Himachal Pradesh Board of School Education, Kangra V. DCIT, Palampur

ITA 673/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2542 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 21-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rule of consistency; Application of stay; Question of law; Assessment record; Block assessment; Condonation of delay; Revised return; Capital expenditure
• Section: 131; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 673/CHD/2014 ASSESSMENT YEAR: 2011-12 & STAY APPLICATION NO. 20/CHD/2015 IN ITA NO. 673/CHD/2014 ASSESSMENT YEAR: 2011-12 HIMACHAL PRADESH BOARD OF VS THE DCIT, SCHOOL EDUCATION CIRCLE (THROUGH ITS SECRETARY), PALAMPUR(HP). DHARAMSHALA, DISTRICT KANGRA (HP) PAN: AAAJH0373H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY VAIDYA RESPONDENT BY : SHRI SUSHIL KUMAR,CIT-DR DATE OF HEARING : 04.01.2016 DATE OF PRONOUNCEMENT : 18.01.2016 O R D E R PER BHAVNESH SAINI,JM THE APPEAL OF ASSESSEE AS WELL AS STAY APPLICATION HAVE BEEN HEARD TOGETHER AND ARE DISPOSED OF THROUG H THIS COMMON ORDER. 2. THE ASSESSEE IN ITS APPEAL HAS CHALLENGED THE ORDER OF LD. CIT(APPEALS), SHIMLA DATED 26.05.2014 FOR 2 ASSESSMENT YEAR 2011-12 ON THE FOLLOWING AMENDED GROUNDS OF APPEAL : A) THAT THE IMPUGNED ORDERS AS PASSED BY THE RESPON DENTS ARE BAD IN LAW AND AGAINST THE FACT AND CIRCUMSTANC ES OF THE CASE. THE LD. ASSESSING OFFICER AS WELL AS THE LD COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LA W AND FACT OF THE CASE BY TREATING THE APPELLANT UNDER TH E PROVISIONS OF SECTION 10(23C)(VI)WITHOUT APPRECIATING THE FUNC TIONING AND OBJECTIVE OF THE APPELLANT BOARD THAT ITS INCOM E IS COVERED BY THE PROVISIONS OF SECTION 10(23C)(IIIAB) . FURTHER THE RESPONDENT HAS TREATED THE APPELLANT AS AOP (AS SOCIATION OF PERSON) WITHOUT ANY BASIS AND AGAINST THE PROVIS IONS OF THE ACT. B) THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS MISINTERPRETED THE PLEADINGS/ARGUMENT S OF THE APPELLANT AND TRAVELED BEYOND THE PRINCIPALS APPLIC ABLE TO THE CASE AS ALSO HAS COMMITTED SERIOUS ILLEGALITY WHILE COMING TO CONCLUSION THAT THE APPELLANT WAS NOT WHOLLY AND SU BSTANTIALLY FINANCED BY THE STATE GOVERNMENT AND IS NOT CONTROL LED BY THE STATE GOVERNMENT 'AND THAT IT IS IMMATERIAL WHETHER OR NOT THE PROFIT MOTIVE EXISTS IN THE APPELLANTS OBJECTIVE. T HE APPELLANT HAS BEEN FINANCED BY THE STATE GOVERNMENT WHICH IS EVIDENT FROM THE VARIOUS DOCUMENTS WHICH WERE BROUGHT BEFOR E THE RESPONDENT AT THE TIME OF THE FRAMING OF THE ASSESS MENT AND IS NOT EXISTS FOR PROFIT MOTIVE AND IS ENTITLED FOR EX EMPTION U/S 10(23) (IIIAB) OF THE INCOME TAX ACT. HENCE ON THIS GROUND ALSO THE APPEAL DESERVE TO BE ALLOWED. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ALL THE GROUNDS OF APPEAL, THE ASSESSEE HAS MADE A CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAB) OF THE ACT. 3 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS BEEN INCORPORATED UNDER THE HIMACHAL PRADESH BOARD OF SCHOOL EDUCATION ACT, 1968 WITH THE PURPOSE OF PUBLICATION OF BOOKS, PRESCRIBING OF SYLLABUS AND CONDUCT OF EXAMINATION OF VARIOUS LEVELS UPTO SECON DARY LEVEL IN THE STATE OF HIMACHAL PRADESH. THE APPELLA NT FILED RETURN OF INCOME ON 30.09.2011 DECLARING NIL INCOME AFTER CLAIM OF EXEMPTION U/S 10(23C) OF THE ACT. A REVISED RETURN WAS FILED ON 29/03/2011 AT NIL INC OME. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. 4(I) DURING THE ASSESSMENT PROCEEDINGS ON PERUSAL OF RETURN OF INCOME AND OTHER DOCUMENTS LIKE AUDI T REPORT, FORM NO. 10BB, THE ASSESSING OFFICER MADE TWENTY POINTS OBSERVATIONS AS ENUMERATED IN PARA 3 OF ASSESSMENT ORDER. THE ASSESSING OFFICER NOTED THAT THE BOARD HAS FAILED TO UTILIZE EARMARKED FUND GIVEN BY THE STATE GOVERNMENT FOR SPECIFIC DIRECTION TO DISTRIBU TE THE TEXT BOOKS ON FREE BASIS TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES, SCHEDULE CASTE & SCHEDULE TRIBES OF RS. 11,90,38,662/- AND UTILIZED FOR OTHER OBJECTS, AND THE BALANCE AMOUNT OF RS.12,21,76,840/ - UTILIZED FOR PRINTING, PUBLISHING AND SALE OF THE B OOKS BUT MAJORITY OF THESE TEXT BOOKS HAVE BEEN SOLD IN THE OPEN MARKET THROUGH BOOK DEPOTS WITH THE MOTIVE OF EARNING PROFIT AND EARNED OF RS.9,48,34,214/- AND T HE PROFIT SO EARNED WAS ALSO NOT UTILIZED FOR THE BENE FIT OF STUDENTS FOR WHICH THE EARMARKED FUND WAS ALLOCATED BY THE EDUCATION DEPARTMENT. THUS, THE BOARD HAS FAILE D TO 4 APPLY THE FUND ALLOTTED BY STATE GOVERNMENT TO THE SPECIFIC DIRECTION TO THE EXTENT OF RS.11,90,38,662 /- AND RS. 9,48,34,214/- WHICH IS THE PROFIT EARNED- BY UTILIZING EARMARKED FUND IN CARRYING OUT ACTIVITIES IN THE NATURE OF TRADE, COMMERCE AND BUSINESS IN THE FORM OF PRINTING, PUBLISHING AND SALE OF THE BOOKS. ACCORDI NGLY THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE AND THE ASSESSES MADE PARA-WISE SUBMISSIONS WHICH ARE AGAIN ENUMERATED ON PAGE 5 TO 7 OF THE ASSESSMENT ORDER. 4(II) THE A O ALSO RECORDED THE STATEMENT OF SECRETARY OF THE BOARD TO FIND OUT THE EXACT UTILIZ ATION OF EARMARKED FUNDS ALLOCATED BY DIRECTORATE OF EDUCATION FOR FREE DISTRIBUTION OF TEXT BOOKS TO TH E STUDENTS BELONGING TO OTHER BACKWARD CLASSES, SCHED ULE CAST AND SCHEDULE TRIBES AND WHETHER THE BOARD HAS RECEIVED ANY MANDATE FOR UTILIZATION OF EARMARKED F UNDS FOR OTHER PURPOSES. AFTER CONSIDERING THE ASSESSEE' S SUBMISSION AND STATEMENT OF SECRETARY OF THE BOARD, THE AO CONCLUDED THAT THE ASSESSEE HAS FAILED TO APPLY EARMARKED FUND TO THE OBJECTS FOR WHICH THE FUND WA S ALLOCATED BY THE GOVERNMENT TO THE EXTENT OF RS.21,38,72,876/- (RS. 11,90,38,662/- OUT OF TOTAL EARMARKED FUND OF RS.24,66,13,426/- + PROFIT EARNE D BY APPLYING THE PART OF THE EARMARKED FUND ON PRINTING AT RS. 12,21,76,840/-). THUS, THE UNUTILIZED EARMARKED FUND OF RS.11,90,38,662/- AND PROFIT EARNED AT RS.9,48,34,214/- FROM THE ACTIVITIES IN THE NATURE OF COMMERCE, TRADE AND BUSINESS TOTALING 5 RS.21,78,72,876/- IS TREATED THE INCOME OF ASSESSEE FOR THE ASSESSMENT YEAR 2011-12 UNDER THE PROVISIONS OF SECTION 2(24)(IIA) OF THE INCOME-TAX ACT, 1961 AND ADDED TO THE INCOME OF THE ASSESSEE. 