ITAT rules in favor of Assessee, bars AO from revisiting settled issue. CIT(A) decision overturned.

The ITAT allowed the Assessee's appeal, precluding the A.O from raising the issue of admitting excess students settled in a previous year. The Ld. CIT(A)'s reliance on the consequential order regarding capitation fee collection was deemed incorrect. The ITAT favored the Assessee, emphasizing the importance of following precedent and accurately interpreting prior decisions.

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Issues:
Appeal against CIT(A)'s order on not granting relief u/s 11 of the IT Act.

Detailed Analysis:

1. Issue of Admitting More Students Than Permitted:
- The Assessee appealed against the A.O's contention of admitting more students than permitted by the approval of the Ministry of External Affairs (MEA). The Ld. CIT(A) disagreed with the A.O, stating that the Ministry had no objection to the student mix, thus justifying the admission of Indian students.
- The ITAT noted that the issue of admitting excess students was settled in a previous year and became final as the revenue did not appeal. The ITAT directed the A.O to examine if there was a prescribed fee for admission to consider the collection of donations as a violation. The A.O, in the consequential order, accepted the Assessee's contentions regarding the absence of a prescribed fee, leading to a favorable decision for the Assessee.

2. Issue of Collecting Capitation Fee:
- On the matter of collecting a capital fee from students, the Ld. CIT(A) upheld the A.O's decision, denying the Assessee exemption u/s 11 of the IT Act. The ITAT noted that the only issue requiring consideration was the collection of capitation fee, as other reasons were not found sustainable by the CIT(A).
- The A.O, in a subsequent order, accepted that there was no prescribed fee for admission, leading to a favorable outcome for the Assessee. Despite this, the Ld. CIT(A, in the current year, confirmed the disallowance u/s 11 without considering the previous order's findings. The ITAT set aside the A.O and CIT(A) orders on this issue, allowing the Assessee's appeal.

In conclusion, the Assessee's appeal was allowed by the ITAT due to the preclusion of the A.O from raising the issue of admitting excess students, which was settled in a previous year, and the incorrect reliance on the consequential order by the Ld. CIT(A) regarding the collection of capitation fee. The ITAT found in favor of the Assessee, emphasizing the importance of following precedent and correctly interpreting previous decisions.

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