TaxTMI 
TaxTMI 
2017 (8) TMI 316
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....cts, and in the circumstances of the case. (2) The Commissioner of Income-tax (Appeals) erred in sustaining the assessment in the status of association of person overlooking the proceedings initiated under section 12A(1)(a) of the Act as well as the pending proceedings under section 10(23C) of the Act without assigning proper reasons and justification. (3) The Commissioner of Income-tax (Appeals) erred in sustaining the assessment of Rs. 1,01,81,782 in the computation of taxable total income without assigning proper reasons and justification. (4) The Commissioner of Income-tax (Appeals) failed to appreciate that there was no proper opportunity given before the passing of the impugned order and any order passed in violation of the principles of natural justice would be nullity in law." 3. Facts apropos are that the assessee, a trust evidenced by a trust deed dated September 9, 1992 is engaged in running educational institutions. For the impugned assessment year, it had claimed exemption under section 10(23C) of the Income-tax Act, 1961 (in short "the Act"). The assessee was running the following institutions : 1. PKD Matric Higher Secondary Sch....
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....l was not obtained from the competent authority despite receipts exceeding Rs. 1 crore. The claim of exemption was denied. The total income was fixed at Rs. 1,01,81,782 and tax levied thereon. 5. Aggrieved, the assessee moved in appeal before the Commissioner of Income-tax (Appeals). The argument of the assessee was that it had filed an application on November 16, 2005 for the assessment year 2005-06 and on October 25, 2006 for the assessment year 2006-07 for approval under section 10(23C)(vi) of the Act. According to the assessee, since the said applications were still to be processed by the Department, tax exemption claimed could not be denied. However, the Commissioner of Income-tax (Appeals) was not impressed by the above argument. According to him, though the assessee had filed an application for approval under section 10(23C)(vi) of the Act on October 25, 2006 for the assessment year 2006- 07, it had not followed up on such application. The learned Commissioner of Income-tax (Appeals) also noted that the assessee never sought registration under section 12A of the Act for claiming exemption under section 11 of the Act as well. Further, as per the learned Commissioner of Inc....
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.... required under section 10(23C)(vi) of the Act. It may be true that the assessee had moved an application for such approval for the assessment year 2006-07 on October 25, 2006 and the application was still to be disposed of. This in our opinion, would not mean that for the impugned assessment year, the assessee was having a valid approval under the said section for claiming exemption. Further the learned Commissioner of Income-tax (Appeals) has specifically noted that the assessee's application for approval under section 10(23C)(vi) of the Act stood rejected by the Chief Commissioner of Income-tax by his order dated June 24, 2013. As to the claim of the assessee that registration under section 12AA of the Act granted to it by the Chief Commissioner of Income-tax on July 28, 2015 was relevant for the impugned assessment year also, it is required to have a look at sub-section (2) of section 12A of the Act, which has been relied on by the learned authorised representative : "12A.(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the asses....
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....ing before the Assessing Officer" does not give any room for the type of interpretation canvassed by the learned authorised representative. Appeal proceeding cannot be equated as proceeding pending before the Assessing Officer. While interpreting a taxing statute, courts cannot travel beyond the words therein if its meaning is plain and unambiguous. Thus we are not inclined to accept the line of argument taken by learned authorised representative. 9. However, a question does remain as to whether section 10(23C) of the Act has been correctly applied in the case of the assessee. At this juncture, it is required to have a careful reading of section 10(23C) of the Act. The relevant clauses under which the income of an educational institution can be treated as exempt under section 10(23C) of the Act are given in sub- clauses (iiiad) and (vi). Both these sub-clauses are reproduced hereunder : "10.(23C) any income received by any person on behalf of-. . . (iiiad) any university or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not ex....
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....ssment year 2010-11. The assessee was denied the exemption under section 10(23C) of the Act as well as the exemption under section 11 of the Act. The income and receipts of the assessee from various institutions run by it, for the relevant previous year, were as under : Income (Rs.) Receipts (Rs.) 1. P. K. D. Matriculation School 83,78,259 3,64,11,087 2. Hostel Division 32,15,580 86,06,721 3. P. K. D. Pre-School 3,69,984 9,47,787 4. Krishnasamy Matriculation School - 1,43,198 1,55,126 5. P. K. D. College of Education 8,74,255 44,38,485 6. P. K. D. T. Ed. College 11,31,780 32,02,058 7. Disha School - 13,59,563 1,51,17,971 1,24,67,097 6,88,79,235 We are of the opinion that the directions given by us for the assessment year 2010-11 at paragraph 10 above will squarely applicable here also. Similar directions are given for the assessment year 2012-13 also. 14. The appeal of the assessee is treated as partly allowed for statistical purposes. 15. Now, we take up appeal of the assessee in I. T. A. No.1819/Mds/2016. 16. In this appeal, the....