TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 274
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....Rs. 47,91,745/- and tax liabilities of Rs. 21,66,185/- which is contrary to the provisions of law, hence the order passed be quashed. 5. Because in any case and in all circumstances of the case, the order passed is bad in law and be quashed. 6. Because the CIT(A) has failed to appreciate that the said assessee society was already enjoying exemption u/s.10(23B) of the Act 1961 upto A.Y. 2007-08 and on expiry of the period had already applied for renewal on 14.05.2009 which renewal was forthcoming. 7. Because the CIT(A) has failed to appreciate that there being no failure on the part of the assessee to obtain the requisite approval from KVIC, as approved for earlier years the theory and principles of decline of legitimate expectation would be applicable and the CIT(A) should ought to have allowed the relief as claimed by exempting the entire income u/s. 10(23B) of the Act. 1961. 2. Though various grounds are raised, but they all relate to denial of exemption under section 10(23B) of the Income-tax Act, 1961 (hereinafter called in short "the Act") on account of non-production of certificate for exemption from Khadi and Village Industries Commission under the KVIC Act. 3. The fact....
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....the ld. CIT(A), but assessee could not furnish exemption certificate even before the ld. CIT(A) and the ld. CIT(A) has confirmed the assessment order denying exemption under section 10(23B) of the Act. 6. Now the assessee has preferred an appeal before the Tribunal. But exemption certificate from Khadi and Village Industries Commission has not been furnished before the Tribunal. The ld. counsel for the assessee, however, has placed reliance upon the provisions of section 139 (4C)(d) of the Act relating to mode of filing and assessment of returns filed by an institution referred to in clause (23B) of section 10 of the Act. Reliance was also placed upon the provisions of section 143(3) (d) of the Act in support of his contention that the returns filed under section 139(4C)(d) of the Act are to be processed as per the procedure laid down in section 143(3)(d) of the Act and the Assessing Officer shall not deny benefit of provisions of section 10(23B) of the Act unless the Assessing Officer intimated the Central Government or the prescribed authority about the contraventions of the provisions of clause (23B) of section 10 of the Act, as the case may be. The ld. counsel for the assessee....
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....in contravention to the provisions of section 10(23B) of the Act. We have also examined the provisions of section 143(3) of the Act and we find that in the case of an institution referred to in clause (23B) of section 10 of the Act, which is required to furnish the return of income under subsection (4C) of section 139 of the Act, no order making an assessment of total income or loss of such institution shall be made by the Assessing Officer without giving effect of provisions of section 10 of the Act unless the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (23B) of section 10 of the Act. In this sub-section also, a provision is made that if the Assessing Officer is satisfied that the activities of the institution is not being carried out in accordance with all or any of the conditions subject to which such institution was approved, he may, after giving reasonable opportunity of showing cause against the proposed withdrawal to the concerned institution, recommend the Central Government to withdraw the approval and the Government may order for withdrawal of the approval and forward copy of the order to....
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....earch association referred to in clause (21) of section 10; (b) news agency referred to in clause (22B) of section 10 ; (c) association or institution referred to in clause (23A) of section 10; (d) institution referred to in clause (23B) of section 10 ; (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in 10sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in 10sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10 ; (f) trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10, (g) body or authority or Board or Trust or Commission (by whatever name called) referred to in clause (46) of section 10 ; (h) infrastructure debt fund referred to in clause (47) of section 10, shall, if the total income in respect of which such research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union or body or authority or Board or Trust ....
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....educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless- (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or subclause (via) of clause (23C) of section 10, as the case may be, by such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place ; and (ii) the approval granted to such scientific research association or other association 7or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded. 9. From a bare reading of the aforesaid provisions of the Act relating to assessment of an institution constituted as a publi....
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....cation issued in this regard has been rescinded. Meaning thereby, during the course of assessment proceedings, the Assessing Officer is required to examine the activities of the assessee and to ascertain the fact whether the assessee/institution has been granted approval by the prescribed authority for the relevant assessment year. 11. Having read the aforesaid provisions of the Act together, we are of the considered view that while completing the assessment of an association or institution referred to in clause (23B) of section 10 of the Act, the Assessing Officer is required to examine the nature of activities of the assessee/institution/society whether it was in pursuant to the object of the institution or association as prescribed under section 10(23B) of the Act and also availability of exemption certificate from the prescribed authority for the relevant assessment year. It is also clear from the provisions of section 10(23B) of the Act that exemption certificate cannot be granted for more than three years. Therefore, from time to time the assessee is required to obtain exemption certificate from the prescribed authority. If it is not obtained for a particular relevant assess....