Sh. Nangli Educational Society, Gurdaspur V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 624/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7723 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-11-2017
• Assessment Year: misc
• Appeal Filed On: 08-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution; Capital expenditure
• Section: 12AA; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. RAVISH SOOD, JUDICIAL MEMBER I.T.A. NO. 624/(ASR)/2016 ASSESSMENT YEAR: PAN: AAEAS2209J M/S. SH. NANGALI EDUCATIONAL SOCIETY, BSF ROAD, GURDASPUR. VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (ADV .) RESPONDENT BY: SH. S. S. KANWAL (D.R.) DATE OF HEARING: 15.11.2017 DATE OF PRONOUNCEMENT: 05.12.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(E) CHANDIGARH DATED 28.10.2016 PASSED U/S 10(23C)(VI) OF THE ACT. 2. AT THE OUTSET, THE LD. AR SUBMITTED THAT COMPLET E DOCUMENTS WERE FILED BEFORE THE LD. CIT(E) FOR REGISTRATION U/S 10 (23C)(VI) BUT THE LD. CIT(E) HAS DISMISSED THE APPLICATION OF ASSESSEE BY OBSERVING IRRELEVANT OBJECTIONS. IT WAS SUBMITTED THAT THE FIRST OBJECTI ON OF LD. CIT(E) IS THAT THE ASSESSEE HAD EARNED INCOME OF RS.30,43,110/- IN THE FORM OF TRANSPORTATION FEE DURING FINANCIAL YEAR 2015-16 AN D HAD ALSO EARNED INCOME BY WAY OF SALE OF BAGS, DRESSES, BOOKS ETC. AND WHICH DO NOT SUPPORT THE CHARITABLE INTENT OF THE APPLICANT FOR THE CAUSE OF PROMOTING EDUCATION. IN THIS RESPECT THE LD. AR SUBMITTED THA T A REPLY WAS FILED ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 2 BEFORE LD. CIT(E) VIDE LETTER DATED 25.10.2016, A C OPY OF WHICH WAS PLACED AT P.B. PAGE 6. THE LD. AR SUBMITTED THAT AS SESSEE WAS IMPARTING EDUCATION AND WAS NOT RUNNING THE SOCIETY FOR THE P ROFIT MOTIVE. HE SUBMITTED THAT THE SCHOOL WAS AFFILIATED WITH CBSE AND THE ASSESSEE HAS TO RUN THE SCHOOL WITHIN CERTAIN NORMS AND IF THERE IS ANY SURPLUS RECEIPT FROM SALE OF BAGS AND TRANSPORTATION FEE IT DOES NO T PROVE THE PROFIT ELEMENT. THE LD. AR SUBMITTED THAT THE ASSESSEE IS RUNNING SCHOOL IN THE DISTRICT OF GURDASPUR AND STUDENTS COME FROM VARIOU S VILLAGES AND TO GET THE STUDENTS INTO SCHOOL, THE BUSES WERE PROVIDED A ND THE ONLY MOTIVE FOR BUSES WAS TO CARRY THE STUDENTS FROM THEIR HOMES TO SCHOOL AND VISE VERSA AND THE BUSES WERE NOT RUN ON COMMERCIAL BUSE S AND WERE ONLY UTILIZED FOR THE PURPOSE OF SOCIETY. AS REGARDS THE SECOND OBJECTION OF LD. CIT(E), THE LD. AR SUBMITTED THAT LD. CIT(E) OBJECTED THAT THERE WAS NO MENTION OF RUNNING ANY SCHOOL IN THE MEMORANDUM OF ASSOCIATION. IN THIS CONNECTIO N IT WAS SUBMITTED THAT THE MAIN OBJECTS OF THE SOCIETY ARE TO IMPART EDUCATION AND THE OBJECTS OF THE SOCIETY ARE VERY CLEAR AND AS A CONS EQUENCE THEREOF THE SOCIETY STARTED THIS SCHOOL AND AS A RESULT OF THIS THEY HAVE GOT THE PERMISSION TO RUN THE SCHOOL FROM CBSE AND IT WAS N OT NECESSARY TO MENTION THE NAME OF THE SCHOOL IN THE MEMORANDUM OF ASSOCIATION AS ONLY BROAD OBJECTS HAS TO BE MENTIONED IN THE MEMOR ANDUM OF ASSOCIATION. ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 3 AS REGARDS THE OTHER OBJECTION OF LD. CIT(E) THAT THE RECEIPTS DURING THE FINANCIAL YEAR 2013-14 TO 2015-16 EXCEEDED THE LIMIT OF RS. 1 CRORE AND THEREFORE ASSESSEE HAD BEEN WRONGLY CLAIMING EX EMPTION U/S 10(23C), IT WAS SUBMITTED THAT THIS OBJECTION OF LD . CIT(E) IS WITHOUT ANY REASONS AND BASIS AND SOCIETY WAS RUNNING SCHOOL ON LY FOR EDUCATION PURPOSE AND NOT FOR PROFIT AND EXEMPTION HAS BEEN C LAIMED AS PRESCRIBED UNDER THE LAW. IT WAS SUBMITTED THAT WHILE GRANTING EXEMPTION CLAIMED U/S 10(23C)(VI) THE LD. CIT(E) HAS TO SEE ONLY TWO THINGS THAT IS AS TO WHETHER THE OBJECTS ARE CHARITABLE IN NATURE AND WH ETHER THE ACTIVITIES OF SOCIETY ARE GENUINE AND IN THIS RESPECT RELIED ON A N ORDER OF HON'BLE ITAT AMRITSAR BENCH IN THE CASE OF ARYA HIGH SCHOOL, MAN SA PLACED AT P.B. PAGE 17 TO 24. NARRATING THE FACTS REGARDING OTHER OBJECTIONS OF LD. CIT(E), THE LD. AR SUBMITTED THAT LD. CIT(E) HAS HELD THAT THE AIMS AND OBJECTS IN THE MEMORANDUM OF ASSOCIATION INCLUDED HELP AND PROVISI ON OF FINANCIAL ASSISTANCE TO POOR AND NEEDY GIRLS FOR THEIR MARRIA GES AND TO RAISE HOMES FOR DESTITUTE WOMEN AND THERE WERE SEVERAL OTHERS A IMS AND CLAIM OF THE SOCIETY THAT IT EXISTED ONLY FOR EDUCATION WAS WRON G. IN THIS RESPECT, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD FILED REVISE D AMENDED COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO P.B. PAGE 12 TO 30 WHERE A COPY OF THE AMENDED MOA WAS PLACED. THE LD. AR SUBMITTED THAT THE LD. C IT(E) HIMSELF HAS NOTED FOR PARA 2 THAT APPELLANT HAD SUBMITTED AN AM ENDED COPY OF ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 4 MEMORANDUM OF ASSOCIATION, HOWEVER HE MISGUIDED HIM SELF AND INCLUDED THE OBJECTS OF THE ORIGINAL MEMORANDUM OF ASSOCIATION ALSO AND THEREFORE THE FINDINGS OF LD. CIT ARE NOT SUSTAINAB LE. THE LD. AR SUBMITTED THAT AT THE TIME OF GRANTING APPROVAL U/S 10(23C)(VI), THE LD. CIT(E) NEEDS TO SATISFY HIMSELF ONLY ABOUT TWO THIN GS THAT THE SOCIETY EXISTS SOLELY FOR EDUCATION PURPOSE AND NOT FOR THE PURPOSE OF PROFIT AND RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWIN G CASE LAWS: 1. DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT(EXEMPTIONS) CHANDIGARH VS. SHRI SHIRDI SAI DARB AR CHARITABLE TRUST (DHARAMSHALA), BARNALA, IN ITA NO.38 OF 2017, ORDER DATED 27/03/2017. 2. DECISION OF P&H HIGH COURT IN THE CASE OF CIT V S. B.K.K. MEMORIAL TRUST REPORTED IN 29 TAXMANN.COM 286. 3. DECISION OF P&H HIGH COURT IN THE CASE OF CIT V S. SURYA EDUCATIONAL & CHARITABLE TRUST REPORTED IN 15 TAXMANN.COM 123. 4. DECISION OF ITAT, AMRITSAR BENCH IN THE CASE OF DIVINE HEALTH SERVICES VS. CIT-II, AMRITSAR IN ITA NO. 417(ASR)/2010, ORDE R DATED 07/06/2012 RELATING TO AY 2010-11. 5. DECISION OF ITAT, AMRITSAR BENCH IN THE CASE OF D.N. MEMORIAL TRUST VS. CIT IN ITA NO. 617(ASR)/2011, ORDER DATED 11/07/201 2. 6. DECISION OF ITAT, AMRITSAR BENCH IN THE CASE OF DREAM LAND EDUCATIONAL TRUST VS. CIT REPORTED IN 109 TTJ 850. 7. DECISION OF ITAT, AMRITSAR BENCH, AMRITSAR IN T HE CASE OF THE MANAGING COMMITTEE ARYA HIGH SCHOOL, MANSA VS. CIT(E) CHANDI GARH IN ITA NO. 469(ASR)/2016, ORDER DATED 11/08/2017 RELATING TO A Y 2015-16. 8. DECISION OF ITAT AMRITSAR BENCH AMRITSAR IN THE CASE OF SANT ISHWAR SHIKSHA SAMITI VS. CIT(E) CHANDIGARH IN ITA NO. 670 (ASR)/2015 ORDER DATED 30/08/2017 RELATING AY 2015-16. 9. DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST AND ORS VS UNION OF INDIA AND ORS REPORTED IN 327 ITR 73. 10. DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT(E) CHANDIGARH VS. SHREE MAHAVIR JAIN SOCIETY (REGD.) I N APPEAL NO. 231 OF 2016 ORDER DATED 11/09/2017. ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 5 3. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE PROVISIONS OF SECTION 10(23C)(VI) ARE VERY CLEAR AND UNAMBIGUOUS WHICH SAY THAT THE SOCIETY SHOULD SOLELY BE FOR EDUCATION PURPOSES AND NOT FOR PURPOSE OF PROFIT AND SINCE IN THIS CASE, THE ASSESSEE HAS BEE N RUNNING THE BUSES AND HAD MADE SALES OF BAGS, DRESSES, BOOKS, ETC THE MOTIVE OF WHICH IS CLEARLY TO EARN INCOME THEREFORE THE LD. CIT(E) HAS RIGHTLY REJECTED THE APPLICATION OF THE ASSESSEE. 4. THE LD. DR HEAVILY PLACES HIS RELIANCE ON THE OR DER OF LD. CIT(E). AS REGARDS THE CASE LAWS RELIED ON BY LD. AR THE LD . DR SUBMITTED THAT THE CASE LAWS RELIED ON LD. AR ARE NOT APPLICABLE T O THE FACTS AND CIRCUMSTANCES OF THE CASE, AS THE CASE LAWS RELIED ON BY LD. AR RELATES TO EXEMPTION U/S 12AA OF THE ACT. 5. THE LD. AR IN HIS REJOINDER SUBMITTED THAT THOUG H SOME OF THE CASES RELIED ON BY HIM RELATE TO SECTION 12AA, HOWE VER BEFORE GRANT OF REGISTRATION U/S 12AA OR SECTION 10(23C)(VI), THE R EQUIREMENT TO BE EXAMINED BY LD. CIT(E) REMAIN SAME. THE LD. AR FURT HER SUBMITTED THAT THE ITAT AMRITSAR BENCH DECISION IN THE CASE OF ARY A HIGH SCHOOL, MANSA IN ITA NO. 469/ASR/2016 PLACED AT P.B. PAGE 17 TO 2 4 RELATES TO EXEMPTION U/S 10(23C)(VI) AND THIS DIRECTLY IS APPL ICABLE TO THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT THE DECISION OF T HE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNA TIONAL CHARITABLE TRUST AND ORS REPORTED IN 327 ITR 73 IS ALSO DIRECT LY APPLICABLE TO THE ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 6 FACTS AND CIRCUMSTANCES OF THE ASSESSEE AS THE HON' BLE PUNJAB & HARYANA HIGH COURT HAS ALSO DEALT WITH THE EXEMPTIO N U/S 10(23C)(VI) OF THE ACT. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH OUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE OBJECTIONS RAISE D BY LD. CIT(E) FOR REJECTING THE APPLICATION OF THE ASSESSEE ARE NOT S USTAINABLE IN LAW AS AT THE TIME OF REGISTRATION, THE LD. CIT(E) HAS TO EXA MINE THE OBJECTS OF THE SOCIETY AND ALSO HAS TO EXAMINE THE GENUINENESS OF ACTIVITIES WITH RESPECT TO THE OBJECT CLAUSE. IN THE PRESENT CASE, IT IS CO RRECT THAT IN THE EARLIER MEMORANDUM OF ASSOCIATION FILED BY ASSESSEE, THERE WERE VARIOUS OBJECTS OUT OF WHICH SOME OF THEM WERE NOT CHARITABLE IN NA TURE. HOWEVER THE ASSESSEE HAD FILED AMENDED MEMORANDUM OF ASSOCIATIO N WHICH LD. CIT(E) HAS TAKEN NOTE OF IN HIS ORDER AT PARA 2 BUT HE MIXED UP THE OBJECT CLAUSE OF BOTH MEMORANDUM OF ASSOCIATIONS. T HE AMENDED MEMORANDUM OF ASSOCIATION IS PLACED AT P.B. PAGE 12 TO 24 AND OBJECTS STATED IN THE MOA ARE REPRODUCED AS UNDER: (I) TO ESTABLISH, TAKE OVER AND MANAGE EDUCATIONAL , TECHNICAL AND MEDICAL INSTITUTIONS. (II) TO ORGANIZE EDUCATIONAL ACTIVITIES; (III) TO START AND CONDUCT EDUCATIONAL PUBLICATIONS , ISSUE PERIODICALS OR LITERATURE PERTAINING TO THIS SPECIFIC FIELD. (IV) TO DEVELOP MIND AS WELL AS PHYSIQUE OF THE CHI LDREN THROUGH GAMES AND EXTRA-CURRICULAR ACTIVITIES AND CREATE PERSONAL ITY AND LEADERSHIP TRAITS IN THE CHILDREN. (V) TO START AND RUN PRIMARY AND SECONDARY SCHOOLS, KINDER GARDEN AND MONTESSORI OR OTHER KINDS OF SCHOOLS, TRAINING SCHO OL FOR TEACHERS, INSTITUTIONS FOR HIGHER EDUCATION AND EDUCATIONAL T RAINING SCHOOLS. ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 7 (VI) TO AFFILIATE WITH OR AMALGAMATE WITH EDUCATIO NAL INSTITUTIONS OR SOCIETIES WITH SIMILAR OBJECTS. (VII) TO DEVISE WAYS AND MEANS FOR THE ADVANCEMENT OF THE YOUTH IN GENERAL SPORTS AND OTHER CULTURAL ACTIVITIES IN ORD ER TO DEVELOP THEIR PERSONALITIES AND OUTLOOK OF LIFE. (VIII) TO PROVIDE MEDICAL AID AND FACILITIES TO STU DENTS OF THE INSTITUTION FOR KEEPING THEM FIT FOR SPORTS AND OTHER CO-CURRICULAR ACTIVITIES AND CULTURAL ACTIVITIES. FROM THE EXAMINATION OF THESE OBJECTS IT IS APPARE NT THAT THE ASSESSEES MAIN OBJECTS ARE TO PROVIDE EDUCATION TO CHILDREN AND WHICH AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT A RE CHARITABLE IN NATURE THEREFORE THIS FINDING OF LD. CIT(E) IS NOT CORRECT . AS FAR AS THE OBJECTION OF LD. CIT(E) REGARDING EARNING OF INCOME FROM BUSE S AND FROM SALE OF BOOKS AND DRESSES, WE FIND THAT THESE BUSES WERE BE ING UTILIZED FOR THE PURPOSE OF CARRYING STUDENTS FROM THEIR HOMES TO SC HOOL AND VISE VERSA AND THERE IS NO MATERIAL AVAILABLE WITH THE DEPARTM ENT TO HOLD THAT THE BUSES WERE BEING UTILIZED FOR COMMERCIAL PURPOSES O THER THAN FOR CARRYING THE STUDENTS. AS REGARDS THE OBJECTION OF LD. CIT(E) THAT THE NA ME OF SCHOOL IN THE MOA IS NOT MENTIONED, WE FIND THAT THIS OBJECTI ON OF LD. CIT(E) IS ABSURD AS MEMORANDUM OF ASSOCIATION IS A DOCUMENT W HEREIN MAIN OBJECTS OF SOCIETY ARE MENTIONED AND TO CARRY OUT T HESE OBJECTS, THE ASSESSEE STARTED SCHOOL TO FULFILL THE MAIN OBJECTS . WE FURTHER FIND THAT AT THE TIME OF REGISTRATION U/S 10(23C)(VI), THE LD. C IT(E) HAS TO EXAMINE THE OBJECTS AND THE GENUINENESS OF ACTIVITIES. THE HON' BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL C HARITABLE TRUST AND ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 8 ORS REPORTED IN 327 ITR 73 VIDE ITS JUDGMENT DATED 29 JAN., 2010 HAS HELD AS UNDER: EXEMPTION UNDER S. 10(23C)(VI)EDUCATIONAL INSTITU TIONPROFIT MOTIVEAT THE INITIAL STAGE WHEN THE APPLICATION FOR EXEMPTIO N IS FILED BY AN EDUCATIONAL INSTITUTION THE SCOPE OF INQUIRY IS RES TRICTED ONLY TO ASCERTAIN THE GENUINENESS OF THE ACTIVITIES OF SUCH INSTITUTI ONONCE APPROVAL IS GRANTED FOR EXEMPTION, THE MONITORING PROVISIONS CO ME INTO PLAY AND THE AO HAS TO EXAMINE WHETHER THE CONDITIONS ON WHICH T HE APPROVAL HAS BEEN GIVEN ARE FULFILLED OR NOTFACT THAT AN INSTITUTION HAS EARNED PROFIT WOULD NOT BE DECIDING FACTOR TO CONCLUDE THAT THE EDUCATI ONAL INSTITUTION EXISTS FOR PROFITEVEN IF THERE REMAINS A SURPLUS AT THE HANDS OF THE EDUCATIONAL INSTITUTION, IT WOULD BE ENTITLED TO EXEMPTION UNDE R S. 10 (23C)(VI) PROVIDED THE EDUCATIONAL INSTITUTION SOLELY EXISTS FOR EDUCA TIONAL PURPOSESCAPITAL EXPENDITURE HAS TO BE DEDUCTED FROM THE GROSS INCOM E OF THE EDUCATIONAL INSTITUTION IN DETERMINING WHETHER 85 PER CENT OF T HE INCOME HAS BEEN APPLIED FOR ITS OBJECTSWORDS 'NOT FOR THE PURPOSES OF PROFIT' ACCOMPANYING THE WORDS 'EXISTING SOLELY FOR EDUCATIONAL PURPOSES ' HAVE TO BE READ AND INTERPRETED IN VIEW OF THE THIRD PROVISO TO S. 10(2 3C)(VI) WHICH PRESCRIBES THE METHODOLOGY FOR THE UTILIZATION AND ACCUMULATIO N OF INCOME AT THE HANDS OF THE EDUCATIONAL INSTITUTIONSEVEN OTHERWIS E, UNLIKE THE PROVISIONS OF SS. 36(L)(XII) AND 37, THE WORDS 'NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE' DO NOT FIND PLACE IN THE THIRD PROVISO TO S. 10(23C)(VI) PRECEDING THE WORDS 'WHOLLY AND EXCLUSIVELY' WHICH CLEARLY DEMONSTRATES THAT THE CAPITAL EXPENDITURE IS TO BE DEDUCTED WHEN EVER THE INSTITUTION APPLIES ITS INCOME FOR THE ACHIEVEMENT OF ITS OBJEC TTHIS VIEW IS FURTHER FORTIFIED BY CL. 11 OF FORM NO. 56D WHICH SPECIFIES THAT THE AMOUNT OF INCOME OF AN UNIVERSITY OR OTHER EDUCATIONAL INSTIT UTION WHICH IS TO BE DEEMED TO BE UTILIZED WHOLLY AND EXCLUSIVELY FOR IT S OBJECTS SHALL HAVE THE MEANING ASSIGNED TO IT IN SUB- SS. (1) AND (1A) OF S. 11IN EVERY CASE OF AN EDUCATIONAL INSTITUTION THERE IS BOUND TO BE A PROF ITPROVISION OF S. 10(23C)(VI) WOULD BE RENDERED OTIOSE IF THE INTERPR ETATION ADOPTED BY THE CHIEF CIT IS ACCEPTEDADMITTEDLY, IN THE INSTANT CA SE, THE APPLICATION OF INCOME IS MORE THAN 100 PER CENT FOR THE ATTAINMENT AND ACHIEVEMENT OF THE OBJECTS OF THE PETITIONER-SOCIETY IN THE LAST T HREE YEARSTHUS, IT COULD NOT BE HELD TO BE AN EDUCATIONAL INSTITUTION EXISTI NG FOR THE PURPOSE OF MAKING PROFIT SO AS TO BE DISENTITLED TO EXEMPTION UNDER S. 10(23C)(VI) FOR THE REASON THAT IT IS EARNING SUBSTANTIAL PROFITS Y EAR AFTER YEARFURTHER, THE CONTENTION OF THE REVENUE THAT THE PETITIONERS BEING SOCIETIES REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860, DO NOT FALL WITHIN THE AMBIT OF THE EXPRESSION 'OTHER EDUCATIONAL INSTITUTIONS' AND , THEREFORE, EXEMPTION UNDER S. 10(23C)(VI) HAS BEEN RIGHTLY WITHDRAWN CAN NOT BE ACCEPTED AS THE CHIEF CIT DID NOT MAKE THE AFORESAID GROUND AS THE BASIS FOR WITHDRAWAL OF EXEMPTION AFTER THE PETITIONERS FILED REPLY TO T HE NOTICE ASSERTING THAT SUCH A GROUND WAS NOT TENABLETHEREFORE, THE IMPUGN ED ORDERS PASSED BY THE CHIEF CIT WITHDRAWING THE EXEMPTION GRANTED UNDER S. 10 (23C)(VI) ARE QUASHED. ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 9 WE FURTHER FIND THAT AMRITSAR BENCH IN THE CASE OF ARYA HIGH SCHOOL UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS AL LOWED REGISTRATION U/S 10(23C)(VI) BY HOLDING AS UNDER: 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCU MSTANCES OF THE CASE SPECIALLY THE DOCUMENTS FILED AND FROM THE DETAILS OF ASSETS AS ON 31 ST MARCH, 2013 IT SHOWS THAT THE ASSESSEE HAS INCURRED EXPENSES ON THE PURCHASE OF LAND WHICH GOES TO SHOW THAT THE ASSESS EE WAS EARLIER UTILIZED THE FUND FOR THE DEVELOPMENT OF INSTITUTION AND OF ITS EXTENSION. FURTHER ACCORDING TO THE JUDGMENT PASSED B Y THE HONBLE APEX COURT IN THE CASE OF CHIEF COMMISSIONER VS. ST. PETERS E DUCATIONAL SOCIETY, 385 ITR 66 (SC) AS RELIED UPON BY THE ASSESSEE SOCIETY WHEREBY IT WAS HELD THAT THE INSTITUTION MAKES PROFIT DOES NOT NECESSAR ILY MEAN IT EXISTS FOR PROFIT AND AN OVERALL VIEW IN YEAR IN QUESTION OBJE CT WAS TO MAKE PROFIT AS OPPOSED TO EDUCATING PERSONS TO BE SEEN. FURTHER, THE HONBLE APEX COURT IN THE CASE OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY VS. ACIT, 384 ITR 37 (SC), WHEREBY IT WAS HELD THAT THERE COULD BE NO MANNER OF DOUBT THAT THE SUR PLUS ACCUMULATED OVER THE YEARS HAD BEEN PLOUGHED BACK FOR EDUCATIONAL PU RPOSES AND IN THE SAID CASE THE HONBLE APEX COURT REMINDED THE CONDI TIONS OF PRINCIPLE LAID DOWN IN QUEENS EDUCATION SOCIETY VS. CIT [2015] 3 72 ITR 699 (SC) WHICH FOR THE SAKE OF BREVITY AND CONVENIENCE ARE REPRODU CED HEREIN BELOW. '11. THUS, THE LAW COMMON TO SECTION 10(23C)(IIIAD) AND (VI) MAY BE SUMMED UP AS FOLLOWS. (1) WHERE AN EDUCATIONAL INSTITUTION CARRIES ON THE ACT IVITY OF EDUCATION PRIMARILY FOR EDUCATING PERSONS, THE F ACT THAT IT MAKES A SURPLUS DOES NOT LEAD TO THE CONCLUSION THA T IT CEASES TO EXIST SOLELY FOR EDUCATIONAL PURPOSES AND BECOMES AN INSTITUTION FOR THE PURPOSE OF MAKING PROFIT. (2) THE PREDOMINANT OBJECT TEST MUST BE APPLIEDTHE PURPOSE OF EDUCATION SHOULD NOT BE SUBMERGED BY A P ROFIT MAKING MOTIVE. (3) A DISTINCTION MUST BE DRAWN BETWEEN THE MAKING OF A SURPLUS AND AN INSTITUTION BEING CARRIED ON 'FOR PR OFIT'. NO INFERENCE ARISES ' THAT MERELY BECAUSE IMPARTING ED UCATION RESULTS IN MAKING PROFIT, IT BECOMES AN ACTIVITY FO R PROFIT. (4) IF AFTER MEETING THE EXPENDITURE, A SURPLUS ARISES INCIDENTALLY FROM THE ACTIVITY CARRIED ONLY THE EDU CATIONAL INSTITUTION, IT WILL NOT; CEASE, TO BE ONE EXISTING SOLELY FOR EDUCATIONAL PURPOSES. ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 10 (5) THE ULTIMATE TEST IS WHETHER ON AN OVERALL VIEW OF THE MATTER IN THE CONCERNED ASSESSMENT YEAR THE OBJECT IS TO MAKE PROFIT AS OPPOSED TO EDUCATING PERSONS. THE OBSERVATION OF THE CIT(E) IS NOT CORRECT TO THE EXTENT THAT THE ASSESSEE IS A SOCIETY AND NOT UNIVERSITY OR OTHER E DUCATIONAL INSTITUTION AND TO THAT EXTENT NOT COVERED BY THE PROVISIONS OF SEC.10(23C)(IV) BECAUSE THE ITAT, A BENCH, CHENNAI IN THE CASE OF SENGUTH AT MATRICULATION HIGHER SECONDARY SCHOOL VS. CIT IN ITA NO.2008/MADS /2015 DEALT WITH THE SAME ISSUE BY OBSERVING AS UNDER: THE PRIMARY CONDITION U/S.10(23C)(VI), THE ASSESSE E SHALL EXIST SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSE S OF PROFIT. THE CHIEF COMMISSIONER OF INCOME TAX WITHOUT OBSERVING THAT THE ASSESSEE NOT SOLELY EXISTING FOR EDUCATIONAL PURPOS E, HE WENT ON PROPOSITION THAT THE ASSESSEE IS NOT HAVING MEMORAN DUM OF ASSOCIATION OR TRUST DEED SO AS TO CARRY ON THE FUN CTION OF THE ASSESSEE. BUT THE FACT BROUGHT ON RECORD SUGGESTS T HAT THE ASSESSEE IS AN AOP, MANAGED BY SENGUNTHER EDUCATION BOARD WHICH IS A REGISTERED BODY UNDER THE SOCIETY REGISTRATION ACT IN THE YEAR 1946 VIDE REGISTRATION NO.S/8/1946. THE ABOVE EDUCATION BOARD IS MANAGING THE ASSESSEE SCHOOL WITH THE COMMITTEE MEM BERS OF THE SAID EDUCATION BOARD AND CONSTITUTED THE OFFICE BEA RERS OF THE INSTITUTION AND DULY FILING THE RETURN OF INCOME. I T IS TO BE OBSERVED THAT THERE IS NO EXPRESSED DEFINITION FOR INSTITUT ION UNDER THE INCOME TAX ACT. HENCE, WE HAVE TO CONSIDER THE GENE RAL MEANING DEFINED IN THE WEBSTERS NEW DICTIONARY, THE WORD INSTITUTION MEANS AN ESTABLISHED OR ORGANIZED SOCIETY OR CORPOR ATION, AN ESTABLISHMENT, ESPECIALLY ONE OF PUBLIC CHARACTER, OR ONE EFFECTING A COMMUNITY; A FOUNDATION. FURTHER, THIS TRIBUNAL, DE LHI BENCH G BENCH IN I.T.A.NO:3360(DEL) OF 2008 DATED 30.04.20 10 IN DECIDING THE APPEAL IN THE CASE ST.THOMAS GIRLS SENIOR SECON DARY SCHOOL, NEW DELHI VS. DIRECTOR OF INCOME TAX(EXEMPTION), NE W DELHI HAVE HELD THAT THE WORD INSTITUTION IS WIDE ENOUGH TO IN CLUDE A SCHOOL, WHICH HAS BEEN ESTABLISHED FOR IMPARTING EDUCATION. MERELY BECAUSE THE ASSESSEE SCHOOL DOES NOT HAVE POWER TO PURCHASE, ACQUIRE, OR SELL THE PROPERTY, DOES NOT MEAN THAT T HE SCHOOL WILL CEASE TO EXIST AS AN INSTITUTION. THUS THE STATUS OF THE ASSESSEE COULD BE A.O.P. IN THE ABSENCE OF ANY MEMORANDUM OF ASSOCIATION OR TRUST DEED. CONSIDERING THE ABOVE DECISION OF TH E I.T.A.T, DELHI BENCH, IN THE PRESENT CASE ALSO THE ABOVE MATRICULA TION SCHOOL WHICH IS MANAGED BY EDUCATION BOARD AND GRANTED PER MISSION BY THE DIRECTOR OF SCHOOL EDUCATION AS EARLY AS 07.10. 1997 IS AN INSTITUTION QUALIFYING FOR EXEMPTION U/S. 10(23C) (VI) OF THE I.T. ACT. HENCE, THE EXEMPTION SOUGH FOR THE ABOVE INSTITUTI ON IS TO BE GRANTED. ACCORDINGLY, WE DIRECT THE CCIT TO GRANT E XEMPTION U/S 10(23C) (VI) OF THE ACT. NOW, COMING TO THE INSTANT CASE, AS IT REFLECTS FRO M THE DETAILS OF FOUR ASSESSMENT YEARS I.E. OF 2012-13, 2013,14, 2014-15 & 2015-16, THAT THE ITA NO.624/(ASR)/2016 ASSESSMENT YEAR: 11 AMOUNT OF RECEIPT HAS BEEN EXCEEDED MORE THAN 1 CRO RE, THEREFORE, THE ASSESSEE PREFERRED THE REGISTRATION U/S 10(23C)(IV) AND IN THE PREVIOUS YEAR AS IT REFLECTS FROM THE BALANCE SHEET, THE ASSESSEE UT ILIZED THE AMOUNT FOR THE PURCHASE OF LAND FOR FURTHER EXTENSION OF THE SCHOO L BUILDING ETC. THAT CERTAINLY GOES TO PROVE THAT THE SAME IS BEING UTILIZED FOR T HE EDUCATIONAL PURPOSES ONLY BECAUSE THE LD. CIT(E) FAILED TO BRING ON RECORD AN Y CONTRARY MATERIAL TO THE FACT. FURTHER AS DISCUSSED ABOVE, THE ASSESSEE IS A LSO COVERED WITHIN THE PROVISIONS OF SEC.10(23C)(VI) OF THE ACT FOR GRANT OF REGISTRATION BECAUSE IN THE ACT, THE INSTITUTION HAS NOT BEEN CATEGORIZED AND I T HAS TO BE GIVEN A GENERAL MEANING AS SPECIFIED IN THE DICTIONARY AS OBSERVED BY THE ITAT, BENCH AT MADSRAS (SUPRA). IN OVERALL CONSIDERATION OF THE FA CTS AND MATERIAL AND JUDGMENTS RELIED UPON BY THE PARTIES, WE ALSO FOUND SUPPORT BY THE JUDGMENTS PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT AS RELIED UPON BY THE LD. DR BECAUSE EXCESS ACCUMULATION IN THE INSTANT CASE HAS CERTAINLY APPLIED FOR THE OBJECTS OF THE SOCIETY ITSELF, THEREFORE, WE DO NOT FIND ANY HESITATION TO ALLOW THE REGISTRATION TO THE ASSESSEE SOCIETY U/S 10 (23 C)(VI) OF THE ACT. HENCE, WE DIRECT THE LD. CIT(E) TO GRANT EXEMPTI ON U/S 10(23C) (VI) OF THE ACT FROM THE DATE OF APPLICATION. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND I N VIEW OF THE JUDICIAL PRECEDENTS, WE DIRECT THE LD. CIT(E) TO GR ANT REGISTRATION TO THE SOCIETY U/S 10(23C)(VI) OF THE ACT. 7. IN NUTSHELL, THE APPEAL FILED BY ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.12.2017 SD/- SD/- (RAVISH SOOD) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05.12.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER