2017 (6) TMI 10

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.... income. The assessee is a society running Col. Satsangi Memorial School, Satbari, Mehrauli, New Delhi and two other educational institutions at Nawarangpur and Bhiwadi. There was a search and seizure operation u/s 132 of the Income Tax, 1961 on 15.01.1999 in the above case. Consequent to the search, the cases of the group were centralized with the then DCIT Central Circle-11, New Delhi. The regular assessment for assessment year 1999-2000 was made on 27.03.2002 on a total income of Rs. 1,57,48,783/-. In this assessment, the claim of the assessee for exemption u/s 10(23C)(vi) was denied. Against the assessment order, the assessee went in appeal and the CIT(A)-1 in Appeal No. 113/02-03, vide his order dated 10.07.2003, partially allowed the ....

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....t a gross total income of Rs. 1,57,48,783/-. 5. Aggrieved, the assessee preferred an appeal before the ld. CIT(A) who partly allowed the assessee's appeal but upheld the denial of benefit u/s 11 and 12 of the Act and the consequent action of the Assessing Officer in bringing to tax the related income. Now, the assessee has approached the ITAT and has raised the following grounds of appeal:- " 1. That the Commissioner of Income Tax (Appeals) erred on facts and in law in upholding the assessment order dated 31.12.2010, passed by the assessing officer under section 143(3) of the Act, without appreciating that the same having been passed without affording adequate opportunity of being heard to the appellant, is violative of the prin....

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.... 5.1 That the Commissioner of Income Tax (Appeals) erred on facts and in law in charging interest under section 220(2) on the ground that the same is not appealable under section 246 of the Act, that too, without affording opportunity of being heard to the appellant. 6. That the Commissioner of Income Tax (Appeals) erred on facts and in law in upholding the action of the assessing officer in levying interests under sections 234A and 234B of the Act. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal before or at the time of hearing." 6. At the outset, the ld. AR submitted that the Hon'ble Delhi High Court in a writ petition filed by the assessee in Director of Income Tax (E....

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....see has been running three schools that are affiliated to CBSE and admittedly, this would not have been permissible in case the assessee did not exist solely for educational purposes and/or if the assessee was found to be pursuing the profit motive. The Hon'ble High Court also observed that the surpluses generated by the assessee were necessarily to be applied towards its charitable objects and, therefore, in view of the aforesaid, exemption cannot be denied by the assessee only for the reason that it had been generating surpluses. In para 73, the Hon'ble Delhi High Court has further observed that the activities of the assessee must be viewed in the overall perspective of its nature and its principal object and it was not disputed t....