ACIT(E), Circle-1(1), New Delhi V. Educate India Society, New Delhi

ITA 917/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4806 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM
• Assessee Lawyers: LALITHA KRISHNAMURTHY
• Keywords: Depreciation; Charitable institution; Assessment record
• Section: 80G; 12A; 131; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI B BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 ACIT(E), CIRCLE-1(1), NEW DELHI. VS EDUCATE INDIA SOCIETY, 19, RAJDOOT MARG, CHANKYA PURI, NEW DELHI-110021. PAN-AAAAE0085E APPELLANT RESPONDENT APPELLANT BY MS. ALKA GAUTAM, SR.DR RESPONDENT BY MS. LALITHA KRISHNAMURTHY, ADV. DATE OF HEARING 24.08.2021 DATE OF PRONOUNCEMENT 30 .0 9 .2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE REVENUE IS PERTAINING TO A SSESSMENT YEAR 2013- 14 AND IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- 40, DELHI DATED 21.11.2017. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD.CIT(A) WAS CORRECT IN NOT APPRECIATING THAT EVEN THOUGH TH E ASSESSEE DOES NOT STRICTLY FALL IN THE AMBIT OF THE AICTE ACT, IT IS BOUND TO FOLLOW THE SPIRIT OF LAW ON ADMISSION TO NRI QUOTA, WHICH HAS NOT BEEN A DHERED TO AND THUS THE ASSESSEE WAS RIGHTLY HELD NOT ELIGIBLE FOR EXEM PTION U/S 11 AND 12 OF THE ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2. THE FACTS NARRATED BY THE LD.CIT(A) IN THE IMPUGNED ORDER ARE REPRODUCED AS UNDER:- ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 2 | P A GE 3.1. THE FACTS OF THE CASE ARE THAT RETURN OF INCO ME DECLARING NIL WAS FILED ON 29/09/2013. THE ASSESSEE SOCIETY IS REGIST ERED UNDER SECTION 12A VIDE LETTER DATED 01/07/1996 AND IS ALS O REGISTERED UNDER SECTION 80G (5)(VI) VIDE ORDER DATED 26/09/20 07 FOR THE PERIOD FROM 01/04/2007 TO 31/03/2010. THE SOCIETY IS REGIS TERED HIGHER EDUCATION AND IS RUNNING COURSES IN ENGINEERING AND MBA. THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE EDUCATION. 3.2. DURING THE COURSE OF EXAMINATION OF ACCOUNTS OF THE ASSESSEE IT WAS NOTED THAT 82 STUDENTS WERE ADMITTED IN THE NRI QUO TA AGAINST THE INTAKE OF 550 STUDENTS WHO ARE RESIDENT INDIANS. DE TAILS OF STUDENT ADMITTED IN THE FINANCIAL YEAR 2012-13 WERE SUBMITT ED WHICH INCLUDED DETAILS OF NRI STUDENTS ALSO. WITH THE VIE W TO EXAMINE THE NRI STATUS OF THE STUDENTS ADMITTED UNDER THE NRI Q UOTA, THE SOCIETY WAS ASKED TO FURNISH DETAILS OF DOCUMENTATION, ADMI SSION POLICY OF THE COLLEGE AND RECEIPTS OF FEE ISSUED NRI QUOTA ST UDENTS. FURTHER TO ASCERTAIN THE GENUINENESS OF THE STUDENTS ADMITTED UNDER THE NRI QUOTA SUMMONS UNDER SECTION 131 WAS ISSUED ALONG WI TH QUESTIONNAIRE TO WHICH RESPONSES WERE RECEIVED FROM 29 STUDENTS. 