TaxTMI 
TaxTMI 
2017 (9) TMI 1461
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....ee itself) ranging from Rs. 30,000 to Rs. 12,00,000. In order to verify the assessee's claim that the donations received from the parents or relatives of the students were voluntary, notices u/s 133(6) were issued randomly to some of the parents. Responses were received in some cases and on examination of the said responses, the AO observed that some of the persons submitted that the donations were given voluntarily whereas in five cases for the A.Y 2011-12, the parties categorically stated that the donation amount was given as a prerequisite for securing admission of their wards in the engineering colleges run by the assessee society. Similar statements were given for the A.Y 2010-11 as well. Taking the same into consideration, the AO observed that the assessee's claim that the donations are entirely voluntary is not correct. Further, taking note of the decision of the Hon'ble Supreme Court in the case of TMA Pai Foundation & Others vs. State of Karnataka & Ors reported in (2002) 8 SCC 481, the AO held that the capitation fee charged over and above the prescribed fee, termed as a donation or building fund or development fund or by any other name, is not permissible and that th....
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....f the assets on which the depreciation has been claimed had already been claimed as application of income, the depreciation on such assets is not allowable. She therefore, upheld the depreciation disallowed by the AO. Aggrieved, the assessee is in appeal against the disallowance of the depreciation whereas the Revenue is in appeal against the relief granted by the CIT (A) allowing the claim of exemption u/s 11 of the Act. 7. The learned DR supported the orders of the AO and submitted that the assessee has collected donations from the parents and relatives of the students at the time of giving admissions, as is evident from the statements of the parents and therefore, the donations cannot be treated to be voluntary and it is in clear violation of the judgment of the Hon'ble Supreme Court in the case of TMA Pai Foundation. He also submitted that only few of the parents have subsequently withdrawn their statements but that does not absolve the assessee from its burden of proving that the donations are voluntary. Thus, according to the learned DR, the order of the CIT (A) granting relief to the assessee is erroneous. 8. The learned Counsel for the assessee, on the other hand, sub....
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....ent fee for different courses. Therefore, if the institution has fixed different sums for different courses, they are perfectly entitled to do so but they must notify the same. To our understanding, the requirement of notifying the fee is to ensure transparency and accountability and to prevent misuse of funds. In the case before us, it is the stand of the assessee that these are voluntary contributions not connected to the admission of students. However, from the statements of the parents before the AO when enquired initially, the contributions are stated to be linked to the admission of students, even though they have filed affidavits subsequently denying the same. We also find that the institution has received the fund through D.Ds/ cheques and has issued receipts for the same and has also accounted for the same. Therefore, there is transparency in accounting the receipts. The Hon'ble Apex Court has further held that the private unaided institutions are entitled to collect funds for the maintenance and improvement of the institution. However, the objective of the collection of funds must be the imparting of standard education to the public at large. In the case before us, th....
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....ment the judgment of the apex court in the case of T.M.A. Pai Foundation (supra) by framing the rules and regulations for admission of students into professional colleges. As per these rules, the fee prescribed per student admitted to an engineering college under the management quota was up to a sum of Rs. 75,000/ per annum. There is no allegation that assessee has collected any fee in excess of such prescribed amount. In addition to the above fee notified, the assessee has also collected the donations not only from some parents/ relatives bit also from members of Society. Whether such collection of donation is prohibited by the Andhra Pradesh Educational Institutions (Regulation of Admission and Prohibition of Capitation Fee) Act, 1983 is to be examined. The reliance of the Revenue has been only on the rules framed vide G.O.Ms.33 (supra) in which there is no mention of donations and contributions to the educational institutions. The rules have prescribed only the fee to be collected from the students and have prohibited the collection of the fee of any kind other than those mentioned in the rules. But Sec.6 of the Andhra Pradesh Educational Institutions (Regulation of Admission an....
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....d above the prescribed fee from students and in such circumstances, it was held that it was to be classified as capitation fee and therefore, not eligible for exemption u/s 11 of the Act. In the case before us, it is seen that the assessee has received donations from various persons and more than 50% of the donations are from people who are not at all concerned with the admission of the students whereas the AO has disallowed the entire donations. It is also seen that all the donations are recorded in the books of account of the assessee and most of the parents and relatives of the students also have stated that the donations are voluntary. Only a few parents of the students have stated that the donations are connected with the admissions and some of these statements have also been retracted subsequently. There is also no finding that the assessee has misused or not used the donations for any other purpose than the purpose for which they have been given i.e. for educational purpose. In such circumstances, we are of the opinion that the exemption u/s 11 of the Act cannot be denied in toto to the assessee with regard to the voluntary donations received by the assessee. Only such donat....