JAIPUR NATIONAL UNIVERSITY, Jaipur V. CIT-II, Jaipur

ITA 740/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5411 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 17-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENA CIT DHK
• Keywords: Charitable institution; Principle of natural justice
• Section: 143(3); 80G; 12; 10; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.740/JP/3 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 JAIPUR NATIONAL UNIVERSITY, JNU CAMPUS, JAGATPURA, JAIPUR CUKE VS. COMMISSIONER OF INCOME TAX - II, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABTJ 0594 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VINOD GUPTA (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI M.S. MEENA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09 .02.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/02/2016 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED THE ASSESSEE AGAINST THE OR DER OF CIT-II, JAIPUR DATED 30.07.2013 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT-II, JAIPUR HAS ERRED IN PASSING THE ORDER U/S 80G(5)(VI ) OF THE IT ACT, 1961 DATED 30.07.2013 WITHOUT FOLLOWING THE PRINCIPLES O F NATURAL JUSTICE IN NOR PROVIDING ADEQUATE/SUFFICIENT OPPORTUNITY OF HE ARING TO THE APPELLATE AUTHORITY. ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 2 (2) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT-II, JAIPUR HAS ERRED IN REJECTING THE APPLICATION OF TH E APPELLANT UNIVERSITY U/S 80G(5)(VI) OF IT ACT, 1961 BY HOLDING THE SAME AS PREMATURE ON VARIOUS FRIVOLOUS NOT APPLICABLE /NON-EXISTENT GROU NDS MENTIONED BELOW: (I) THAT SETTING UP OF MEDICAL COLLEGE AND HOSPITAL PRO JECT BY THE APPELLANT UNIVERSITY IS NOT APPROVED/VALIDATED. (II) THAT THE APPELLANT UNIVERSITY HAS NOT SOUGHT EXEMPT ION U/S 10(23)(C)(VI) OF THE IT ACT, 1961. (III) THAT THE QUANTUM OF REFUNDABLE CAUTION MONEY COLLEC TED FROM THE STUDENTS IS INCREASING EVERY YEAR. (IV) THAT THE SPONSORING BODY MAY DISSOLVE THE APPELLANT UNIVERSITY AND ON DISSOLUTION OF UNIVERSITY, ALL THE ASSETS AN D LIABILITIES OF THE UNIVERSITY SHALL VEST IN SPONSORING BODY. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE APPEL LANT HAS BEEN ESTABLISHED THROUGH AN ACT PASSED BY THE STATE LEGISLATURE OF R AJASTHAN NAMELY, THE JAIPUR NATIONAL UNIVERSITY, JAIPUR ACT, 2008. THE APPELL ANT IS AN EDUCATION INSTITUTION INVOLVED IN IMPARTING HIGHER EDUCATION IN VARIOUS D ISCIPLINES. THE OBJECT OF THE APPELLANT, AS PER SECTION 4 OF THE JNU ACT, READS A S FOLLOWS: 4. THE OBJECTS OF THE UNIVERSITY SHALL BE TO UNDE RTAKE RESEARCH AND STUDIES IN THE DISCIPLINES SPECIFIED IN SCHEDULE II AND SUCH O THER DISCIPLINES AS THE UNIVERSITY MAY WITH THE PRIOR APPROVAL OF THE STATE GOVERNMENT , DETERMINE FROM TIME TO TIME AND TO ACHIEVE EXCELLENCE AND IMPART AND DISS EMINATE KNOWLEDGE IN THE SAID DISCIPLINE. THE APPELLANT FILED AN APPLICATION BEFORE LD CIT F OR REGISTRATION U/S 80G OF THE ACT ON 31.01.2013 IN PRESCRIBED FORM AND REQUISITE DOCUMENTS SUCH AS COPY OF CERTIFICATE OF REGISTRATION UNDER SECTION 12A(A) OF THE ACT, COPY OF AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2009-10 TO 2011-12, INCOME TAX RETURN FOR ASSESSMENT YEAR 2011-012 AND 2012-13, DETAILS A ND EVIDENCES OF CHARITABLE ACTIVITIES CARRIED OUT BY APPELLANT AND COPY OF ASS ESSMENT ORDER PASSED U/S 143(3) FOR ASSESSMENT YEAR 2009-10 & 2010-11. EVEN THOUGH BOTH AO AND ADDITIONAL CIT RECOMMENDED FOR GRANT OF APPROVAL U/ S 80G(5)(VI), THE APPLICATION ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 3 FILED BY THE APPELLANT DIDNT FIND FAVOUR WITH THE LD CIT WHO REJECTED THE APPLICATION. HENCE, THE PRESENT APPEAL BEFORE US. 2.1 DURING THE COURSE OF HEARING, THE LD. AR DRAWN OUR REFERENCE TO THE PROVISIONS OF SECTION 80G(5) WHICH ARE REPRODUCED H EREIN BELOW: (5) THIS SECTION APPLIES TO DONATIONS TO ANY INST ITUTION OR FUND REFERRED TO IN SUB CLAUSE (IV) OF CAUSE (A) OF SUB-SECTION (2), ONLY I F IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND IF IT FULFILLS THE FOLLOWING CONDITIONS, NAMELY:- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOME, S UCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER TH E PROVISIONS OF SECTIONS 11 AND 12 (OR CAUSE(23AA) FOR CLAUSE 23(C)OF SECTION 1 0): PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME BEING PROFITS AND GAINS OF BUSINESS, THE CONDITION THAT SUCH INCO ME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 11 SHALL NOT APPLY IN RELATION TO SUCH INCOME, IF (A) THE INSTITUTION OR FUND MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS; (B) THE DONATIONS MADE TO THE INSTITUTION OR FUND ARE N OT USED BY IT, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS ; AND (C) THE INSTITUTION OR FUND ISSUES TO A PERSON MAKING T HE DONATION A CERTIFICATE TO THE EFFECT THAT IT MAINTAINS SEPARAT E BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS AND THAT THE DONATIONS REC EIVED BY IT WILL NOT BE USED, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF S UCH BUSINESS. (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO N OT, CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 4 (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCOUNTS OF ITS RECEIPTS AND EXPENDITURE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED AS A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 186 0 (21 OF 1860), OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY P ART OF INDIA OR UNDER SECTION 25 OF THE COMPANIES ACT, 1956 (1 OF 1956) O R IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INS TITUTION RECOGNIZED BY THE GOVERNMENT OR BY A UNIVERSITY ESTABLISHED BY LAW, O R AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW) OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR A LOCAL AUTHORITY. 2.2 THE LD. AR SUBMITTED THAT THE APPELLANT SATIS FIES EACH OF THE ABOVE QUALIFYING CRITERIA FOR GETTING APPROVAL U/S 80G(5) (VI) OF THE ACT AND HAS SUBMITTED AS UNDER: 1. FIRST AND FOREMOST, THE PREDOMINATE CONDITION FOR B ECOMING ELIGIBLE FOR APPROVAL UNDER SECTION 80G(5)(VI) IS THAT THE INST ITUTION MUST BE ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE. IN THE INSTANT CAS E, THE APPELLANT HAS BEEN ESTABLISHED THROUGH JNU ACT PASSED BY THE STATE LEG ISLATURE OF RAJASTHAN, MEANS IT IS ESTABLISHED IN INDIA. APPELLANT IS AN EDUCATIONAL INSTITUTE INVOLVED IMPARTING OF HIGHER EDUCATION IN VARIOUS DISCIPLINE S OF STUDY AS EXPLAINED IN THE SECTION 4 OF THE JNU ACT. THE ACTIVITY OF EDUCATIO N IS CLEARLY COVERED UNDER SECTION 2(15) OF THE ACT, WHICH DEFINES THE CHARITA BLE PURPOSE, HENCE, MEETING THE CRITERIA LAID DOWN UNDER SAID SUB-SECTION. 2. CLAUSE (I) OF SAID SECTION REQUIRES THAT THE INCOME OF SUCH INSTITUTE MUST NOT LIABLE TO INCLUDE IN THE TOTAL INCOME UNDER THE PRO VISION OF SECTION 11 & 12. IN THE INSTANT CASE, APPELLANT IS REGISTERED U/S 12A(A ) OF THE ACT AND ALSO HAVE BEEN ASSESSED U/S 143(3) FOR A.Y. 2009-10, 2010-11 WHEREIN INCOME OF THE INSTITUTE HAS NOT BEEN INCLUDED IN THE TOTAL INCOME APPLYING THE PROVISION OF SECTION 11 AND 12 OF THE ACT. 3. CLAUSE (II) OF SAID SECTION REQUIRES THAT THE INSTR UMENT UNDER WHICH THE INSTITUTION IS CONSTITUTED DOES NOT CONTAIN ANY PRO VISION FOR TRANSFER OR APPLICATION OF INCOME OR ASSETS OF THE INSTITUTION FOR ANY PURPOSE OTHER THAN A CHARITABLE PURPOSE. IN THE INSTANT CASE, APPELLANT IS CONSTITUTED UNDER JNU ACT, ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 5 WHEREIN CLAUSE 43 PROVIDES THAT APPELLANT CAN BE DI SSOLVED BY THE SPONSORING BODY ONLY AFTER THE APPROVAL OF THE STATE GOVERNMEN T AND ON DISSOLUTION OF APPELLANT, ALL THE ASSETS AND LIABILITIES OF THE AP PELLANT SHALL VEST IN SPONSORING BODY. IN THIS REGARD IT IS RELEVANT TO MENTION HERE THAT, APPELLANT IS A BODY CORPORATE HAVING PERPETUAL SUCCESSION CAPABLE OF HOLDING MOVA BLE AND IMMOVABLE PROPERTY IN ITS NAME. THE FUNDS OF THE APPELLANT C AN BE UTILIZED ONLY FOR MEETING RECURRING AND NONRECURRING EXPENDITURE, EXP ENSES IN CONNECTION WITH THE AFFAIRS OF THE APPELLANT IN TERMS OF SECTION 10 OF THE JNU ACT. MOREOVER THE SPONSORING BODY I.E. MAHIMA SHIKSHA SMITI, JAI PUR IS ITSELF A BODY WITH CHARITABLE PURPOSE REGISTERED UNDER SECTION 12A(A) OF THE ACT. THEREFORE EVEN PRESUMING FOR THE SAKE OF ARGUMENTS THAT CLAUSE 43 PROVIDES FOR THE TRANSFER AT ANY TIME OF THE WHOLE OR ANY ART OF THE INCOME O R ASSETS OF THE INSTITUTION STILL IT WOULD BE FOR THE PURPOSE OF CHARITABLE IN NATURE AS THE SPONSORING BODY ITSELF HAS CHARITABLE OBJECTS AS STATED SUPRA. THEREFORE, THERE IS NO PROVISION FOR TRANSFER OR APPLICATION OF INCOME OR ASSETS OF THE APPELLANT FOR PURPOSE OTHER THAN A CHARITABLE PURPOSE. ALTHOUGH EVEN THI S IS ALSO NOT POSSIBLE STRAIGHT WAY WITHOUT THE APPROVAL OF STATE GOVERNME NT, MEANS, APPELLANT AT ITS OWN CANNOT TRANSFER EVEN TO SPONSORING BODY, WH ICH IS ALSO A CHARITABLE INSTITUTION REGISTERED U/S 12A(A) OF THE ACT. 4. ``CLAUSE (III) OF SAID SECTION REQUIRES THAT, THE I NSTITUTION IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNI TY OR CASTE. IN THE INSTANT CASE, APPELLANT IS AN EDUCATIONAL INSTITUTE CONSTIT UTED UNDER JNU ACT, ENGAGED IN IMPARTING HIGHER EDUCATION, WHEREIN CLAUSE 32 O F JNU ACT CLEARLY SAYS THAT ADMISSION IN THE UNIVERSITY SHALL BE MADE STRICTLY ON THE BASIS OF MERIT, EXCEPT FOR STUDENTS OF SC/ST/OBC/WOMEN AND HANDICAPPED PA RSONS, WHICH SHALL BE PROVIDED AS PER THE POLICY OF THE STATEMENT GOVERNM ENT. THE SAME EXCEPTION HAS ALSO BEEN MADE IN SAID CLAUSE BY WAY OF INSERTI ON OF EXPLANATION 1 TO SECTION 80G(5D) AND SAME IS REPRODUCED FOR READY RE FERENCE AS FOLLOWS: EXPLANATION 1, AN INSTITUTION OR FUND ESTABLISHED FOR THE BENEFIT OF SCHEDULED CASTES, BACKWARD CLASSES, SCHEDULED TRIBE S OR OF WOMEN AND ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 6 CHILDREN SHALL NOT BE DEEMED TO BE AN INSTITUTION OR FUND EXPRESSES TO BE FOR THE BENEFIT OF A RELIGIOUS COMMUNITY OR CASTE W ITHIN THE MEANING OF CLAUSE (III) OF SUB-SECTION (5). HENCE, IT IS CLEAR THAT IT IS NOT EXPESSED TO BE FO R THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. FURTHER, THE APPELLANT IS REGISTERED U/S 12A(A) OF THE ACT. 5. CLAUSE (IV) OF THE SAID SECTION REQUIRES THAT THE I NSTITUTE MAINTAIN REGULAR ACCOUNT OF ITS RECEIPTS AND EXPENDITURE. IN THE INS TANT CASE, APPELLANT IS MAINTAINING REGULAR ACCOUNTS OF RECEIPTS AND EXPEND ITURE. FURTHER APPELLANT IS GETTING THE SAME AUDITED BY A CHARTERED ACCOUNTANT, WHICH WERE DULY SUBMITTED TO LD. CIT (REFER TO PARA 1 OF HIS ORDER) . BASED ON THE AUDITED FINANCIAL STATEMENTS THE ASSESSMENTS HAVE ALSO BEEN COMPLETED U/S 143(3). THEREFORE, THIS CONDITION IS ALSO SATISFIED. 6. CLAUSE(V) OF THE SAID SECTION REQUIRES THAT THE INS TITUTION IS EITHER CONSTITUTED AS A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 OR IS A UNIVERSITY ESTABLISHED BY LAW. AS ELA BORATED HEREINBEFORE, APPELLANT IS A UNIVERSITY ESTABLISHED UNDER THE JNU ACT. THEREFORE, THIS CONDITION IS ALSO SATISFIED. FOREGOING DISCUSSION OF FACTS AND LAW, CLEARLY SHOW S THAT, THE APPELLANT IS SATISFYING EACH AND EVERY REQUIREMENT PRESCRIBED