4(III) FURTHER, THAT ASSESSING OFFICER NOTED THAT ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE ON PAYM ENTS MADE TO THE AUTHORS ON ACCOUNT OF ROYALTY AND AUDIT OR'S FEE OF RS.1,57,55,253/- AND RS 12,00,000/- RESPECTI VELY. THE AO DISALLOWED AN AMOUNT OF RS.1,96,55,253/- U/S 40(A)(I) OF THE ACT. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAD DEBITED CAPITAL EXPENDITURE O F RS.53,97,924/- ON CONSTRUCTION OF NEW BUILDING. THE AO'S FINDING WAS ADMITTED BY THE ASSESSEE AND ON TH IS ACCOUNT AN AMOUNT OF RS.53,97,924/- WAS DISALLOWED. THUS, A TOTAL ADDITION OF RS. 23,89,36,053/- WAS MA DE AND THE ASSESSEE'S CLAIM UNDER SECTION 10(23C) WAS NOT GRANTED. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND DURING THE COURSE OF APPEAL, THE ASSESSEE HAS MADE VERBAL AS WELL AS WRITTEN SUBMISSIONS. THE GIST OF THE SUBMISSIONS IS AS UNDE R:- (I) THE APPELLANT HAS BEEN INCORPORATED UNDER THE HIMACHAL PRADESH BOARD OF SCHOOL EDUCATION ACT, 1968 WITH THE PURPOSE OF PUBLICATION OF BOOKS, PRESCRIBING OF SYLLABUS AND CONDUCT OF EXAMINATION AT VARIOUS LEVELS UPTO SECONDARY LEVEL IN THE STATE OF HIMACHAL PRADESH. THE APPELLANT APPLIED ON 20.06.2008 BEFORE CHIEF COMMISSIONER OF INCOME-TAX, 6 H.P. REGION (CCIT) FOR GRANTING THE EXEMPTION UNDER SECTION 10 (23C) (VI) AND (VIA) OF THE ACT. SINCE, THE APPELLANT IS ENGAGED SOLELY FOR THE PURPOSES OF EDUCATION, HENCE ITS INCOME IS EXEMPTED UNDER SECTION 10 (23) (III) (AB) OF THE ACT. VIDE ORDER D ATED 30.6.2009 APPROVAL U/S 10(23C) (VI) OF THE ACT. W.E .F. ASSESSMENT YEAR 2009-10 RELEVANT TO FINANCIAL YEAR 2008-09 WAS GRANTED TO THE BOARD. THEREAFTER, VIDE LETTER DATED 23.12.2009 THE APPELLANT SUBMITTED TO THE CCIT STATING THE REASONS WHY THE APPROVAL WHICH HAS BEEN GRANTED UNDER SECTION 10(23C) (VI) IS REQUIRED TO BE MODIFIED AND THE APPELLANT BE GRANTE D EXEMPTION U / R 10(23C) (III)(AB) OF THE ACT. (II) VIDE LETTER DATED 11.03.2010 THE CCIT PASSED AN ORDER AND HELD THAT THE HP BOARD OF SCHOOL EDUCATION IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. HENCE, THE BOARD DOES NOT APPEAR TO SATISFY THE CONDITION OF SECTION 10(23C) (IIIAB). THE QUESTION WHETHER 10(230) (IIIA B) EXEMPTION IS ALLOWABLE OR NOT IS AN ASSESSMENT ISSU E AND WILL BE DECIDED IN DUE COURSE. THE CCIT DECLINE D TO INTERVENE IN THE MATTER AND TREATED THE APPLICAT ION AS REJECTED. (III) DURING THE ASSESSMENT PROCEEDINGS F OR A. Y. 2011-12 THE AO CAME TO THE CONCLUSION THAT THE BOARD HAS NOT BEEN ADHERING TO THE PROVISIONS OF TH E SECTION 10(23C)(IV) OF THE ACT. THE APPELLANT SUBMITTED THAT THE BOARD IS COVERED BY THE SECTION 10(23C) (IIIAB) OF THE INCOME TAX ACT AND ENTIRE INCOME OF THE BOARD IS EXEMPTED FROM INCOME TAX. THE APPELLANT BOARD HAS BEEN FINANCED BY THE HIMACHAL PRADESH GOVERNMENT. THE APPELLANT BOARD IS FINANCIALLY ASSISTED BY THE STATE GOVERNMENT AND THUS THE REQUIREMENT OF SECTION 10(23C) (IIIAB) OF THE IT. ACT IS FULFILLED BY THE APPELLANT BOARD. 7 (IV) IT WAS SUBMITTED THAT AS PER THE SUB SECTION (IIIAB) THE REQUIREMENTS TO QUALIFY FOR EXEMPTION UNDER THIS SECTION IS THAT THE EDUCATIONAL INSTITUT E EXISTS SOLELY FOR EDUCATIONAL INSTITUTE WAS WHOLLY OR SUBSTANTIALLY FINANCED THE GOVERNMENT. IT WAS SUBMITTED THAT THERE IS CATEGORICALLY FINDING BY TH E ASSESSING AUTHORITY WHO HAS AFTER SCRUTINIZING THE DOCUMENTS CAME TO THIS CONCLUSION THAT THE INSTITUTION (APPELLANT BOARD) IS NOT ESTABLISHED FO R ANY PROFIT MOTIVE. THE APPELLANT AFTER PLACING RELIANCE ON JUDICIAL PRONOUNCEMENTS SUBMITTED THAT THE APPELLANT EDUCATIONAL INSTITUTE EXISTS SOLELY F OR EDUCATIONAL PURPOSE AND NOT FOR THE PURPOSE OF PROF IT AND SAID EDUCATIONAL INSTITUTE IS SUBSTANTIALLY FINANCED BY THE HIMACHAL PRADESH STATE GOVERNMENT. FURTHER THE APPELLANT SUBMITTED THAT EVEN IF SOME AMOUNT REMAINS SURPLUS WITH THE APPELLANT THAT IS UTILIZED ONLY FOR THE PURPOSES OF EDUCATION. (V) IN VIEW OF ITS SUBMISSIONS THE APPELLANT PRAYED FOR, THE ORDERS AS PASSED BY THE AO, MAY BE QUASHED AND SET ASIDE AND THE INCOME OF THE APPELLANT MAY BE HELD TO BE EXEMPTED U/S 10(23C) (IIIAB) OF THE A CT. 6. THE LD. CIT(APPEALS), CONSIDERING THE SUBMISSION S OF THE PARTIES AND MATERIAL ON RECORD, DISMISSED AP PEAL OF THE ASSESSEE FOLLOWING HIS APPELLATE ORDER FOR ASSESSMENT YEAR 2006-07 IN WHICH, ON IDENTICAL FAC TS THE SIMILAR CLAIM OF ASSESSEE WAS DISMISSED. THE FINDINGS IN APPELLATE ORDER IN PARA 6 TO 6.1 ARE REPRODUCED AS UNDER : I HAVE CONSIDERED THE FACTS, CASE HISTORY AND THE R IVAL SUBMISSIONS. IT IS NOTED THAT MY PREDECESSOR HAS DEA LT 8 THE ASSESSEE'S APPEAL FOR A. Y. 2006-07. MY PREDECESSOR ON THE SIMILAR ISSUE IN THE ASSESSEE'S OWN CASE HAS GIVEN THE FINDING FOR APPEAL NO. IT/569/09-1 0/SML VIDE O RDER DATED 28/2/2012 AS UNDER:- '5.2 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED. IT IS NOTED THAT THE APPELLANT BOARD HAD APPLIED FOR GRANT OF EXEMPTION U/S 10(230) (VI) AND THE SAID EXEMPTION WAS GRANTED BY THE CCIT, SHIMLA W. E. F. ASSESSMENT YEAR 2009-10. THE APPELLANT'S REQUEST FOR THE CONDONATION OF DELAY IN FILING THE APPLICATI ON FOR APPROVAL U/S 10(23C) (VI) AND FOR GRANT OF EXEMPTION W.E.F. A.Y.2005-06 HAS BEEN REJECTED BY THE CCIT, SHIMLA. THEREFORE THERE IS NO STRENGTH IN THE APPELLANT'S ARGUMENT THAT IT SHOULD BE GRANTED EXEMPTION U/S 10(23C)(VI) OF THE ACT. SIMULTANEOUSLY THE APPELLANT IS CLAIMING EXEMPTION U/S 10(23C)(IIIAB). THUS THE APPELLANT IS TRYING TO TAKE BENEFIT OF THE PROVISIONS OF TWO DIFFERENT SECTIONS OF THE ACT AT THE SAME TIME. IT IS, HOWEVER , NOTED THAT THE CLAIM OF THEN APPELLANT UNDER SECTION 10(23C)(IIIAB) IS OTHERWISE ALSO NOT LEGALLY SUSTAINABLE. AS PER THE PROVISIONS OF SECTION 10(23C)(IIIAB), THE CONCERNED UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION MUST BE WHOLLY AND SUBSTANTIALLY FINANCED BY THE GOVERNMENT. AS PER THE ASSESSMENT RECORD OF THE APPELLANT, IT HAD NEVER BEEN FINANCED BY THE GOVT. DURING THE PERIOD A.Y. 2004-05 TO A.Y. 2010-11. IT HAS BEEN GENERATING ITS OWN INCOME FROM SALE OF BOOKS AND ON ACCOUNT OF REGISTRATION FEES. THE AID FROM THE STATE GOVT. TO THE APPELLANT IS NIL. IT HAS BEEN WRONGLY MENTIONED BY THE LD. A.O. IN THE ASSESSMENT ORDER THAT THERE IS NO DOUBT THAT ASSESSEE BOARD IS FINANCED AND CONTROLLED BY THE STATE GOVT. IN FACT, IN THE YEAR UNDER APPEAL, THE APPELLANT BOARD HAS TRANSFERRED AN AT OF RS. 5 9 CRORES TO THE H.P. GOVT. FROM ITS OWN INCOME. IT IS FURTHER NOTED THAT THE APPELLANT BOARD IS NOT DIRECTLY CONTROLLED BY THE STATE GOVT. BUT IS GOVERNED UNDER A SEPARATE HIMACHAL PRADESH BOARD OF SCHOOL EDUCATION ACT, 1968. ON THE GIVEN FACTS OF THE CASE, IT IS ALSO EVIDENT THAT THE APPELLANT BOARD DOES NOT EXIST SOLELY FOR EDUCATIONAL PURPOSES. IT IS, IN FACT, EARNING HUGE PROFITS. ONCE IT IS ESTABLISHED THAT THE APPELLANT BOARD HAD GENERATED SURPLUS AND PROFITS, IT IS IMMATERIAL WHETHER OR NOT THE PROFIT MOTIVE EXISTED IN THE APPELLANTS OBJECTIVES. THE RECEIPT OF INCOME IN THE HANDS OF THE APPELLANT IS TAXABLE AND THEREFORE, THE ACTION OF THE LD. A.O. DOES NOT CALL FOR ANY INTERFERENCE. THE ADDITION OF RS. 12,24,21,993/- TO THE TAXABLE INCOME OF THE APPELLANT IS, THEREFORE, UPHELD AS THE APPELLANT IS NOT ELIGIBLE FOR EXEMPTION UNDER ANY OF THE PROVISIONS OF THE INCOME-TAX ACT. IN THE RESULT, THE APPEAL OF THE APPELLANT IS DISMISSED. 6. SINCE THE FACTS OF THE CASE AND TH E ISSUE OF DENIAL OF EXEMPTION OF INCOME UNDER SECTION 10(23C) TO THE APPELLANT ARE SAME IN THE ASSESSMENT YEAR 2011-1 2 ALSO, THEREFORE, I AGREE WITH THE DECISION, AS ABOVE, OF MY PREDECESSOR GIVEN FOR ASSESSMENT YEAR 2006-07. THUS, IN A.Y. 2011-12, THE ADDITION OF RS. 23,89,36,053/- MADE BY THE A.O. AS TAXABLE INCOME OF THE APPELLANT IS UPHELD AS THE APPELLANT IS NOT ELIGIBL E FOR EXEMPTION UNDER ANY PROVISIONS OF THE INCOME TAX ACT. THESE GROUNDS OF APPEAL ARE DISMISSED. 7. THE ASSESSEE IS IN APPEAL CHALLENGING THE ORDERS OF AUTHORITIES BELOW IN NOT GRANTING DEDUCTION/EXEMPTI ON UNDER SECTION 10(23C)(IIIAB) OF THE ACT. 10 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 9. IT IS ADMITTED FACT THAT THE LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2006-07 DATE D 28.02.2012 WHICH ORDER HAS BEEN CONFIRMED BY ITAT CHANDIGARH-A BENCH IN THE CASE OF SAME ASSESSEE IN ITA 405/2012, ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 13.09.2013 AND APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. THE FINDINGS OF THE TRIBUNAL IN PARAS 9 TO 12 ARE REPRODUCED AS UNDER : 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 10 (23C)(III AB) OF THE INCOME TAX ACT PROVIDES AS UNDER:- 10(23C) [(IIIAB) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT; OR (IIIAC) 10. THE CONDITION OF THE ABOVE PROVISION WOULD SHOW THAT UNIVERSITY AND OTHER EDUCATIONAL INSTITUTIONS MUST EXIST SOLELY FOR EDUCATION PURPOSES AND NOT FOR THE PURPOSES OF PROFITS AND WHICH IS WHOLLY AND SUBSTANTIALLY FINANCED BY T HE GOVERNMENT. THE ASSESSING OFFICER HAS GIVEN A SPECI FIC FINDING AGAINST THE ASSESSEE THAT IN THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS NOT FULFILLED THE CONDITIO NS OF THE ABOVE PROVISION. IT WAS ALSO FOUND THAT IN THE ASSE SSMENT YEAR 11 UNDER APPEAL, THE ASSESSEE HAS ADVANCED ITS INCOME TO THE STATE GOVERNMENT. THE LD. CCIT SHIMLA HAS GRANTED APPROVAL U/S 10(23C) (VI) OF THE INCOME TAX ACT TO THE ASSESSEE AOP FROM THE ASSESSMENT YEAR 2009-10 ONWAR DS SUBJECT TO CERTAIN CONDITIONS, THEREFORE, THE SAME WOULD NOT APPLY TO THE ASSESSMENT YEAR UNDER APPEAL I.E. 2006 -07. THE LD. CIT(A) ON EXAMINATION OF THE ASSESSMENT RECORD ALSO FOUND THAT ASSESSEE HAD NEVER BEEN FINANCED BY THE GOVERNMENT DURING THE ASSESSMENT YEAR IN APPEAL AND OTHER YEARS. IT WAS ALSO FOUND THAT ASSESSEE HAS BEEN GE NERATING ITS OWN INCOME FROM SALE OF BOOKS AND ON ACCOUNT O F REGISTRATION FEES. THE LD. CIT(A) THEREFORE, ON EX AMINATION OF THE RECORDS FOUND THAT THE AID FROM THE STATE G OVERNMENT TO THE ASSESSEE IS NIL AND IT WAS WRONGLY MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE BOARD IS FINANCED AND CONTROLLED BY THE STATE GOVER NMENT. IN FACT, IN THE ASSESSMENT YEAR UNDER APPEAL, THE ASS ESSEE BOARD HAS TRANSFERRED AND AMOUNT OF RS. 5 CRORES TO THE HIMACHAL PRADESH GOVERNMENT FROM ITS OWN INCOME. IT WAS ALSO NOTED FROM THE RECORD THAT ASSESSEE BOARD IS NOT DIRECTLY CONTROLLED BY THE STATE GOVT. BUT IS GOVER NED UNDER THE SEPARATE HIMACHAL PRADESH BOARD OF SCHOOL EDUCA TION ACT, 1968. THE LD. CIT(A), THEREFORE, FOUND THAT AS SESSEE DOES NOT EXIST SOLELY FOR EDUCATIONAL PURPOSES. IT IS IN FACT EARNING HUGE PROFITS AND HAS SURPLUS INCOME AND PRO FITS. THE FINDING OF THE FACT RECORDED BY LD. CIT(A) CLEARLY SUGGESTS THAT ASSESSEE DID NOT HAVE FULFILL THE TERMS AND CO NDITIONS OF SECTION 10(23C)(IIIAB) OF THE I.T.ACT. THE APPEAL WAS ADJOURNED MANY TIMES BUT THE ASSESSEE DID NOT TAKE ANY STEPS TO PRODUCE ANY EVIDENCE BEFORE THE TRIBUNAL TO CONT RADICT THE FINDINGS OF FACT RECORDED BY LD. CIT(A) IN THE IMPU GNED ORDER. EVEN DURING THE COURSE OF ARGUMENTS, LD. C OUNSEL FOR THE ASSESSEE WAS SPECIFICALLY REQUIRED TO POINT OUT ANY ERROR IN THE ORDER OF LD. CIT(A) ON THE BASIS OF EVIDENCE OR MATERIAL ON RECORD BUT IT WAS STATED THAT NO EVIDEN CE OR MATERIAL HAS BEEN FILED ON RECORD TO CONTRADICT THE ABOVE FINDING OF FACT RECORDED BY LD. CIT(A). THE LD. CO UNSEL FOR THE ASSESSEE ONLY RELIED UPON THE TWO UNREPORTED JU DGMENTS 12 AS ABOVE, HOWEVER, THE SAID JUDGMENTS COULD NOT BE CONSIDERED FAVORABLE IN FAVOUR OF THE ASSESSEE IN T HE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD IN FAVOUR OF THE ASSESSEE. THUS, THE FINDINGS OF FACT RECORDED BY L D. CIT(A) ABOVE HAVE NOT BEEN REBUTTED THROUGH ANY MATERIAL, THEREFORE, WE CONCLUDE THAT ASSESSEE MISERABLY FAIL ED TO SATISFY THE REQUIREMENT OF SECTION 10(23C)(IIIAB) O F THE INCOME TAX ACT IN THE ASSESSMENT YEAR UNDER APPEAL. 11. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY ERROR IN THE ORDER OF LD. CIT(A) IN REJECTING THE C LAIM OF THE ASSESSEE U/S 10(23C) (IIIAB) OF THE I.T. ACT. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 10. IN ASSESSMENT YEAR 2006-07, IT WAS FOUND THAT T HE ASSESSEE DOES NOT EXIST SOLELY FOR EDUCATIONAL PURP OSES. IT IS EARNING HUGE PROFITS AND HAS SURPLUS INCOME A ND PROFITS. THE FINDING OF FACT RECORDED BY THE LD. CIT(APPEALS) CLEARLY SUGGEST THAT ASSESSEE DID NOT FULFILL THE TERMS AND CONDITIONS OF SECTION 10(23C)(IIIAB) OF THE INCOME TAX ACT. IT WAS ALSO FOUND THAT ASSESSEE BO ARD IS NO DIRECTLY CONTROLLED BY THE STATE GOVERNMENT B UT IS GOVERNED UNDER SEPARATE HIMACHAL PRADESH BOARD OF SCHOOL EDUCATION ACT, 1968. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED DURING THE COURSE OF ARGUMENTS THAT THE ABOVE ORDER OF THE TRIBUNAL DATE D 13,09,2013 HAS NOT BEEN CHALLENGED BY THE ASSESSEE IN FURTHER APPEAL BEFORE HIGH COURT. IT IS ALSO STATE D THAT ASSESSEE HAS FILED MISCELLANEOUS APPLICATION BEFORE ITAT CHANDIGARH BENCH AGAINST THE ORDER OF THE TRIBUNAL 13 DATED 13.09.2013 WHICH IS ALSO DISMISSED. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE H AS PREFERRED APPEAL AGAINST THE ORDER PASSED ON THE MISCELLANEOUS APPLICATION. THEREFORE, IT STANDS CL EAR THAT THE FINDING OF FACT RECORDED IN ASSESSMENT YEA R 2006-07 IN APPEAL OF THE ASSESSEE HAS REACHED FINAL ITY AS THE ORDER OF THE TRIBUNAL DATED 13.09.2013 HAS N OT BEEN CHALLENGED IN APPEAL BEFORE THE HIGH COURT. 11. THE ASSESSING OFFICER ON PERUSAL OF THE AUDIT REPORT ON RECORD FOUND THAT ASSESSEE HAS RECEIVED R S. 24,66,13,426/- FROM THE DIRECTOR OF EDUCATION, HIMACHAL PRADESH FOR UTILIZATION OF FUNDS FOR THE FINANCIAL YEAR 2010-11 UNDER CONSIDERATION WITH SPE CIFIC DIRECTION FOR FREE DISTRIBUTION OF TEXTBOOKS TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES, SCHEDULED CASTE AND SCHEDULED TRIBES, FOLLOWING THE ORDER OF THE GOVERNMENT OF HIMACHAL PRADESH THROUGH NOTIFICATION DATED 21.11.1996, COPY OF WHICH IS ATT ACHED AS ANNEXURE TO THE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREFORE, NOTED THAT THE FUNDS ALLOTTED B Y THE DIRECTORATE OF EDUCATION TO THE ASSESSEE BOARD AT R S. 24.66 CR WAS EARMARKED FOR THE FREE DISTRIBUTION OF TEXTBOOKS TO THE STUDENTS BELONGING TO THE SPECIFIC CLASS OF STUDENTS, BUT THE BOARD HAS FAILED TO UTILIZE FU NDS FOR THE EARMARKED PURPOSES. THE ASSESSING OFFICER FURT HER NOTED THAT THE BOARD HAS UTILIZED RS. 11,90,38,662/ - OUT OF THE EARMARKED FUND OF RS. 24.66 CR FOR FULFI LLMENT 14 OF OTHER OBJECTS FOR MEETING OF ESTABLISHMENT, ADMINISTRATION AND OFFICE EXPENSES FOR WHICH THE FU ND WAS NOT ALLOCATED. THUS, THE ASSESSEE VIOLATED THE PROVISIONS OF SECTION 11(4) OF THE INCOME TAX ACT. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE B OARD HAS STATED TO HAVE UTILIZED ONLY RS. 12.75 CR FOR PRINTING OF TEXTBOOKS WHICH INCLUDES ESTABLISHMENT AND OFFICE EXPENSES OF RS. 2.05 CR, PAYMENT OF AUDIT FE ES OF RS. 12 LACS, ROYALTY TO AUTHORS OF RS. 1.58 CR, PUR CHASE OF PAPER OF RS. 6.11 CR, PRINTING OF TEXTBOOKS OF R S. 2.07 CR AND PAYMENT OF RENT OF RS. 21,91,055/- ETC. THUS , BOARD HAS INCURRED ONLY RS. 10,00,01,870/- ON PRINT ING OF THE BOOKS FROM WHICH THE BOARD HAS PRINTED 69,50,143 TEXTBOOKS FOR FREE DISTRIBUTION TO THE SPECIFIED CLASS OF THE STUDENTS AS PER HIMACHAL PRA DESH GOVERNMENT NOTIFICATION BUT THE BOARD EVEN HAS NOT DISTRIBUTED THESE TOTAL TEXTBOOKS TO THESE CATEGORI ES OF STUDENTS BUT SOLD MAJOR PORTION OF THESE TEXTBOOKS IN THE OPEN MARKET THROUGH BOOK DEPOTS WITH THE MOTIVE OF EARNING PROFITS AND EARNED PROFIT OF RS. 9,48,34,21 4/-. THE ASSESSING OFFICER, THEREFORE, FOUND THAT ASSESS EE WAS FOUND TO BE CARRYING OUT ACTIVITIES OF PRINTING , PUBLISHING AND SALE OF TEXTBOOKS WHICH IS IN THE NA TURE OF COMMERCE, TRADE AND BUSINESS TO EARN PROFIT. 11(I) THE ASSESSING OFFICER FURTHER FOUND THAT ASSE SSEE IS ENGAGED IN CARRYING OUT THE ACTIVITIES OF CONDUCTIN G OF THE EXAMINATION AND IN-FACT, NOT IMPARTING ANY EDUCATIO N IN 15 TERMS OF TRAINING AND SCHOOLING DIRECTLY TO THE STU DENTS. THE SECRETARY OF THE BOARD HAS CATEGORICALLY DENIED HAVING IMPARTING ANY EDUCATION DIRECTLY OR INDIRECTLY TO T HE STUDENTS IN TERMS OF TRAINING OR SCHOOLING. THE ASS ESSEE HAS RECEIVED INCOME FROM SCHOOLS AS EXAMINATION AND OTHER FEES ETC. THE BOARD HAS NOT RECEIVED ANY FIN ANCIAL SUPPORT WHOLLY OR SUBSTANTIALLY FROM THE GOVERNMENT . OUT OF THE TOTAL FUNDS OF RS. 24.66 CR, THE BOARD HAS MISAPPROPRIATED AND UTILIZED THE FUNDS FOR OTHER PU RPOSES OTHER THAN FUNDS ALLOTTED WITH SPECIFIC DIRECTION T O DISTRIBUTE THE TEXTBOOKS ON FREE BASIS TO THE BACKW ARD CLASSES, SCHEDULED CASTES AND SCHEDULED TRIBES. THE ASSESSEE HAS SHOWN INCOME FROM SALE OF BOOKS OF RS. 34.19 CR AND DEBITED EXPENDITURE AT RS. 17.06 CR. THE ASSESSING OFFICER, IN TOTALITY OF THE FACTS AND CIRCUMSTANCES, FOUND THAT ASSESSEE HAS EARNED PROFI T ON SALE OF THE BOOKS. THE ASSESSEE, HOWEVER, DENIED T HE OBSERVATIONS OF THE ASSESSING OFFICER, THEREFORE, T HE ASSESSING OFFICER IN ORDER TO FIND OUT THE EXACT UT ILIZATION OF EARMARKED FUNDS ALLOCATED BY THE DIRECTORATE OF EDUCATION FOR FREE DISTRIBUTION OF TEXTBOOKS TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES AND SCHEDULE CASTES AND SCHEDULE TRIBES AND WHETHER THE BOARD HAS RECEIVED ANY MANDATE OR REQUESTED FOR UTILIZATION OF EARMARKED FUNDS FOR OTHER PURPOSES T O THE DIRECTORATE OF EDUCATION AND TO FIND OUT EXACT NATU RE OF THE ACTIVITIES AND STATUS OF THE BOARD, ISSUED SUMM ONS UNDER SECTION 131 TO THE SECRETARY OF THE BOARD AND THE 16 SECRETARY OF THE