TaxTMI 
TaxTMI 
2012 (1) TMI 34
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....e assessment years 2005-06, 2006-07 and 2007-08. He has observed that there was variation of administrative expenses in the three assessment years. Under the heads „administrative expenses‟, „community health wing‟ and „aids wing‟, the following expenses have been noticed : • Administrative Expenses : Asstt.Year 2007-08 Asstt.Year 2006-07 Asstt.Year 2005-06 CNI Synd Evaluation Commission 3,00,000 Nil Nil Building Rent 86,880 28,960 43,760 Committee Meeting Exp. 1,29,748 34,523 10,829 Legal & Professional fees 2,56,278 1,61,000 13,000 IEC Material 1,53,734 1,07,336 Nil Repairs & Maintenance 2,53,144 1,62,458 22,189 Stationary & Printing 1,39,743 1,59,291 35,689 Telephone Expenses 1,30,683 1,88,092 38,093 • B. Community Health Wing : Asstt.Year 2007-08 Asstt.Year 2006-07 Asstt.Year 2005-06 Travel and Conveyance 2,09,673 5,33,593 5,21,620 Legal & Professional fees 83,000 -- -- Training & Reorientation --- 2,30,828 4,50,091 Meeting....
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....n tickets were not attached in all cases etc. Similar adverse comments have been made in respect of other travel expenses to Mumbai, Hyderabad, Chennai etc. It is noticeable that the expense involved varied between Rs.5,000/- to about Rs.20,000/-. These were paid in cash. The name and details of the persons who had undertaken the travel were mentioned/stated. The respondent had examined professional and legal expenses and has stated that external vouchers were not obtained or revenue stamp was not affixed on the receipt portion. In some cases, payment was made in cash. However, the purpose of payment was indicated. Similarly, with regard to the external consultancies, other services, extra work, gifts and other payments, similar objections have been recorded. 4. Thereafter, the respondent has observed as under : "From the above details, it can be seen that the applicant does not maintain proper accounts as expenses are not supported by external vouchers. In case of cash payments, the name and address of the recipient have not been mentioned on various vouchers. In some cases, even internal vouchers were not produced. The counsel for the applicant failed to offer any expla....
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.... provision. With the insertion of the first proviso, the PA is required to vet the application. This vetting process is stipulated by the second proviso. It is important to note that the second proviso also indicates the powers and duties of the PA. While considering the approval application in the second proviso, the PA is empowered before giving approval to call for such documents including annual accounts or information from the applicant to check the genuineness of the activities of the applicant institution. Earlier that power was not there with the PA. Under the third proviso, the PA has to ascertain while judging the genuineness of the activities of the applicant institution as to whether the applicant applies its income wholly and exclusively to the objects for which it is constituted/established. Under the twelfth proviso, the PA is required to examine cases where an applicant does not apply its income during the year of receipt and accumulates it but makes payment therefrom to any trust or institution registered under Section12AA or to any fund or trust or institution or university or other educational institution and to that extent the proviso states that such payment sh....
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....es like the present case, where appellant-Institute was given exemption up to financial year ending 31.3.1998 (assessment year 1998-99) and where an application is made on 7.4.1999, within seven days of the new dispensation coming into force, the PA can grant approval subject to such terms and conditions as it deems fit provided they are not in conflict with the provisions of the 1961 Act (including the abovementioned monitoring conditions). While imposing stipulations subject to which approval is granted, the PA may insist on certain percentage of accounting Income to be utilized/applied for imparting education in India. While making such stipulations, the PA has to examine the activities in India which the applicant has undertaken in its Constitution, MoUs, and Agreement with Government of India/National Council. In this case, broadly the activities undertaken by the appellant are - conducting classical education by providing course materials, designing courses, conducting exams, granting diplomas, supervising exams, all under the terms of an Agreement entered into with Institutions of the Government of India. Similarly, the PA may grant approvals on such terms and conditions as ....