UN DER THE LAW TO GET APPROVAL U/S 80G(50(VI) AT THE TIME OF APPLICATION FILED BEF O4E LD. CIT. THEREFORE, IT IS REQUESTED TO DIRECT TO GRANT APPROVAL U/S 80G(5)(VI ) OF THE ACT, BY REVERSING THE ORDER OF LD. CIT. 2.3 IN RESPONSE TO THE OBSERVATION MADE BY LD. CIT IN HIS ORDER, LD AR SUBMITTED AS UNDER: 1. LD. CIT IN PARA 4 OF HIS ORDER OBSERVED THAT THE S ETTING UP A MEDICAL COLLEGE AND HOSPITAL PROJECT IS NOT APPROVED/VALIDATED BY A NY OF THE CLAUSES OF THE NOTIFICATION DATED 29.03.2008. IN CONNECTION TO THE OBSERVATION OF LD. CIT, WE SUB MIT THAT, SECTION 4 OF THE JNU ACT PERMITS IT TO PURSUE/UNDERTAKE DISCIPLINES OTHER THAN THOSE ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 7 MENTIONED IN THE SCHEDULE II WITH THE PRIOR APPROVA L OF THE STATE GOVERNMENT. IT IS RELEVANT TO MENTION HERE THAT VIDE LETTER NO. F.3(8) EDU.4/2011 DATED 30 JUNE, 2011 THE STATE GOVERNMENT HAS GRANTED APPROVA L FOR STARTING OF NEW DISCIPLINE OF HEALTH AND MEDICAL SCIENCES TO THE AP PELLANT. THE APPROVAL INTER- ALIA INCLUDES THE APPROVAL FOR DEVELOPMENT OF REQU ISITE INFRASTRUCTURE FOR THIS PURPOSE. THEREFORE, APPELLANT IS AUTHORIZED./APPRO VED/NOTIFIED TO SET UP A MEDICAL COLLEGE AND HOSPITAL PROJECT AND THE OBSERV ATION OF LD. CIT IS CONTRARY TO THE FACT. 2. LD. CIT IN PARA 5 OF HIS ORDER OBSERVED THAT APPELL ANT HAS NOT SOUGHT EXEMPTION U/S 10(23)(C)(VI) OF THE ACT. IN THIS REGARD WE SUBMIT THAT, SEEKING EXEMPTION UN DER SECTION 10(23)(C)(VI) OF THE ACT IS NOT A PRE-CONDITION TO SEEK REGISTRATION U/S 80G OF THE ACT. THE APPELLANT IS REGISTERED UNDER SECTION 12A(A) OF THE ACT W.E.F. 01,04,2008 VIDE CERTIFICATE DATED 30.03.2009 AND THEREBY THE INCOME OF THE APPELLANT IS NOT LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE P ROVISIONS OF SECTION 11 AND 12 OF THE ACT. THEREFORE, THE APPELLANT FULFILS THE R EQUIREMENT OF REGISTRATION U/S 80G(5)(I) OF THE ACT EVEN WITHOUT SEEKING EXEMPTION U/S 10(23)(C)(VI) OF THE ACT. IT IS PERTINENT TO MENTION HERE THAT THE APPE LLANT HEREIN HAS BEEN ASSESSED U/S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2009-10, 2010-11 AND THEREAFTER WITHOUT THERE BEING ANY DISPUTE OF WHATS OEVER KIND IN RELATION TO THE EXEMPTION AVAILABLE TO THE APPELLANT U/S 11 AND 12 OF THE ACT. THEREFORE, THE OBSERVATION OF LD. CIT IS CONTRARY TO THE LAW. 3. THE LD. CIT IN PARA 6 OF HIS ORDER OBSERVED THAT, T HE QUANTUM OF CAUTION MONEY, NOT REFUNDED, HAS BEEN INCREASING EVERY YEAR . IN THIS REGARD, IT IS SUBMITTED THAT THE OUTSET THA T THE QUANTUM OF THE CAUTION MONEY INCREASES EVERY YEAR DUE TO THE FOLLOWING REA SONS: (A) THE NUMBER OF THE STUDENT INCREASES EVERY YEAR AS T HE STUDENTS ADMITTED IN FIRST YEAR GETS PROMOTED TO NEXT YEAR AND FRESH STUDENT TAKE ADMISSION IN THE FIRST YEAR AND EVERY NEW STUDENT HAS TO DEPOSIT THE REFUNDABLE CAUTION MONEY AT THE TIME OF ADMISSION. ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 8 (B) THE APPELLANT ADDS FRESH COURSES EVERY YEAR AS A RE SULT OF WHICH INTAKE OF STUDENTS AND CORRESPONDING CAUTION MONEY INCREASES EVERY YEAR. (C) THE CAUTION MONEY IS REFUNDED ONLY WHEN THE STUDENT S AFTER COMPLETING THE COURSE LEAVES THE UNIVERSITY THE COMPLETE DETAILS OF THE CAUTION MONEY RECEIVED AND REFUNDED IN EACH OF THE LAST 4 YEARS IS PROVIDED HEREIN BELOW; YEAR OPENING BALANCE OF CAUTION MONEY CAUTION MONEY REFUNDED CAUTION MONEY RECEIVED FROM NEW STUDENTS BALANCE 2009 - 10 71,32,158 23,1,775 41,41,900 89,02,283 2010 - 11 89,02,283 20,65,505 40,32,820 1,08,69,598 2011 - 12 1,08,69,598 23,69,428 40,17,200 1,25,17,370 2012 - 13 1,25,370 22,00,345 43,13,100 1,46,30,125 TOTAL 90.07,053 1,65,05,020 HOWEVER, WITHOUT PREJUDICE TO ABOVE, IT IS SUBMITTE D THAT THE INCREASE IN CAUTION MONEY CANNOT BE A BASIS FOR REJECTING THE R EGISTRATION U/S 80G OF THE ACT AS THE SAME IS BEYOND THE SCOPE OF ENQUIRY U/S 80G(5)(VI) OF THE ACT AS EVIDENT FROM THE PROVISIONS OF SECTION 80G(5 ) READ WITH RULE 11AA WHICH REQUIRES CONSIDERATION OF THE CONDITIONS LAID CLAUSE (I) TO (V) OF SUB SECTION(5) OF SECTION 80G OF THE ACT. IT IS THEREF ORE EVIDENT THAT THE ASPECT OF INCREASE IN CAUTION MONEY CANNOT BE ENQUIRED WH ILE MAKING ENQUIRY U/S 80G OF THE ACT. IT MAY BE A RELEVANT ASPECT FOR EN QUIRY WHILE GRANTING REGISTRATION U/S 12A(A) OF THE ACT OR DURING THE CO URSE OF ASSESSMENT PROCEEDINGS BUT CERTAINLY NOT DURING THE COURSE OF GRANTING REGISTRATION U/S 80G AND PARTICULARLY WHEN THE REGISTRATION U/S 12A( A) HAS ALREADY BEEN GRANTED AND THE ASSESSMENT ORDER U/S 143(3) OF THE ACT HAS BEEN PASSED ACCEPTING THE RETURNED INCOME AT NIL AS INCOME EXEM PT U/S 11 OF THE ACT. THE SAID POSITION OF LAW WHICH IS EVEN OTHERWISE CL EAR AND UNAMBIGUOUS HAS BEEN DECLARED IN THE JUDGEMENT OF SONEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY VS. CIT & ANR (2005) 278 ITR 262 (P&H). ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 9 4. LD. CIT IN PARA 7 OF HIS ORDER, OBSERVED THAT, EXCE SS/SURPLUS OF INCOME OVER EXPENDITURE HAS BEEN SUBSTANTIALLY APPLIED TOWARDS ADDITION MADE TO FIXED ASSETS. IT APPEARS THAT SAID OBSERVATION HAS BEEN MADE TAKING INTO CONSIDERATION THE JUDGMENT OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS. QUEENSS EDUCATIONAL SOCIETY 310 ITR 160, W HICH IS ALSO REFERRED BY LD. CIT IN PARA 9.A OF HIS ORDER. IT IS RELEVANT TO MENTION HERE THAT, UNDISPUTEDLY A LL THE INVESTMENT/APPLICATION TOWARDS FIXED ASSETS HAS BEEN MADE FOR FURTHERANCE OF THE OBJECT OF THE APPELLANT. IT IS WORTHWHILE HERE TO NOTE THAT THE SAID JUDGEMENT OF QUEENS EDUCATIONAL SOCIETY (SUPRA) HAS ALREADY REVERSED BY THE HONBLE SUPREME COURT VIDE ORDER DATED 16.03.2015, WHEREIN IT IS AC KNOWLEDGED BY THE COURT THAT AN INCIDENTAL SURPLUS WHICH IS GENERATED AND WHICH HAS RESULTED IN ADDITIONS TO THE FIXED ASSETS IS UTILIZED AS THE BA LANCE SHEET WOULD INDICATE TOWARDS UPGRADING THE FACILITIES OF THE COLLEGE INC LUDING FOR THE PURCHASE OF LIBRARY BOOKS AND THE IMPROVEMENT OF THE INFRASTRUC TURE. WITH THE ADVANCEMENT OF TECHNOLOGY NO COLLEGE OR INSTITUTION CAN AFFORD TO REMAIN STAGNANT. THE INCOME TAX ACT, 1961 DOES NOT CONDIT ION THE GRANT OF AN EXEMPTION UNDER SECTION 10(23C) ON THE REQUIREMENT THAT A COLLEGE MUST MAINTAIN THE STATUS-QUO, AS IT WERE IN REGARD TO IT S KNOWLEDGE BASED INFRASTRUCTURE. NOR FOR THAT MATTER IS AN EDUCATION AL INSTITUTION PROHIBITED FROM UPGRADING ITS INFRASTRUCTURE ON EDUCATIONAL FACILI TIES SAVE ON THE PAIN OF LOSING THE BENEFIT OF THE EXEMPTION UNDER SECTION 10(23C). IMPOSING SUCH A CONDITION WHICH IS NOT CONTAINED IN THE STATUTE WOULD LEAD TO A PERVERSION OF THE BASIC PURPOSE FOR WHICH SUCH EXEMPTIONS HAVE BEEN GRANTED TO EDUCATIONAL INSTITUTIONS. KNOWLEDGE IN CONTEMPORARY TIMES IS T ECHNOLOGY DRIVEN. EDUCATIONAL INSTITUTIONS HAVE TO MODERNIZE, UPGRADE AND RESPOND TO THE CHANGING ETHOS OF EDUCATION. EDUCATION HAS TO BE R ESPONSIVE TO A RAPIDLY EVOLVING SOCIETY. 5. THE LD. CIT IN PAR 8 OF HIS ORDER, OBSERVED THAT, U PON DISSOLUTION OF APPELLANT ALL THE ASSETS AND LIABILITIES OF THE APPELLANT SHALL V EST IN SPONSORING BODY. ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 10 IN THIS REGARD IT IS RELEVANT TO MENTION HERE THAT APPELLANT IS BODY CORPORATE HAVING PERPETUAL SUCCESSION CAPABLE OF HOLDING MOVA BLE AND IMMOVEABLE PROPERTY IN ITS NAME. THE FUNDS OF THE APPELLANT C AN BE UTILIZED ONLY FOR MEETING RECURRING AND NON RECURRING EXPENDITURE, E XPENSES IN CONNECTION WITH THE AFFAIRS OF THE APPELLANT IN TERMS OF SECTI ON 10 OF THE JNU ACT. MOREOVER THE SPONSORING BODY I.E. MAHIMA SIKSHA SAM ITI, JAIPUR IS ITSELF BODY WITH CHARITABLE PURPOSE REGISTERED UNDER SECTION 12 A(A) OF THE ACT. THEREFORE, EVEN PRESUMING FOR THE SAKE OF ARGUMENTS THAT CLAU SE 43 PROVIDES FOR THE TRANSFER OF AT ANY TIME OF THE WHOLE OR ANY PART O F THE INCOME OR ASSETS OF THE INSTITUTION STILL IT WOULD BE FOR THE PURPOSE OF CHARITABLE I N NATURE AS THE SPONSORING BODY ITSELF HAS CHARITABLE OBJECTS AS S TATED SUPRA. THEREFORE, THERE IS NO PROVISION FOR TRANSFER OR APPLICATION OF INCO ME OR ASSET OF THE APPELLANT FOR PURPOSE OTHER THAN CHARITABLE PURPOSE. ALTHOU GH, EVEN THIS IS ALSO NOT POSSIBLE STRAIGHT WAY WITHOUT THE APPROVAL OF STATE GOVERNMENT, MEANS APPELLANT AT ITS OWN CANNOT TRANSFER EVEN TO SPONSO RING BODY, WHICH IS ALSO A CHARITABLE INSTITUTION REGISTERED U/ S 12A(A) OF TH E ACT. 3. THE LD CIT DR ARGUED THE MATTER AT LENGTH AND RE LIED UPON THE ORDER OF LD CIT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. THE APPELLANT IS ALREADY REGISTERED AS A C HARITABLE INSTITUTION UNDER SECTION 12A(A) OF THE ACT. AT THE TIME OF MOVING T HE SUBJECT APPLICATION UNDER SECTION 80G(5) OF THE ACT, THE APPROVAL UNDER SECTI ON 12A(A) WAS IN PLACE AND NOT REVOKED. GIVEN THIS UNDISPUTED FACTS, THE LIMITED QUESTION THAT ARISE FOR CONSIDERATION IS WHETHER ADDITIONAL CONDITIONS PRES CRIBED UNDER SECTION 80G(5) HAVE BEEN FULFILLED BY THE APPELLANT. THE APPELLAN T HAS SUBMITTED DETAIL REPLY AS TO HOW IT SATISFIES EACH OF THE SPECIFIED CONDITION S WHICH HAVE BEEN REPRODUCED IN PARA 2.1 ABOVE. EVEN LD CIT HAS NOT DISPUTED SATIS FACTION OF ANY OF THESE CONDITIONS IN HIS ORDER EXCEPT FOR CONDITION RELATI NG TO VESTING OF ALL THE ASSETS AND LIABILITIES OF THE APPELLANT IN SPONSORING BODY UPO N DISSOLUTION OF THE APPELLANT. IN THIS REGARD, THE APPELLANT HAS SUBMITTED THAT THE S PONSORING BODY IS ALSO A CHARITABLE INSTITUTION WHICH IS REGISTERED UNDER SE CTION 12A(A) OF THE ACT AND IN A SCENARIO, WHETHER THE APPELLANT IS DISSOLVED, ALL T HE ASSETS AND LIABILITIES SHALL VEST ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 11 WITH A CHARITABLE INSTITUTE WHICH WILL APPLY IT FOR CHARITABLE PURPOSE. ACCORDINGLY, THE APPELLANT SATISFIES THIS CONDITION AS WELL. FURTHER, IT IS NOTED THAT THE APPELLANT HAS BEEN MA INTAINING ITS BOOKS OF ACCOUNTS, GETTING THEM AUDITED AND REGULAR IN FILING OF ITS T AX RETURN WHICH HAS ALSO BEEN ASSESSED FOR TWO PAST ASSESSMENT YEARS. THE DEPART MENT HAS ALL THE POWERS TO INVESTIGATE ON A REGULAR BASIS WHETHER THE APPELLAN T IS COMPLYING WITH THE STIPULATED CONDITIONS OR NOT. HOWEVER, AT THE STAG E OF GRANT OF CERTIFICATE UNDER 80G, THE DETAIL ENQUIRY AS APPARENTLY DONE BY LD CI T IN TERMS OF CAUTION MONEY RECEIPTS, UILISATION OF FUNDS FOR PURCHASE OF FIXED ASSETS, ETC IS NOT WHAT WHICH IS CONTEMPLATED IN LAW AS HAS BEEN HELD BY THE COURTS FROM TIME TO TIME. KEEPING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE APPELLANT IS ALREADY GRANTED APPROVAL UNDER SECTION 12A(A) OF THE ACT, WE HEREBY DIRECT LD CIT TO GRANT APPROVAL TO THE APPELLANT UNDER SECTIO N 80G(5)(VI) OF THE ACT. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/0 2/2016. SD/- SD/- ( R.P. TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 29/ 02 /2016 PILLAI ITA NO. 740/JP/13 JAIPUR NATIONAL UNIVERSITY, JAIPUR VS. CIT-II, JAIPU R 12 VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- JAIPUR NATIONAL UNIVERSITY, JNU CAMPUS, JAIPUR 2. THE RESPONDENT- THE CIT-II, JAIPUR 3. THE CIT(A) - 4. THE CIT - 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO . 740 /JP/13) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.