ASSESSEE BOARD SMT. RAKHI KAHLON ATTENDED THE PROCEEDINGS BEFORE ASSESSING OFFICER A ND HER STATEMENT WAS RECORDED. THE QUESTION NOS. 1 TO 8 A ND THEIR ANSWERS ARE REPRODUCED IN THE ASSESSMENT ORDE R WHICH READ AS UNDER : Q. NO.L- PLEASE EXPLAIN WHETHER THE BOARD HAS RECEIV ED PAYMENT FROM DIRECTORATE OF EDUCATION, HIMACHAL PRADESH FOR SU PPLY DISTRIBUTION OF FREE TEXT BOOKS TO THE STUDENTS BELONG ING TO OTHER BACKWARD CLASSES, SCHEDULE CASTE AND SCHEDULE TRIBE S DURING THE FINANCIAL YEAR 2010-11. IF YES, PLEASE QUANTIFY THE AMOUNT RECEIVED UNDER THIS HEAD. ANS:- YES, THE BOARD HAS RECEIVED RS. 24,66,13,42 6/- FOR DISTRIBUTION OF FREE TEXT BOOKS TO THE STUDENTS FROM CLASS 1 TO 10TH TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES, SCHEDULE CASTE & SCHEDULE TRIBES. Q.NO.2- PLEASE EXPLAIN WHETHER THERE WAS A MANDATE FR OM THE DIRECTORATE OF EDUCATION THAT PAYMENT ALLOCATED FOR FREE DISTRIBUTION OF TEXT BOOKS TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES, SCHEDULE CASTE AND SCHEDULE TRIBES FOR UTILIZING THIS ALLOCATED FUND FOR OTHER PURPOSES SUCH AS SALE OF THE BOOKS TO THE OTHER CATEGORY-.OF STUDENTS THROUGH BOOK DEPOTS AND UTILIZING THE FUND FOR EXAMINATION OR OTHER PURPOSES. ANS:- NO, WE HAVE NOT RECEIVED ANY MANDATE FROM TH E DIRECTORATE OF EDUCATION FOR UTILIZED OF ABOVE MENTIONED ALLOCATE FUNDS FOR OTHER PURPOSE SUCH AS SALE OF BOOKS AND UTILIZATION OF FUND FOR EXAM. Q.NO.3. PLEASE EXPLAIN WHETHER THE FUND ALLOCATE OF RS. 24,66,13,426/-.FOR THE PURPOSE OF DISTRIBUTION OF FREE TEXT BOOKS TO THE STUDENTS BELONGING TO OTHER BACKWARD CLASSES AN D SCHEDULE CASTE & SCHEDULE TRIBE HAD BEEN UTILIZED FOR OTHER PU RPOSES, OTHER THAN PURPOSE FOR SPECIFIC DIRECTION FOR UTILIZATION. I F YES, PLEASE QUANTIFY THE SAME. ANS:- YES, WE HAVE UTILIZED RS. 11,90,38,662/- FOR THE EXAMINATION PURPOSES OF ALL STUDENTS. THE BALANCE AMOU NT OF RS. 12,75,74,764/- HAD BEEN UTILIZED FOR PRINTING OF TEXT BOOKS OUT OF WHICH WE SOLD THE TEXT BOOKS THROUGH DEPOTS AMOUNTING TO RS. 9,48,34,214/- AND BALANCE BOOKS HAS BEEN DISTRIBUTED ON FREE BASIS TO THE STUDENTS BELONGING TO OTHER BACKWARD CL ASSES, SCHEDULE CAST & SCHEDULE TRIBE. THE BOOKS DISTRIBUTED TO THESE CATEGORIES OF STUDENTS HAVE ALREADY BEEN SUBMITTED. Q. NO. 4:- PLEASE EXPLAIN WHETHER THE BOARD HAS CARRIED OUT THE ACTIVITIES IN THE NATURE OF PRINTING OF TEXT BOOKS AN D SALE OF THE BOOKS WHICH IS IN THE NATURE OF COMMERCE, TRADE AND BUS INESS ANS:- YES, THE BOARD HAS CARRIED OUT THE ACTIVITIES OF PRINTING AND PUBLISHING OF TEXT BOOKS AND SOLD THE TEXT BOOKS THR OUGH DEPOTS OUT OF TOTAL STOCK PRINTED AS PER OBJECT NO. 12 OF THE BYE LAWS OF THE BOARD, BUT THE ACTIVITIES OF PRINTING AND SALE OF T EXT BOOKS ARE NOT IN THE NATURE OF COMMERCE AND TRADE. 17 Q. NO. 5:- PLEASE EXPLAIN WHETHER THE BOARD IS CARRY ING OUT ANY ACTIVITIES OF SCHOOLING, TRAINING OR IMPARTING ANY TYPE O F EDUCATION DIRECTLY OR INDIRECTLY TO THE STUDENTS OTHER THAN HOLDING OF EXAMS FOR CLASSES 8 TH , 10 TH & 12 TH . ANS:- WE ARE CONNECTING EXAMINATION FOR TESTING THE KN OWLEDGE OF CLASSES 8 TH , 10 TH , 11 TH & 12 TH BUT NOT IMPARTING ANY TYPE OF EDUCATION DIRECTLY OR INDIRECTLY TO THE STUDENTS OTH ER THAN HOLDING OF EXAM FOR CLASSES 8 TH , 10 TH & 12 TH . ANS:- WE ARE CONNECTING EXAMINATION FOR TESTING THE KNOWLEDGE OF CLASSES 8 TH , 10 TH 11 TH & 12 TH , BUT NOT IMPARTING EDUCATION TO THE STUDENTS DIRECTLY OR INDIRECTLY. APART FROM THAT WE AL SO DISTRIBUTE SCHOLARSHIP TO THE MERITORIOUS STUDENTS. Q. NO.6:- PLEASE EXPLAIN WHETHER YOU HAVE MAINTAINED S EPARATE BOOKS OF ACCOUNTS FOR PRINTING AND SALE OF BOOKS? ANS:- NO, WE ARE NOT MAINTAINING SEPARATE BOOKS OF ACCOUNTS FOR PRINTING AND SALE OF BOOKS. Q. NO,7:- PLEASE EXPLAIN WHETHER BOARD HAS EARNED PROF IT FROM PRINTING AND SALE OF BOOKS MADE THROUGH BOOK DEPOTS? ANS:- THE BOARD HAS NOT EARNED ANY PROFIT FROM THESE ACTIVITIES. BUT YES THE BOARD HAS EARNED SURPLUS OR EXPENDITURE F ROM THE ACTIVITIES OF PRINTING, PUBLISHING AND SALE OF BOOKS. IT IS ALSO BROUGHT TO YOUR NOTICE THAT THE SURPLUS SO GENERATED FROM THESE ACTIVITIES HAS BEEN UTILIZED FOR EXAMINATION ACTIVITIES . Q. NO:8:- PLEASE EXPLAIN WHETHER THE BOARD HAS RECEIVED ANY TYPE OF WHOLLY OR SUBSTANTIALLY FINANCIAL SUPPORT FRO M GOVT. FOR RUNNING OF DAY TO DAY ACTIVITIES AND FOR FULFILMENT OF OBJECTS OF BOARD OTHER THAN ALLOCATION OF FUND MADE BY DIRECTOR OF EDUCATION, H.P. OF RS.24,66,13,426/- FOR DISTRIBUTION OF FR EE TEXT BOOKS FOR THE STUDENTS BELONGING TO BACKWARD CLASSES , SCHEDULE CAST & SCHEDULE CASTE ? ANS:- NO, WE HAVE NOT RECEIVED ANY FINANCIAL SUPPORT FROM THE GOVT. OF H.P. FOR FUNCTIONING/FULFILMENT OF OBJECTS OF THE BOARD OTHER THAN FUNDS MENTIONED ABOVE FOR DISTRIBUTION OF FR EE TEXT BOOKS FOR SPECIFIC OBJECTIVE TO THE STUDENTS BELONG TO OTHER BACKWARD CLASSES, SCHEDULE CAST & SCHEDULE TRIBE. 12. THE ASSESSING OFFICER IN VIEW OF THE STATEMENT OF THE SECRETARY OF THE ASSESSEE BOARD AND MATERIAL ON RECORD FOUND THAT THE ASSESSEE BOARD HAS RECEIVED R S. 24.66 CR FOR FREE DISTRIBUTION OF TEXTBOOKS TO THE BACKWARD CLASSES, SC & ST STUDENTS BUT THE SAME HAV E BEEN UTILIZED IN CONTRAVENTION OF THE OBJECTS FOR W HICH THE FUNDS WERE ALLOCATED. THE ASSESSEE HAS NOT REC EIVED ANY MANDATE FROM THE DIRECTORATE OF EDUCATION FOR 18 UTILIZING THE ABOVESAID EARMARKED FUNDS FOR THE PURPOSES OTHER THAN THE PURPOSE/OBJECT FOR WHICH TH E FUND WAS ALLOCATED. THE FUNDS WERE UTILIZED FOR TH E PURPOSE OTHER THAN THE OBJECTS OF THE ASSESSEE. THE TEXTBOOKS WERE SOLD AND PROFIT WAS EARNED. THE SECRETARY DENIED TO HAVE IMPARTED ANY EDUCATION DIRECTLY OR INDIRECTLY TO THE STUDENTS IN THE NATUR E OF SCHOOLING OR TRAINING. THE ASSESSEE HAS ALSO STATE D THAT ASSESSEE BOARD HAS NOT RECEIVED ANY TYPE OF FINANCI AL SUPPORT FROM THE GOVERNMENT WHOLLY OR SUBSTANTIALLY FOR FUNCTIONING AND FULFILLMENT OF THE OBJECTS OF THE B OARD OTHER