TaxTMI 
TaxTMI 
2016 (7) TMI 1369
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....red in confirming the order of ht AO in making an addition of Rs. 9,00,684/- 3. That the ld.CIT(A) erred in confirming the order of the AO in making an addition of Rs. 14,58,500/-. 3. Brief facts of the case that the assessee is a public charitable trust and registered with Charity Commissioner, Bharuch since 1977. It is holding registration no.B-839. The assessee has been getting its accounts audited under the Bombay Public Trust Act, 1950. It has also been registered under section 12A and 12AA of the Income Tax Act vide letter no./Baroda/CITIII/ Tak/12(K)/110 (76-S)/2012-13 dated 28.6.2013. During the accounting year for the Asstt.Year 2010-11, the assessee was not enjoying registration under section 12A of the Income Tax Act.....
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....School Building Fund. Since the assessee was not registered under section 12A, thus, according to the AO, the assessee cannot claim this amount. He accordingly made addition of Rs. 14,58,500/-. The AO has determined total taxable income of the assessee at Rs. 23,59,184/- as against NIL income disclosed by the assessee. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. Before me, the ld.counsel for the assessee has contended that in various authoritative judgments at the end of the Hon'ble High Courts, it has been held that a trust or society might have various objects in their memorandum of association, but in if any particular year they are existing solely for the purpose of education, then, exemption under section 10....
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....entions and gone through the record. I have perused computation of income available at page no.23 of the paper book. This computation along with revised computation for the purpose of section 10(23C)(iiiad) has been reproduced by the authorized representatives of the assessee in his submissions filed to the AO. It is pertinent to take note of this computation. It reads as under: "Income from other sources: Rent Rs.12,305 Bank Interest Rs.519,568 Fees from Schools Rs.4,479,685/- Interest from school Rs.118,178/- Rs.5,245,736 Less: Establishment Expenses Rs.31,650/- 5,214,087 Less: Expenditure on the objects of the trust School Expenses ....
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....i) cannot be denied merely on the ground that in the object clause the assessee has other objects also than the education. The Hon'ble High Court has also eliminated the apprehension of the Revenue that in future the assessee shall pursue such non-educational objects. According to the Hon'ble High Court there are various safeguards to deal with that situation. The discussion made by the Hon'ble High Court in para-23 of the judgment is worth to note. 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....
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.... existing solely for educational purpose." 8. Similarly, the Karnataka High Court has considered an identical issue in the case of Geetanjali Education Society (surpa). According to the Hon'ble High Court, if it is established that the assessee has not carried out any other activities except education, then, the benefit of section 10(23C) cannot be denied. The discussion made by the Hon'ble Karnataka High Court para 11 and 13 is worth to note. They read as under: "11. From bare perusal of the observations made by the Supreme Court in American Hotel's case, what appears to us, is that the Assessing Officer while considering the case, such as one in hand, has to closely analyse activities of the Institute, objects of the Insti....
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....al activity the assessee did not/do not carry on any other activity is the fact, which is not in dispute. In other words, though the activities as reflected in Clauses 3(b) and 3(h), may constitute the purpose, other than the educational purpose, but, during the relevant assessment year, it is not the case of the revenue nor is there any material to show, that the society was ginning any activities other than the educational activity. In this view of the matter, we are of the considered opinion that the view taken by the Tribunal is not correct and deserves to be set aside. There are adequate safeguards that if the activities other than educational activities are undertaken by the society, exemption granted can be withdrawn. Merely, because....