TaxTMI 
TaxTMI 
2013 (1) TMI 82
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....ject of the assessee is to impart education to poor and needy persons, particularly to the weaker section of the society. In addition to that, the objects of the assessee society are to provide free medical and other charitable work etc. and its income is exempt u/s. 10(23C)(iiiad) of the IT Act and its aggregate annual receipt does not exceed Rs. 1.00 crore. Shri Neeraj Kumar, Advocate appeared on behalf of the assessee and admitted before the AO that the assessee society is not registered u/s. 12AA of the IT Act and claimed exemption u/s. 10(23C)(iiiad) of the Act. The AO reproduced the aims and objects of the assessee society in the assessment order at page 2 and found that apart from educational objects, the assessee has other objects also, which are not connected with educational activities. Therefore, it was evident from the aims and objects of the assessee society that the assessee exists for non-educational purpose also. Therefore, the provisions of section 10(23C)(iiiad) would not apply in this case because it did not exist solely for educational purposes. The AO after considering the reply of the assessee and on the basis of material on record found that the assessee has ....
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....inancial year 2005-06 on 06.09.2005, but no refusal of registration is made and the assessee had bonafide belief that the registration u/s. 12A has been granted. Since the assessee exists solely for educational purposes, therefore, the assessee is entitled for relief u/s. 12A as well as u/s. 10(23C)(iiiad) of the Act being the receipts less than Rs. one crore. The remand report from the AO was called for in which the AO reiterated the stand taken at the assessment stage and submitted that total receipts of the assessee are more than Rs. one crore and there is no approval by the prescribed authority. Therefore, no exemption could be granted to the assessee. Further, the grant of registration u/s. 12A is not appealable before the ld. CIT(A) as per provisions of section 246A of the IT Act and as such, the CIT(A) has no jurisdiction to entertain such a matter. The ld. CIT(A), considering the material on record and the submissions of both the parties, dismissed the appeal of the assessee. His findings in appellate order in paras 7 to 8 are reproduced as under : "7. After having carefully considered appellant's submission and also the facts brought out by the AO in the assessment orde....
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....ious purposes. However, contribution received with a specific direction that they shall form part of the corpus of the trust or institution shall not be included in income for the purpose of section11. In other words, voluntary contributions other than those towards corpus specific direction are deemed as income. Therefore, it may be noted that insertion of section 2(24)(iia) along with section 12(1) has created a statutory assumption which deems voluntary contribution as an income. The aforesaid decision was cited by the Supreme Court in Padmaraje R. Kadambande v. CIT [1992] 195 ITR 877. 7.2 Thus, in case of present assessee, the donations received from several donors, without carrying any specific direction, i.e. Not being corpus donations, would fall under 'Voluntary Contributions' and, thus, are deemed income. 7.3 It is admitted fact on record that assessee has not been granted registration u/s. 12A. The assessee has argued that as Commissioner of Income Tax, Aligarh did not refuse its application made u/s. 12A, so registration should be deemed to be granted. I am afraid, there is no such provision in the Act. The assessee is apparently referring to view taken by Sp....
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....t is not eligible for exemption u/s 10(23C)(iiiad). 7.5 in view of above, all the grounds of appeal are rejected. AO's action of assessing appellant's income at Rs.86,34,460/- is upheld. 8. In the result, the appeal is dismissed." 3. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and submitted that when the CIT has not refused to grant registration within time, it amounts to deemed registration u/s. 12AA of the IT Act and the assessee is entitled for exemption u/s. 11 of the IT Act. He has further furnished information received in this regard under RTI Act and also relied upon the decision of Hon'ble Allahabad High Court in the case of Society for the Promotion of Education Adventure Sport & Conservation of Environment v. CIT in which it was held that "Effect of non-consideration of the application for registration under s. 12A within the time fixed by s. 12AA(2) would be a deemed grant of registration." He has also relied upon the order of ITAT Delhi, Special Bench in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2008] 111 ITD 175, in which following question was referred to ....
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....on u/s. 12AA of the IT Act. The matter in issue before the Special Bench was not connected with the computation of income on the basis of regular assessment. Similarly, the issue before the Hon'ble Allahabad High Court in the case of Society for the Promotion of Education Adventure Sport & Conservation of Environment (supra) was in writ petition with regard to the delay on the part of the IT authorities in not deciding the application for registration. Whether the ld. CIT has granted registration or did not refuse to grant registration is an independent and distinct matter from the computation of income on the basis of regular assessment passed by the AO. In section 246A several provisions have been mentioned in which if any order is passed by the Assessing Authority, it would be appealable order before the Commissioner (appeals). No remedy is provided if the CIT did not pass any order u/s. 12AA for filing the appeal before the ld. CIT(A). According to section 253(1)(c), the order passed by the Commissioner u/s. 12AA is appealable before the Appellate Tribunal if the assessee was aggrieved against the order of the CIT u/s. 12AA of the IT Act. It would mean that no remedy lies for g....
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....sity or educational institution do not exceed the amount of annual receipts as may be prescribed; or 5.1 Section 10(23C)(vi) of the IT Act provides as under : [(vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority; or 5.2 Section 2(24)(iia) of the IT Act provides the definition of income, which includes - (iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10 [or by an electoral trust. 6. Considering the facts of the case in the light of above provisions of law,....