THAN THE EARMARKED FUND OF RS. 24.66 CR RECEI VED FROM FREE DISTRIBUTION OF TEXTBOOKS TO THE SPECIFIE D CLASS OF STUDENTS. THE ASSESSING OFFICER, THEREFORE, ADD ED THE AMOUNT AS INCOME OF THE ASSESSEE AND AFTER COMPLETI NG THE ASSESSEE'S ASSESSMENT ON OTHER ISSUES, COMPUTED THE TOTAL INCOME AT RS. 23,89,36,053/-. SECTION 10(23C)(IIIAB) OF THE INCOME TAX ACT PROVIDES AS UN DER : 10(23C) [(IIIAB) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT; OR 13. THE CONDITION OF THE ABOVE PROVISION WOULD SHOW THAT UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION MU ST EXIST SOLELY FOR EDUCATION PURPOSE AND NOT FOR THE 19 PURPOSE OF PROFIT WHICH IS WHOLLY AND SUBSTANTIALLY FINANCED BY THE GOVERNMENT. ALL THE CONDITIONS SHA LL HAVE TO BE CUMULATIVELY SATISFIED BEFORE SEEKING EXEMPTION UNDER THE ABOVE PROVISIONS. THE ASSESSIN G OFFICER HAS GIVEN A SPECIFIC FINDING AGAINST THE AS SESSEE THAT ASSESSEE HAS RECEIVED RS. 24.66 CR FROM DIRECT ORATE OF EDUCATION, HIMACHAL PRADESH FOR UTILIZATION OF T HESE FUNDS WITH SPECIFIC DIRECTIONS FOR FREE DISTRIBUTIO N OF TEXTBOOKS TO THE STUDENTS BELONGING TO OTHER BACKWA RD CLASSES, SC AND ST. THE ASSESSING OFFICER REFERRED TO THE NOTIFICATION OF GOVERNMENT OF HIMACHAL PRADESH DATED 21.11.1996 IN THIS REGARD THROUGH WHICH FUNDS HAVE BEEN ALLOCATED TO THE ASSESSEE FOR FREE DISTRI BUTION OF THE TEXTBOOKS TO THE SPECIFIED CLASS OF THE STUD ENTS. IT IS ALSO BROUGHT ON RECORD THAT EXCEPT THIS AMOUN T, WHICH WAS GIVEN FOR SPECIFIC PURPOSE OF FREE DISTRI BUTION OF THE TEXTBOOKS TO BACKWARD CLASS STUDENTS ETC., ASSESSEE BOARD HAS NOT RECEIVED ANY FINANCIAL SUPPO RT WHOLLY OR SUBSTANTIALLY FROM THE GOVERNMENT. IT IS ALSO BROUGHT ON RECORD THAT WHATEVER FUNDS WERE GIVEN FO R SPECIFIC PURPOSE OF FREE DISTRIBUTION OF THE TEXTBO OKS TO SPECIFIED CLASS OF STUDENTS, HAVE BEEN MISUSED IN VIOLATION OF THE NOTIFICATION. THE BOARD HAS FAILE D TO UTILIZE EARMARKED FUNDS GIVEN BY THE STATE GOVERNME NT FOR THE SPECIFIC PURPOSE. IT IS ALSO NOT IN DISPUT E THAT TEXTBOOKS WHICH HAVE BEEN PRINTED BY THE ASSESSEE BOARD HAVE BEEN SOLD IN OPEN MARKET THROUGH BOOK DEPOTS WITH THE MOTIVE OF EARNING PROFITS AND ASSES SEE 20 EARNED RS. 9.48 CR. THE COPY OF THE REVISED INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.03.2011 IS FILED AT PAGE 163 OF THE PAPER BOOK WHICH SHOWS THA T ASSESSEE HAS RECEIVED INCOME FROM STUDENTS FEES IN A SUM OF RS. 17.89 CR AND ALSO RECEIVED BOOK INCOME O F RS.34.19 CR. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED DETAILS OF INCOME FROM BOOKS (PRIVATE) IN ASSESSMEN T YEAR UNDER APPEAL WHICH SHOWS THAT ASSESSEE HAS RECEIVED INCOME ON SALE OF BOOKS THROUGH PRIVATE DE POTS IN A SUM OF RS. 9,53,65,751/- AND THE AMOUNT REIMBURSED BY THE HIMACHAL PRADESH GOVERNMENT WAS O F RS. 24.60 CR AND THUS, THE TOTAL BOOK INCOME RECEIV ED BY THE ASSESSEE WAS OF RS. 34.19 CR. INCLUDING THE INTEREST INCOME. THE INCOME & EXPENDITURE ACCOUNT ALSO SHOWS ASSESSEE HAS INCOME FROM OTHER HEADS AS WELL. IN THIS INCOME & EXPENDITURE ACCOUNT, ASSESS EE HAS NOT SHOWN ANY AMOUNT RECEIVED OR FINANCED BY TH E GOVERNMENT. THE FUNDS OF RS. 24.66 CR HAVE BEEN RECEIVED BY ASSESSEE FROM DIRECTORATE OF EDUCATION FOR THE PURPOSE OF FREE DISTRIBUTION OF TEXTBOOKS TO TH E BACKWARD CLASS STUDENTS, THEREFORE, THE SAME COULD NOT BE CONSTRUED TO BE WHOLLY AND SUBSTANTIALLY FINANCE D BY THE GOVERNMENT. WHEN THE ASSESSING OFFICER EXAMINE D THE SECRETARY OF THE ASSESSEE BOARD SMT. RAKHI KAHL ON UNDER SECTION 131 OF THE INCOME TAX ACT, SHE HAS ADMITTED IN ANSWER TO QUESTION NO. 8, AS REPRODUCED ABOVE, THAT ASSESSEE BOARD HAS NOT RECEIVED ANY FINANCIAL SUPPORT FROM GOVERNMENT OF HIMACHAL PRADE SH 21 FOR FUNCTIONING/FULFILLMENT OF THE OBJECTS OF THE B OARD OTHER THAN FUNDS MENTIONED ABOVE FOR DISTRIBUTION O F FREE TEXTBOOKS FOR SPECIFIC OBJECTIVE TO THE STUDEN TS BELONGING TO BACKWARD CLASS ETC. SHE HAS ALSO ADMI TTED IN ANSWER TO QUESTION NO. 2 ABOVE THAT ASSESSEE BOA RD HAS NOT RECEIVED ANY MANDATE FROM THE DIRECTORATE O F EDUCATION FOR UTILIZATION OF THE FUND OF RS. 24.66 CR FOR OTHER PURPOSES SUCH AS SALE OF BOOKS AND UTILIZATIO N OF FUNDS FOR EXAMS. SHE HAS ALSO ADMITTED TO HAVE SOL D THE TEXTBOOKS THROUGH PRIVATE DEPOTS AMOUNTING TO RS. 9 .48 CR. SHE HAS ALSO ADMITTED THAT ASSESSEE BOARD IS NO T IMPARTING EDUCATION TO THE STUDENTS DIRECTLY OR INDIRECTLY. IT IS ALSO ADMITTED THAT BOARD HAS EAR NED SURPLUS OVER THE EXPENDITURE FROM THE ACTIVITIES OF PRINTING, PUBLISHING AND SALE OF BOOKS. THEREFORE, THERE IS A CLEAR ADMISSION ON THE PART OF THE SECRETARY O F THE ASSESSEE BOARD THAT ASSESSEE BOARD HAS NOT RECEIVED ANY FINANCIAL SUPPORT FROM THE GOVERNMENT OF HIMACH AL PRADESH FOR FUNCTIONING/FULFILLMENT OF THE OBJECTS OF THE ASSESSEE BOARD. THE ASSESSEE BOARD IS NOT IMPARTIN G ANY EDUCATION AND WAS SELLING TEXTBOOKS ON WHICH PR OFIT HAVE BEEN EARNED. THEREFORE, ADMISSION OF THE SECR ETARY OF THE BOARD CLEARLY DISENTITLE THE ASSESSEE FOR CL AIMING ANY RELIEF UNDER SECTION 10(23C)(IIIAB) OF THE INCO ME TAX ACT. 14. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COU RSE OF ARGUMENTS SUBMITTED THAT SECRETARY OF THE BOARD HAS 22 MADE A WRONG STATEMENT BEFORE THE ASSESSING OFFICER . HOWEVER, HE HAS ADMITTED THAT SECRETARY OF THE BOAR D HAS NEVER RETRACTED FROM HER STATEMENT AT ANY STAGE LATER ON. IT, THEREFORE, STANDS CLEAR THAT THE STA TEMENT OF THE SECRETARY OF THE BOARD WAS CLEAR ADMISSION O N THE PART OF THE ASSESSEE BOARD TO PROVE THAT ASSESSEE I S NOT ENTITLED FOR ANY EXEMPTION/DEDUCTION UNDER SECTION 10(23C)(IIIAB) OF THE ACT. 15. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HOTEL KUMAR PALACE V CIT 283 ITR 110 HELD AS UND ER: HELD, THAT AS NOTICED BY THE COMMISSIONER, INCOME FROM CATERING BUSINESS WAS ESTIMATED BY THE ASSESSING OFFICER, ON THE BASIS OF THE STATEMENT OF THE PARTNER, RECORDED DURING THE COURSE OF SEARCH, AND DIARIES SEIZED IN THESE PROCEEDINGS. THE TRIBUNAL HAD ALSO OBSERVED THAT IN HIS STATEMENT, THE PARTNER HAD ADMITTED THAT INCOME FROM CATERING BUSINESS WAS NOT FULLY RECORDED IN THE BOOKS OF ACCOUNT. THIS FINDING WAS NEVER UNDER CHALLENGE. THE BLOCK ASSESSMENT WAS VALID. 16. HON'BLE SUPREME COURT IN THE CASE OF ITO VS MANGAT RAM NORATA RAM NARWANA & ANOTHER 336 ITR 624 HELD AS UNDER : ADMISSION IS THE BEST EVIDENCE AGAINST THE MAKER A ND IT CAN BE INFERRED FROM THE CONDUCT OF THE PARTY. ADMIS SION IMPLIED BY CONDUCT IS STRONG EVIDENCE AGAINST THE MA KER BUT HE IS AT LIBERTY TO PROVE THAT SUCH ADMISSION WAS MI STAKEN OR UNTRUE. 23 17. HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF HUKUM CHAND JAIN V ITO 334 ITR 197 HELD AS UNDER ; HELD, DISMISSING THE APPEAL, THAT ADMISSION DESPITE B EING AN IMPORT-PIECE OF EVIDENCE WAS NOT CONCLUSIVE AND IT WAS OPEN TO THE ASSESSEE TO SHOW THAT IT WAS NOT CORREC T. BUT IN THIS CASE, NO SUCH EFFORT WAS MADE BY THE ASSESSEE AND NO SUCH MATERIAL WAS PRODUCED BY HIM. THE ASSESSEE COU LD NOT PRODUCE ANY OTHER EVIDENCE TO THE CONTRARY TO SH OW THAT INVESTMENTS WERE ACTUALLY MADE IN DIFFERENT YEA RS THAN THIS. THE ASSESSMENT WAS VALID. 18. THE FINDING OF FACT RECORDED IN EARLIER ASSESSM ENT YEAR 2006-07 HAVE NOT BEEN REBUTTED THROUGH ANY MATERIAL ON RECORD IN WHICH THE LD. CIT(APPEALS) FO UND THAT ASSESSEE DOES NOT EXIST SOLELY FOR EDUCATIONAL PURPOSES AND IT IS A FACT THAT ASSESSEE EARNING HUG E PROFITS AND HAS SURPLUS INCOME AND PROFITS. THESE FINDINGS OF FACT HAVE BEEN CONFIRMED BY THE TRIBUNA L VIDE ORDER DATED 13.09.2013. THE LD. COUNSEL FOR T HE ASSESSEE SOUGHT SEVERAL ADJOURNMENTS TO PRODUCE SUFFICIENT MATERIAL AND EVIDENCE ON RECORD TO DISTI NGUISH THE CASE OF THE ASSESSEE FROM THE ASSESSMENT YEAR 2 006- 07 BUT LD. COUNSEL FOR THE ASSESSEE DID NOT PRODUCE ANY MATERIAL OR EVIDENCE TO PROVE THAT FACTS ARE ALL TO GETHER DIFFERENT FROM THE FINDING OF FACT RECORDED IN ASSE SSMENT YEAR 2006-07. AS NOTED ABOVE, NO AMOUNT IS GIVEN B Y THE STATE GOVERNMENT TO THE ASSESSEE BOARD FOR ANY EDUCATIONAL PURPOSE. THEREFORE, THERE IS NO QUESTI ON OF 24 GOVERNMENT WHOLLY OR SUBSTANTIALLY FINANCING THE ASSESSEE BOARD. THE ASSESSEE BOARD HAS INDEPENDENT SOURCE OF INCOME I.E. INCOME FROM STUDENTS FEES, B OOKS INCOME, INTEREST INCOME AND OTHER INCOME ETC. INCO ME & EXPENDITURE ACCOUNT IS SUPPORTED BY THE STATEMENT O F THE SECRETARY OF THE BOARD RECORDED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, IN WHICH THE SECRETARY OF T HE ASSESSEE BOARD HAS ADMITTED THAT BOARD HAS NOT RECEIVED ANY FINANCIAL SUPPORT FROM THE GOVERNMENT OF HIMACHAL PRADESH FOR FUNCTIONING/FULFILLMENT OF THE OBJECTS OF THE BOARD. THE BOARD HAS RECEIVED RS. 2 4.66 CR FOR DISTRIBUTION OF FREE TEXTBOOKS TO THE STUDEN TS BELONGING TO OBC/SC/ST AND ACCORDING TO THE INCOME & EXPENDITURE ACCOUNT, THE COST OF THE BOOKS HAS BEEN SHOWN IN A SUM OF RS. 17.06 CR AND ULTIMATELY THE T OTAL BOOK INCOME OF THE ASSESSEE INCLUDING INTEREST HAS BEEN SHOWN AT RS. 34.19 CR AND AS SUCH, THE ASSESSEE BO ARD HAS MISUSED THE FUNDS PROVIDED BY THE STATE GOVERNMENT FOR LIMITED PURPOSES. THUS, THE ASSESS EE IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNM ENT. THE ASSESSEE EARNED RS. 9.48 CR ON SALE OF TEXTBOOK S WHICH WERE SOLD THROUGH PRIVATE BOOKSELLERS FOR OTH ER STUDENTS, SO THE FUNDS GIVEN BY THE STATE GOVERNMEN T FOR THE BENEFIT OF OBC/SC/ST STUDENTS HAVE NOT BEEN UTILIZED BY THE ASSESSEE BOARD. THE NOTIFICATION O F THE GOVT. OF HIMACHAL PRADESH DATED 21.11.1996, THUS, H AS BEEN VIOLATED BY THE ASSESSEE BOARD. 25 18. SIMILARLY, WHEN THE ASSESSEE RAISED THE ISSUE BEFORE CCIT, SHIMLA IN CONNECTION WITH APPROVAL UND ER SECTION 10(23C)(VI) OF THE INCOME TAX ACT, THE ASSE SSEE WAS INFORMED OF THE ORDER OF LD. CCIT, SHIMLA VIDE LETTER DATED 11.03.2010 (SUPRA). THE ASSESSEE WAS INTIMAT ED THAT FROM THE RECORD MAINTAINED ALONGWITH APPLICATI ON UNDER SECTION 10(23C)(VI), IT WAS SEEN THAT THE ASS ESSEE IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT HENCE, THE BOARD DOES NOT APPEAR TO SATI SFY THE CONDITIONS OF SECTION 10(23C)(IIIAB) OF THE INC OME TAX ACT. IT IS NOT CLARIFIED BY THE LD. COUNSEL FO R THE ASSESSEE WHETHER ASSESSEE CHALLENGED THE AFORESAID ORDER OF THE CCIT, SHIMLA INTIMATED THROUGH LETTER DATED 11.03.2010 BEFORE ANY APPROPRIATE FORUM. THIS IS A LSO INCRIMINATING FINDING AGAINST THE ASSESSEE. 18(I). THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT SINCE ASSESSEE RECEIVED RS. 24.66 CR FROM THE STATE GOVERNMENT, THEREFORE, CONDITIONS OF SECTION 10(23C)(IIIAB) HAVE BEEN SATISFIED. THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE IS NOT TENABLE. THE SECRE TARY OF THE BOARD IN HER STATEMENT RECORDED UNDER SECTIO N 131 OF THE INCOME TAX ACT IN ANSWER TO QUESTION NO. 1 HAS CATEGORICALLY ADMITTED THAT BOARD HAS RECEIVED RS. 24.66 CR FOR DISTRIBUTION OF FREE TEXTBOOKS TO THE STUDENTS BELONGING TO RESERVED CATEGORIES. THE TOT AL BOOK INCOME ON THIS ISSUE WAS OF RS. 34.19 CR WHICH WOULD CLEARLY PROVE THAT ASSESSEE BOARD EXISTS FOR THE 26 PURPOSE OF PROFIT. THE LD. COUNSEL FOR THE ASSESSE E FURTHER CONTENDED THAT NO FACT IS MENTIONED IN THE NOTIFICATION DATED 21.11.1996 THAT PRIVATE SALE CAN NOT BE DONE BY THE ASSESSEE WHICH IS THE OBJECT OF THE ASSESSEE BOARD. THE COPY OF THE HIMACHAL PRADESH BOARD OF SCHOOL EDUCATION ACT, 1968 IS PLACED ON RE CORD IN WHICH IN SECTION 10(12), IT IS SPECIFIED THAT BO ARD SHALL ARRANGE FOR THE PREPARATION, WRITING, COMPILA TION, PRINTING, PUBLISHING AND SALE OF TEXTBOOKS, OTHER EDUCATIONAL MATERIAL AND UNDERTAKE THE PUBLICATION OF ANY OTHER EDUCATIONAL WORK, BOOKS OR PERIODICALS, B UT THIS SECTION DOES NOT AUTHORIZE THE ASSESSEE BOARD TO EARN ANY PROFIT IN VIOLATION OF THE NOTIFICATION OF THE GOVERNMENT ISSUED FOR SPECIFIC PURPOSE TO PROVIDE F REE TEXTBOOKS TO THE RESERVED CATEGORY STUDENTS. THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE IS ALSO NOT TENABLE AS PER ANSWER TO QUESTION NO. 1 ABOVE OF TH E SECRETARY OF THE ASSESSEE BOARD THAT ASSESSEE BOARD RECEIVED RS.24.66 CR FOR DISTRIBUTION OF FREE TEXTB OOKS TO RESERVED CATEGORY STUDENTS IS CORROBORATED BY THE RECEIPTS ISSUED BY THE ASSESSEE BOARD ON RECEIPT OF THE AFORESAID AMOUNT IN WHICH IT IS SPECIFICALLY MENTIO NED THAT AMOUNTS IN QUESTION HAVE BEEN RECEIVED FOR SU PPLY OF FREE TEXTBOOKS. THEREFORE, ASSESSEE CANNOT EARN PROFIT OUT OF THE SAME TRANSACTION WHICH IS SPECIFI CALLY DIRECTED BY THE STATE GOVERNMENT. THE CONTENTION O F LD. COUNSEL FOR THE ASSESSEE IS, THEREFORE, REJECTED TH AT ASSESSEE CAN PRINT AND PUBLISH THE TEXTBOOKS FOR OT HER 27 STUDENTS OUT OF THE SAME AMOUNT WHICH WAS RECEIVED FOR A SPECIFIC PURPOSE. 18(II) THE LD. COUNSEL FOR THE ASSESSEE LASTLY CO NTENDED THAT PRINCIPLE OF RES-JUDICATA DOES NOT APPLY TO TH E INCOME TAX PROCEEDINGS, HOWEVER, LD. DR SUBMITTED T HAT RULE OF CONSISTENCY DOES APPLY TO THE INCOME TAX PROCEEDINGS AND ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY ORDER OF ITAT CHANDIGARH BENCH IN THE CA SE OF SAME ASSESSEE FOR ASSESSMENT YEAR 2006-07 DATED 13.09.2013 (SUPRA). 19. IN VIEW OF THE ABOVE DISCUSSION AND FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW, IT IS CLEAR THAT ASSESSEE HAS FAILED TO REBUT THE FINDING OF FACT RE CORDED BY THE AUTHORITIES BELOW IN ASSESSMENT YEAR UNDER APPEAL AS WELL IN PRECEDING ASSESSMENT YEAR 2006-07 DECIDED EARLIER. THOUGH THE PRINCIPLE OF RES-JUDIC ATA DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS BUT TH E RULE OF CONSISTENCE DOES APPLY TO THE INCOME TAX PROCEEDINGS. HON'BLE DELHI HIGH COURT IN THE CASE O F ARJ SECURITIES PRINTER 264 ITR 276 HELD THAT FOR THE SAKE OF CONSISTENCY AND FINALITY OF LITIGATION, EAR LIER DECISION ON SAME QUESTION SHOULD NOT BE REOPENED UN LESS NEW FACTS CAME TO THE KNOWLEDGE. HON'BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS CIT 193 ITR 321 AND HON'BLE MADHYA PRADESH HIGH COURT IN THE CA SE OF GODAVARI CORPORATION LTD. 156 ITR 835 HELD THAT, RULE OF CONSISTENCY SHALL HAVE TO BE MAINTAINED IN 28 INCOME TAX PROCEEDINGS. IN THE PRESENT CASE, DESPITE GIVING SEVERAL OPPORTUNITIES TO THE LD. COUNSEL FOR THE ASSESSEE, NO EVIDENCE OR MATERIAL IS PRODUCED BEFOR E US TO DISTINGUISH THE CASE OF THE ASSESSEE FROM THAT O F ASSESSMENT YEAR 2006-07 IN WHICH THE IDENTICAL ISSU ES HAVE BEEN DECIDED AGAINST THE ASSESSEE BOARD. THEREFORE, LD. DR IS JUSTIFIED IN CONTENDING THAT T HE ISSUE IS COVERED AGAINST THE ASSESSEE BY EARLIER OR DER OF THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE DATED 13.09.2013. 20. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON FOLLOWING DECISIONS : I) DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CIT VS RAJASTHAN STATE TEXTBOOK BOARD 244 ITR 667 IN WHICH THE ISSUE WAS EXEMPTION UNDER SECTION 10(22) OF THE INCOME TAX ACT IN WHICH THE CIRCULAR OF THE BOARD DATED 19.08.1975 UNDER SECTION 10(22) WAS FOLLOWED. IN THIS CASE THE LD. CIT(APPEALS) AS WELL AS TRIBUNAL HAVE NOTICED THAT EVEN IF SOME AMOUNT REMAINS SURPLUS, THAT IS UTILIZED ONLY FOR THE PURPOSE OF EDUCATION, THEREFORE, ORDER OF THE TRIBUNAL WAS HELD NOT TO BE ERRONEOUS AND NO QUESTION OF LAW ARISES. II) DECISION OF ORISSA HIGH COURT IN THE CASE OF SECONDARY, BOARD OF EDUCATION VS ITO 86 ITR 408 IN WHICH IT WAS OBSERVED THAT UNDER THE ORISSA SECONDARY EDUCATION ACT, 1953, SECRETARY BOARD OF EDUCATION, ORISSA HAS A FUND. ONE OF THE SOURCE OF INCOME OF THE BOARD 29 IS PROFIT FROM COMPILATION, PUBLICATION, PRINTING AND SALE OF TEXTBOOKS. THE PROFIT SO EARNED ENTERED INTO BOARD FUND. THE INCOME & EXPENDITURE OF THE BOARD IS CONTROLLED AND THE ENTIRE EXPENDITURE IS TO BE DIRECTED TOWARDS DEVELOPMENT AND EXPANSION OF EDUCATION PURPOSE. THE ISSUE WAS UNDER SECTION 10(22) OF THE INCOME TAX ACT. III) DECISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF CIT BHOPAL VS MADHYA PRADESH PATHYA PUSTAK NIGAM 226 CTR 497 IN WHICH THE ISSUE WAS UNDER SECTION 10(22) OF THE INCOME TAX ACT AND THE MATTER HAS BEEN REMANDED TO THE ASSESSING OFFICER FOR RE-CONSIDERATION. 20(I) DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ASSAM STATE TEXTBOOK PRINTING & PUBLICATION CORPORATION LTD. VS CIT 319 ITR 317 IN WHICH ALSO T HE ISSUE WAS UNDER SECTION 10(22) OF THE INCOME TAX AC T AND MATTER WAS RESTORED TO THE ASSESSING OFFICER FO R CONSIDERING THE ISSUE DENOVO IN THE LIGHT OF THE JUDGEMENT OF THE RAJASTHAN HIGH COURT AND ORISSA HI GH COURT WITH REFERENCE TO THE CBDT CIRCULAR DATED 19.08.1975 (SUPRA). ALL THE ABOVE DECISIONS ARE DISTINGUISHABLE ON FACTS OF THE PRESENT CASE BECAUS E IN THE PRESENT CASE, IT IS SPECIFICALLY FOUND THAT ASS ESSEE DOES NOT EXIST SOLELY FOR EDUCATION PURPOSE AND EAR NED PROFITS AND FURTHER ASSESSEE IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. THEREFOR E, THE CONDITIONS OF SECTION 10(23C)(IIIAB) OF THE INC OME TAX ACT HAVE NOT BEEN SATISFIED IN THE PRESENT CASE . 30 THEREFORE, THESE DECISIONS WOULD NOT SUPPORT THE CA SE OF THE ASSESSEE. 21. CONSIDERING THE ABOVE DISCUSSION, IN THE LIGHT OF THE FINDING OF FACT RECORDED BY THE AUTHORITIES BEL OW AND EARLIER DECISION IN THE CASE OF THE ASSESSEE, WE AR E OF THE VIEW ASSESSEE HAS FAILED TO SATISFY REQUIREMENT S OF SECTION 10(23C)(IIIAB) OF THE INCOME TAX ACT, THERE FORE, ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION UNDER THE ABOVE PROVISIONS. THE APPEAL OF THE ASSESSEE, THUS , HAS NO MERIT AND SAME IS ACCORDINGLY DISMISSED. 22. SINCE WE HAVE DISMISSED APPEAL OF THE ASSESSEE, THEREFORE, NO APPEAL IS PENDING SO AS TO CONSIDER T HE STAY APPLICATION. THE SAME HAS THUS, BECOME INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE AND S TAY APPLICATION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH JANUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD