TaxTMI 
TaxTMI 
2016 (1) TMI 1022
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....IC. 4. Because C1T(A) has erred on facts and in law in confirming the determination of total income of Rs. 15,36,181/- and tax liabilities of Rs,631,330/- 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 had in law and be quashed. 6. Because the CIT(A) has failed to appreciate that the assessee society was already enjoying exemption u/s.10(23B) of the Act upto Assit. Year 2007-08 and on expiry of the period had already applied for renewal on 14.09.2009 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 CLT(A) should ought to have allowed the relief as claimed by exempting the entire income us 10(23B) of the Act 1961." 2. During the course of hearing, Ld. counsel for the assessee has invited our attention that impugned issues involved in this appeal are squarely covered by the order of the Tr....
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....wal of the approval and forward copy of the order to the concerned institution. Meaning thereby, a specific procedure has been laid down for framing an assessment in the case of an institution referred to in clause 10(23B) of the Act while granting exemption therein. For the sake of reference, we extract the relevant provisions as under:- "SECTION 10(23B): (23B) any income of an institution constituted as a public charitable trust or registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act, in force in any part of India, and existing solely for the development of khadi or village industries or both, and not for purposes of profit, to the extent such income is attributable to the business of production, sale, or marketing, of khadi or products of village industries: Provided that -- (i) the institution applies its income, or accumulates it for application solely for the development of khadi or village industries or both ; and (ii) the institution is, for the time being, approved for the purpose of this clause by the Khadi and Village Industries Commission: Provided further that the Com....
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....pect 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 or Commission or infrastructure debt fund is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1). SECTION 143(3): (3) On the day specified in the notice,- (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determi....
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....nstitution 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 public charitable trust or registered under the Societies Registration Act or under any law corresponding to that Act enforce and exists solely for development of Khadi or Village Industries or both and not for the purpose of profit, we find that such institution can claim exemption of such income attributable to the business or production, sale or marketing of Khadi or products of Village Industries, if it obtains approval from the Khadi and Village Industries Commission. 10. As per proviso below sub-section (23B) of section 10 of the Act, the Commission shall not grant approval for more than three assessment years beginning with the assessment year next following the financial year in which it is granted. As per third proviso, the approval once granted can also be withdrawn if the Commission is satisfied that the institution....
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....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 assessment year, the benefit of exemption cannot be granted to the assessee. The contention of the ld. counsel for the assessee that once exemption certificate is granted, the benefit of exemption cannot be denied without intimating the Central Government or the prescribed authority with regard to the contravention of the provisions of clause (23B) of section 10 of the Act cannot be accepted, as this condition is required to be complied with by the Assessing Officer where the assessee is having a valid exemption certificate for a particular assessment year. If the assessee does not have exemption certificate for a particular assessment year, the benefit of exemption for that year cannot be granted to the assessee. 12. Turning to the facts of the case, it is an admitted fact that during the course of assessment p....