TaxTMI 
TaxTMI 
2008 (3) TMI 501
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....edgement of which is on record, none appeared for the assessee and hence we proceed to dispose of the appeals on merits, ex parte qua the assessee. 2. Though several grounds have been raised in the appeals, the substance of the grievance of the department is against granting exemption under section 11 of the Income-tax Act, 1961 ('the Act') to the assessee despite the provisions of section 10(23C) of the Act. 3. The assessee is a registered society running educational institutions. The main object of the society is to impart education and that it does not exist for the purpose of profit as mentioned in the statement of facts filed before the CIT(A). It is registered under section 12A of the Act vide registration certificate No. P.R. N....
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....her. According to him, the assessee is entitled to seek exemption under any of the two provisions. He relied on the judgment of the Supreme Court in the case of Continental Construction Ltd. v. CIT [1992] 195 ITR 81, CIT v. Bar Council of Maharashtra [1981] 130 ITR 28 (SC) and of the Allahabad High Court in the case of Bar Council of Uttar Pradesh v. CIT [1983] 143 ITR 584 ^ . Accordingly, he granted exemption to the assessee under section 11 of the Act for both the years under consideration. 5. One of the main arguments of the learned Departmental Representative was that section 10(23C) was a specific provision and hence the assessee cannot take recourse under section 11 which is a general provision. It was also argued that section....
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....sentative that whereas exemption under section 11 is activity based, exemption under section 10(23C) is institution based and, therefore, an institution cannot claim exemption under section 11. However, while making this argument, the learned Departmental Representative, it seems, has missed out on the provisions of section 12 of the Act. Sub-section (2) of section 12 provides that the value of any services, being medical or educational, made available by any charitable trust running such institution or made available by an educational institution shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable purposes. But such income shall be chargeable to tax only to the extent the s....
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....ome also falls under section 11 and conditions under that section are not fulfilled. Conversely, income not covered by section 10(22) would still be exempt under section 11 if conditions of that section are not fulfilled. Similarly, the 10th Edition of 'Law of Income-tax' by Sampath Iyengar mentions at page-1496 that institutions which are exempt under section 10(22) may also be exempt under section 11 of the Act. In fact, it is difficult to conceive the idea of availability of exemption on the ground that one is activity oriented and the other is institution oriented. How can an institution avail exemption under section 10(23C) without carrying out any activity. If the argument of the learned Departmental Representative is to be accepted, ....
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....tions in para 5 of its judgment, which is reproduced below : "We may point out that there are other allied provisions like, for instance, sub-section (23C) in section 10 which clearly indicate that the Legislature did not intend to rule out section 11 when exemption was claimable under such specific provisions of section 10." There cannot be a more eloquent expression of law and hence it is absolutely futile to argue that institutions falling under section 10(23C) cannot claim exemption under section 11. The above is the law of the land. 7. There is another dimension to the issue. It is the Commissioner who grants registration under section 12AA of the Act. Once when registration is granted by the Commissioner, it implies that the ....