Shri Vaishnav Plolytechnic College Govn By VSK Market Tech Education Society, Indore V. The CIT-CPC ,Bangalore, Bangalore

MA 45/Ind/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1283 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-07-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 30-05-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V. BANSAL
• Keywords: Period of limitation; Set aside
• Section: 11; 12A; 254(2)

Judgement Text

Page 1 of 7 आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER MA No.45/Ind/2024 (Arising out of ITA No.356/Ind/2022) (Assessment Year:2015-16) Shri Vaishnav Polytechnic College, Governed by VSK Technical Education Society Vs. DCIT, CPC Bangalore (Appellant / Assessee) (Revenue) PAN: AAFTS9636P Assessee by Ms. Nisha Lahoti & Shri V. Bansal, ARs Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 28.06.2024 Date of Pronouncement 02 .07.2024 O R D E R Per Vijay Pal Rao, JM: By way of this Misc. Application the assesse is seeking rectification of mistake in the order of this Tribunal dated 06.10.2023. Though, the electronic registration system of the Tribunal is showing delay of 30 days in filing Misc. Application however, on verification of the record we find that the impugned order of the Tribunal was send to the assesse on 30.11.2023 therefore, Misc. Application filed by the assesse is within the period of limitation. MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 2 of 7 Page 2 of 7 2. Ld. AR of the assesse has submitted that the assessee was denied the claim of exemption u/s 10(23C)(iiiab) by the CPC as well as CIT(A) despite the fact that the assessee fulfills the conditions prescribed under the said section and eligible for the exemption of the income of its educational institution, Shri Vaishnav Polytechnic College and particularly the conditions of more than 50% of total receipt as aid from the Government provided in Rule 2BBB of the Income Tax Rules. Ld. AR has submitted that the Tribunal has set aside the matter to the record of the AO for verification of the record and details to ascertain whether the aid received from Government is more than 50% of the total receipt and then the income of the educational institution would be exempt in the hands of the assessee. Ld. AR has submitted that there is a mistake apparent from record so far as the observation of the Tribunal that consolidated income and expenditure account placed at page no.18 of the paper book pertains to the assessee society and not of educational institution whereas the income and expenditure of Shri Vaishnav Polytechnic College is placed at page no.28 of the paper book. Thus the relevant record was available before the tribunal but the same was inadvertently not considered by this tribunal while passing impugned order. Therefore, the Ld. AR has submitted that there is an apparent mistake from record for not considering the relevant record which may be rectified by considering the said record and necessary amendment be carried out in the order of the Tribunal. MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 3 of 7 Page 3 of 7 3. On the other hand, Ld. DR has submitted that the Tribunal has given the reasoning for remanding the issue of ascertaining the facts to the record of the AO and therefore, there is no mistake apparent from record to be rectified in the proceedings u/s 254(2) of the Act. He has further submitted that when the matter is set aside to the record of the AO to verify and ascertain the facts relating to the conditions of Government aid received by the educational institutions run by the assesse then all these facts can be brought to the notice of the AO in the remand proceedings. 4. We have considered the rival submissions as well as relevant material on record. The tribunal has recorded the submission of the Ld. AR in para 3 of the impugned order as under: “3. Before the tribunal, Ld. AR of the assesse has submitted that since the assesse is not registered u/s 12A of the Act, therefore, the assesse has claimed only benefit u/s 10(23C)(iiab) as the assesse substantially financed by the State Government. Ld. AR has referred to the consolidated income and expenditure account for the year under consideration and submitted that the assessee received govt. grant of Rs.5,39,95,000/- whereas the total gross receipt is Rs.8,65,67,382/-. Thus, Ld. AR has submitted that the government grant received by the assessee is more than 50% of the gross receipt and therefore, the assessee is substantially financed by the Government as provided u/s 10(23C)(iiiab). Ld. AR has also referred to Rule 2BBB wherein the term substantially financed by the Government is defined. Thus, Ld. AR has submitted that the assesse is entitled for exempt u/s 10(23C)(iiiab) and the addition made by the CPC and confirmed by the CIT(A) is not justified and the same is liable to be deleted.” 4.1 Thus, it was contended on behalf of the assessee that the assesse received Government Grant of Rs.5,39,50,000/- as against the grants receipt of Rs.8,65,67,382/- these details MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 4 of 7 Page 4 of 7 were found in the computation of income placed at page no.1 & 2 of the paper book and further consolidated income and expenditure account placed at page no.18 of the paper book belongs to the assessee society including the grant receipt of the educational institution run by the assesse without bifurcation of details. The relevant part of the findings of the Tribunal in para 5 to 7 are as under: “5. We have considered the rival submissions as well as relevant material on record. The assesse society inter alia running educational institution namely Shri Vaishnav Polytechnic College Indore. In the computation of income the assesse has declared loss of Rs.7612/- as placed at page no.2 & 3 of the paper book as under: Assesse Name : SHRI VAISHNAV SAHAYAK MARKET TECHNICAL EDUCATIONAL SOCIETY Address : 0 MOG LINES INDORE-452001 Mobile Number : 9977633018 E-mail : [e-mail] PAN : AAFTS9636P Incorp. Date : 26/06/1962 COMPUTATION OF INCOME INCOME FROM OTHER SOURCES Rs. Rs. Rs. INCOME FROM INTEREST Other interest income Interest income from S.B. a/c and FDR 4756833 4756833 RENTAL INCOME FROM MACHINERY, PLANTS, BLDGS ETC. Rental income 148200 148200 INCOME FROM OTHERS Sales of tender forms fee 23020 27689329 27712349 27712349 VOLUNTARY CONTRIBUTIONS 53950000 53950000 Grant from Government GROSS TOTAL INCOME 86567 Less : Deductions / Exemtions claimed u/s 11 a) Amount applied to charitable or religious purpose in India during the previous year MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 5 of 7 Page 5 of 7 Revenue Account 94180159 (- )94180159 GROSS TOTAL INCOME (LOSS) (-)7612 ...................................................................................................................... CALCULATION OF TAX Tax on Total Income NIL Less: Tax deducted/collected t source from Interest 3839 Rent 27467 Professional Services 8400 (-) 39706 Net Tax Refundable (Subject to interest u/s 244A) (-) 39 Rounded off (-) 39 6. As apparent from the computation of income the assesse claimed exempt u/s 11 of the Act whereas admittedly the assesse is not registered u/s 12A of the Act therefore, the claim of exemption u/s 11 of the Act was not proper and allowable and denial of the same by the CPC is in accordance with law. However, the assesse has stated to have claimed the exemption u/s 10(23C)(iiiab) in the return of income but the copy of the return of income is not placed on record to verify this fact. However, before the Ld. CIT(A) the assesse has claimed the exemption u/s 10(23C)(iiiab) which was not considered and decided by the CIT(A) while passing the impugned order. It is pertinent to note that the as per the provisions of section 10(23C)(iiiab) any income received by any person on behalf of any University or other educational institution existed solely for educational purposes and not for the purpose of profit and which is wholly or substantially financed by the Government would not form part of the total income of such person. Thus, the income of the educational institution in the hands of the assesse society would be exempt if the said educational institution or University is existed solely for educational purpose and not for the purpose of profit and the same is wholly or substantially financed by the Government. As per Rule 2BBB an University or educational institution shall be considered as being substantially financed by the Government for any previous year if the Government grant to such university or other educational institution, hospital exceeds 50% of the total receipts including any voluntary contribution of such university or other educational institution during the relevant previous year. For ready reference Rule 2BBB is quoted as under: “2BBB. For the purposes of sub-clauses (iiiab) and (iiiac) of clause (230) of section 10, any university or other educational institution, hospital or other institution referred therein, shall be considered as being substantially financed by the Government for any previous MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 6 of 7 Page 6 of 7 year, if the Government grant to such university or other educational institution, hospital or other institution exceeds fifty per cent of the total receipts including any voluntary contributions, of such university or other educational institution, hospital or other institution, as the case may be, during the relevant previous year.]” 7. Thus, an University or educational Institution received govt. grant more than 50% of the total receipts the same would be regarded as substantially financed by the Govt. In the case in hand the consolidated income and expenditure account placed at page no.18 of paper book is of the assesse society and not of the educational institution being Shri Vaishnav Polytechnic College. Therefore, the total receipt of the college as well as the Government grant receivable during the previous year is required to be verified from the relevant record to be produced by the assesse. Since this issue has not been examined by the authorities below therefore, in the facts and circumstances of the case and in the interest of justice we set aside the matter to the record of the AO for fresh adjudication of the same after proper verification of the relevant record and facts regarding the total receipts of the Shri Vaishnav Polytechnic College run by the assesse society and aid received by the said college from the Government during the previous year. In case the aid received from the Government is more than 50% of Total receipts as provided in Rule 2BBB of the Income Tax Rules then the income of the educational institution namely Shri Vaishnav Polytechnic College would be exempt in the hands of the assessee. Needless to say before passing fresh order the assessee be given an appropriate opportunity of hearing.” 4.2 Ld. AR has pointed out that at page no.28 of the paper book the Income and Expenditure account of educational institution namely Shri Vaishnav Polytechnic College is placed which reflects Government aid of Rs.5,39,50,000/-. Since the gross receipts are not clear from income and expenditure account and also not matching with the gross receipt reflected in the consolidated income and expenditure account of the assesse society therefore, it is not possible in the proceedings u/s 254(2) to reconsider and re-appreciate the facts and evidences. Further the matter has already been remanded to the record of the AO to verify and ascertain the relevant facts regarding Government aid and total gross receipt of the MANo.45/Ind/2024 Shri Vaishnav Polytechnic College Page 7 of 7 Page 7 of 7 educational institution and therefore, we do not find any reason to modify the finding of tribunal vide order dated 06.10.2023. We may clarify that the AO shall consider the income and expenditure account of Shri Vaishnav Polytechnic College as well as other relevant record to be filed by the assesse while deciding the matter in the remand proceedings. 6. In the result, the Misc. application of assessee is dismissed. Order pronounced in the open court on 02.07.2024. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore, 02 .07.2024 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore