TaxTMI 
TaxTMI 
2018 (7) TMI 1548
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the society and made inquiries with respect to two different sets of Memorandum of Association/Rules. The AO also carried out verification of income and expenditure account and investment in fixed assets for the immediately preceding four assessment years and came to the conclusion that the activities of the society were not in accordance with the provisions of sections 2(15), 11, 12 and 13 of the Act. The AO opined that the activities of the society were that of 'business of education' under the garb of charitable activity. The AO determined the total taxable income at Rs. 4,39,10,330/- in the status of AOP. This entailed disallowance of corpus amounting to Rs. 3,46,46,000/-, disallowance of Rs. 90,67,879/- out of interest and disallowance of excess of income over expenditure at Rs. 1,96,455/-. 2.1 Aggrieved, the assessee approached the Ld. CIT (Appeals) who allowed the assessee's appeal and directed the AO to accept the returned income at Nil. 2.2 Now, the department has approached the ITAT and has challenged the action of the Ld. CIT (Appeals) by raising the following grounds of appeal:- "1. On the facts and in the circumstances of the case, the Ld. CIT(A) has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... granted by the CIT, Faridabad on 30.09.2004 w.e.f. 09.06.2004, and thereafter, the assessee amended its memorandum of association on 24.03.2007, but no fresh application was made for 12AA registration'. Under these circumstances, since the 12AA registration dated 30.09.2004 would not apply after 24.03.2007, and no fresh registration was obtained following the amendment, the claims under section 11-13 of the Act, for the year under consideration are not admissible at all." 3.1 The Ld. Sr. DR submitted that the registration u/s 12AA was granted to the assessee with effect from 09.06.2004 and, thereafter, the assessee had amended its Memorandum of Association on 20.04.2007 but no fresh application was made for 12AA registration. The Ld. Sr. DR submitted that since, subsequent to the amendment in the Memorandum of Association, no fresh registration was obtained, the assessee's claim u/s 11, 12 and 13 were not admissible at all. 4. In response, the Ld. Authorised Representative, at the outset, submitted that the additional ground being raised by the department did not have the necessary approval of the higher authorities and submitted that it was filed by the AO on his own behalf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....03.2016 2009-10 153A(1)(b) ALLOWED 29.03.2016 2010-11 153A(1)(b) ALLOWED 29.03.2016 2011-12 153A(1)(b) ALLOWED 29.03.2016 2012-13 153A(1)(b) ALLOWED 29.03.2016 2013-14 153A(1)(b) ALLOWED 29.03.2016 2014-15 153B(1)(b)/143(3) ALLOWED 29.03.2016 4.2 The Ld. Authorised Representative placed extensive reliance on the findings recorded by the Ld. CIT (A) while giving relief to the assessee and submitted that the Ld. CIT (A) had given relief to the assessee after due consideration of the facts and proper analysis of the settled judicial precedents, especially the judgment of the Hon'ble Apex Court in the case of Queen's Educational Society vs. CIT reported in 372 ITR 699 (SC). The Ld. Authorised Representative also submitted that in view of the principle of consistency and there being no change in the facts and circumstances of the case as available on record from assessment year 2005-06 to assessment year 2014-15, the benefit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... perusal of the order of the Ld. CIT (A) shows that the Ld. CIT (A) has noted the assessee society was granted certificate for deduction u/s 80G of the Act initially on 16.12.2004 and subsequently on 14.05.2007 thus, underlying the fact that the issue of charitable nature of activity had been duly deliberated upon by a superior authority of the AO for the period 01.04.2007 to 31.03.2010 and, thus, the same was applicable for assessment year 2007-08, that is year under reference also. The Ld. CIT (A) has also noted that the assessee was enjoying registration u/s 12AA of the Act since 2004 and the issue of genuineness of the objects of the assessee society had been considered by the AO's superior at the time of grant of registration u/s 12AA. The Ld. CIT (A) has also noted that the AO, in the present case, had no jurisdiction to either adjudicate or review the orders of the higher authorities as per the administrative decorum of propriety as envisaged in sections 116 to 119 of the Act. The Ld. CIT (A) has noted that the AO has misled herself in preceding to examine the exemption u/s 11 of the Act and has noted it as being preposterous and unwarranted specially because the AO was not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot be appropriate to allow that position to be changed in a subsequent year. Their Lordships extracted with approval the following passage from Hoystead v. Commissioner of Taxation [1926] AC 155 (PC): "Parties are not permitted to begin fresh litigations because of the view they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle." 5.4 The Hon'ble Apex Court in Radhasoami Satsang (supra) reiterated the following observation made by it in Parashuram Pottery Works Co. Ltd. v. ITO reported in (1977) SCR (2) 92: "At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion Society vs. CIT reported in 327 ITR 699 (SC). The relevant observations of the Hon'ble Apex Court are as under:- "(1) Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit. (2) The predominant object test must be applied - the purpose of education should not be submerged by a profit making motive. (3) A distinction must be drawn between the making of a surplus and an institution being carried on "for profit".No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit. (4) If after meeting expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes. (5) The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to educating persons. (6) The correct t....