TaxTMI 
TaxTMI 
2017 (10) TMI 828
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.... 12AA (3) and that too with effect from 01-04-2007 by observing that activities of the society are not in the nature of charitable and has further erred in relying upon the assessment order passed u/s 143(3) in assessee's own case for AY 2008-09. 2. That Ld. CIT has erred in law and on facts in cancelling the registration u/s 12A by making the following observations:- (a) In the assessment order passed u/s 143(3), it has been established that income of the assessee society is not eligible for exemption u/ 11 & 12 of the IT Act, 1961. (b) Income of the assessee is from fee and other related levies etc. which cannot constitute the income falling within the ambit of classes as defined in section 11 & 12. (c) The receipts of the society in the form of fee and other charges do not qualify for the exemption u/s 11 & 12 of the IT Act, 1961. (d) The assessee's activities are commercial in nature and there is no element of charity. 3. That in any view of the matter and in any case, action of Ld CIT in canceling the registration under section 12AA is bad in law and against the facts and circumstances of the case and is contrary to the pri....
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.... that as the exemption application of the society under section 10 (23C)(vi) has been rejected on 31/10/ 2010, Therefore, the surplus shown by the Society of Rs. 5 79743/- is neither eligible for exemption under section 11 and 12 or under section 10 (23C) of the act. He made several other addition for that particular year. Proceedings before Ld CIT 5. In view of the above assessment order, the Ld. Commissioner of income tax issued show cause notice to the assessee that why it's registration under section 12 A of the income tax act, 1961 may not be cancelled. In response to this notice the assessee filed certain written submissions on various dates and relied upon certain decisions. However, the Ld. CIT rejected the contentions of the assessee and held that as per order under section 143 (3) of the income tax act, 1961 passed by the assessing officer for assessment year 2008 - 09, it has been established that the income of the assessee society is not eligible or exemption under section 11 and 12 of the income tax act. The main reasons given by him in his order, are as under:- a. that the income derived by the assessee is from fees collected from the students and is not i....
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....efore it is apparent that assessee is not earning profit and it does not exist for the same. He further referred to the decision of the coordinate bench in case of the assessee for assessment year 2005 - 06 and 2008 - 09 dated 27/11/2013 wherein the issue was considered and the coordinate bench has held that the approach of Department regarding charging of the fees holding against the assessee was not approved. Therefore he submitted that the assessee trust, society should have been granted and continued to have been granted the registration under section 12 AA of the income tax act. Arguments of the revenue 8. The Ld. departmental representative relied upon the order of the Ld. CIT. Reason and Decision 9. We have carefully considered the rival contentions and carefully perused the order of the Ld. CIT passed under section 12 A A cancelling the registration of the trust w.e.f. 01/04/2007. Hon'ble Supreme Court recently in Queen's education society versus CIT 372 ITR 699, has held that where a surplus is made by an educational institute which is also ploughed back for educational purpose, the said institution was to be held existed solely for educational purposes and not for t....
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....rust i.e. imparting education. The trust was initially running the school in a rented building and the surplus, i.e. the excess of the receipts over expenditure. In the year under appeal (and in the earlier appeals) has enabled the appellant to acquire its own property, acquire computers, library books, sports equipments etc. for the benefit of the students. And more importantly the members of the society have not utilized any part of the surplus for their own benefit. The AO wrongly interpreted the resultant surplus as the main objective of the assessee trust. As held above, profit is only incidental to the main object of spreading education. If there is no surplus out of the difference between receipts and outgoings, the trust will not be able to achieve the objectives. Any education institution cannot be run in rented premises for all the times and without necessary equipment and without paying to the staff engaged in imparting education. The assessee is not getting any financial aid/assistance from the Government or other philanthropic agency and, therefore, to achieve the objective, it has to raise its own funds. But such surplus would not come within the ambit of den....
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....ociety or body is occupying and using the land and building for a charitable purpose within the meaning of sub-section (4)? (ii) What is the meaning of the expression "supported wholly or in part by voluntary contribution"? (iii) Whether any trade or business is carried on in the premises within the meaning of sub-section (5)?' 17. In answering question one, the Court held that School Education would only come within an exemption if it involved public benefit. Having so held, the Court stated: '78. The rulings arising out of Income Tax Act may not be of great help because in the Income Tax Act "charitable purpose" includes the relief of the poor, education, medical relief and the advancement of any other object of general public utility. The advancement of any other object of general public utility is not found under the Delhi Municipal Corporation Act. In other words, the definition is narrower in scope. This is our answer to question No. 1.' 18. Secondly, the extracted portion from the said judgment in the judgment of the Uttarakhand High Court concerned itself with question two, namely, whether the educational society is s....
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....ourt in the context of benefit claimed under Section 11 of the Act held: "9. In the present case, the assessee is not claiming any benefit under Section 11(2) as it cannot; because in respect of this assessment year, the assessee has not complied with the conditions laid down in Section 11(2). The assessee, however, is entitled to claim the benefit of Section 11(1)(a). In the present case, the assessee has applied Rs. 8 lakhs for charitable purposes in India by purchasing a building which is to be utilised as a hospital. This income, therefore, is entitled to an exemption under Section 11(1). In addition, under Section 11(1)(a), the assessee can accumulate 25% of its total income pertaining to the relevant assessment year and claim exemption in respect thereof. Section 11(1)(a) does not require investment of this limited accumulation in government securities. The balance income of Rs. 1,64,210.03 constitutes less than 25% of the income for Assessment Year 1970-71. Therefore, the assessee is entitled to accumulate this income and claim exemption from income tax under Section 11(1)(a)." We set aside the judgment of the Uttarakhand High Court dated 24th September, 20....
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.... section 12A A of the income tax act. We also clarify here that coordinate bench has set aside the assessment order passed by the Ld. assessing officer for assessment year 2005 - 06 and 2008 - 09 to the file of the Ld. assessing officer with certain directions which may Jaycees Public School, Vs. ITO, be carried out considering the decision of the Hon'ble Supreme Court stated above. In the result ITA No. 4554/del/2012 filed by the assessee is allowed. ITA no 4555 / Del/2012 for AY 2006-07 14. This appeal is filed by the assessee against the order of the ld CIT(A)-II, Dehradun dated 02.07.2012 for the Assessment Year 2006-07. 15. The assessee has raised the following grounds of appeal in ITA No. 4555/Del/2012 for Assessment Year 2006-07 :- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order and that too without complying the mandatory conditions of section 147 to 151 of the Income Tax Act, 1961 and reopening of the case and framing the impugned assessment order is bad in law and beyond the jurisdiction of the Ld. A.O. 2. That ....
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.... - 06 and the coordinate bench has passed order for assessment year 2005 - 06 and 2008 - 09 setting aside the issue to the file of the assessing officer. The Ld. departmental representative Lee supported the orders of the lower authorities. 19. We have carefully considered the rival contentions and also perused the orders of the lower authorities. So far as the issue of reopening of the assessment is concerned, no arguments were advanced before us by the Ld. authorized representative. Therefore ground No. 1 of the appeal of the assessee is dismissed. 20. Regarding the ground No. 2 and ground No. 3 of the appeal of the assessee. We have carefully perused the order of the coordinate bench where the identical issue was considered in paragraph No. 2, where the salary was disallowed. On the ground that employees Provident fund has not been paid as well as the denial of deduction under section 11 and 12 of the income tax act were considered. The coordinate bench has set aside the whole issue back to the file of the Ld. assessing officer vide para No. 3 of that order. In view of this we also set aside ground No. 2 and 3 of the appeal of the assessee back to the file of the Ld. asses....