AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1369
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....tion 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. It has filed its return of income on 9.12.2010 declaring total....
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....er 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(23C) should not be denied to such societies. In order to buttres....
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....f 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 Rs.4,256,507/- Trist Expenses Rs.56,895/- Rs.4,313,402/- Rs.900,685/- Less: Statutory accumulation @ 15% permitted u/s.11....
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....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 C.P. Vidya Niketan Inter College. At present the society does not have any activity other than running and maintaining educational institutions. The other objects and purposes in the 'Smriti Patra' may, if such objects are undertaken, may constit....
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....arried 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 Institute, its sources of income and utilization. In that case, the Supreme Court considered its activities as reflected in the paragraph quoted above and therefore, while remanding the matter, made it clear that the appellant had fulfilled the threshold pre-condition ....
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.... 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 there exists object, which is not related to educational activities, in our opinion, is not sufficient to deny the exemption/benefit of Section 10(23C)(iiiad) of the Act. In short, in the absence of any allegation or material against the society showing that they are in....