TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 1113
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....ee u/s. 10(23C)(iiiad)". Ground No.3. The learned CIT(A) erred in fact and in law in directing the A.O to delete the addition made in respect of the building fund and infrastructure development fund. Ground No.4. The learned CIT(A) erred in fact and in law in directing the A.O to delete the addition made in respect of donations made to non-approved institutions u/s.12A of the Act. Hence, the Order of CIT(A)-VI, Bangalore is not acceptable in principle and since the tax effect involved in this case exceeds the monetary limit prescribed in the CBDT Instruction No.3/2011, further appeal to Hon .ITAT is suggested in view of the above." 3. The assessee is a society registered under the Karnataka Societies Registration Act, 1960 on 30.9.1974. For the A.Y. 2008-09, the assessee filed return of income in the status of Association of Juridical Person [AJP] declaring NIL income and claiming exemption u/s. 11 of the Act of Rs. 13,32,75,393. The assessee claimed that it was running as many as 39 educational institutions in Bangalore. The further claim of the assessee was that the annual receipts of each of the educational institutions have to be taken separately without aggregation for ....
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.... 2005-06, by order dated 11.7.2008, the Tribunal had held that each of the 39 educational institutions run by the assessee and its receipts have to be considered separately and not by aggregating all the receipts for the purpose of allowing exemption u/s.10(23)(iiiad) of the Act. The Tribunal therefore held that wherever the total receipts of each of the educational institutions run by the assessee is less than Rs.One crore, then the assessee should be given the benefit of exemption u/s. 10(23C)(iiiad) of the Act. The AO, however, held as follows:- "4.2 Following the above CIT Appeal's decision for A.Y.2006-07 and on the facts of the assessee's case as detailed in the assessment order for the A.Y.2006-07 & 2007-08, it is held that: i) M/s Children's Education Society is the only "person" to which the exemption u/s 10(23C)(iiiad) can be applied; ii) There cannot be a selective application of section l0(23C)(iiiad) to each educational institution as they are not separate assessee and each separate institution run by the Society cannot fall under any legal definition under the I.T. Act and there is only one "person" i.e., the Society to which the I.T. Act would apply. ii....
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.... the AO determined the total income of the assessee as follows:- Excess of income over expenditure of the Society as returned without considering the surplus of Twelve Educational institution whose aggregate annual receipts are claimed to be less than Rs. 1 crore for the reasons as discussed above 6,71,03,352 Add: Building fund added by the assessee to the net surplus fund before claiming exemption u/s 11 10,31,785 Add: Infrastructure Development fund added by the assessee to the net surplus fund before claiming exemption u/s 11 6,51,40,255 Add: Donation disallowed to the extent not made to the approved institutions as discussed above 2,80,301 Total Surplus of the Society 13,35,55,693 Less: Exemption u/s 11 claimed is not allowed for the reasons as discussed above since registration u/s 12A has not been granted to the assessee NIL Total Income 13,35,55,693 14. Aggrieved by the order of the AO, the assessee filed appeal before the CIT(Appeals), who held as follows:- 15. On the question of status of the assessee, following the decision of the Tribunal in assessee's own case in ITA Nos. 329 to 331/Bang/200....
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.....140 & 141/Bang/2010 dated 20.05.2010, it has been held as follows: "34. The fifth ground raised by the assessee is a ground alternate to its ground relating to exemption u/s.10(23C). The alternate ground is that the assessee has been granted registration u/s. 11 and 12. It is true that the assessee has been granted registration u/s. 12A at the intervention of the Tribunal on the basis of the finding that the assessee is a charitable institution. But as the issue of charitable institution has been adjudicated in favour of the assessee under the provisions of law contained in section 10(23C)(iiiad), this alternate ground does not survive. Accordingly, it is technically rejected." 2.5.2 Respectfully following the decision of the Hon'ble ITAT, I hold that the above alternate ground does not survive in as much as, the main relief claimed with regard to exemption under section l0(23C)(iiiad) of the Act has been granted. Accordingly, this ground is technically rejected." 15.4 With regard to receipts on account of building funds and infrastructure development fund collected by the assessee, the CIT(A) found that the Tribunal had accepted the plea of the assessee in its own case....
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....ot called for. Even otherwise the fundamental principle with regard to taxation of charitable institution is donation for an equally charitable purpose is application of fund for charitable purposes. Accordingly, we delete the partial disallowance confirmed by the CIT(A) in this regard and allow this ground raised by the assessee.:" 2.7.3 Respectfully following the decision of the Hon'ble ITAT in the appellant's own case, the addition made of Rs. 2,80,301/- is hereby deleted. The ground raised is allowed." 16. Aggrieved by the reliefs given by CIT(A), the Revenue has preferred appeal before the Tribunal. Aggrieved by the order of the CIT(Appeals) in not annulling the order of assessment on the ground that when a return is filed in the status of AJP, the AO cannot change the status to AOP and frame the assessment, the Assessee has filed appeal before the Tribunal. According to the assessee, the return was filed in the status of AJP and proceedings taken on that return should have been dropped and fresh proceedings should have been initiated against the assessee in the status of AOP and thereafter assessment framed. In this regard, the assessee placed reliance on the following de....
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....Hon'ble High Court of Karnataka supra, this issue has to be remanded to the AO for fresh consideration. It is ordered accordingly. Thus, ground No.3 raised by the revenue is allowed for statistical purposes. 20. As far as the donations made by the assessee are concerned, we find that the CIT(Appeals) has relied upon on the order of the Tribunal while allowing relief to the assessee. The fact that the revenue has not accepted the said order cannot be a ground to make the impugned disallowance. Consequently, we dismiss grounds No.1, 2 & 4 raised by the revenue. 21. In the result, the appeal by the revenue is partly allowed for statistical purposes. ITA 1657/Bang/2012 22. As far as the appeal of the assessee is concerned, we find that the question, as to whether the assessment order should be annulled because of adopting the status different from the one declared by the assessee in the return of income filed, has already been considered and held against the assessee by this Tribunal, as has been noticed by the CIT(A) in para 2.3.2 of his order, which reads as follows:- "2.3.2 The above ground of appeal is with regard to the assessment of the appellant in the status of "AOP....