3.3. THE ASSESSEE WAS SPECIFICALLY REQUIRED TO GIVE DETAILS ABOUT THE PROCESS OF NRI QUOTA ADMISSION DONE BY THE MANAGEME NT. IN RESPONSE IT WAS, INTER ALIA, MENTIONED THAT STUDENT S SPONSORED BY NRI AND NOT NRI STUDENTS WERE GIVEN ADMISSION. IT W AS ALSO MENTIONED THAT NO SCRUTINY COMMITTEE WAS NEEDED FOR THE PURPOSE SINCE SEATS WERE FILLED ON A FIRST-COME FIRST-SERVE D BASIS SUBJECT TO ELIGIBILITY CRITERIA AND THAT AFTER ADMISSION PROCE SS WAS COMPLETE, MANY SEATS WERE LYING VACANT IN VARIOUS COURSES. TH E ASSESSING OFFICER REFERRED TO THE AICTE REGULATIONS PERTAININ G TO ADMISSION UNDER NRI/ FOREIGN NATIONAL/ PERSON OF INDIAN ORIGI N CATEGORY/QUOTA IN AICTE APPROVED INSTITUTIONS WHICH- I. DEFINED NRI TO MEAN NON-RESIDENT INDIAN AS DEFIN ED IN THE INCOME TAX ACT, 1961 WITH CERTAIN CLARIFICATION S (REGULATION 3.9); ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 3 | P A GE II. DEFINED SELF-FINANCING INSTITUTION' TO MEAN T ECHNICAL INSTITUTIONS EITHER NOT RECEIVING ANY RECURRING GRA NT FROM GOVERNMENT OR GOVERNMENT ORGANISATIONS RECEIVING RE CURRING GRANTS LESS THAN 50% OF ITS OPERATING EXPENSES FROM GOVERNMENT OR GOVERNMENT ORGANISATIONS (REGULATION 3.24); III. PROVIDED THAT IN SELF-FINANCING INSTITUTIONS, 50% SEATS SHALL BE TREATED AS FREE SEATS AND OTHER 50% SEATS SHALL BE TREATED AS PAYMENT SEATS AND OUT OF PAYMENT SEATS, OF THE TOTAL INTAKE SHALL BE EARMARKED FOR NRIS. THE NRI S EATS SHALL BE TREATED WITHIN THE 50% PAYMENT SEATS. AGAINST NR I SEATS, ONLY A PERSON WHO IS NRI HIMSELF/HERSELF MAY SEEK A DMISSION AND NO OTHER CANDIDATES WITHOUT NRI STATUS WOULD BE ELIGIBLE (REGULATION 4.2); IV. PROVIDED THAT SEATS REMAINING UNFILLED FROM TH E NRI QUOTA WILL BE REVERTED TO THE PAYMENT SEATS AND THI S WILL HAVE TO BE FILLED FROM LIST OF SELECTED CANDIDATES PREPA RED AS PER THE PROCEDURE LAID DOWN FOR ADMISSIONS TO TECHNICAL INS TITUTIONS; V. DID NOT PROVIDE FOR ADMISSION OF NRI SPONSORED S TUDENTS (REGULATION 4.5); VI. PROVIDED THAT THE INSTITUTION SHALL NOT BE PER MITTED TO CHARGE EQUIVALENT AMOUNT OF NRI FEES FROM THE STUDE NTS ADMITTED UNDER VACANT NRI SEATS (REGULATION 4.5). 3.4. THE ASSESSING OFFICER, AFTER STUDYING THE ADMI SSION FORMS OF THE NRI CANDIDATES FOUND THAT NEITHER THE CANDIDATES WHO WE RE ADMITTED UNDER VARIOUS TECHNICAL COURSES WERE INSTITUTION WE RE HIMSELF/HERSELF AN NRI NOR ANY OF THE PARENTS OF SU CH CANDIDATES WERE NRI. RELYING ON REGULATION 4.2 OF THE ALL INDI A COUNCIL FOR TECHNICAL EDUCATION (ADMISSION UNDER NON-RESIDENT I NDIAN (NRI)/FOREIGN NATIONAL (FN)/PERSONS OF INDIAN ORIGI N (PIO) CATEGORY / QUOTA IN AICTE APPROVED INSTITUTIONS) REGULATIONS, 2002, THE ASSESSING OFFICER HELD THAT IT IS MANDATORY ON THE PART OF THE INSTITUTION THAT ONLY A PERSON WHO IS NRI HIMSELF/H ERSELF MAY SEEK ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 4 | P A GE ADMISSION AND NO OTHER CANDIDATES WITHOUT NRI STATU S WOULD BE ELIGIBLE. THE ASSESSING OFFICER ALSO RELIED UPON RE GULATION 4.5 OF THE SAID AICTE REGULATIONS WHICH PROVIDED THAT THERE IS NO PROVISION FOR ADMISSION OF NRI SPONSORED STUDENTS AND OBSERVED TH AT THE INSTITUTION HAS NOT CARED TO ADHERE TO THIS MANDATO RY RULE AND CONTINUED WITH ADMISSION UNDER NRI QUOTA BY ACCEPTI NG THE APPLICATION FORMS SPONSORED BY CERTAIN PERSONS WHO WERE HOLDING EITHER THE INDIAN PASSPORT OR FOREIGN PASSPORTS. TH E ASSESSING OFFICER ALSO NOTED THAT THE INSTITUTION MADE ITS OW N RULES FOR ADMISSION UNDER NRI QUOTA AND BY PASSED STATUTORY I NSTRUCTIONS AND GUIDELINES ISSUED BY AICTE WHICH IS A BODY OF T HE MINISTRY OF HUMAN RESOURCE DEVELOPMENT, NEW DELHI. THE ASSESSIN G OFFICER THEN RELIED ON VARIOUS JUDGEMENTS OF HON'BLE HIGH C OURTS ON THE ISSUE OF ADMISSION AND TECHNICAL COURSES UNDER THE NRI QUOTA AND, IT WAS HELD THAT THE ASSESSEE INSTITUTION HAS BREACHED THE LAW AND ADMITTED STUDENTS ILLEGALLY UNDER NRI QUOTA DURING THE FINANCIAL YEAR 2012-13 WITH THE OBJECTIVE TO RAKE IN LARGE AM OUNTS OF MONEY FROM INDIAN RESIDENT STUDENTS. IT WAS ALSO NOTED TH AT NEITHER THE PARENTS NOR THE STUDENTS WERE NRIS. IN VIEW OF THIS IT WAS OBSERVED THAT THE INSTITUTION CANNOT BE TREATED AS A CHARITA BLE ENTITY WITHIN THE AMBIT OF SECTION 11. THE ASSESSING OFFICER RELI ED UPON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE PROPE RTY TAX CASE OF MCD VS CHILDREN BOOK TRUST WHEREIN BASIC TENETS REL ATING TO CHARITY WERE GIVEN. IT WAS ALSO NOTED THAT THE ASSESSEE INS TITUTION DID NOT SHOW ANY HONEST PURPOSE TO THE EXTENT CHARITY TO PO OR STUDENTS WHO HAVE REMAINED OUT OF CONTENTION FOR ADMISSION TO A PROFESSIONAL COURSE AND HENCE IT WAS HELD THAT CHARITABLE PURPOS E WAS MISSING IN THE CASE. THE CASE WAS SUMMED UP BY THE ASSESSIN G OFFICER AS UNDER: I. THE INSTITUTION HAD ADMITTED STUDENTS UNDER NRI QUOTA IN AN ILLEGAL FASHION BY INFRINGING STATUTORY DIRECTIONS GIVEN BY AICTE AND HON'BLE SUPREME COURT. ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 5 | P A GE II. THE CONCEPT OF CHARITY HAS TO BEGIN WITH AND IN TENT OF MAGNANIMITY AND PHILANTHROPY AND NOT WITH AN INTENT TO FRAUDULENTLY ADMIT STUDENTS BY VIOLATING THE SECURI TY GUIDELINES AND HARMING THE INTEREST OF UNSUSPECTING , INNOCENT AND UNINFORMED STUDENTS. THERE IS NO WAY TO COMPENS ATE THESE STUDENTS, WHO SUFFERED BECAUSE THEY COULD NOT GET ADMISSION DUE TO AN ILLEGAL PRACTICE BY THE ASSESSE E INSTITUTION. 3.5. THE ASSESSING OFFICER ALSO RELIED UPON THE PRO VISIONS CONTAINED IN SECTION L1(L)(A) AND HELD THAT THE PROPERTY WHOSE I NCOME WILL NOT BE A PART OF TOTAL INCOME OF THE ASSESSEE HAS TO EXIST W HOLLY FOR CHARITABLE AND RELIGIOUS PURPOSE. IT WAS ALSO HELD THAT THERE IS AN ELEMENT OF NECESSITY IN THESE WORDS AND THESE WORDS MANDATE TH AT THE PROPERTY OF THE INSTITUTION WHICH IS CLAIMING ITS I NCOME TO BE EXEMPT FROM INCOME TAX MUST BE USED IN A CHARITABLE MANNER , I.E., WITH AN INTENT TO SPREAD CHARITY AMONGST THE PEOPLE. IT WAS ALSO NOTED THAT IN THE INSTANT CASE, THE ASSESSEE INSTITUTION HAS N OT ONLY VIOLATED THE GUIDELINES OF THE CONTROLLING AUTHORITY, I.E., AICT E BUT ALSO THE SUPREME COURT GUIDELINES ON THE ISSUE UNDER DISCUSS ION. IT WAS ALSO HELD THAT THE ASSESSEE INSTITUTION HAS TO BE TREATE D AS ANY OTHER COMMERCIAL INSTITUTION WHICH IS INVOLVED IN THE PRO CESS OF TEACHING STUDENTS FOR A COST. IT WAS HELD THAT THE CHAT ACTI VITY CARRIED OUT BY THE ASSESSEE DURING THE PERIOD INTO CONSIDERATION I S NOT CHARITABLE AND, THEREFORE, THE ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION UNDER SECTIONS 11 AND 12. ONLY DEPRECIATION ON FIXE D ASSETS PURCHASED DURING THE YEAR WAS ALLOWED AND DEPRECIAT ION ON ASSETS PURCHASED IN EARLIER YEARS WOULD NOT BE ALLOWED BEC AUSE A ASSETS WOULD HAVE BEEN CLAIMED AS APPLICATION OF INCOME IN EARLIER YEARS. INCOME WAS COMPUTED AT RS. 4, 19,80,320/-. 3. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS, PARTLY ALLOW ED THE APPEAL OF THE ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 6 | P A GE ASSESSEE. THEREBY, LD.CIT(A) DIRECTED THE ASSESSIN G OFFICER TO ALLOW EXEMPTION U/S 11 & 12 OF THE ACT WITH ALL CONSEQUENTIAL BENEF ITS. 4. AGGRIEVED AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. LD. SR. DR STRONGLY RELIED ON THE DECISION OF TH E ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE HAS VIOLATED THE GUIDEL INES ISSUED BY THE REGULATORY AUTHORITY AND ADMITTED 82 STUDENTS IN NR I QUOTA AGAINST INTAKE OF 550 STUDENTS. LD.SR.DR SUBMITTED THAT THE ASSESSIN G OFFICER HAS CATEGORICALLY OBSERVED THAT THERE IS NO PROVISION FOR ADMISSION O F NRI SPONSORS OF STUDENTS. THEREFORE, CONSIDERING THE VIOLATION, THE ASSESSING OFFICER CAME TO JUST CONCLUSION THAT THE ASSESSEES SOCIETY IS NOT EXIST ING FULLY FOR CHARITABLE PURPOSE. 6. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF LD.CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER HAS MIS-DIRECTED HIMSELF. AS IN THE ASSESSMENT ORDER, THE INFERENCE DRAWN BY THE ASSESSING OFFICER IS FALLACIOUS AND CONTRARY TO THE RECORDS. HE SUBMITT ED THAT THE ACTION OF THE ASSESSING OFFICER IS EX-FACIE ILLEGAL, ARBITRARY AN D UNJUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. HE SUBMITTE D THAT LAW DOES NOT PERMIT THE ASSESSING OFFICER TO ACT IN WHIMSICAL MANNER. HE SUBMITTED THAT THE ASSESSEE HAD PLACED ALL RELEVANT INFORMATION AND SU PPORTING EVIDENCES BEFORE THE ASSESSING OFFICER. HENCE, HE WAS NOT JUSTIFIED TO TAKE CONTRARY VIEW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORDS. THE LD.CIT(A) HAS GIVEN FINDING ON FA CT BY OBSERVING AS UNDER:- ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 7 | P A GE 5.1.6. THE MERIT CUM MEANS FEE CONCESSION SCHEME IS TO BE IMPLEMENTED BY THE UNIVERSITY IN ACCORDANCE WITH THE HARYANA PR IVATE UNIVERSITIES ACT, 2006. THE UNIVERSITY COLLECTED EXTRA FEES AMOUNTING TO RS. 78,45,000/- FROM NRI CATEGORY WHICH WAS USED FOR PAYING SCHOLAR SHIP AMOUNTING TO RS. 1,35,03,075/-. FROM THE ASSESSMENT RECORD IT IS SEEN THAT DETAILS OF SCHOLARSHIPS GIVEN WERE FURNISHED VIDE LETTER DATED 17/03/2016 WHICH WERE IN RESPONSE TO THE QUERY OF THE ASSESSING OFFI CER DATED 15/03/2016 REGARDING DETAILS OF SCHOLARSHIP PAID. NO ADVERSE I NFERENCE HAS BEEN DRAWN BY THE ASSESSING OFFICER WITH REGARD TO THE S CHOLARSHIPS PAID. 5.1.7. THE ASSESSING OFFICER HAS RELIED ON VARIOUS JUDGEMENTS OF VARIOUS HON'BLE COURTS WITH REGARD TO ADMISSION THROUGH NRI QUOTA. IT IS TO BE NOTED THAT ALL THESE ARE WITH REGARD TO AICTE APPRO VED INSTITUTIONS AND THE SAME ARE NOT APPLICABLE IN THE CASE OF THE APPELLAN T AS DISCUSSED ABOVE, THE CASE OF THE APPELLANT BEING THAT OF A UNIVERSIT Y. 5.1.8. THE ASSESSING OFFICER, IN THE ASSESSMENT ORD ER, HAS NOT DOUBTED THE FACT THAT THE ASSESSEE IS PROVIDING EDUCATION. IN T HIS CASE THE ISSUE, THEREFORE, IS WHETHER EXEMPTION UNDER SECTION 11 CA N BE WITHDRAWN EVEN IF THERE IS AN INFRINGEMENT IN THE PROCESS OF ADMISSIO N? IT HAS BEEN HELD BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CCI T VS. GEETANJALI UNIVERSITY TRUST [(2013) 24 TAXMAN 11 (RAJ.)] THAT FOR THE PURPOSE OF SECTION 1023C)(VI), FAILURE OF THE ASSESSEE EDUCATIONAL INS TITUTION TO PROVIDE ADMISSIONS STRICTLY IN ACCORDANCE WITH THE PRESCRIB ED RULES, REGULATIONS AND STATUTE COULD NOT LEAD TO ITS LOSING CHARACTER AS AN ENTITY EXISTING SOLELY FOR THE PURPOSE OF EDUCATION. IN THIS CASE T HE COMMISSIONER NOTICED THAT THE HIGH COURT HAD PASSED AN ORDER IN ASSESSEE 'S CASE THAT ADMISSION TO MEDICAL COURSE HAD NOT BEEN MADE ON TH E BASIS OF SYSTEM APPROVED BY THE MEDICAL COUNCIL OF INDIA AND, THUS, THOSE ADMISSIONS WERE ILLEGAL. RELYING ON THE AFORESAID ORDER, THE C OMMISSIONER HELD THAT SINCE THE ASSESSEE-TRUST HAD VIOLATED THE PROCEDURE OF ADMISSION AS LAID DOWN BY THE GOVERNMENT/MEDICAL COUNCIL, IT DID NOT QUALIFY AS AN INSTITUTE WITHIN THE MEANING OF SECTION 10(23C)(VI) AND (VIA) . IT WAS HELD THAT: ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 8 | P A GE A PLAIN READING OF THE PROVISIONS OF SECTION 10(2 3C)(VI) WOULD REVEAL THAT WHAT IS REQUIRED FOR THE PURPOSE OF SEE KING APPROVAL THEREUNDER IS THAT THE UNIVERSITY OR OTHER EDUCATIO NAL INSTITUTION SHOULD EXIST 'SOLELY FOR EDUCATIONAL PURPOSES AND N OT FOR PURPOSES OF PROFIT'. IT IS NOWHERE THE CASE AND/ OR FINDING OF THE CCIT THAT ON ACCOUNT OF THE SAID DEFECT IN THE ADMISSION PROCEDU RE, THE TRUST CEASED TO EXIST SOLELY FOR EDUCATIONAL PURPOSES AND / OR IT EXISTED FOR THE PURPOSES OF PROFIT. FURTHER, IT WAS NOT THE CASE OF THE REVENUE THAT THE STUDENTS WHO WERE ADMITTED WERE NOT IMPARTED EDUCATION IN TH E COLLEGE IN WHICH THEY WERE ADMITTED AND/ OR THE ADMISSIONS GRA NTED WERE FAKE OR NON-EXISTENT OR THAT THE INCOME GENERATED B Y ADMITTING THE SAID STUDENTS WAS NOT USED FOR THE PURPOSE OF THE T RUST. THE EMPHASIS ON PART OF THE CCIT THAT THE PURPOSE OF EDUCATION WOULD NOT BE SERVED IF THE EDUCATION IS F OR STUDENTS WHO HAVE BEEN ILLEGALLY ADMITTED AND THE PURPOSE OF EDU CATION AS CONTEMPLATED IN THE SECTION WOULD BE SERVED ONLY IF THE STUDENTS HAVE BEEN LEGALLY ADMITTED AND NOT OTHERWISE, APPEA RS TO BE GOING BEYOND THE REQUIREMENTS OF THE SECTION. OF COURSE, THE REQUIREMENT OF AN EDUCATIONAL INST ITUTION TO PROVIDE ADMISSIONS STRICTLY IN ACCORDANCE WITH THE PRESCRIBED RULES, REGULATIONS AND STATUTE CANNOT BE LESS EMPHASIZED, RATHER THE SAME NEED TO BE ADHERED TO IN LETTER AND SPIRIT, BUT THE N, THE SAID VIOLATION CANNOT LEAD TO ITS LOOSING THE CHARACTER AS AN ENTI TY EXISTING SOLELY FOR THE PURPOSE OF EDUCATION. 5.1.9 THE SOLE REASON FOR DENYING EXEMPTION IS THAT GUIDELINES LAID DOWN BY AICTE REGULATIONS HAVE NOT BEEN FOLLOWED WITH RE SPECT TO ADMISSIONS TO NRI QUOTA AND INTEREST OF UNSUSPECTING INNOCENT AND UNINFORMED STUDENTS HAS BEEN HARMED. AS BROUGHT OUT ABOVE, THE AICTE ACT DOES NOT EVEN APPLY TO THE CASE OF THE APPELLANT. IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT NO EDUCATION HAS BEEN IMPART ED OR PROFITS HAVE BEEN SIPHONED OFF. AS MENTIONED EARLIER, NO ADVERSE INFERENCE HAS ALSO ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 9 | P A GE BEEN GIVEN AS REGARDS FEE CONCESSION/ SCHOLARSHIPS GIVEN TO STUDENTS, DETAILS OF WHICH ARE AVAILABLE ON RECORD WHEREAS TH E HON'BLE SUPREME COURT IN THE CASE OF P.A. INAMDAR V. STATE OF MAHAR ASHTRA [(2005) 6 SCC 537] HAVE HELD THAT DIFFERENTIAL FEE STRUCTURE IS A LLOWABLE PAY HIGHER FEES COULD BE CHARGED FROM RICHER STUDENTS WITH THE PURP OSE OF SUBSIDISING THE STUDENTS FROM ECONOMICALLY WEAKER SECTION. 5.1.10 IN VIEW OF THE DISCUSSION ABOVE, THE DENIAL OF EXEMPTION UNDER SECTION 11 AND 12 BY THE ASSESSING OFFICER CANNOT B E SUSTAINED. THE ASSESSING OFFICER IS DIRECTED TO ALLOW EXEMPTION UN DER SECTION 11 AND 12 WITH ALL CONSEQUENTIAL BENEFITS. GROUNDS OF APPEAL NUMBER IS 1 TO 6 ARE ALLOWED. 8. THE REVENUE COULD NOT REBUT THE AFORESAID FINDIN G BY PLACING CONTRARY EVIDENCE. THEREFORE, WE DO NOT SEE ANY REASON TO I NTERFERE IN THE FINDINGS OF LD.CIT(A), THE SAME IS HEREBY AFFIRMED. HENCE, GRO UND NO.1 OF THE REVENUE IS DISMISSED. 9. GROUND NO.2 IS A PRAYER TO ADD, ALTER OR AMEND A NY GROUND OF APPEAL, NO SUCH LEAVE IS SOUGHT DURING THE COURSE OF HEARING HENCE, THIS GROUND NO.2 RAISED BY THE REVENUE IS ALSO DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 30 TH SEPTEMBER, 2021. SD/- SD/- (DR. B.R.R.KUMAR) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIA L MEMBER *AMIT KUMAR* ITA NO.917/DEL/2018 ASSESSMENT YEAR : 2013-14 10 | P A GE COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI