIBED AUTHORITY HAS IGNORED ALL THE MATERIAL FACTS AS EXPLAINED DURING PROCEEDINGS AS M ENTIONED IN PARA 5 OF THE ORDER. 3. THAT LD. PRESCRIBED AUTHORITY WAS NOT JUSTIFIED BY HOLDING THAT FUNDS OF THE INSTITUTE ARE BEING UTILIZED BY PERSON COVERED U/S 13(3) OF THE INCOME TAX ACT FOR HIS OWN BENEFIT. THE FACTS H AVE BEEN IGNORED ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 3 THAT BENEFIT HAS BEEN TAKEN BY INSTITUTE AND NOT BY PERSON COVERED U/S 13(3). IT IS, THEREFORE, REQUESTED THAT APPLICATION FOR AP PROVAL U/S 10(23C)(VI) MAY KINDLY BE ACCEPTED AND ORDER PASSED BY PRESCRIBED AUTHORITY MAY KINDLY BE SET ASIDE. APPEAL MAY KINDL Y BE ACCEPTED. 4. THE ASSESSES HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO.718(ASR)/2017 . 1. THAT LD. CIT (EXEMPTIONS), CHANDIGARH WAS NOT JUSTIFIED IN REJECTING THE APPLICATION U/S 10(23C)(VI) FOR GRANT APPROVAL BY OBSERVING THAT CONDITION 'NOT FOR PROFIT' IS IMPINGED BY THE HOST OF FEES (MORE THAN TWENTY HEADS) BEING CHARGED. 2 THAT LD. CIT(EXEMPTIONS) WAS ALSO NOT JUSTIFIED B Y TAKING THE GROUND FOR REJECTION THAT APPLICATION U/S 10(23C) HAD BEEN REJECTED EARLIER ON THE BASIS OF VERY RELEVANT REASONING WHEREAS EVERY APPL ICATION IS INDEPENDENT FOR ADJUDICATION ON THE FACTS OF APPLICATION WHICH IS UNDER CONSIDERATION. 3. THAT THE CONDITIONS DISCUSSED IN PARA 5.1 AN D PARA 5.2 OF THE ORDER UNDER APPEAL ARE NOT APPLICABLE FOR REJECTION OF AP PLICATION. 4. THAT PARA 8 OF THE ORDER HAS ALSO BEEN MISIN TERPRETED. 5. THAT LD. CIT (EXEMPTIONS) WAS ALSO NOT JUSTI FIED BY IGNORING THE CIRCULAR NO. 14/2015. 6. THAT THE APPELLANT CRAVES RIGHT TO AMEND OR ALTER ANY OF THE GROUND BEFORE OR AT THE TIME OF FINAL HEARING OF APPEAL. THAT IT IS THEREFORE PRAYED THAT ON FACTS AND CIRCU MSTANCES SUBMITTED ABOVE, APPROVAL U/S 10(23C)(VI) MAY KINDL Y BE GRANTED AND KINDLY BE ACCEPTED. 5. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITA NO.719(ASR)/2017. 1. THAT LD. CIT (EXEMPTIONS), CHANDIGARH WAS NOT JUSTIFIED IN REJECTING THE APPLICATION U/S 10(23C)(VI) FOR GRANT APPROVAL BY OBSERVING THAT CONDITION 'NOT FOR PROFIT' IS IMPINGED BY THE HOST OF FEES (MORE THAN TWENTY HEADS) BEING CHARGED. ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 4 2. THAT LD CIT (EXEMPTIONS) WAS ALSO NOT JUSTIF IED BY TAKING THE GROUND FOR REJECTION THAT PREPONDERANCE OF FEES COLLECTED IN THE NAME OF 'DEVELOPMENT FEE AND BUILDING' IS NOT SYNC WITH THE CONDITIONS ENVISAGING THEIR REDEPLOYMENT IN THE FIELDS OF EDUCATION BUT I GNORED THE FACT THAT SUCH FUNDS ARE NECESSARY TO MEAT THE EXPENDITURE NECESSA RY EXPENSES FOR EDUCATION PURPOSES. 3. THAT LAND ON WHICH BUILDING HAS BEEN CONSTRU CTED HAS BEEN GIVEN BY CHAIRMAN SANT BABA HAZOORA SINGH AND AS PER RULES A ND REGULATIONS OF THE SOCIETY PARA (II) AND (III) IS BINDING ON CHAIR MAN FOR SUCCESS OF SOCIETY. SOCIETY AND HE NOT SUPPOSED TO TAKE BACK THE LAND W HEN HE HAS TO MAKE ALL ARRANGEMENTS FOR SUCCESS. 4. THAT PARA 8 OF THE ORDER HAS ALSO BEEN MISIN TERPRETED. 5. THAT LD. CIT (EXEMPTIONS) WAS ALSO NOT JUSTI FIED BY IGNORING THE CIRCULAR NO. 14/2015. 6. THAT THE APPELLANT CRAVES RIGHT TO AMEND OR ALTER ANY OF THE GROUND BEFORE OR AT THE TIME OF FINAL HEARING OF APPEAL. THAT IT IS THEREFORE PRAYED THAT ON FACTS AND CIRCU MSTANCES SUBMITTED ABOVE, APPROVAL U/S 10(23C)(VI) MAY KINDL Y BE GRANTED AND KINDLY BE ACCEPTED. 4. WE SHALL FIRST TAKE UP THE ITA NO.624(ASR)/2015 FOR ADJUDICATION . THE BRIEF FACTS OF THE CASE ARE THAT AN APPLICATION IN F ORM NO.56D, REQUESTING FOR GRANT OF EXEMPTION U/S 10(23C) (VI) OF THE I.T. ACT, 1961 WAS FILED ON 25.09.2014 BY THE APPELLANT BE FORE THE LD. CIT(E), WHICH CAME UP FOR CONSIDERATION BEFORE THE CCI T, LUDHIANA, WHO VIDE LETTER NO.2520 DATED 08.09.2015 ASKED TO SUB MIT THE RELEVANT DOCUMENTS AND REPLY TO THE QUERIES BY THE FI XED DATE I.E., 22 ND SEP., 2015. THE APPELLANT ON DATED 28.09.2015 SUBMI TTED REPLY AS MENTIONED IN PARA NO.5 OF THE ORDER IMPUGNED HERE IN, HOWEVER, DUE TO CHANGE OF INCUMBENT, VIDE LETTER NO.2823 DATED 29. 09.2015, THE DATE OF HEARING WAS FIXED FOR 30.09.2015, ON WHICH DA TE, THE APPELLANT REMAIN UN-REPRESENTED, AND THEREFORE, THE APPLICATION OF THE APPELLANT WAS DECIDED EX-PARTE ON 30.09.2015 ITSELF. THE REJECTION OF ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 5 THE APPLICATION WAS MAINLY ON THE TWO REASONS WHICH HAVE BEEN CITED BY THE PR. CHIEF COMMISSIONER, CHANDIGARH, (HOLDING ADDITIONAL CHARGE OF CCIT, LUDHIANA) WHICH ARE REPRODUCED HEREIN BELOW. 7. REPLY OF THE ASSESSEE IS NOT ACCEPTABL E. THE LAND ON WHICH THE BUILDING OF THE COLLEGE IS SITUATED BELONGS TO SANT BABA HAZURA SINGH, NO AGREEMENT HAS BEEN SIGNED WITH SANT BABA HAZURA SINGH AS TO WHAT WOULD HAPPEN TO BUILDING IN CASE THE LAND IS T AKEN BACK BY SANT BABA HAZURA SINGH, IT HAS NOT BEEN EXPLAINED HOW TH E INVESTMENT OF APPLICANT WOULD BE SAFE. THIS CLEARLY SHOWS THAT TH E COMMITTEE MEMBERS FOR REASON NOT EXPLAINED AND BEST KNOWN TO THEM HAVE NOT TREATED THE FUNDS OF THE SCHOOL IN THE BEST INTERES T OF THE SCHOOL. AS THE FUNDS OF THE SCHOOL HAVE BEEN UTILIZED FOR CONSTRUC TION OF BUILDING IN THE NAME OF SANT BABA HAZURA SINGH AND AS THE OWNERSHIP REMAINS WITH SANT BABA HAZURA SINGH THE FUNDS OF THE INSTITUTION HAVE BEEN UTILIZED NOT FOR THE OBJECTS OF THE INSTITUTION. THIS IS CLE AR VIOLATION OF PROVISIONS OF 3' D PROVISO TO SECTION 10(23C) READ WITH SECTION 11 (5 ) OF THE I.T. ACT. 8. THE APPLICANT HAS ADVANCED LOANS TO DERA OF W HICH SANT BABA HAZURA SINGH IS THE HEAD. SANT BABA HAZURA SINGH IS ALSO THE PERSON COVERED UNDER SUB SECTION 3 OF SECTION 13 OF INCOME TAX ACT, 1961. THE APPLICANT HAS SIMPLY STATED THAT LOANS ARE TAKEN FR OM DERA WHEN NEEDED AND GIVEN TO DERA WHEN FUNDS ARE REQUIRED BY IT. THUS, THE FUNDS OF THE INSTITUTE ARE BEING UTILIZED BY PERSON COVERED U/S 13(3) OF THE INCOME TAX ACT, 1961 FOR HIS OWN BENEFIT. THE F UNDS ARE NOT BEING EXCLUSIVELY USED FOR EDUCATIONAL PURPOSES. 5. FROM THE RECORD, IT APPEARS THAT THE APPELLANT HAS FI LED AN UNDERTAKING AND CONTENTS OF THE SAME ARE REPRODUCED HER EIN BELOW. UNDERTAKING I SANT HAZOORA SINGH S/O SANT BABA BHAG SINGH DERA BHORE WALA VILLAGE SUKHANAND DISTRICT, MOGA DO HERE BY UNDERTAKE THAT THE LAND MEASURING ABOUT 4/5 ACRES SITUATED IN VILLAGE SUKHANAND, AND I HAD VOLUNTARILY GIVEN FOR RUNNING THE EDUCATIONAL INSTITUTES NAMELY SANT BABA BHAG SINGH MEMORIAL GIR LS COLLEGE, SANT BABA BHAG SINGH MEMORIAL GIRLS COLLEGE OF EDUCATION , SANT BABA BHAG SINGH MEMORIAL GIRLS SR. SEC. SCHOOL AND SANT BABA BHAG SINGH MEMORIAL PUBLIC SCHOOL ALL SITUATED IN VILLAGE SUKH ANAND DISTRICT MOGA WITHOUT ANY LEASE AGREEMENT OR THEKA AS THE SAID LA ND WAS GIVEN BY DONATION 'HIBA NAMA}' BY SOME LAND OWNERS OF VILLAG E SUKHANAND. I UNDERTAKE THAT THE SAME SHALL NOT BE TAKEN BACK. BE ING LIFE TIME CHAIRMAN OF THE EDUCATIONAL SOCIETY UNDER THE CONTR OL OF WHICH ALL THE ABOVE EDUCATIONAL INSTITUTIONS ARE BEING RUN AND I AM BOUND TO SEE THAT THESE ARE FUNCTIONING SUCCESSFULLY AND I AM ALSO BO UND TO SEE THAT NO LOSS MAY HAPPEN IN THERE FUNCTIONING. THE SAID LAND WAS DONATED BY ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 6 THE VILLAGERS TO RUN THE EDUCATIONAL INSTITUTIONS F OR GIRLS AS THERE WAS NO COLLEGE IN THE SURROUNDING AREAS UP TO 40 KILOMETER S. I ALSO UNDERTAKE THAT I SHALL NOT CHARGE ANY LEASE MONEY OR THEKA IN FUTURE ALSO. THIS UNDERTAKING SHALL BE BIN DING ON GADI OWNERS OF DERA BHORE WALA SUKHANAND WHO SO EVER MAY SUCCEE D ME IN FUTURE. WRITTEN AND SUBMITTED TO SOCIETY TO PASS ANY RESOLU TION AS THE SOCIETY MAY DESIRE. I FURTHER CERTIFY THAT I HAVE S IGNED THIS UNDERTAKING IN THE PRESENCE OF SOCIETY MEMBERS PRESENT AT THIS TIME. DATED:- 28.09.2016 S/D (SANT HAZOORA SINGH) 6. IN OUR CONSIDERED VIEW, ALTHOUGH, THE UNDERTAKING CAN BE TERMED AS PROPER REPLY TO THE REJECTION BY THE LD. PR.CCIT, CHANDIGARH, HOWEVER, WE FEEL IT APPROPRIATE TO DIRECT THE LD. PR . CCIT, CHANDIGARH TO ASK THE APPELLANT TO SUBMIT THE RELEVANT DOCUMENTS IN THE FORM OF AFFIDAVIT OR RELINQUISH DEED OR ANY AGREEMENT. THE L D. PR. CCIT, CHANDIGARH HAS MENTIONED IN PARA NO.7 OF ITS ORDER WI TH REGARD TO THE SECOND GROUND OF REJECTION THAT THE APPELLANT HAS ADVAN CED LOANS TO DERA OF WHICH SANT BABA HAZUR SINGH IS THE HEAD. SANT BABA IS ALSO THE PERSON COVERED UNDER SUB-SECTION 3 OF SECTION 13 OF TH E INCOME TAX ACT, 1961. IT WAS SUBMITTED BY THE LD. AR THAT THE DONATIONS ARE RECEIVED THROUGH DERA AS AND WHEN REQUIRED AND DURING THE YEAR UNDER CONSIDERATION A SUM OF RS.17,60,500/- WERE RECEIVE D FROM DERA WHICH IS CLEAR FROM THE COPY OF DONATION ACCOUNT AT RS.17, 62,500/-, WHICH GOES TO SHOW THAT LOAN/ADVANCE OF RS. 15 LACS CAN BE TREATED AS COVERED BY THE AFORESAID AMOUNT AND THEREFORE, CANNOT BE TERMED AS PERSONAL USE OF THE FUNDS OF THE INSTITUTION BECAUSE SANT BABA HAZUR SINGH IS NOT ONLY THE OWNER OF THE DERA BUT ALSO A LI FE TIME CHAIRMAN OF THE SOCIETY. 7. WE FIND THAT THE REASONING GIVEN BY THE LD. AR TO B E LOGICAL AND PROBABLE, THEREFORE, WE CANNOT UPHELD THE REASONING G IVEN BY THE PR. ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 7 CCIT, CHANDIGARH TO THE EFFECT THAT THE FUNDS OF THE INSTITUTION ARE BEING UTILIZED BY THE PERSON COVERED U/S 13(3) OF THE ACT FOR HIS OWN BENEFIT AND NOT BEING USED EXCLUSIVELY FOR THE EDUCATIO NAL PURPOSES BECAUSE IT WAS INTER-SE ARRANGEMENT BETWEEN THE SOCIETY/D ERA AND THE APPELLANT. 8. THE APPELLANT HAS ALSO CHALLENGED THE ORDER UNDER CONSI DERATION ON THE GROUND THAT DUE TO CHANGE OF INCUMBENT, A FRESH NOTICE WAS REQUIRED TO BE ISSUED BUT NO SUCH NOTICE WAS ISSUED BECAUSE IT WAS NEVER BEEN SERVED UPON THE APPELLANT TILL TODAY AND EVEN OTHERWISE WAS NOT PROBABLE TO SERVE THE NOTICE DATED 29 TH SEP., 2015 FOR HEARING ON 30.09.2015. 9. WE HAVE INDEPENDENTLY APPLIED OUR MIND SUCH AS ON TH E CHANGE OF INCUMBENT, VIDE LETTER NO. 2823 DATED 29.09.2015, THE CASE WAS FIXED FOR HEARING ON 30.09.2015 WHICH CLAIMED TO NOT BEEN RECEIVED BY THE APPELLANT AND EVEN OTHERWISE THE ORDER HAS BE EN PASSED ON 30 TH SEP., 2015 AND THERE IS A GAP OF ONLY ONE DAY IS ISSUI NG THE NOTICE AND FIXING THE DATE OF HEARING WHICH CLEARLY REFLECTS V IOLATION OF THE RULE OF AUDI-ALTERAM-PARTEM . RIGHT OF BEING HEARD IS THE FUNDAMENTAL RIGHT OF EVERY LITIGATION WHICH INCLUDES THE APPELLAN T HEREIN , THEREFORE, NOT PROVIDING SUFFICIENT OPPORTUNITIES ON CHANGE OF INC UMBENT AND DECIDING THE CASE EX-PARTE ON VERY NEXT DATE OF ISSUING A NOTICE, CLEARLY REFLECTS THAT RULE OF NATURAL JUSTICE HAS NOT BE EN FOLLOWED WHICH ENTAIL THE ORDER INVALID. 10. HENCE, WE FEEL IT APPROPRIATE TO REMAND BACK THE INSTA NT CASE TO THE FILE OF THE LD. CIT(E), TO DECIDE AFRESH THE APPL ICATION OF THE APPELLANT FILED UNDER SECTION U/S 10(23C)(VI), WHILE T AKING INTO ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 8 CONSIDERATION, THE OBSERVATION AND ANALYZATION MADE A BOVE IN THIS ORDER, HOWEVER, WITHIN THREE MONTHS FROM THE DATE OF THIS ORDER, BY AFFORDING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE APPELLANT. 11 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. ITA NO.718 (ASR)/2018 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT HAD MADE AN APPLICATION U/S 10(23C)(VI) OF THE INCOME TAX ACT, 1961 ON DATED 28.09.2016 BEFORE THE LD. CIT(E), CHANDIGARH BY STAT ING THAT THE AIMS AND OBJECTS OF THE APPELLANT SOCIETY ARE RUNNING THE COL LEGE/INSTITUTION ARE TO OPEN, START AND RUN THE EDUCATIONAL INSTITUTIO NS. THE SAID APPLICATION WAS TAKEN INTO CONSIDERATION BY THE LD. CI T(E) BY ISSUING A SHOW CAUSE NOTICE DATED 07.02.2017 FIXING THE CASE FOR HE ARING ON 16 TH FEB., 2017. BY SHOW CAUSE NOTICE DATED 07.02.2017, THE APPELLANT WAS CALLED UPON TO SUBMIT THE DOCUMENTS/DETAILS AS MENTIONED IN PARA NO.6 OF THE ORDER TO SUBSTANTIATE THE NATURE AND GENU INENESS OF ITS ACTIVITIES BY THE FIXED DATE I.E. 16.02.2017, HOWEVER , ON 16.02.2017 NO ONE ATTENDED ON BEHALF OF THE APPELLANT, THEREFO RE, ANOTHER OPPORTUNITY WAS GRANTED TO THE APPELLANT BY FIXING T HE MATTER FOR HEARING ON 14.09.2017, THEREAFTER, THE CASE WAS ADJOUR NED TO 25.02.2017, HOWEVER, VIDE LETTER DATED 20.09.2017, SOME ADDITIONAL QUERIES AS MENTIONED IN PARA NO.7 OF THE ORDER HAVE B EEN RAISED. THE LD. AR OF THE APPELLANT, VIDE ITS LETTER DATED 25.09.2017 FILED THE REPLY, THEREAFTER, THE LD. CIT(E), PROCEEDED WIT H THE CASE AND FINALLY REJECTED THE APPLICATION FILED BY THE APPELL ANT U/S 10(23C)(VI) FOR GRANT OF APPROVAL, WHILE CONSIDERING THE EARLIER REJECTION ORDER DATED 30.09.2014 PASSED BY THE PR. CCIT, CHANDIGARH U S. 10(23C)(VI) ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 9 OF THE ACT AS WELL AS ON THE MERITS BY MENTIONING THA T THE APPELLANT IS CHARGING FEES IN LARGE QUANTITY UNDER SEVERAL HEADS ARE CLEAR POINTERS THAT THE ACTIVITIES ARE GEARED TOWARDS MAXIMIZING PRO FITS AND THE CONDITION NOT FOR PROFIT IS IMPINGED BY THE HOST OF FEES (MORE THAN TWENTY HEADS) BEING CHARGED AND THE SIMILAR APPLICATION HAS BEEN REJECTED EARLIER ON THE BASIS OF VERY RELEVANT REASONIN G. 13. THE IMPUGNED ORDER PASSED BY THE LD. CIT(E), CHANDIG ARH WAS CHALLENGED BEFORE US BY FILING THE INSTANT APPEAL. 14. WE HAVE HARD THE RIVAL SUBMISSION OF THE PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE ORDER IMPUGNED HEREIN. 15. THE FIRST REASON FOR DECLINING THE APPROVAL IS THAT THE EARLIER APPLICATION REJECTED BY THE PR. CCIT, CHANDIGARH (HO LDING ADDITIONAL CHARGE OF CCIT, LUDHIANA), WE ARE IN AGREEMENT WITH THE APPELLANT THAT EVERY APPLICATION IS REQUIRED INDEPENDENT ADJUD ICATION ON THE BASIS OF ITS FACTS AND MERITS BECAUSE EVERY YEAR EXEMPTION IS REQUIRED TO BE TAKEN SEPARATELY AND SUBJECTED TO ASSESSMENT, THEREF ORE, WE DO NOT FIND ANY FORCE IN THE AFORESAID REASONING. HOWEVER, OBSERVATION OF THE LD CIT(E) TO THE EF FECTS ' THE LAND ON WHICH THE BUILDING OF THE COLLEGE IS SITUATED BELONGS TO SANT BABA HAZURA SINGH, NO AGREEMENT HAS BEEN SIGNED WITH SANT B ABA HAZURA SINGH AS TO WHAT WOULD HAPPEN TO BUILDING IN CASE THE LAND IS TAKEN BACK BY SANT BABA HAZURA SINGH, IT HAS NOT BEEN EXPLAI NED HOW THE INVESTMENT OF APPLICANT WOULD BE SAFE' , HAS ALREADY D EALT BY US IN ITA NO. ITA NO.624(ASR)/2015 IN PARA NO. 4 TO 6 AND CONCLUSION OF THE SAME SHALL MUTATIS MUTANDIS APPLY TO THE INSTANT CASE. ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 10 16. SECOND REASON FOR REJECTION IS THAT CHARGING OF FEE IS IN LARGE QUANTITY UNDER SEVERAL HEADS IS CLEAR POINTERS THAT THE ACTIVITIES ARE GEARED TOWARDS MAXIMIZING PROFITS. IT WAS SUBMITTED BY THE LD. COUNSEL OF THE APPELLANT THAT IT IS EVIDENT FROM THE AUDIT ACCOUNTS THAT THE EDUCATIONAL INSTITUTIONS IS BEING RUN SOLELY FOR TH E EDUCATIONAL PURPOSES AND OUT OF GROSS RECEIPT OF RS.281,79,040/-, MA XIMUM AMOUNT I.E. 91.74% HAVE BEEN APPLIED FOR EDUCATIONAL PURPOSES AND APPELLANT IS CHARGING FEES AS PER GUIDELINES OF THE PUNJ AB UNIVERSITY. OUR ATTENTION WAS ALSO DRAWN BY THE LD. AR TO THE AN NEXURES - A1, A3 & A5, PAGE NO.22-26 OF THE PB, WHERE ACCORDING TO RULE OF PUNJAB UNIVERSITY, HEADS NO 1 TO 18 HAVE BEEN MENTION ED FOR CHARGING OF SEPARATE FEES UNDER THE SEPARATE HEADS, THEREFORE, T HE REASON FOR REJECTION OF APPLICATION BY THE LD. CIT(A) TO THE EF FECT THAT THE APPELLANT IS CHARGING FEES FOR MORE THAN 20 HEADS, HAV ING NO SUBSTANCE AND CANNOT BE TERMED AS LOGICAL REASONING FOR R EJECTION OF APPLICATION U/S 10(23C) (VI) OF THE ACT. 17. THIRD REASON FOR REJECTION GIVEN BY THE LD. CIT(E) IS THAT THE COLLEGE/INSTITUTION IS NEITHER BEEN REGISTERED AS A SO CIETY NOR THE NAME OF THE COLLEGE HAS BEEN MENTIONED IN RULES AND REGULAT IONS/BYE LAWS OF THE SOCIETY. IT WAS SUBMITTED BY THE LD. AR THAT ST. B ABA BHAG SINGH MEMORIAL EDUCATION SOCIETY, DERA BHOREWALA, SUKHANAND IS A REGISTERED SOCIETY UNDER THE REGISTRATION OF SOCIETY (A CT XXI OF 1860) VIDE REGISTRATION NO.822 OF 1994-95 HAS EXPRESS COVERAG E OR MANDATE OVER THE EDUCATIONAL INSTITUTIONS RUN BY IT BECAUSE THE AIMS AND OBJECTS OF THE SOCIETY AMONGST OTHERS ARE TO OPEN, START A ND RUN THE EDUCATIONAL INSTITUTIONS MAY BE CO-EDUCATION OR FOR GI RLS ONLY TO ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 11 PROMOTE ANY OTHER ACTIVITIES SOLELY FOR EDUCATIONAL PUR POSES AND NOT FOR ANY PROFIT MAKING PURPOSES. IT WAS FURTHER SUBMITTE D BY LD. AR THAT SOCIETY WAS REGISTERED ON 13.09.1994 AND IN THE ARTICLE OF ASSOCIATION AND RULES AND REGULATIONS, NO NAME OF ANY EDUCATIONAL INSTITUTION, COLLEGE, SCHOOL, INSTITUTION OF MEDICAL PHARMACY AND ENG INEERING COLLEGE COULD BE MENTIONED AS UPTO THAT TIME IT WAS NO T KNOWN AS TO WHAT WOULD BE THE NAME AND WHEN IT WOULD BE STARTED. SO FAR AS INSTITUTION AT THE PRESENT ARE CONCERNED, THESE ARE BEIN G RUN BY THE SOCIETY AND IT IS NOT POSSIBLE TO GET REGISTERED EACH AND EVERY INSTITUTION AS ALL ARE AFFILIATED WITH THEIR RESPECTIVE AUTHORITIES I.E. UNIVERSITY AND CENTRAL BOARD OF SECONDARY EDUCATION. WE FIND THAT THE EXPLANATION OFFERED BY THE LD. AR TO BE LOGICAL BECAUSE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEG ROVE INTERNATIONAL CHARITABLE TRUST IN CWP NO.6031/2009 H AS ALREADY DEALT WITH THE SIMILAR AND IDENTICAL SITUATION BY HOLDING TH AT THE EDUCATIONAL INSTITUTIONS, WHICH ARE REGISTERED AS A SOCIETY, WOULD CO NTINUE TO RETAIN THEIR CHARACTER AS SUCH AND WOULD BE ELIGIBLE TO APPLY F OR EXEMPTION U/S 10(23C)(VI) OF THE ACT. 8.13 (4) THE EDUCATIONAL INSTITUTIONS, WHICH ARE REGISTERED AS A SOCIETY, WOULD BE CONTINUE TO RETAIN THEIR CHARACTE R AS SUCH AND WOULD BE ELIGIBLE TO APPLY FOR EXEMPTION UNDER SECTION 10 (23C)(VI) OF THE ACT. 18. ON THE AFORESAID REASONS AND FACTUAL ANALYZATION, WE ARE OF THE CONSIDERED VIEW THAT THE REASONING GIVEN BY THE LD. CI T(E) FOR REJECTION OF THE APPLICATION U/S 10(23C)(VI) OF THE ACT CANNOT BE HELD AS LOGICAL REASONING AND THEREFORE, CONSIDERING THE CASE OF THE APP ELLANT INDEPENDENTLY, THE NATURE OF ITS ACTIVITIES, 91.74 % OF THE GROSS RECEIPTS HAVE BEEN APPLIED FOR EDUCATIONAL PURPOSES AND FEES ARE BEING CHARGED ACCORDING TO THE PARAMETERS OF THE PUNJAB UNIVE RSITY, ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 12 THEREFORE, WE FEEL IT APPROPRIATE TO REMAND THE CASE TO THE FILE OF THE LD. CIT(E) TO DECIDE AFRESH APPLICATION OF THE ASSEEEE/ APPELLANT FILED U/S 10(23C)(VI) OF THE ACT, WHILE TAKING INTO CONSIDERA TION, THE OBSERVATIONS AND ANALYZATIONS MADE ABOVE IN THIS ORDER , HOWEVER, WITHIN THREE MONTHS FROM THE DATE OF THIS ORDER, BY A FFORDING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE APPELL ANT. 19 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.719(ASR)/2017 FOR A.Y. 2016-17 IN THE INSTANT APPEAL, FIRST GROUND OF REJECTION OF THE APPLICATION IS THAT THE SCHOOL/INSTITUTION HAS NEITHER BEEN REGISTE RED AS A SOCIETY NOR AS THE NAME OF THE SCHOOL HAS BEEN MENTIONED IN T HE RULES AND REGULATIONS/BYE LAWS OF THE SOCIETY. THIS GROUND OF RE JECTION HAS ALREADY BEEN REPLIED BY US WHILE ADJUDICATING ITA NO. 718 (ASR)/2017 IN PARA NO. 17, HENCE, REASONING OF THE SAME SHALL MUTATIS MUTANDIS APPLY TO THE FACTS OF THE INSTANT CASE. THE SECOND GROUND OF REJECTION IS THAT THE APPLICANT IS CHARGING FEES IN QUANTITIES IN SEVERAL HEADS WHICH ARE CLE AR POINTERS THAT THE APPELLANT IS CHARGING FEES IN LARGE QUANTITY UNDER SEVERAL HEADS ARE CLEAR POINTERS THAT THE ACTIVITIES ARE GEARED TOWARDS MAXIMIZING PROFITS. EXACTLY SIMILAR GROUND HAS ALSO BEE N DEALT WITH BY US IN ITA NO.718 IN PARA NO. 16 AND THE CONCLUSION OF T HE SAME SHALL MUTATIS MUTANDIS APPLY TO THE FACTS OF THE INSTANT CASE QUA REASON OF REJECTION UNDER CONSIDERATION. ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 13 20. THIRD GROUND OF REJECTION IS THAT THE LAND HAS NOT BEEN INCLUDED IN THE SCHEDULED OF FIXED ASSETS, WHICH INDICATE S THAT THE OWNERSHIP OF THE LAND AT WHICH SCHOOL BUILDING HAS BEEN CONSTRUCTED IS WITH THE APPLICANT SCHOOL. FURTHER, IT HAS NOT BEEN EX PLAINED AS TO HOW THE INVESTMENT OF APPLICANT IN THE BUILDING WOULD BE SAFE. SIMILAR AND IDENTICAL ISSUE HAS ALREADY BEEN DEALT WITH BY US IN IT A NO.624(ASR)/ 2015 AND THE REASONING, OBSERVATION AND CONCLUSION OF T HE SAME SHALL MUTATIS MUTANDIS APPLY TO THE INSTANT CASE QUA GROUND OF MENTIONED IN PARA 10 OF THE ORDER. 21. ON THE AFORESAID OBSERVATIONS, ANALYZATION AND REASONS, WE FEEL IT APPROPRIATE TO REMAND BACK THE INSTANT CASE TO THE FILE OF THE LD. CIT(E), TO DECIDE AFRESH THE APPL ICATION OF THE APPELLANT FILED UNDER SECTION U/S 10(23C)(VI), WHILE T AKING INTO CONSIDERATION, THE OBSERVATION AND ANALYZATION MADE A BOVE IN THIS ORDER, HOWEVER, WITHIN THREE MONTHS FROM THE DATE OF THIS ORDER, BY AFFORDING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE APPELLANT. 22 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. 23. ALL 03 APPEALS STANDS ALLOWED FOR THE STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 .09.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 11.09.2018 /PK/ PS. ITA NOS,624, 718 &719(ASR)/2017 (A.Y: 2016-17) ST. BABA BHAG SINGH MEMOR IAL, GIRLS COLLEGE & ST. BABA BHAG SINGH MEMORIAL SR. SECONDARY SCHOOL VS. CIT (E) 14 COPY OF THE ORDER FORWARDED TO: (1) ST. BABA BHAG SINGH MEMORIAL GIRLS COLLEGE, V&OP:- SUKHANAND, MOGA (2) ST. BABA BHAG SINGH MEMORIAL SENIOR SECONDARY SCHOOL V&OP:- SUKHANAND BHAGTA ROAD, DIST:- MOGA (2) THE CIT (EXEMPTIONS), CHANDIGARH (3) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER