Krishna Avanti Educational Society, Ujjain V. CIT Exemption, Bhopal

ITA 910/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6766 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 04-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Keywords: Charitable institution; Set aside
• Section: 80G; 12AA; 201; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 910/IND/2018 ASSESSMENT YEAR: 2018-19 REVENUE BY SHRI R.S. AMBEDKAR, SR.DR APPELLANT BY SHRI MANOJ F ADNIS, CA DATE OF HEARING 0 4 .0 2 . 20 2 0 DATE OF PRONOUNCEMENT 07 .0 2 . 2020 KRISHNA AVANTI EDUCATIONAL SOCIETY, 35, DEWAS ROAD, BHARATPURI PRASHANIK KSH, UJJAIN VS. CIT ( EXEMPTION ) , BHOPAL (APPELLANT) (RE VENUE ) PAN NO. AABAK5702H ITA NO. 911/IND/2018 ASSESSMENT YEAR: 2018-19 AVANTIKA KRISHI GAURAKS HA TRUST, B-1/21 MAHAKAL VANIJYA KENDRA, NANAKHEDA, UJJAIN VS. CIT ( EXEMPTION ) , BHOPAL (APPELLANT) (RE VENUE ) PAN NO. AA DTA8024P KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 2 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE O F ASSESSEE(S) ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (EXEMPTION) (IN SHORT LD.CIT(E)], BHOP AL DATED 27.09.2018 . 2. ASSESSEE(S) HAS RAISED FOLLOWING GROUNDS OF APPEAL ; KRISHNA AVANTI EDUCATIONAL SOCIETY,ITA NO.910/IND/2 018 1. THE LD. CIT HAS ERRED IN REJECTING THE APPLICATION UNDER SECTION 80G(5)(VI) INSPITE OF THE TRUST HAVING COMPILED WIT H REQUIREMENT OF SECTION 80G(5) READ WITH RULE 11AA. 2. THE LD. CIT HAS ERRED IN REJECTING THE APPLICATION MERELY BECAUSE ASSESSEE SOCIETY IS RUNNING EDUCATION INSTITUTION A ND CHARGING FEES. APPELLANT CRAVES LEAVE TO ADD/ALTER/MODIFY GROUND OF APPEAL BEFORE THE FINAL DISPOSAL OF APPEALS. AVANTIKA KRISHI GAURAKSHA TRUST, ITA NO.911/IND/20 18 1. THE LD. CIT HAS ERRED IN REJECTING THE APPLICATION UNDER SECTION 80G(5)(VI) INSPITE OF THE TRUST HAVING COMPILED WIT H REQUIREMENT OF SECTION 80G(5) READ WITH RULE 11AA. 2. THE LD. CIT HAS ERRED IN REJECTING THE APPLICATION MERELY BECAUSE ASSESSEE SOCIETY IS RUNNING EDUCATION INSTITUTION A ND CHARGING FEES. KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 3 APPELLANT CRAVES LEAVE TO ADD/ALTER/MODIFY GROUND O F APPEAL BEFORE THE FINAL DISPOSAL OF APPEALS. 3. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON T HEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 4. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE REC ORDS ARE THAT ASSESSEE(S) ARE THE TRUSTS RUNNING EDUCATION INSTIT UTIONS AND GAUSHALE WERE GRANTED REGISTRATION U/S 12AA OF I.T. ACT VIDE ORDER DATED 9.10.2017. THE ASSESSEE(S) MADE APPLICATIONS U/S 80G(5)(VI) FOR GETTING APPROVAL U/S 80G(VI) OF THE ACT BEFORE LD. CIT(EXEMPTION), BHOPAL WHICH WAS REJECTED WITH THE OBSERVATION THAT SINCE THE SOCIETIES ARE RUNNING EDUCATIONAL INSTIT UTIONS AND FEES IS BEING CHARGED FROM THE STUDENTS FOR THEIR SERVIC ES THERE IS NO JUSTIFICATION FOR THE SOCIETIES TO SEEK EXEMPTION U /S 80G OF THE ACT. 5 . NOW AGGRIEVED ASSESSEE(S) ARE IN APPEAL BEFORE T HE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE FILED FOLLOWING WRITT EN SUBMISSIONS IN RESPECT OF KRISHNA AVANTI EDUCATION AL SOCIETY AND AVANTIKA