TaxTMI 
TaxTMI 
2015 (12) TMI 37
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....re disposed of by this common order for the sake of convenience and brevity. 2. Representatives of both sides argued their cases at length. The Ld. Counsel for the assessee took us to the relevant documentary evidences filed in the form of Paper book. 3. We have given a very thoughtful consideration to the submissions made by the Representatives. We have also carefully gone through the relevant documentary evidences qua the issues. We have also perused the orders of the authorities below. 4. Briefly stated the facts of the case are that the assessee-society was formed in 1932 with the only aim and object of running Educational Institutions. The assessee is imparting education through various High Schools, Degree Colleges of Commerce and Science, Management studies in Technology, Packaging etc. at various places in Mumbai and Navi Mumbai. 4.1. The assessee is a Registered society under Societies Registration Act, XXI of 1860 dated 21.4.1932 and is also registered under the Bombay Public Trust Act, 1950. The assessee-society has been granted certificate u/s. 80G vide order No. DIT(E)/MC/80G/2430/2009-10 dated 29.5.2009 for the period 1.4.2009 to 31.3.2012. It is also an a....
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....ich was like where the students paid capitation fees in cheque, the same was accounted for but where the capitation fees was paid in cash, the same was routed through cheque by taking donations from parties in lieu of cash. Further, such capitation fees was classified into two categories, (i) receipted i.e. where receipts were issued which are duly found reflected in the books of account and (ii) nonreceipted i.e. in cases where receipts were not issued. This nonreceipted capitation fees was brought back subsequently by accepting cheques from third parties in exchange of unaccounted capitation fees 4.8. Since the Revenue authorities were of the firm belief that the assessee has been taking capitation fees thereby making the institution a profit making institution. The assessee was denied the benefits of exemption u/s. 11 also. 5. The third issue relates to the additions made on account of anonymous donation u/s. 115BBC of the Act. 5.1. We also find that the First Appellate authority has allowed the claim u/s. 11 of the Act in respect of receipts other than capitation fees. The Department has preferred an appeal against this action of the Ld. CIT(A) and the assessee is in a....
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....n fee Act, 1987). Therefore, the activities cannot be regarded as genuine activity. There also the factum of collection of capitation fee and conversion part of the same into donation was under consideration. The relevant part of the findings of the Tribunal are at para-13 of its order which read as under: "It is clear from the series of decisions relied upon by the assessee that the mere accepting the capitation fee cannot be brought into the scope of Section 12AA(3) if the prominent activity of the assessee are not doubted being imparting of education and promotion of education. The assessee has been carrying on the activity in the field of education through its aided and unaided institutions since the year 1932. The various educational institutions run by the assessee are affiliated with the Boards of School Education and Universities. These activities in the field of education through various institutions are not in dispute and therefore, the genuineness of the same are not in dispute. The Commissioner has also accepted the fact of the activity of the assessee that the assessee is engaged in the educational activity but he has opined that the educational activity has b....
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....ilding at Rs. 9,52,010/- in F. Y. 1999-2000 and Rs. 847,742/- in F. Y. 2000- 01 relevant for asstt. years 2000-01 and 2001-02 respectively. Thus, if the amount of investment into fixed assets such as building, furniture and fixture etc. were also kept in view, there was hardly any surplus left. ... ... The assessee society is undoubtedly engaged in imparting education and has to maintain a teaching and non-teaching staff and has to pay for their salaries and other incidental expenses. It, therefore, becomes necessary to charge certain fee from the students for meeting all these expenses. The charging of fee is incidental to the prominent objective of the trust i.e. imparting education. The trust was initially running the school in a rented building and the surplus, i.e. the excess of the receipts over expenditure. In the year under appeal (and in the earlier year appeals) has enabled the appellant to acquire its own property, acquire computers, library books, sports equipments etc. for the benefit of the students. And more importantly the members of the society have not utilized any part of the surplus for their own benefit. The A.O wrongly interpreted the resultant surplus as t....
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....dents fees received Net expenditure (excluding student fees) Government grants % of Govt. grant to Net expenditure A B C=(A)-(B) D E=(D)/(C) 2003-04 248,533,000 74,125,000 174,408,000 58,919,000 34% 2004-05 226,043,000 110,181,000 115,862,000 57,878,000 50% 2005-06 247,681,000 134,875,000 112,806,000 49,426,000 44% 2006-07 297,549,000 167,259,000 130,290,000 58,441,000 45% 2007-08 326,004,135 209,091,973 116,912,162 77,789,619 67% 2008-09 324,309,198 240,738,421 83,570,777 86,456,961 103% 2009-10 388,151,926 273,525,517 114,626,409 95,942,503 84% 2010-11 518,856,628 291,789,070 227,067,558 99,006,591 44% 2011-12 492,282,047 319,719,588 172,562,459 148,484,944 86% 7.2. If the Government grants are considered in the light of the aforementioned facts, it would be clear that the contribution ranges from 34% to 103%. According to the Revenue authorities, since the Government has not financed 75% or more the institution cannot be considered as wholly or substantially financed by the Governmen....
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....the case of National Education Society, the Hon'ble High Court has considered whether 35.94% of contribution would amount to substantially financed by the Government and the Court answered "yes". 7.6. Similarly, in the case of Indian Institute of Management (supra), the Hon'ble Court accepted the contribution of 37.85% as sufficient for making the institution "substantially financed by the Government". 7.7. Considering the aforementioned decision of the Hon'ble Court in the light of the factual matrix of contribution as exhibited at para- 7.1 above, we have no hesitation to hold that the institution is "substantially financed by the Government". Thus, fulfilling the third condition also for the eligibility for claiming exemption u/s. 10(23C)(iiiab) of the Act. 8. It would not be out of place to mention here that even after the survey and search operation, the Government grants are still received by the Institution which establishes the fact that even in the eyes of the Government, the institution is solely existing for imparting education. We, therefore, direct the AO to grant exemption u/s. 10(23C)(iiiab) of the Act. 9. Continuing further and for the same of completene....
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.... the total donation of ` 30.5 lakhs a sum of ` 1.98 lakhs was received from the students. A.O has not doubted the fact that the assessee is imparting education and as per the settled law of taxation imparting education is covered by the word charitable activity. If income earned by a trust is utilised for charitable purposes it cannot be held that trust is carrying out business. FAA has rightly pointed out that there is no evidence on record that profit earned by the assessee-trust were not utilised by it for non charitable purposes. It is also a fact that there is no instance of violation of provisions of sections 11-13 of the Act by the trust. In our opinion principles enumerated by the Hon'ble Supreme Court in the cases of Gujarat Maritime Board and Surat City Gymkhana are applicable to the case under consideration. Therefore, we are of the opinion that assesseetrust was carrying out charitable activities and was entitled to exemption. Therefore, confirming the order of the FAA we decide Ground No. 1 against the A.O." 13. Although the aforementioned decisions are given in respect of granting registration u/s. 12A of the Act but nevertheless the ratio in all these decisions re....
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....ore, we do not find much weight in denying the benefits for such activity. We hold in favour of the assessee and against the Revenue. 17. The Ld. Departmental Representative has filed a book exhibiting various judicial decisions but have referred to only 2 decisions namely Vodithala Education Society 20 SOT 353 and Travancore Education Society in ITA No. 194 of 2014. The decision of Vodithala Education Society has been considered by the Tribunal which have been referred by us at para-12 above and in Travancore Education Society's case also does not help the Revenue inasmuch as it relates to the rejection of application u/s. 12AA of the Act wherein the rejection was upheld on account of the fact that the trustees shared amongst themselves the admission collected whereas in the case in hand as mentioned elsewhere, there is not even a whisper of shares of the funds by the members of the society. 18. In so far as the issue relating to the fund transferred for sinking fund/platinum jubilee SIES-EAT fund is concerned, we find that this issue does not emanate from the search proceedings and therefore squarely covered in favour of the assessee and against the Revenue by the decision ....