TaxTMI 
TaxTMI 
2010 (1) TMI 1151
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....emption granted under Section 10(23C)(vi) of the Income-tax Act, 1961 (for brevity, 'the Act') was withdrawn whereas in this bunch, the exemption has not been granted. However, in sum and substance the controversy is substantively the same as the grounds of withdrawal and non-grant of exemption are identical. Accordingly, first the facts of all these cases be noticed. 2. FACTS 2.1 CWP No. 20574 of 2008 2.1.1 Amir Education Society, Faridabad-petitioner has challenged order dated 30.9.2008 (P-8) passed by the Chief Commissioner of Income Tax, Panchkula, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of assessment years 2008-09 to 2010- 11. The petitioner is a Society registered under the Societies Registration Act, 1860. The petitioner-Society was formed with the object of establishing a progressive School at Faridabad with a view to impart education. It has been claimed that the founder members had given their agricultural land, total measuring 65 Kanals 15 Marlas, on lease for a period of 30 years on nominal lease rent of Rs. 1 per year for the exclusive use of a school, namely, Modern Delhi Public School. On the af....
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....o the Municipal Corporation in respect of the land lease to the Society but the same have been accounted in the books of accounts of the Society. 2.1.5 It has further been found that in the balance sheet and income & expenditure account of the school for the year ending 31.3.2007, the repairs of the school building have been shown whereas there was no building. On account of rent, a substantial amount of Rs. 53.87 lacs has been debited in the income and expenditure account of the school out of the total expenditure (including depreciation) of Rs. 1.35 crores in the year ending 31.3.2007. 2.1.6 The Chief Commissioner has also referred to the objects of the petitioner-Society, as contained various paras of the Memorandum of Association and came to the conclusion that the same are repugnant to the condition prescribed in clause (b) of the un-numbered third proviso of Section 10 (23C) of the Act as the petitioner-Society has power to invest/deposit its funds in forms or modes other than those specified in Section 11(5) of the Act. 2.1.7 It has also been found that there is intermingling of the accounts of the members of the Girdhar family and of the petitioner-Society. The assets of....
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....2.2.2008. The Assessing Officer did not recommend the case of the petitioner-Society for exemption under Section 10(23C)(vi) of the Act, inter alia, on the ground that a portion of the income of the assessee has been applied for purposes other than educational purposes, which is not exempted under Section 10(23C) and is taxable. The Assessing Officer also pointed out that the kitchen expenses, which were related to purposes other than the educational purposes, during the assessment years 2003-04 to 2007-08 had been debited in the income and expenditure account of the assessee. It was also reported that additions of Rs. 1,50,468/- in respect of assessment year 2003-04 and Rs. 1,48,409/- in respect of assessment year 2004-05 have been made while completing the assessments under Section 143(3) of the Act. It was also mentioned by the Assessing Officer in his report that the aims and objects of the assessee-petitioner are to improve the social status of their community and the kitchen expenses referred to above were, in fact, incurred on the members of the petitioner- Society/donors, who visited Kurukshetra, therefore, the same have been used for their hospitality. The Commissioner of ....
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.... the petitioner-Society for grant of exemption under Section 10(23C)(vi) of the Act and in para 13 of the impugned order held as under:- "13. It is seen that these factually specific and categorical findings of the Assessing Officer have not been plausibly rebutted by the assessee inspite of the two opportunities of being heard given to it. A perusal of the enclosures with the report of the Assessing Officer also reveals that apart from kitchen expenses, certain function expenses have also been debited by the assessee in its books of accounts on a regular basis. The assessee has also not come forward with any details as to for which specific functions/ceremonies of the School these expenses have been incurred. The AO has reported that similar types of expenses are being debited in the accounts in the subsequent years also. In a nutshell, from the facts brought out on record, it is seen that the income of the Society/School is not being utilized exclusively for educational purposes and it is, therefore, clear that the educational institution run by the Society is not existing solely for educational purposes. The basic requirement of the sub-clause (vi) of clause (23C) of Section 10....
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.... 39.36% in the last four years. Even after reducing depreciation, the surplus/excess of income over expenditure in all these years is found to be quite high reaching upto 30.48% in the financial year 2006-07. The Chief Commissioner noticed the income and expenditure accounts of the petitioner Society for the last four years starting from the year ending on 31.3.2005 upto 31.3.2008 and found that the surpluses/profits generated by the educational institutions cannot be regarded as merely incidental and the same are systematic and substantial. The Chief Commissioner after relying upon the judgment of the Uttrakhand High Court rendered in the case of CIT v. M/s Queens Educational Society, (2009) 177 Taxman 326, came to the conclusion that the petitioner-Society is consistently and systematically generating profits and surpluses year after year and merely because it is making some capital expenditure for the assets of the schools out of this income, is not enough to claim exemption. 2.3.3 The other ground for rejecting the claim of the petitioner-Society for grant of exemption is evident from perusal of para 14 of the impugned order. The Chief Commissioner has noticed that the petitio....
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....8. The Chief Commissioner noticed the income and expenditure accounts of the petitioner Society for the last five years starting from the year ending on 31.3.2004 and upto 31.3.2008 and found that without considering depreciation the actual surplus of the educational institution in question has ranged from 32.02% to 42.35% during those years. It has been further pointed out that even if the depreciation is taken into account, the surplus/excess of income over expenditure in all these years is very high and ranges from 26.22% to 35.24% and after incurring the capital expenditure the assessee-petitioner is retaining substantial surplus in its books of accounts year after year. The Chief Commissioner after relying upon the judgment of the Uttrakhand High Court rendered in the case of M/s Queens Educational Society (supra) came to the conclusion that the petitioner-Society is consistently and systematically generating profits and surpluses year after year and merely because it is making some capital expenditure for the assets of the schools out of this income, is not enough to claim exemption. Laying stress on the word 'solely', which appears in Section 10(23C)(vi) of the Act, the Chie....
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....ved to the effect that the petitioner-Society has lent a very substantial amount of several lacs of rupees to Shri Ashok Sardana, a Governing Body member, which was not in accordance with the provisions of Section 11(5) of the Act. The CIT, Faridabad, did not recommend the case of the petitioner-Society for approval under Section 10(23C)(vi) of the Act. It has further been noticed that the audit reports in form No. 10BB were not filed along with the respective returns by the petitioner-Society. 2.5.3 With regard to advancement of loan to Shri Ashok Sardana, the stand taken by the petitioner-Society in its reply dated 8.9.2008 was that in the year 2001 they decided to shift the Preparatory School to another building to make available the rooms for XI and XII classes. Since no premises in the vicinity of the school were available and the authorities did not allow running of the school in a residential area, therefore, a loan of Rs. 5,50,000/- was given to Shri Ashok Sardana on 1.6.2001 for construction. It was further stated that interest @ 14.5% has been charged on the said loan. The balance of the loan as on 31.3.2007 was Rs. 4,46,456/-. 2.5.4 After considering the aforementioned....
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....e from such letting out of the property. 2.5.7 The Chief Commissioner of Income Tax also recorded a finding that the educational institution being run by the petitioner-Society is generating substantial surplus year after year during the last five years. The Chief Commissioner has primarily relied upon the judgment of the Uttrakhand High Court rendered in the case of M/s Queens Educational Society (supra). Laying stress on the word 'solely', which appears in Section 10(23C)(vi) of the Act, the Chief Commissioner has finally concluded that it cannot be said that the petitioner-Society and the educational institution run by it are existing solely for the purpose of education and not for the purpose of profit and rejected its case. 2.6 CWP No. 8135 of 2009 2.6.1 Vaish Model Senior Secondary School Education Society, Bhiwanipetitioner has challenged order dated 26.3.2009 (P-11) passed by the Chief Commissioner of Income Tax, Panchkula, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of assessment years 2008-09 onwards. The petitioner is a Society registered under the Societies Registration Act, 1860. It has been running t....
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.... the last three years (P-8). Thereafter, on 24.3.2009 again a notice was sent by the office of the Chief Commissioner of Income Tax, Panchkula, to the effect that from the income and expenditure accounts of the petitioner-Society it is revealed that the educational institution run by it is generating surpluses year after year. The attention of the petitioner- Society was drawn to the judgment of Uttrakhand High Court rendered in the case of M/s Queens Educational Society (supra). The petitioner-Society was further asked to explain as to how it fulfills the conditions prescribed by various provisos of clause (23C) of Section 10 for the grant of exemption under Section 10(23C)(vi) of the Act. The date of hearing was fixed as 26.3.2009 and no further opportunity of being heard was to be afforded since the petitioner's case has been considered as a time barring matter (P-9). On 26.3.2009, the petitioner- Society filed its written submissions in response to the notice dated 24.3.2009. 2.6.4 On 26.3.2009 itself, the Chief Commissioner of Income Tax, Panchkula, after hearing the parties passed the impugned order rejecting the claim of the petitioner-Society for grant of exemption under S....
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....the educational institution run by it is existing solely for the purpose of education and not for the purpose of profit. 2.7 CWP No. 8258 of 2009 2.7.1 Sanathan Dharam Shiksha Samiti, Hansi, District Hisar-petitioner has challenged order dated 23.3.2009 (P-14) passed by the Chief Commissioner of Income Tax, Panchkula, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of assessment years 2005-06 to 2008-09. The petitioner is a Society registered under the Societies Registration Act, 1860. It has been engaged for the last 17 years in the activity of providing education and other facilities for pupil's mental, physical and moral growth through curricular and co-curricular activities and to infuse national spirit in their minds. It has been claimed that the educational institution run by the petitioner-Society exists solely for educational purposes and not for the purposes of earning profit. On 31.3.2008, the petitioner-Society applied for grant of exemption under Section 10(23C)(iv) and (v) of the Act in Form 56 along with the requisite documents. 2.7.2 The Income Tax Officer, Ward No. 4, Hisar, vide letter dated 12.5.2008....
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....earlier assessment years. (iii) That a perusal of the Balance Sheets enclosed alongwith its application revealed that it had advanced a loan of Rs. 2,50,000/- to "Shiv Mandir A/c" which did not appear to be an investment or deposit of its funds in a form or mode specified in sub-section (5) of section 11 and that, therefore, there was an apparent violation of the clause (b) of the 3rd proviso to clause (23C) of section 10 by the applicant society. (iv) The applicant society was asked to intimate as to whether it had filed the prescribed audit reports on Form No. 10BB of the Income Tax Rules, 1962 alongwith its returns of incomefor the assessment years 2006-07, 2007-08 and 2008- 09 required to be filed as per the 10th proviso of clause (23C) of section 10 and if not filed, to explain the reasons for not furnishing the same. (v) A perusal of the Income & Expenditure accounts of the applicant society revealed that the educational institutions run by it had been generating substantial surpluses year after year. In this regard, the attention of the applicant Society was drawn to this fact and also to the judgment dated 24.09.2007 of Hon'ble Uttrakhand High Court at Nainital in ITA No....
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....pts do not exceed Rs. 1 crore. The educational institutions, whose aggregate annual receipts exceed Rs. 1 crore, have to seek exemption/approval under Section 10(23C)(vi) and they have to comply with the requirements and conditions prescribed in the various provisos of clause (23C) of Section 10 of the Act. Thus, it has been found that the petitioner-Society had been wrongly claiming exemption of its income under Section 10(23C)(iiiad) of the Act for the assessment years 2005-06, 2006-07 and 2007-08 and with a view to regularise its wrong and illegal claim of exemption already made by it under Section 10(23C)(iiiad), it has now made a belated claim for exemption under Section 10(23C)(vi) of the Act. 2.7.6 The defence taken by the petitioner-Society regarding advancement of loan of Rs. 2,50,000/- to Shiv Mandir account also did not find favour with the Chief Commissioner. The petitioner-Society has pleaded that the aforementioned amount was, in fact, donated to Shiv Mandir Balika Vidyalya, Uchana, District Jind. This has been found to be against the facts on record because in all its balance sheets, the said amount has been shown as a loan due to the petitioner- Society year after ....
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....merely because it is making some capital expenditure for the assets of the schools out of this income, is not enough to claim exemption. Laying stress on the word 'solely', which appears in Section 10(23C)(vi) of the Act, the Chief Commissioner has given a finding that it cannot be said that the petitioner- Society and the educational institution run by it are existing solely for the purpose of education and not for the purpose of profit. 2.8 CWP 8981 of 2009 2.8.1 M/s Mehra Institute of Education, Putilghar, Amritsar-petitioner has challenged order dated 9.3.2009 (P-8) passed by the Chief Commissioner of Income Tax, Amritsar, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of financial year 2007-08. The petitioner is a Society registered under the Societies Registration Act, 1860 (for brevity, 'the 1860 Act'). It has been engaged for the last more than ten years in the activity of providing education through a school, namely, 'The Senior Study II' at G.T. Road, Putlighar, Amritsar, which is affiliated with the Central Board of Secondary Education, New Delhi. It is claimed that the petitioner Society is an educational ....
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....urt rendered in the case of M/s Queens Educational Society (supra) as well as judgment of Hon'ble the Supreme Court rendered in the case of Aditanar Educational Institution v. Additional Commissioner of Income-tax, [1997] 224 ITR 310. Laying stress on the word 'solely', which appears in Section 10(23C)(vi) of the Act, the Chief Commissioner has given a finding that it cannot be said that the petitioner- Society and the educational institution run by it are existing solely for the purpose of education and not for the purpose of profit. The Chief Commissioner has also rejected the claim of the petitioner-Society on the ground that the profit/surplus earned by it are being utilised to enhance its capacity by creation of fixed assets and for renovation to earn more profit by pursuing its main object of running the educational institution. 2.9 CWP No. 9156 of 2009 2.9.1 Gurunanak Education Trust, Ludhiana-petitioner has challenged order dated 17/19.3.2009 (P-1) passed by the Chief Commissioner of Income Tax, Ludhiana, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of assessment years 2000-01 and 2002-03. The petitioner is ....
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....t Deed has been extracted, which reads thus: "Any how, therefore, this trust has been constituted for the purpose essentially for provision of education, setting up for educational Institutions and also taking such steps as may be considered necessary by the Trust for Propagation of Sikh Tenets etc. and other charitable purpose as the trust may deem fit and necessary." 2.9.4 The Chief Commissioner while stressing upon the words 'may be' in the aforementioned object, has concluded that exemption under Section 10(23C) (vi) of the Act could not be granted to the petitioner-Trust because it is not running its institutions solely for educational purposes but also for religious purposes of propagation of Sikh tenets and accordingly rejected its claim. In that regard reliance has been placed on the judgments of Hon'ble the Supreme Court rendered in the cases of Union of India v. Wood Papers Ltd., (1990) 4 SCC 256 and State of West Bengal v. Ashutosh Laahiri, JT 1995 (7) SC 553; judgment of Rajasthan High Court in the case of Kota Co-operative Marketing Society Ltd. v. CIT, [1994] 207 ITR 608 (Raj); judgment of Calcutta High Court in the case of CIT v. Sutna Stone & Lime Co. Ltd., [1982]....
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....oned show cause notice. On 17.3.2009, the petitioner-Trust filed its written submissions claiming that the aforementioned judgments have no application in its case. 2.10.2 During the course of the hearing, the Chief Commissioner of Income Tax, Ludhiana, also noticed that one of the objectives of the petitioner-Trust is 'Propagation of Sikh Tenets'. Accordingly, the petitioner-Trust was required to furnish the details of expenses incurred for spreading Sikh Tenets because it was felt by the Chief Commissioner that the petitioner-Trust is not existing 'solely' for 'educational purposes' but for 'propagation of Sikh tenets'. 2.10.3 The Chief Commissioner vide the impugned order has given his findings under two heads. Firstly, on the issue of systematic surplus the finding recorded is that the total surplus of the petitioner-Trust has ranged from 15.34% to 26.92% during the last three years ending on 31.3.2006, 31.3.2007 and 31.3.2008. It has, thus, been concluded that the surpluses/profits generated by the educational institutions of the petitioner-Trust cannot be regarded as merely incidental to the main purposes rather the same are systematic and substantial. In that regard relian....
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....e prescribed Form 56-D. 2.11.2 The case of the petitioner-Society was taken up by the Chief Commissioner of Income Tax, Ludhiana. From the balance sheet of the petitioner-Society it came to his notice that the land on which the building of the educational institution in question was being constructed, was owned by Smt. Avinash Kaur, Secretary of the petitioner-Society, whereas rent of Rs. 3,00,000/- has been paid to Shri Nirmal Singh (HUF), who is husband of said Smt. Avinash Kaur. Accordingly, a show cause notice, dated 18.12.2008, was issued to clarify in whose hands the ownership of the property vests when the land belongs to Smt. Avinash Kaur and as to why the claim of exemption should not be rejected on this ground alone. 2.11.3 In response to the show cause notice, the assessee-petitioner took the stand that the land in question was taken on lease from Shri Nirmal Singh (HUF) and others. It has been pointed out that there are two sites of land out of which constructed area measuring 5200 square yards was in existence and the educational institution also raised construction on vacant land, which was shown in the balance sheet whereas the other site was taken on lease from Sh....
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....hkula, rejecting the application for grant of approval for exemption under Section 10(23C)(vi) of the Act in respect of assessment year 2008-09. The petitioner is a registered educational Society engaged in educational activities at Faridabad. It has been running a school in the name and style of A.D. Public School, which is affiliated with the Central Board of School Education. On 7.1.2008, the petitioner-Society applied for grant of exemption under Section 10 (23C)(vi) of the Act in respect of assessment year 2008-09 in the prescribed Form 56-D since the income of the petitioner-Society crossed the prescribed limit of Rs. 1 crore for the first time during the assessment year 2008-09. A notice was issued to the petitioner-Society to explain certain discrepancies in the application to which it has filed reply along with the requisite details. 2.12.2 The case of the petitioner-Society for grant of exemption in respect of assessment year 2008-09 was taken up by the Chief Commissioner of Income Tax, Panchkula. The Chief Commissioner, vide the impugned order dated 13.1.2009, rejected the claim of the petitioner-Society primarily on two grounds. Firstly, it has been noticed that the pe....
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....come to the purpose of education cannot be gone into. In that regard he has placed reliance on the observations of Hon'ble the Supreme Court in the case of American Hotel and Lodging Association v. Central Board of Direct Taxes, [2008] 301 ITR 86. He has further submitted that the Chief Commissioner has committed grave error in law by reckoning the loan advanced to Shri O.P. Joshi, the Principal of the institution as mis-application. According to the learned counsel when loan is advanced to the Principal of an educational institution then it is to be regarded as application of income to an educational purpose as it would attract better talent to impart education in the institution. He has further submitted that merely because the Principal by virtue of statutory provision is ex-officio member of the Managing Committee for taking effective decisions would not divest him of his status as an employee of the institution whose primary function is to run the institution in the best possible manner. In support of the proposition that dual status of a person cannot be ignored, he has placed reliance on a Division Bench judgment of the Andhra Pradesh High Court in the case of Commission....
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....uthorities under Section 119(1). However, there is an expression prohibition by the proviso to Section 119(1) that no direction could be issued so as to require any income tax authority to make a particular assessment or to dispose of a particular case in a particular manner or to interfere with the discretion of the Commissioner in the exercise of appellate jurisdiction. According to the learned counsel the satisfaction recorded by the Chief Commissioner suffers from basic malady of reopening various cases on the strength of the judgment of the Utrakhand High Court without any proper application of mind. He has maintained that there may be genuine cases but all cannot be roped in for issuing a show cause notice which in fact reveal total non application of mind. 3.2.3 He has then placed reliance on the provisions of Section 11(1)(a) and 11(2) of the Act and argued that exemption under the aforesaid provisions cannot be denied to an assessee on the ground that it should have invested the entire surplus amount in any or in either of the securities enumerated in Section 11(2)(a) of the Act. In that regard, he has placed reliance on the observations made by Hon'ble the Supreme Co....
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.... Shri Suresh Chander and Usha Rani, his wife, is in respect of their services rendered as teachers. 3.3.2 Learned counsel has submitted that the conclusion reached by the Chief Commissioner that the petitioner institution is not a wholly educational institution, in fact, suffers from inherent legal infirmity. According to the learned counsel the petitioner institution has been preaching the five basic scriptures of universal nature which have emanated from six scriptures known as religion. Withdrawal of exemption on the ground it is a religious institution imparting religious education is not well based. He has maintained that the petitioner institution is only imparting education of 'teaching of religious tenents' which is also part of education and not contrary to the concept of education. 3.4 CWP Nos. 20574 of 2008 and 6343 of 2009 3.4.1 Ms. Radhika Suri, learned counsel for the petitioners has argued that it is wholly unwarranted on the part of the Chief Commissioner or the Assessing Authority to say that the petitioner is accumulating profits because under sub- section (24) of Section 2 the expression 'income' has been defined which would include even profit....
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....s in India by purchasing a building which is to be utilised as a hospital. This income, therefore, is entitled to an exemption under S. 11(1). In addition, under S. 11(1) (a) the assessee can accumulate 25% of its total income pertaining to the relevant assessment year and claim exemption in respect thereof. S. 11(1)(a) does not require investment of this limited accumulation in Government securities. The balance income of Rs. 1,64,210.03 constitutes less than 25% of the income for assessment year 1970- 71. Therefore, the assessee is entitled to accumulate this income and claim exemption from income-tax under S. 11(1)(a)." 3.4.3 The aforesaid judgment has been followed and applied by a Division Bench of the Delhi High Court in the case of CIT v. Divine Light Mission, (2005) 196 CTR Reports 135. Therefore, she has submitted that capital expenditure cannot be excluded as long as it is created for achieving the object of education. 3.4.4 The other argument raised by her is that the scope of enquiry contemplated by Section 10(23C) of the Act with the Chief Commissioner is not to encroach upon the area allocated to the Assessing Officer as has been done in the present case. 3.5 C.W.P....
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....denying registration under Section 10 (23C)(vi) of the Act unless and until it is actually mis-used. 3.7 CWP No. 2721 of 2009 3.7.1 Mr. Ravi Shankar, learned counsel for the petitioner has referred to para 14 of the impugned order dated 13.1.2009 (P-6) passed by the Chief Commissioner of Income-tax, Panchkula and argued that the Audit Reports in Form 10BB for the assessment years 2006-07 to 2008-09 are not required to be furnished mandatorily along with the returns of income. According to the learned counsel, a Full Bench of this Court has already held that the provision is directory in nature and the delay in filing the Audit Report in Form 10BB is not mandatory. In that regard he has placed reliance on a Full Bench judgment of this Court in case of CIT v. Punjab Financial Corporation, 254 ITR 6 (FB). 3.7.2 Elaborating his argument further he has pointed out that it was a case of granting exemption. He has argued that incidental accumulation surplus is no ground to deny exemption. In that regard he has made reference to para 13 of the impugned order. He has also placed reliance on third proviso to Section 10(23C) (vi) and argued that if the accumulation is not more than 15%, th....
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....ant to refer and examine Section 10(22) vis-à-vis Section 10(23C)(vi), which have been held to be analogues to each other. The scope of section 10 (22) of the Act, which is precursor of Section 10(23C)(vi), has been analysed by their Lordships' of Hon'ble the Supreme Court in the case of American Hotel and Lodging Association Educational Institute (supra), holding that the actual existence of the educational institution has been a pre-condition of the application for initial approval under Section 10(22). It has been held that on grant of approval the charging Section 11 and 13 were not to apply. Therefore, before new dispensation, which has been applied from 1.4.1999, after the grant of exemption under Section 10(22), there was no room for assessment nor any scope for raising any demand, the grant of approval under Section 10(22) used to have an automatic effect. The view of their Lordships' is discernible from the following part of paras 26 and 27, which reads thus:- 26. ......Once an applicant-institution came within the phrase "exists solely for educational purposes and not for profit" no other conditions like application of income were required to be complied with. The....
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....ely for educational purposes then it would qualify for grant of exemption under Section 10(23C)(vi) of the Act." 5.1 In para 6.5, of the said judgment the following three questions of law have been raised:- "(A) Whether an educational institution would cease to exist 'solely' for educational purposes and not for purposes of profit merely because it has generated surplus income over a period of 4/5 years after meeting its expenditure? (B) Whether the amount spent on acquiring/ constructing capital assets wholly and exclusively becomes part of the total income or it becomes entitled to exemption under Section 10 (23C)(vi) of the Act? (C) Whether an institution registered as a Society under the Societies Registration Act, 1860, lose its character as an educational institution, eligible to apply for exemption under Section 10 (23C)(vi) of the Act?" 5.2 Our answer to the aforesaid questions would be the same as has been given in Pinegrove International Charitable Trust's case (supra) and the same reasoning is adopted. It is pertinent to notice that Question No. (A) has been answered in favour of the assessee and against the revenue. Questions Nos. (B) and (C) have been answered joi....
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.... educational purposes may be expressly stipulated as per the statutory requirement. Thereafter the Assessing Authority may ensure compliance of those conditions. The cases where exemption has been granted earlier and the assessments are complete with the finding that there is no contravention of the statutory provisions, need not be reopened. However, after grant of approval if it comes to the notice of the prescribed authority that the conditions on which approval was given, have been violated or the circumstances mentioned in 13th proviso exists, then by following the procedure envisaged in 13th proviso, the prescribed authority can withdraw the approval. (3) The capital expenditure wholly and exclusively to the objects of education is entitled to exemption and would not constitute part of the total income. (4) The educational institutions, which are registered as a Society, would continue to retain their character as such and would be eligible to apply for exemption under Section 10(23C)(vi) of the Act. [See para 8.7 of the judgment - Aditanar Educational Institution case (supra)] (5) Where more than 15% of income of an educational institution is accumulated on or after 01.04....