KRISHI GAURAKSHA TRUST :- KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 4 KRISHNA AVANTI EDUCATIONAL SOCIETY THE APPELLANT TRUST IS REGISTERED AS A SOCIETY UNDER MP SOCIETIES REGISTRATION ACT, 1973(PAPER BOOK PG.42) AN D ALSO UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (PAPE R BOOK PG. 10 & 11). THAT THE APPELLANT COMPLIES WITH ALL THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB-SECTION S OF SECTION 8 0G OF THE ACT. THUS, THE APPELLANT MEETS THE REQUIREMENT FOR BEING APPROVED UNDER SECTION 80G, AS PRESCRIBED UNDER SUB-RULE (4) OF RULE 11AA OF THE INCOME TAX RULES, 1962. THAT THE APPELLANT WAS ORIGINALLY REGISTERED AS 'SHRI APOORV SAGAR ANANYA JAIN SAMITI' AND SUBSEQUENTLY THE NAME WAS CHANGED TO 'KRISHNA AVANTI EDUCATIONAL SOCIETY' WHICH HAS BEEN RECORDED BY ASSISTANT REGISTRAR UJJAIN VIDE CER TIFICATE DATED 04.0S.2011(PAPER BOOK PG.42). THAT THE HON'BLE CIT (EXEMPTIONS) HAS NOT TAKEN INTO ACCOUNT THE ABOVE CERTIFICATE AND HAS RECORDED FINDINGS CONTRA RY TO THE DOCUMENTS ON RECORD. THAT THE HON 'BLE CIT (EXEMPTIONS) HAS NOT CONSIDERE D THE FACT THAT EVEN THOUGH THE SCHOOL IS CHARGING FEES FROM T HE STUDENTS, IT HAS INCURRED LOSSES AS UNDER:- FIN ANCIAL YEAR SURPLUS/(DEFICIT) (IN RS.) CUMULATIVE SURPLUS/(DEFICIT) (IN RS.) PAPER BOOK PAGE NO. 2013 - 14 (32,652.00) (32,652.00) 89 2014 - 15 6,022.00 (26,630.00) 82 2015 - 16 34,024.00 7,574.00 76 2016 - 17 (4,83,084.85) (4,75,510.85) 178 2017 - 18 (2,91,736 .04) (7,67,256.89) 173 THAT THE APPELLANTS RELIES ON THE VARIOUS DOCUMENTS FILED BEFORE HON'BLE CIT (EXEMPTIONS), WHICH ARE LISTED IN THE ANNEXURE. KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 5 AVANTIKA KRISHI GAURAKSHA TRUST THAT T HE APPELLANT TRUST IS A TRUST ( COPY OF TRUST DEED AT AT PAPER BOOK PG. 7 TO 21). THAT THE APPELLANT IS REGISTERED UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (PAPER BOOK PG. 165 &166) THAT THE APPELLANT COMPLIES WITH ALL THE CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SUB-SECTION S OF SECTION 8 0G OF THE ACT. THUS, THE APPELLANT MEETS THE REQUIREMENT FOR BEING APPROVED UNDER SECTION 80G, AS PRESCRIBED UNDER SUB-RULE (4) OF RULE 11AA OF THE INCOME TAX RULES, 1962. THAT THE HON 'BLE CIT (EXEMPTIONS) HAS NOT CONSIDERE D THE FACT THAT EVEN THOUGH THE SCHOOL IS CHARGING FEES FROM T HE STUDENTS, IT HAS INCURRED LOSSES AS UNDER:- FINANCIAL YEAR SURPLUS/(DEFICIT) (IN RS.) CUMULATIVE SURPLUS/(DEFICIT) (IN RS.) PAPER BOOK PAGE NO. 201 4 - 1 5 35,128.00 35,128.00 60 201 5 - 1 6 (91,491.00) ( 56,363 .00) 55 2016 - 17 71,156.00 1479 3.00 49 THAT THE APPELLANTS RELIES ON THE DOCUMENTS FILED A T THE TIME OF APPLICATION/ DURING THE COURSE OF HEARING BEFORE HO N'BLE CIT (EXEMPTIONS), AS PER ANNEXURE ENCLOSED. THAT THE APPELLANTS RELIES ON THE FOLLOWING DECISI ONS; (I) SRAJAN SHOD SANSTHAN SAMITI V. CIT (EXEMPTION) (2019) 336 ITJ 181 (TRIB.-INDORE) (II) QUEEN'S EDUCATIONAL SOCIETY VS. CIT [2015] 372 ITR 699/231 TAXMAN 286/5 TAXMANN.COM 255 (SC). 7. LD. COUNSEL FOR THE ASSESSEE PRAYED FOR GIVING DIR ECTION TO LD. CIT (EXEMPTION) FOR ISSUE OF CERTIFICATE U/S 80G(5)(VI) OF THE ACT IN RESPECT OF BOTH ASSESSEE(S) NAMELY KR ISHNA KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 6 AVANTI EDUCATIONAL SOCIETY AND AVANTIKA KRISHI GAURA KSHA TRUST. 