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2016 (12) TMI 548
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....being not maintainable. At that point of time, no appeal was provided against order passed under section 10(23)(c)(vi) of the Income Tax Act. Therefore, the assessee has filed Special Civil Application No.10233 of 2015 before the Hon'ble Gujarat High Court. This application was filed on 9.6.2015 i.e. immediately after withdrawal of the appeal from the Tribunal. During the pendency of this appeal, there has been amendment in the Income Tax Act whereby clause (f) to Section 253(1) has been added. By virtue of this amendment an appeal has been provided before the Tribunal against the order of the prescribed authority passed under section 10(23)(c)(vi) of the Act. The assessee has withdrawn SCA from the Hon'ble High Court and filed present appeal before the Tribunal on 16.10.2015. On the strength of these details, it has been pleaded that appeal is not time barred, rather, there is a procedural delay. After going through the record, we find that the assessee was always vigilant. It has wrongly availed remedy of appeal before the Tribunal in 2014, but after disposal of the appeal, being not maintainable, it went to Hon'ble High Court by way of SCA. All these steps have been taken within....
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....t. It has never been acted upon by the assessee. The Hon'ble Supreme Court in the case of Dharamposhanam (supra) has also observed that if there is an evidence, pointing out to the conclusion that assessee has not carried out any other activity, as mentioned in ancillary object, but exclusively carried out agriculture activity, then status of the assessee will be decided by ignoring the existence of such ancillary objects. He emphasised that the ld.CIT(A) has made reference to few lines from the judgment of the Hon'ble supreme Court and used them out of context. He took us through complete paragraph which read as under: "It has been urged on behalf of the appellant that what should be taken into consideration is the activity actually conducted by the assessee, and not what is open to it under the provisions of its Memorandum of Association. We do not agree. Wheth er a trust is for charitable purposes falls to be determined by reference to all the objects for which the trust has been brought into existence. See Tennent Plays, Ltd. v. Commissioner of Inland Revenue(3) and Incorporated Council of Law Reporting for England and Wales v. Attorney- General and Commissioners of Inland R....
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.... CCIT and therefore, it is not amenable to appeal before the Tribunal. He made reference to the decision of the Hon'ble High Court of Orissa in the case of Orissa Trust of Technical Educational Vs. CCIT, 178 TAXMAN 363 (Ori.). He placed on record copy of the Hon'ble High Court. 7. We have duly considered rival contentions and gone through the record carefully. Section 253 of the Income Tax Act provides a right to the assessee to file appeal before the Tribunal against the orders mentioned therein. It is pertinent to take note of this section. It reads as under: "253. (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) ....... ........... ........... [(f) an order passed by the prescribed authority under sub-clause (vi) or sub-clause (via) of clause (23C) of section 10] 8. In the appeal to the Tribunal under section 253(1) of the Act, any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such orders. 9. Order passed by the prescribed authority under sub-clause (vi) and subclause (via) of clause (23C) of Section 10. A....
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.... manage any public Institution of the village." 11. The ld.prescribed authority was of the opinion that under clause (b) and (c), the assessee could entertain any other objects than education. Therefore, the assessee is not entitled for approval under section 10(23C)(vi) of the Act. This situation has been considered in the judgement relied upon by the ld.counsel for the assessee. It is pertinent to make reference to the observations of the Hon'ble Allahbad High Court in the case of C.P. Vidya Niketan Inter College Shikshan Society Vs. UOI, 40 taxmann.com 76. It reads as under: "23. In the present case the petitioner society is registered charitable society with the Registrar of Societies and is also registered under Section 12A with its objects of establishing, running and maintaining educational institutions. It has a school by the name of C.P. Vidya Niketan Inter College. At present the society does not have any activity other than running and maintaining educational institutions. The other objects and purposes in the 'Smriti Patra' may, if such objects are undertaken, may constitute such purpose, to be other than educational purpose, but at present it cannot be sa....
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.... 9 of the writ petition that the hearing proceeded on the same day on 27.5.2011, when the petitioner was required to produce the audit report under Rule 16CC in Form 10BB, and the petitioner was granted time to furnish the same within three days, has not been specifically denied in the counter affidavit. The reply is rather argumentative. We also find that there was no hurry to close the enquiry in as much as the rejection of the application will visit serious consequence on the petitioner in as much as having exceeded the aggregate receipts over and above Rupees One crore, the income of the society in the absence of the exemption under Section 10 (23C) (vi) would not qualify for exemption." 12. Similarly, the Hon'ble Allahabad High Court has again considered in the case of CIT Vs. Hardayal Charitable & Education Trust, 46 taxmann.com 16 (All). The observation of the Hon'ble High Court reads asunder: "6. Before the Tribunal, it was sought to be asserted on behalf of the Department that the assessee does not exist solely for educational purposes since in its Memorandum, it is permitted to follow, what the Tribunal described, certain generalised objects which go beyond educatio....
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....ssee for registration under section 12AA. This view was, however, as noted earlier, reversed in a judgment of Division Bench of this Court dated 15 March 2013 against which no challenge has been preferred by the revenue before the Supreme Court. But that apart, it must be noted that the assessee is a trust and not a Private Limited Company. The trust admittedly does not carry on any other business save and except conducting education. 9. Finally, it may be necessary to note that the entitlement of the assessee to the exemption under section 10(23C) was dealt with by the CIT(A). We find no reason or justification to hold that the CIT(A) ought to have remitted the proceedings before the Assessing Officer. The material to arrive at such a conclusion was before the CIT(A). The only objection which was raised on behalf of the revenue has been found to be untenable." 13. The Hon'ble Karntaka High Court has also got occasion to consider the issue. The Hon'ble Karnataka High Court has made reference to the decision of the Hon'ble Allahabad High Court in the case of C.P. Vidya Niketan Inter College Shikshan Society (supra) and concurred with this. The finding recorded by the Hon'ble K....
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....o serve the church and the nation would not mean that the educational institution not existing solely for educational purpose. This observation was made by the High Court after referring to the judgments in C P Vidya Niketan and American Hotel. The Bombay High Court in Vanita Vishram Trust -vs- Chief Commissioner of Income-Tax and another (2010) 327 ITR 121 (Bom) after considering the provision contained in Section 10(23C)(vi) of the Act observed that though the objects clause contained varied objects including the management and development of moveable and immoveable properties, the statement of fact before the Court, which was not disputed, was that the only activity carried out by the Trust ever since its inception was the conduct of educational institutions. The Institution, in that case, had a history of over 80 years during the course of which the only activity was of conducting educational institution. 13. In the present case, it is not in dispute that the society has been conducting the primary and secondary school in the State of Karnataka since 2002. Nor is there any dispute before us that save and except for conducting school, the society has carried on any other acti....