TaxTMI 
TaxTMI 
2014 (10) TMI 779
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....3 wherein the Hon'ble Supreme Court had held that claim for deduction not made in the return of income cannot be entertained by the A.O. otherwise than by filing a revised return. 3. On the facts and circumstances whether the Ld. CIT(A) was right in holding that the assessee has been allowed exemption u/s 10(23C)(vi) of the Income Tax Act, 1961 for the A.Y. 2008- 09 whereas, the assessee has claimed exemption u/s 11 of the Act in its return of income for the A.Y. 2008-09 and income declared on the basis of exemption claimed u/s 11 of the Act has been accepted by the AO and not u/s 10(23)(vi) of the Act. 4. On the facts and circumstances whether the Ld. CIT(A) was right in deleting the purchase/addition made to fixed assets which are not the application towards charitable purpose. 5. On the facts and circumstances whether the Ld. CIT(A) was right in facts and circumstances and in law in not considering the decision in the case of CIT vs. M/s Queen Educational Society 233 CTR 395 wherein the Hon'ble High Court of Uttarkhand had held that the assets purchased/constructed out of income from imparting the education with a view to expand the institution and to earn more ....
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.... 2,64,54,253 Less: application as per Income & expenditure A/c 1,75,97,901 Less: application as per statement of affairs 53,84,680 Less: application @15% allowable u/s 11(1) 39,68,138 Less: accumulation as per notice u/s 11(1) r.w. Exp 1,41,08,968 Total application for charitable purpose 2,64,54,253 Therefore, total income Nil 4.1 The AO observed that the application of Rs. 53,84,680/- which was claimed to have been made through statement of affairs was made on the purchase/addition to the fixed assets. Further, in response of accumulation claimed to have been made as per Explanation to sec 11(1) of the I.T.Act,1961, it was also noticed that no application for exercise of option in writing was found on record. Accordingly, he asked the assessee that as to why the expenditure made on addition/purchase of fixed assets may not be treated as application for charitable purpose in view of the ratio of decision in the case of Queens Educational Society v. CIT of the Hon'ble High Court of Uttarakhand and since no notice as per section 11(1) of the Act r.w. Exp.2 to this section, was given within the prescribed time limits, why exemption may not ....
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....ing the return u/s 139(5) of the I.T. Act, 1961, cannot be given to it as it, as the time limits for revising the return has already expired on 31.3.2011. Thus, again the request of the assessee to grant exemption u/s 10(23C)(vi) of the I.T.Act, 1961 cannot be accepted. iii) The request of the assessee for grant of exemption u/s 10(23C)(vi) of the I.T.Act, 1961 cannot be accepted even u/s 154 of the Act, as this is not a mistake apparent from record. It is not case in which benefit as per Circular No.725 dated 16.10.1995 of the CBDT can be allowed to the assessee in view of the fact that original exemption was not claimed u/s 10(23C)(vi) of the I.T.Act, 1961. 3.2. Keeping in view the above facts, the request of the assessee for grant of exemption u/s 10(23C)(vi) of the I.T.Act, 1961 cannot be accepted." Accordingly, the AO added Rs. 1,41,08,968/- being the amount of accumulation claimed as per explanation to section 11(1) but not allowed as application. 5. On appeal, the Ld. CIT(A) deleted the addition so made vide paras 4 to 5, which for the sake of convenience is reproduced as under: "4. I have carefully considered the submission of assessee. I have also called the....
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....the section under which the exemption was supposed to be claimed was mentioned by the assessee as 10(23C)(vi) of the Act which is the identical case in the impugned assessment year. 4.3. In view of the above, there is a lot of force, in the exemption of assessee that the exemption allowed to u/s 10(23C)(vi) of I.T.Act, was in force for the A.Y. 2009-10 also as it was an one time exemption and the assessee was entitled to exemption on the grounds of consistency and as well as on merits. But before reaching there some consideration is required to see whether facts were identical in all these assessment years. Though the AO in the impugned order has made additions on the grounds of application of income in purchase of capital assets and non-filing of notice in terms of explanation to section 11(1) of I.T.Act, it is to be seen at the outset that the provision of section 11(1) of the Act are as such not applicable in cases covered u/s 10(23C)(vi0 of I.T.Act which are governed by 3rd proviso below section 10(23C0 which reads as under, as far as application of income is concerned. Provided that the fund or trust or institution [or any university or other educational institution or a....
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....stitution and while applying the said judgment including the judgment which had been rendered by Hon'ble the Supreme Court in the case of Children Book Trust, it lost sight of the amendment which had been carried out with effect from 1-4-1999 leading to the introduction of the provisions of section 10(23C) of the Act. Lastly, that view is not consistent with the law laid down by Hon'ble the Supreme Court in American Hotel & Lodging Association, Educational Institute (supra). 4.6. Also in case of M/s. Manavi Mangal Society 328 ITR 421 (P&H) a similar view of upheld. 4.7. The jurisdictional Hon'ble ITAT, Amritsar in case of M/s. D.N. Memorial Trust, ITA No.617(Asr)/2011 while deciding the appeal of assessee against denial of registration u/s 12AA of I.T. Act, by CIT, Jammu has held as under: "8. We have heard the rival contentions and perused the facts of the case. There is nothing on record brought out by the Ld. CIT that fees structure is in-genuine or against the accepted norms. Nothing has been brought on record by the Ld. CIT that the activities of the Trust are for non-charitable purpose or for personal purposes of the trustees etc. Rather whatever funds we....
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....uch claim since the same has not been claimed by filing the revised return. He further argued that the assessee got the exemption u/s 10(23C)(vi) of the Act on 12.07.2010 only and at the most he could have applied for exemption before the A.O. immediately which in fact, was applied before the A.O. much later. Accordingly, he prayed to reverse the order of the ld. CIT(A). 7. The Ld. counsel for the assessee, Mr. P.N.Arora, at the outset, relied upon the order of the ld. CIT(A) and argued that at the time of filing the return of income, the deduction was claimed u/s 11 of the Act and the assessee was not having approval u/s 10(23C)(vi) of the Act, though the assessee made an application to the CCIT who vide her order dated 13.08.2007 approved the Institution u/s 10(23C)(vi) of the Act, but for the assessment year 2005-06 only, whereas the same should have been allowed for the assessment year 2005-06 and onwards i.e. for all the times to come for the assessee-institution. The assessee accordingly moved an application with the prayer before the CCIT for rectification and the Ld. CCIT rectified her order dated 12.07.2010 and granted the approval for the assessment year 2005-06 and on....
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....e time of filing of the return of income. The assessee had made an application for the said approval which was received by the assessee vide order dated 13.08.2007 for the assessment year 2005-06 wrongly which was rectified by the CCIT vide her order dated 12.07.2010 for the assessment year 2005-06 and onwards for all the times to come. From the said chronology, it is evident that the assessee was having approval u/s 10(23C)(vi) from the CCIT vide order dated 13.08.2007, though the same was rectified u/s 154 of the Act on 12.07.2010. Thus, the argument of the Ld. DR that the ld. CIT(A) has not dealt with the non-filing of notice under explanation to section 11(1) of the Act, is wrong since the same has been dealt with by the ld. CIT(A) vide para 4.4 of his order. In fact, the assessee had option to make claim under section 10(23C)(vi) or Section 11(1) of the Act, in view of the decision of the ITAT, Pune Bench in the case of Bharati Vidyapeeth Medical Foundation vs. ACIT (supra) and the assessee cannot be forced to go for deduction u/s 11 of the Act. Though the claim was made before the AO during assessment proceedings, as and when the assessee got the rectified order from CCIT. It....
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....e are dismissed. 11. As regards grounds No. 4 & 5, we concur with the views of the ld. CIT(A), as reproduced hereinabove, in view of the decision in the case of M/s. Pinegrove International Charitable Trust (supra), M/s. Manav Mangal Society (supra) and M/s. D.N.Memorial Trust (supra) and in view of findings of ld. CIT(A), in particular in para 4.8 hereinabove. Accordingly, we find no infirmity in the order of the ld. CIT(A). Thus, grounds No. 4 & 5 of the Revenue are dismissed. 12. In the result, the appeal of the Revenue in ITA No.397(Asr)/2012 for the assessment year 2009-10 is dismissed. 13. Now, we take up appeal of the revenue in ITA No.557(Asr)/2013 for the A.Y. 2010-11. The facts in the present appeal of the revenue are that the AO did not consider the amount utilized in the purchase of fixed assets for achieving the educational objectives of the trust in view of the decision of the Hon'ble High Court of Uttrakhand in the case of Queens Educational Society. The Ld. CIT(A) relying upon the decision of the Hon'ble Punjab & Haryana High Court in the case of M/s. Pinegrove International Charitable Trust (supra) and the decision of ITAT, Amritsar Bench in the ca....