Vedic Balika Mahavidyalya C/o- Khandelwal Sharma & Co., CA S-2, IInd Floor, Annapurna Chamber, Opp. Railway Station Post Office, Jaipur, Jaipur V. ITO Exemption Ward-1, Jaipur, Ward-1, Jaipur

ITA 663/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5128 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANMOHAN KANDPAL ACIT DHK
• Section: 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA -@ ITA NO. 663/JP/2019 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 VEDIC BALIKA MAHAVIDYALYA, SEC.3, VARUN PATH, MANSAROVAR, JAIPUR-302004. CUKE VS. I.T.O. (EXEMPTIONS), WARD-1, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAABV 0295 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MUKESH KHANDELWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI MANMOHAN KANDPAL (ACIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/11/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/02/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-3, JAIPUR DATED 06/03/2019 FOR THE A.Y. 2010-11 IN THE MATTER OF ORDER PASSED U/S 147/143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE HAS RAISED SOLITARY GROUND, WHICH IS AS UNDER: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL BY DISALLOWING THE CLAIM OF THE APPELLANT CLAIMED U/S 10(23C)(IIIAD) AND TAXING THE SURPLUS OF RS. 13,20,833/- AS INCOME OF THE APPELLANT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION EXISTING SOLELY FOR ITA 663/JP/2019 VEDIC BALIKA MAHAVIDYALYA VS ITO (E) 2 EDUCATIONAL PURPOSES. IT RUNS A GIRLS COLLEGE AT MANSAROVAR, JAIPUR. THE ASSESSEE DID NOT FILE ITS RETURN OF INCOME AND ITS CASE WAS REOPENED ON THE BASIS OF INFORMATION ABOUT CASH DEPOSIT OF RS. 24,79,000 IN THE BANK ACCOUNT. A RETURN WAS FILED IN PURSUANCE TO NOTICE U/S 148 OF THE ACT CLAIMING EXEMPTION OF THE WHOLE INCOME U/S 10(23C)(IIIAD) OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT, THE AO DENIED TO GRANT EXEMPTION TO THE ASSESSEE U/S 10(23C)(IIIAD) OF THE ACT BY STATING THAT THERE ARE VARIOUS OTHER OBJECTS IN THE CONSTITUTION OF THE ASSESSEE AND HENCE IT DID NOT EXIST SOLELY FOR EDUCATIONAL PURPOSES WHICH IS PRE REQUISITE FOR CLAIMING EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. 4. IN THE APPEAL FILED BEFORE THE LD. CIT(A), THE LD. CIT(A) HAS FURTHER FORTIFIED THE ORDER OF THE A.O. BY OBSERVING THAT IN THE INCOME AND EXPENDITURE ACCOUNT THERE ARE CERTAIN RECEIPTS WHICH MAY NOT AT ITS FACE VALUE BE EXPECTED TO BE FROM EDUCATIONAL ACTIVITIES SUCH AS BUILDING RENT AND INCOME FROM EXAM FEES. ON THE BASIS OF THESE TWO RECEIPTS HE HELD THAT THE ASSESSEE MADE OTHER ACTIVITIES ALSO OTHER THAN EDUCATION AND HENCE IS NOT ENTITLED FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ITA 663/JP/2019 VEDIC BALIKA MAHAVIDYALYA VS ITO (E) 3 ASSESSEE INSTITUTION SOLELY EXIST FOR EDUCATIONAL PURPOSES. ALL THE OBJECTS WHICH ARE MENTIONED IN THE CONSTITUTION DEED (AS DESCRIBED BY ID. AO AT PAGE 3 AND 4 OF HIS ORDER) ARE RELATED TO EDUCATION ONLY AND IN NONE OF THEM ANY PROFIT MOTIVE CAN BE SMELLED. EXCEPT EDUCATION THE ASSESSEE HAS NOT PERSUADED ANY OTHER ACTIVITY AND HENCE THE CLAIM OF DEDUCTION U/S 10(23C)(IIIAD) OF THE ACT CANNOT BE DENIED. I ALSO OBSERVE THAT ALL THE OBJECTS STIPULATED IN THE CONSTITUTION ARE FOR EDUCATIONAL PURPOSES WITHOUT ANY PROFIT MOTIVE. 6. IN THE CASE OF SHRI BALA JI PREM ASHRAM (ITAT, CHANDIGARH BENCH) (ITA NO. 318/CHD/2013 VIDE ORDER DATED 27.10.2015) AND IN THE CASE OF SUDITI GLOBAL ACADEMY (ITAT, AGRA BENCH)(ITA NO. 63/AGRA/2013 VIDE ORDER DATED 12.07.2013) BOTH THE TRIBUNALS HAVE HELD THAT MERELY DUE TO SOME OTHER OBJECTS APPEARING IN CONSTITUTION EXEMPTION U/S 10(23C)(IIIAD) CANNOT BE DENIED IF THE INSTITUTION HAS NOT FOLLOWED ANY OTHER ACTIVITY. 7. WITH REGARD TO LD. CIT(A)S ALLEGATION, I OBSERVE THAT THE ASSESSEES INSTITUTION ALLOWS THE AUTHORITIES SUCH AS VARIOUS UNIVERSITIES, COLLEGES, GOVERNMENT AUTHORITIES, BANKS TO USE THEIR BUILDING FOR CONDUCTING VARIOUS COMPETITIVE EXAMINATIONS AND HENCE WHOLE THE INCOME SO RECEIVED IS FROM AUTHORITIES FOR PURPOSES WHICH ARE CONNECTED ITA 663/JP/2019 VEDIC BALIKA MAHAVIDYALYA VS ITO (E) 4 WITH EDUCATION ONLY AND HENCE EARNING OF SUCH INCOME CANNOT DISENTITLE THE ASSESSEE FOR CLAIMING THE SAID EXEMPTION. 8. THE ASSESSEES INSTITUTION HAS ALSO SHOWN PETTY SURPLUS FROM EXAMINATION FEES. THE LD. CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEES INSTITUTION AS PER PRACTICE FOLLOWED BY ALL EDUCATIONAL INSTITUTIONS COLLECT EXAMINATION FEES FROM THE STUDENTS AND PAYS THE SAME TO BOARD/UNIVERSITY ETC. CONDUCTING SUCH EXAMINATION. THE LEDGER ACCOUNT OF SAID EXAM FEES IS ANNEXED AT APB 11 AND COPIES OF THE DEMAND DRAFTS GOT MADE FOR PAYING TO THE UNIVERSITY OF RAJASTHAN WERE ALSO PRODUCED BEFORE THE LOWER AUTHORITIES. 9. IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN THE A.O.S ACTION IN DECLINING EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEBRUARY, 2020. SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 TH FEBRUARY, 2020. *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- VEDIC BALIKA MAHAVIDYALYA, JAIPUR. ITA 663/JP/2019 VEDIC BALIKA MAHAVIDYALYA VS ITO (E) 5 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O. (E), WARD-1, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 663/JP/2019) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR