TaxTMI 
TaxTMI 
2018 (11) TMI 633
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....deleting the addition of Rs. 90, 31, 280/- even though approval 10(23C)(vi) was not granted to the society by the competent authority and thereby ignoring the decision of the I.T.A.T. Amritsar Bench in the case of (2014) 48 taxman.com 386 (Amritsar Trib.) in the I.T.A.T. Amritsar Bench Income Tax Officer v Vivekanand Society of Education and Research. 3. Whether on the facts and circumstances of the case Ld.CIT(A) was justified in deleting the addition of Rs. 90, 31, 280/- even if no time limit for granting approval u/s 10(23C)(vi) is prescribed in the I.T.Act." 3. Briefly stated facts as culled out from the records are that the assessee is a society running educational institutes. The return of income was filed on 23.12.2004 in which Income of Rs.Nil was declared. The Society is registered under the Society's Registration Act vide order dated 15.10.1999. The assessee was also granted registration u/s 12AA of the Income Tax Act by the Commissioner of Income Tax, Bhopal vide order No.56/04-05 dated 24.05.2005 w.e.f. 01.04.2004. The society is engaged in the social services and educational activities. The case picked up for scrutiny and necessary notices u/s 143(2) and 14....
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....d by the appellant, the matter was taken up with the office of the Pro CCIT, Bhopal. It was conveyed vide letter dated 06.06.16, forwarding thereby a letter dated 02.06.16 of the CIT(Exemption), Bhopal that the said application dated 23.12.2004 in form no. 560 for approval u/s 10(23C) for AY 2004-05 has not been disposed off by way of any order/ record of proceeding thereon. 4.4 I have carefully considered the findings recorded by the Id. AO as per the assessment order, the order dated 21.05.2007 of the CIT(A)-1, Bhopal the facts of the case on record and the submissions made by the appellant. It is now confirmed that the application dated 23.12.04 filed by the appellant for approval u/s 10(23C) has not been disposed off. Therefore, the facts of the case are the same on which relief was allowed by the Id. CIT(A)-1, Bhopal after a detailed discussion in view of various judicial pronouncements. Respectfully following the above, I confirm the relief allowed by Id. CIT(A)-I, Bhopal as the facts and circumstances have remained the same. Accordingly, the ground no.1, is allowed to the appellant". 6. Aggrieved Revenue is in appeal before the Tribunal in the second round. 7.....
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....by a society. Referring to the judgment of Hon'ble High Court of Karnataka in the case of CIT vs. Children's Education Society (supra), wherein the Hon'ble High Court has held that "if an assessee is running several educational institutions, if any of them is wholly or substantially financed by the Government then the income from which educational institution received by the assessee is not included while computing its total income. Similarly income from each educational institution if they are not receiving any aid from the government wholly or substantially in respect of which the aggregate annual receipt is not exceeding Rs. 1 crore, is also not included while computing annual total income of the assessee". Referring to the above judgment of the Hon'ble Karnataka High Court the Senior Counsel for the assessee submitted that the gross income from each of the four institutions run by the assessee are below Rs. 1 crores and therefore the assessee is eligible for the exemption u/s 10(23C(iiiad) of the Act. 10. We have heard rival contentions and perused the records placed before us and carefully gone through the judgments referred and relied by both the parties. 11....
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....on and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or (iii)(ad) any University or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed; or (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iii)(ab) or sub-clause (iii)(ad) and which may be approved by the prescribed authority" 14. Section 10 groups in one place various incomes which are exempted from tax, which includes certain types of income from the ambit of total income, as defined under the Act. The incomes enumerated in the Section are not only excluded from the taxable income of the assessee, but also from his total income. They are not to be taken into consideration for the purpose of determining e....
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....t for the purposes of earning any profit and the assessee itself could be termed as an "educational institution" coming within section 10(22) of the Act. The High Court has concurred with this view. The High Court has further held that the medium through which the assessee could effectuate its objects is the college and by employing this medium, the assessee imparts education and it cannot be stated that the assessee is only a financing body and does not, on the facts, come within the scope of "other educational institution" occurring in section 10(22) of the Act. Reliance was placed on the decision of the Allahabad High Court in Katra Education Society v. ITO [1978J III ITR 420, to hold that an educational society could be regarded as an educational institution if the society was running an educational institution. We are of the view that an educational society or a trust or other similar body running an educational institution solely for educational purposes and not for the purpose of profit could be regarded as "other educational institution" coming within section 10(22) of the Act. (See CIT v. Doon Foundation [1985] 154 ITR 208 (Cal) and Agarwal Shiksha Samiti Trust v. CIT [198....
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....ly financed by the Government, then the income of such educational institutions in the hands of the assessee, is not included in the total income of the assessee. The reason appears to be that if the Government is financing, thev would take all precautions before parting _ funds and make sure that such educational institution is existing for the educational purpose and not for the purpose of profit. Therefore, the income derived on such institutions is excluded from the total income of the assessee. The next exemption is contained in Sub-clause (iii)(ad). If any University or other educational institution existing solely for educational purpose and not for the purposes of profit, if the aggregate annual receipts of such University or educational institution do not exceed the amount of annual receipts as may be prescribed. 17. Rule 2BC of the Income-Tax rules prescribes the amount of annual receipts for the purposes of sub-clauses (iii)(ad) and (iii)(ae) of clause (23C) of section 10, which reads as under: "2BC (1) For the purposes of sub-clause (iii)(ad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any uni....
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....ve introduced separate sub-clauses as (iii)(ab) and (iii)(ad). If such interpretation is placed, sub-clause (iii)(ab) becomes otiose. Therefore, it is not possible to place such an interpretation. If an assessee society is running several educational institutions, if some of them are wholly or substantially financed by the Government in terms of sub-clause (iii)(ab), the income on behalf of such educational institution received by the assessee is exempted from being computed the total income of the assessee. If the assessee is running other educational institutions which are not wholly or substantially financed by the Government, then the benefit of that exemption is also extended to the income derived from such educational institutions and received by the assessee under sub-clause (iii)(ad) reading with sub- clause (iii)(ad) along with Rule 2BC. It was contended, the Legislature used the word "aggregate annual receipt" and "amount of annual receipts" and therefore, the provisions are not one and the same. The word "aggregate" has been defined in Chambers 21st Century Dictionary as under: "aggregate - noun = a collection of separate units brought together, a total taken al....
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....er the responsibility completely. Therefore, the field of education is now thrown open to private organizations. But for throwing open the field. to the private operators, probably, the country would not have achieved in the field of education what it has achieved. Therefore, lot of funds are invested in running these educational institutions, either by creating a Society or a Trust. In course of time, they have expanded their activity providing course in various subjects at various levels and for that purpose they have established more than one educational institution. Each educational institution is a separate entity controlled under various statutes for various purposes. May be the Management of these educational institutions would be in the hands of the Societies or the Trust, but for all other purposes they are different, independent entities. That is the reason why Section 10 (23)(c) is worded as under: "Any income received by any person on behalf of. .. " Here "any person" refers to the assessee and "on behalf of' refers to such institutions. It may be an University, it may be an educational institution, it may be a hospital or other institutions of sim....