8 . PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDER OF LD. CIT(EXEMPTION). 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE COMMON GROUND RAISED IN BOTH THE APPEALS RELATING TO THE ASSESSEE(S) NAMELY KRISHNA AVANTI EDUCATIONAL SOCIETY AND AVANTIKA KRISHI GAURA KSHA TRUST IS THAT THE LD. CIT(EXEMPTION) ERRED IN REJEC TING THE APPLICATION U/S 80G(5)(VI) IN SPITE OF THE FACT THAT BOTH THE ASSESSEE SOCIETY/TRUST HAVE COMPLIED TO CONDITIONS PROVIDED IN SECTION 80G OF THE ACT. BOTH THE ASSESSEE(S) ARE DULY REGISTERED U/S 12AA OF THE I.T. ACT VIDE ORDER DATE D 9.10.2017. 10. AS PER THE BYE-LAWS THE MAIN OBJECTS OF KRISHNA AV ANTI EDUCATIONAL SOCIETY ARE (I) TO ESTABLISH EDUCATIONA L INSTITUTIONS (II) TO PROVIDE AWARENESS OF THE EDUCA TION ETC. KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 7 11. THE MAIN OBJECTS AS PER THE BYE-LAWS OF AVANTIKA KR ISHI GAURAKSHA TRUST ARE (I) TO PROTECT COWS AND MAINTAIN GAUSHALA (II) TO ESTABLISH EDUCATIONAL INSTITUTIONS (III) TO PROVIDE FACILITIES TO OLD AGE PEOPLE (IV) TO PUBLIS H & DISTRIBUTE VEDIK BOOKS ETC. 12 . FROM PERUSAL OF THE ORDER OF LD. CIT(EXEMPTION) W E OBSERVE THAT HE HAS NOT MADE ANY OBSERVATIONS JUSTI FYING THAT THE ASSESSEE HAS NOT COMPLIED TO THE MAIN OBJE CTS FOR WHICH IT IS RUNNING. THE ACTIVITIES HAVE BEEN DULY UNDERTAKEN. ALL; NECESSARY RECORDS IN THE FORM OF BOOKS OF ACCOUNTS, AUDITED BALANCE SHEET AND OTHER DOCUMENTA RY EVIDENCES TO SUPPORT THAT CHARITABLE ACTIVITIES ARE BEING CONSISTENTLY CARRIED OUT IN THE PAST ARE MAINTAINED . 13. THE SOLE REASON FOR WHICH THE LD. CIT(EXEMPTION) H AS DENIED THE APPROVAL OF 80G (5)(VI) OF THE ACT IS BY WAY OF OBSERVING THAT SINCE ASSESSEE SOCIETY IS RUNNING EDUCATIONAL INSTITUTION AND FEE IS BEING CHARGED FROM STUDENTS AGAINST SUCH SERVICES, THERE IS NO JUSTIFICATION IS SEEN TO SEEK EXEMPTION U/S 80G OF THE ACT. THE ASSESSEE TRUST I S ALSO NOT KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 8 BEEN ABLE TO JUSTIFY THE CASE FOR SEEKING APPROVAL U/S 80G . THE ABOVE REMARKS OF LD. CIT(EXEMPTION) ARE TOO GEN ERAL AND BY NO CANON CAN BE A SPECIFIC OBSERVATION SUFFI CIENT ENOUGH TO DENY THE APPROVAL TO ASSESSEE U/S 80G(5)(V I) OF THE ACT. 14 . CHARITABLE ACTIVITIES ARE DEFINED IN SECTION 2(15 ) OF THE ACT WHICH READS AS FOLLOWS; (15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE P OOR, EDUCATION, YOGA, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHE R CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY, UNLESS (I) SUCH ACTIVITY IS UNDERTAKEN IN THE COURSE OF A CTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR ACTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RECEIPTS, O F THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES, OF THAT PR EVIOUS YEAR; 15. IN THE LIGHT OF THE ABOVE DEFINITION CHARITABLE P URPOSES WHEN WE GO THROUGH THE MAIN OBJECTS OF THE ASSESSEE TRUSTS WE FIND THAT BOTH THE ASSESSEE(S) ARE CARRYING OUT THE ACTIVITIES OF CHAR ITABLE IN NATURE. M/S KRISHNA AVANTI EDUCATIONAL SOCIETY IS RUNNING SCHOO L AND IMPARTING EDUCATION AND M/S. AVANTIKA KRISHI GAURAKSHA TRUST IS ALSO CARRYING OUT KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 9 ACTIVITIES TO PROTECT THE COWS, MAINTAINING GOUSHAL AS AND RUNNING EDUCATIONAL INSTITUTIONS. 16. NOW THE ASSESSEE(S) IN ORDER TO GET THE APPROVAL U /S 80G5(VI) OF THE ACT ASSESSEE NEEDS TO FULFIL THE FOL LOWING CONDITIONS PROVIDED U/S 80G(5) OF THE ACT:- SECTION 80G(5) IN THE INCOME- TAX ACT, 1995 (5) THIS SECTION APPLIES TO DONATIONS TO ANY INSTIT UTION OR FUND REFERRED TO IN SUB- CLAUSE (IV) OF CLAUSE (A) OF SUB- SECTION (2), ONL Y IF IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND IF IT FULFILS THE FOLLOWING CONDITIONS, NAMELY:-- (I) 1 WHERE THE INSTITUTION OR FUND DERIVES ANY INCOME, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTAL INCOME UNDER THE PROVISI ONS OF SECTIONS 11 AND 12 OR CLAUSE (22) 3 OR CLAUSE (22A)] 3 OR CLAUSE (23)] 4 OR CLAUSE (23AA)] 5 OR CLAUSE (23C)] OF SECTION 10: 6 PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME, BEING PROFITS AND GAINS OF BUSINESS, THE CONDITION THAT SUCH INCOME WOULD NOT BE LIABLE TO I NCLUSION IN ITS TOTAL INCOME UNDER THE PROVISIONS OF SECTION 1 1 SHALL NOT APPLY IN RELATION TO SUCH INCOME, IF,- (A) THE INSTITUTION OR FUND MAINTAINS SEPARATE BOOKS O F ACCOUNT IN RESPECT OF SUCH BUSINESS; (B) THE DONATIONS MADE TO THE INSTITUTION OR FUND ARE NOT USED BY IT, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS; AND (C) THE INSTITUTION OR FUND ISSUES TO A PERSON MAKING THE DONATION A CERTIFICATE TO THE EFFECT THAT IT MAINTAINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS AND THAT THE DONATIONS RECEIVED BY IT WILL NOT BE USED, DIR ECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS;]] (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED- DOES NOT, OR THE RULES GOVERNING THE INSTITUTION OR FUND DO NOT, CO NTAIN ANY PROVISION FOR THE TRANSFER OF APPLICATION AT ANY TIME OF THE WHOLE OR ANY PAR T OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOSE OTHER THAN A C HARITABLE PURPOSE; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCOUNTS OF ITS RECEIPTS AND EXPENDITURE; 7 ] (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED AS A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1 8608 (21 OF 1860 ), OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA OR UNDER SECTION 25 OF THE KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 10 COMPANIES ACT, 19569 (1 OF 1956 ), OR IS A UNIVERS ITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INSTITUTION RECOGNISED BY THE GO VERNMENT OR BY A UNIVERSITY ESTABLISHED BY LAW, OR AFFILIATED TO ANY UNIVERSIT Y ESTABLISHED BY LAW, 10 OR IS AN INSTITUTION APPROVED BY THE CENTRAL GOVERNMENT FOR THE PURPOSES OF CLAUSE (23) OF SECTION 10,] OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR A LOCAL AUTHORITY; 1 AND] (VI) 2 IN RELATION TO DONATIONS MADE AFTER THE 31ST DAY O F MARCH, 1992 , THE INSTITUTION OR FUND IS FOR THE TIME BEING APPROVED BY THE COMM ISSIONER IN ACCORDANCE WITH THE RULES 3 MADE IN THIS BEHALF: PROVIDED THAT ANY APP ROVAL SHALL HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS, NOT EXCEEDING 4 FIVE] ASSESSMENT YEARS, AS MAY BE SPECIFIED IN THE APPROVAL.] 17. THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS AS PR OVIDED IN SECTION 80G(5)(I) TO (IV) OF THE ACT AND IS CONSISTE NTLY CARRYING OUT CHARITABLE ACTIVITIES. ON THE OTHER HAN D LD. CIT(EXEMPTION) HAS VERY CASUALLY DENIED THE APPROVA L WITHOUT REBUTTING AT ANY STAGE AS TO WHETHER THE AS SESSEE HAS FAILED TO FULFIL ANY OF THE CONDITIONS MENTIONE D IN 80G(5)(I) TO (IV). JUST BECAUSE THAT THE ASSESSEE IS RUNNING EDUCATIONAL INSTITUTIONS BY CHARGING FEES FROM THE STUDENTS CANNOT BE A SOUND BASIS FOR REJECTING THE APPLICATI ON FOR GRANT OF APPROVAL U/S 80G5(VI) OF THE ACT. 18 . HONBLE APEX COURT IN THE CASE QUEEN'S EDUCATIONAL SOCIETY VS. CIT [2015] 372 ITR 699/231 TAXMAN 286/5 TAXMANN.COM 255 HELD AS UNDER; KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 11 I. WHERE THE EDUCATIONAL INSTITUTION CARRIES ON THE AC TIVITY OF EDUCATION PRIMARILY FOR EDUCATING PERSONS, THE FACT 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, II. THE PREDOMINANT OBJECT TEST MUST BE APPLIED- THE PU RPOSE OF EDUCATION SHOULD NOT BE SUBMERGED BY A PROFIT MAKIN G MOTIVE. III. A DISTINCTION MUST BE DRAWN BETWEEN THE MAKING OF A SURPLUS AND AN INSTITUTION BEING VARIED ON 'FOR PRO FIT'. NO INFERENCE ARISES THAT MERELY BECAUSE IMPARTING EDUC ATION RESULTS IN MAKING A PROFIT, IT BECOMES AN ACTIVITY FOR PROFIT. IV. IF AFTER MEETING EXPENDITURE, A SURPLUS ARISES INCIDEN TALLY FROM THE ACTIVITY CARRIED ON BY THE EDUCATIONAL INS TITUTION, IT WILL NOT CEASE TO BE ONE EXISTING SOLELY FOR EDUCAT IONAL PURPOSES. V. THE ULTIMATE TEST IS WHETHER ON AN OVERALL VIEW OF THE MATTER IN THE CONCERNED ASSESSMENT YEAR THE OBJECT IS TO M AKE PROFIT AS OPPOSED TO EDUCATING PERSON. 19. THE ABOVE JUDGMENT OF HON'BLE APEX COURT IS SUFFIC IENT ENOUGH TO BRUSH ASIDE THE OBSERVATION OF LD. CIT(EX EMPTION) IN THE IMPUGNED ORDERS. 20 . WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND ON OBSERVING THAT BOTH THE ASSESSEE(S) ARE RUNN ING WITH THE MAIN OBJECT OF CARRYING OUT CHARITABLE ACTIVITIES A S PROVIDED U/S 2(15) OF THE ACT AND ALSO SINCE LD. CIT(EXEMPTION) FAILED TO PROVE THAT ASSESSEE HAS NOT FULFILLED THE CONDITIONS U/S 80G(5) (I) TO (IV) OF THE ACT, WE FIND NO JUSTIFICATION IN THE ORDER OF CIT(EXEMPTION) DENYING APPROVAL U/S 80G5(VI) OF THE ACT TO BOTH TH E ASSESSEE(S). KRISHNA AVANTI EDUCATIONAL SOCIETY & AVANTIKA KRISH I GAURAKSHA TRUST ITA NOS. 910 & 911/IND/2018 12 21 . WE ACCORDINGLY SET ASIDE THE ORDER OF LD. CIT(EXE MPTION) AND DIRECT HIM TO RECONSIDER THE APPLICATION OF THE ASS ESSEE(S) U/S 80G OF THE ACT AND GRANT THE APPROVAL U/S 80G5(VI) OF T HE ACT TO BOTH THE ASSESSEE(S) NAMELY M/S KRISHNA AVANTI EDUCATIONAL SOCIETY AND M/S. AVANTIKA KRISHI GAURAKSHA TRUST. 22. IN THE RESULT RESPECTIVE GROUNDS RAISED IN THE APP EAL OF THE ASSESSEE(S) IN ITA NO.910/IND/2018 & ITA NO.911/IND /2018 STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.02.20 20. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 07 FEBRUARY, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE