TaxTMI 
TaxTMI 
2018 (11) TMI 1542
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.... Grounds of ITA No. 252/JP/2018 (1) Ld. Pr.CIT(C) has erred in law and on facts in withdrawing approval under section 10(23C)(vi) and 10(23C)(via) by invoking 14th proviso to section 10(23C)(vi) and 10(23C)(via) of Income tax Act by misinterpreting the true facts of the case. (2) Ld. Pr. CIT (C) was not justified in:- (a) Not differentiating the Donations and Capitation fees, as the capitation fees is charged in advance and is of equal amount for each course whereas the donations are received voluntarily, of different sums and were paid by the Donors even after the admission of the students as per their own convenience, even in installments (identical nature of donations received up to A.Y. 2008-09 were accepted as such in scrutiny assessments up to that year when recorded in regular books of accounts) in withdrawing the approval under section 10 (23C) (vi) and (via) of IT Act. (b) Treating the activities of applicant Trust as not according to condition subject of which it was approved u/s. under section 10(23C) (vi) & 10(23C) (via) of IT Act; (c) Treating the assessee Trust as not carrying its activities as per conditions laid down in....
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....((vi) & (via) retrospectively w.e.f. 01.04.2006 without finding any such document or noticing any in-genuine activity of the Trust during the course of search justifying such action as the same being afterthought in order to nullify the effect of order dated 30th June 2017 u/s. 245D(4) of IT Act passed by Hon'ble Income tax Settlement Commission, Addl. Bench-2, New Delhi." Grounds of ITA No. 253/JP/2018 (1) Ld. Pr.CIT(C) has erred in law and on facts in cancelling registration under section 12AA of IT Act by invoking provisions of section 12AA (3) of Income tax Act by misinterpreting the true facts of the case. (2) Ld. Pr. CIT (C) was not justified in:- (a) Not differentiating the Donations and Capitation fees, as the capitation fees is charged in advance and is of equal amount for each course whereas the donations are received voluntarily, of different sums and were paid by the Donors even after the admission of the students as per their own convenience, even in installments (identical nature of donations received up to A.Y. 2008-09 were accepted as such in scrutiny assessments up to that year when recorded in regular books of account) cance....
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.... tax Act to bring to tax on violation of provisions of Act but the same cannot be equated to be a ground to revoke the registration under section 12AA of IT Act. (3) Without prejudice to ground No. (1) to (3), above Id. Pr. CIT (C) has erred in law and on facts in cancelling registration under section 12AA by invoking provisions of section 12AA(3) of IT Act retrospectively w.e.f. 01.04.2006 without finding any such document or noticing any in-genuine activity of the Trust during the course of search justifying such action as the same being afterthought in order to nullify the effect of order dated 30th June 2017 u/s. 245D(4) of IT Act passed by Hon'ble Income tax Settlement Commission, Addl. Bench-2, New Delhi." 2. In the case of NIMS University, Rajasthan, Jaipur, the appeal has been filed by the assessee against separate impugned orders dated 29/08/2017, refusing the grant of registration U/s. 12AA(1)(b) of the Act; and order dated 19/03/2018 refusing the grant of approval of exemption U/s. 10(23C)(vi) and (via) of the Act by Ld. Commissioner OF Income Tax (Exemptions). 3. In so far as the appeals in the case of Indian Medical Trust are concerned, the facts and....
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....re collected which as per the Revenue were mostly incriminating in nature and also post search enquiries established that the activities of the Trust were not genuine. One of the key incriminating materials which is the subject matter of major dispute before us, was receipt of unaccounted 'capitation fees' charged by the Trust outside its regular books of account and income and expenditure account for the various assessment years. Though, there were other materials relating to undisclosed investments were found from the possession of the Trustees and persons running the institution in the form of unaccounted cash, jewellery, foreign currency etc., which may not have that direct relevance for the cancellation of approval/registration, albeit it may have some bearing in the hands of the Trustees. The assessee post search proceedings had filed an application before the Income Tax Settlement Commission, wherein it had offered Rs. 1.7 crores on account of unaccounted 'capitation fees', however, after calling for the details and report from the department based on the seized material and post search enquiry, the Settlement Commission had determined the unaccounted receipt....
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.... also gathered that the 'capitation fees' received from the students were neither from the management quota nor NRI quota but from general students. The documents wherein 'capitation fees' recorded, were found to be written in the handwriting of the trustees and one of the main trustees, Dr. B.S. Tomar has been stated to be keeping trail of such capitation fees. In response to the show case notice by the ld. Pr. CIT, the assessee submitted that, firstly, it is in the nature of 'voluntary donations' received from the parents/students and up to assessment year 2008-09 all these donations were duly recorded in the regular books of account, which were subjected to scrutiny u/s 143(3) and the same were accepted by the Assessing Officer; and secondly, from A.Y. 2009-10 onwards though such voluntary contributions were not recorded but assessment were completed u/s 143(3). However, the ld. Pr.CIT noted that from the A.Y. 2009-10 onwards, the capitation fees which has been treated as voluntarily donations by the assessee were collected in cash by the trustees and have neither been recorded in the regular books of account nor has been disclosed in the audited financia....
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....onducted that the students were force to pay capitation fees for taking admissions and receiving final "No Dues" certificate only when the entire capitation fees was paid. Many instances have been found where installments with fixed duration of payments of capitation fees was granted which only goes to show that it was not voluntarily at all but was thrust upon the parents/guardians of the students and were taken forcefully. Further the assessee's Trust was following a 'package system' in which the students were given fixed packages of capitation fee, hostel fee and admission fee and this he held that it clearly goes to prove that the students were required to compulsorily pay the capitation fee to receive their degrees. Ld. PCIT has also demolished the assessee's contention that the major part of such voluntary donation has been applied in construction of new educational building on the ground that, firstly, there is no evidence for application of capitation fees in the construction of educational building which has been found during the course of search proceedings; and secondly, on the contrary there were various documents which shows the use of voluntary donatio....
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.... in the books of account and hence it violated the conditions laid down in 10th proviso to Section 10(23C)(vi)&(via) of the Act by earning undisclosed/suppressed income in the form of capitation fees and not accounting for it in the books of account. The receipts offered by the assessee before the ITSC and the amount added by the ITSC were unaccounted receipts not found recorded in the books of the Trust and therefore, it was clear cut violation of 10th proviso. Thus, he concluded that in view of clear-cut violation of provisions of Section 10(23C)(vi)&(vi) of the Act i.e., 10th proviso and 14th proviso whereby the assessee's activities has been found to be non-genuine, the approval granted to assessee Trust needs to be withdrawn. 8. Another important issue which has been raised by Ld. PCIT is on account of expenditure being incurred in 'News India Channel', by the Trust which was not as per the objectives of the Trust. The ld. Pr.CIT has noted that the assessee Trust was operating a news channel namely, "News India" at NIMS University and has two more offices at Ranchi and Patna. The assessee's claim was that the News India Channel was established in accordance ....
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....ch were not accounted for in the books. For instance, in page 79 there is a noting of salary paid to Dr. Nilesh at 5.40 lacs, which is 90,000/- for six months and similar payment to Dr. Harvey @ Rs. 95,000/- for 12 months and Dr. Mahesh @ Rs. 70,000/- for three months. The total of these amounts has been written as '18.9', which was deduced by the department as Rs. 18.9 lacs. Similar noting was there regarding cash payment to Dr. Thomas for Rs. 95,000+80,000. All these revealed that payments were made to the doctors in cash to the tune of Rs. 20.65 lacs. Similarly, noting is appearing at page No. 66 for the payment made to the various doctors, the details of which has been noted by him in para 6.1 of the impugned order which aggregated to Rs. 6.25 lacs. From these seized documents, the ld. Pr.CIT concluded that the Trust was incurring expenditure in cash from its unaccounted receipts and this fact too has been accepted by the ITSC in para 16.15 of the order. 10. After giving detail reasoning, he thus concluded that the approval granted to the assessee Trust U/s 10(23C) (vi) & (via) of the Act is to be withdrawn after invoking the 14th proviso to its Section w.e.f. from 0....
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.... activities of the trust are not being carried out in accordance with its objects. In view of the discussion made above, I am satisfied that activities of the assessee trust (M/s Indian Medical Trust) are not genuine and are not being carried out in accordance with the objects of the assessee trust. Therefore, the registration of the assessee trust u/s 12AA(1)(b)(i) is hereby cancelled by invoking section 12AA (3) of the Income tax Act, 1961 with effect from 01/04/2006." Argument placed by the Ld. A.R. of the assessee: 12. Before us, Ld. Counsel for the assessee Shri G.M. Mehta after reiterating the entire facts and background of the case submitted that the various allegations made by the ld. Pr. CIT, in the impugned order cannot be sustained so as to cancel the approval/registration from retrospective effect. One of the main allegation of the ld. Pr.CIT was that the assessee has received capitation fees in cash, the same is not correct appreciation of facts, because these were purely in the nature of 'voluntary donations' received from the parents/students and such voluntariness is borne by the fact that, firstly, it has not been received by all the students bu....
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....e observation and the finding of the ld. Pr.CIT that the activities of the Trust are not in accordance with the objects is not correct or based on any material on record, but is based on surmises and conjectures with various incorrect interpretation of facts wrong assumptions. Ld. Pr. CIT could not show from the material on record that there has been diversion of funds by the assessee Trust to the trustees and it was used for the personal purposes as alleged in the impugned order. He pointed out that the addition made on account of foreign travel expenses, unaccounted investments, jewellery etc. in the hands of the trustees and relatives have been subject matter of scrutiny assessment U/s 153A of the Act in their hands and no adverse inference has been drawn and all the additions have been deleted. Thus, the observations of the ld. Pr.CIT that the Trust's fund has been misused are wholly divorced from the facts. The entire adverse inference based on so called alleged capitation fees received in cash, he submitted that though may not have been recorded in the books of account but the same has been fully utilized for the objects and activities of the Trust and therefore, no adver....
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....ther commercial purpose. 14. Ld. Counsel has also referred and relied upon the CBDT Circular No. 21/2016 dated 27/05/2016 wherein clarification has been given for cancellation of registration U/s 12AA of the Act that it is not mandatory that the registration already granted U/s 12AA on the ground that the cut-off specified in the proviso to section 2(15) of the Act has exceeded in a particular year and without there being any change in the nature of activities of the institution, then cancellation of registration without justifiable reasons cause additional hardship to the assessee. Therefore, keeping the spirit of the said circular, he prayed that cancellation of the registration of charitable institution granted U/s 12AA of the Act is not warranted just because of proviso to Section 2(15) of the Act comes into play. 15. Lastly, he submitted that the registration granted earlier could not be cancelled with retrospective effect especially in the case of assessee, when no show cause notice or opportunity was given by the ld. Pr. CIT that he is withdrawing the registration/approval w.e.f. 01/4/2006. In support of his contention that registration cannot be withdrawn from retrosp....
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....tration. There are twin conditions wherein the ld. Pr. CIT can cancel the registration and both the conditions are independent and mutually exclusive to each other. In other words, if either of the conditions is violated, i.e., the activities are not carried out in accordance with the objects; or the activities are not genuine, then the statute provides power to rescind or cancel the approval/registration granted earlier to the Trust. Here in this case, both the charges have been framed against the assessee Trust and especially on non-genuineness of the activities of the assessee Trust. He then tried to impress upon as to what kind of activities of any Trust or Institution can be reckoned to be non-genuine. These are, according to him are as under: - * activities are not legal as it has caused some infringement of law. * accounts are not properly maintained or the receipts are not accounted for in the books of account. * the trust/society is not registered with competent authority. * it has caused some misrepresentation of facts before any authority. * it has encroached public property. * it has given undue benefits to the trust....
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....fee. In the seized documents found, he pointed out that there are noting by the trustees in their own handwriting for charging of capitation fee and that to be instalments have been granted. Voluntary donation cannot be charged or given in schedule and fixed instalments. Now whether capitation fee can be legally collected by educational institution or not, he referred to the Constitutional Bench judgment of the Hon'ble Supreme Court in the case of TMA Pai Foundation Vs. State of Karnataka (2002) 8SCC 481. He further submitted that a distinction has to be drawn between the donation towards corpus and the donation for earmarked purpose. Referring to the judgment of Hon'ble Supreme Court in the case of Municipal Corporation of Delhi Vs. Children Book Trust (1992) 63 Taxman 385 he pointed out that the Hon'ble Court has held that term 'voluntary contribution' towards the corpus fund must satisfy twin tests viz., (i) it should be voluntary without any quid pro quo; and (ii) with a specific direction towards corpus fund of the trust. Beneficiary's contribution could not be called as voluntary contributions, as there would be some consideration for the contribution ....
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....Dr. B.S. Tomar was having one share of face value of Rs. 10 and the percentage of his holding was 0.0001%. Once the Trust is the owner of a Private Limited Company practically having all the shares, then it is a clear-cut violation of Section 11(5) and 10(23C) of the Act. 19. Regarding allegation of cash payments to the Doctors, he pointed out from the seized documents, which has been placed in the paper book filed before us, that there is clear cut noting in the handwriting of the trustees wherein cash payments had been made to the doctors which shows that the assessee has incurred unexplained expenditure outside the books, because in the regular books of account only cheques payment have been reflected. If the payments have been made in cash then there must be cash earnings which are nothing but coming from capitation fees received in cash. For this reason, also it can be held that the assessee's activities were not genuine. 20. Lastly, coming to the issue whether registration/approval can be cancelled from a retrospective date, ld. DR submitted that here in this case, registration was granted in the year 2000, whereas the same has been cancelled only w.e.f. 2006-07 whi....
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....n a very large scale. A global search and seizure action were carried out by the Income Tax department and Investigation Wing of the department on 30/10/2014 at various premises of the assessee Trust as well as the residential premises of the trustees. Though, various incriminating materials/documents and unexplained investments and cash was found, however, in the present case, we are concerned mostly with the documents and seized material which indicates that the assessee Trust has been receiving 'capitation fee' in a very systematic and organized manner from various students right from the A.Y. 2006-07 till the date of search. The quantification of the 'capitation fee' which could be unearthed from the search and post search enquiry were quantified to 650 students as tabulated by the department which is also forming part of the impugned order marked as "Annexure-A". In the said annexure, detail analysis of unaccounted capitation fee received by the assessee Trust has been given which highlights the details of seized annexure number, page number, financial year to which capitation fees pertain, date of fees received, name of the student, name of the father/relative....
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....#39; on a statement prepared by the applicant itself which was found during the search. However, the applicant argues that a mere statement which was prepared by an employee and not by a Trustee and in which word 'capitation' is used on a few entries cannot be made the basis to term the entire donations received by it during the years under consideration to be not voluntary in nature. (d) Whether the donations were voluntary or otherwise is of relevance for the proceedings before us only in the context of the stand taken by the applicant that these donations being voluntary contributions should be treated as 'corpus donations' which are to be treated as exempt. Sec 11(1)(d) of the Income-Tax Act provides that income in the form of voluntary contributions are not be included in the total income of a Trust. However, Sec. 11(1)(d) lays down another condition: such voluntary contributions are not to be treated as exempt unless the donor gives a specific direction that they shall form a part of the corpus of the trust or Institution. It is seen that in none of the 638 donations received by the applicant there is any declaration by the donor that the amount is to....
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....39; whereby the students were given fixed packages of capitation fee, hostel fee and admission fee which this clearly goes to prove that the students were required to compulsorily pay the capitation fee to receive their degrees. Only when such cash was received, the student was given "No Dues Certificate". Such huge cash received over and above the regular course fees and hostel fees, which have been termed as 'capitation fee' by the department and 'voluntary donation' by the assessee has not been recorded in the books of account at all and which fact has also been admitted by the assessee trust right from the A.Y. 2009-10. The reason given by the assessee for not recording these cash fees/voluntary donation /capitation fees before the authorities below and also before us is that, the head of the accounts department has left the job after assessment year 2008-09 and therefore, these amounts could not be recorded in the regular books of account for all the subsequent years. Such a reasoning and the argument ostensibly cannot appeal to the conscience of any court, because if the assessee has recorded all other receipts which are running into hundred of crores of rupee....
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....ey are over and above the regular fees and hostel fee charged; and secondly, there is a systematic pattern of fixing of the capitation fees course wise devised in a package system and also there is a schedule for making the payments of such fees in installments. Such systematic way of receiving cash fees cannot be held to be given by consent or free choice and willingly, because there cannot be any fixed amount for a sum which is given by free will and choice and it completely lacks element of voluntariness. The donation has element of free will and there cannot be any fixed amount and here in this case it has been brought on record by the department that once this amount is given then only 'no dues certificate' has been issued to the students by the trustees. Thus, under no circumstances, such a cash fees can be held to be given voluntarily or is in the nature of voluntary donation. It is undoubtedly in the nature of enforced fee charged over and above the regular fees by the assessee trust through its trustees which has neither any sanction of law nor has been recorded in the books of account. 25. This issue of charging of 'capitation fee' by private Medical Co....
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....ovisions. A whole procedure has been laid down under the Income Tax Act not only for providing benefit from exemption of tax but also if any violation is found, then the Act authorizes the authorities to withdraw such benefit. For instance, u/s 10 (23C) clauses (vi) and (via) read with 13th proviso provides for rescinding and withdrawal of the approval granted earlier. The relevant proviso reads as under: Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) is notified by the Central Government [or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that- (i) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not- (A) applied its income in accordance with the provisions contained in clause (a) of the third proviso; ....
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....pass an order in writing cancelling the registration of such trust or institution:" The aforesaid provision thus, clearly provides that PCIT/CIT has the power to cancel the registration granted u/s 12A or 12AA, if he is satisfied that the activities of the trust or institution are not genuine or are not carried out in accordance with the objects. Both the conditions are mutually exclusive to each other and if any of the one condition is satisfied, then the registration granted can be cancelled. 27. Now the issue is, whether receiving of a 'capitation fee' can be held to be genuine or not; or whether it is for the purpose of education. One of the main contentions raised by the assessee was that all such cash fees received, though not recorded in the books has been fully utilized in the construction of college/hospital buildings and being used for expanding the infrastructure and therefore, no adverse inference can be drawn regarding non-genuineness. Such an argument is delusive and flawed, firstly for the reason that it is purely based on hypothesis as no evidence or material has been brought on record or has been found during the course of search that these cash fees ....
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.... adopted by many institutions to earn large amounts for their private or selfish ends. If capitation fee and profiteering is to be checked, the method of admission has to be regulated so that the admissions are based on merit and transparency and the students are not exploited. It is permissible to regulate admission and fee structure for achieving the purpose just stated." Further, in the judgment of T.M.A. Pai Foundation (supra), the Hon'ble Apex Court had made a very important observation which reads as under: "57. We, however, wish to emphasize one point, and that is that inasmuch as the occupation of education is, in a sense, regarded as charitable, the government can provide regulations that will ensure excellence in education, while forbidding the charging of capitation fee and profiteering by the institution. Since the object of setting up an educational institution is by definition "charitable", it is clear that an educational institution cannot charge such a fee as is not required for the purpose of fulfilling that object. To put it differently, in the establishment of an educational institution, the object should not be to make a profit, inasmuch as educa....
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.... provided in Sub-section (5) of Section (11) of the Act. Once there is a clear-cut bar upon a Trust or institution carrying out charitable activity to invest in the shares of private limited company, then if such a Trust or institution violates such provision then it has to be held that the activities of the Trust is not genuine as it is not in accordance with the law governing benefit given to the charitable trust or institution. On this point also, we hold that the assessee's activities are not genuine. 30. Lastly, in so far as the issue of cash payment to the Doctors outside the books, we find from perusal of the seized documents that the revenue has not been able to properly correlate or establish that such payments have been made outside the books or such cash has actually been made. In any case, even it is treated as some adverse material, however, we are not dwelling upon this aspect as we have already held on two counts that the assessee's activities are not genuine and therefore, we are not adjudicating this allegation of the Revenue. 31. Another moot question here in this case is, whether such an approval u/s 10(23C) or registration U/S 12AA granted earlier ....
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.... has been provided that the registration granted at any time U/s 12A can also be cancelled by the Pr.CIT or CIT. The intention of the Legislature was thus to bereft any charitable trust for enjoying benefit of exemptions if its activities are found to be non-genuine or is not carried out in accordance with objects for which it was granted registration. Though the section does not provide clearly from which date registration can be cancelled, however on plain reading it is quite palpable that the cancellation can be done from the time when the activities are found to be non-genuine or is found not being carried out in accordance with objects. If non-genuineness is not found from an earlier date but from the present date then cancellation cannot be made from back date, however if the trust or institution based on any material or information is found to be carrying non-genuine activity from the earlier period then from that period registration can be cancelled. The date from when the non-genuineness is found is the decisive and determinative factor. There are set of judgments as cited by the Ld. DR like U.P. Distillers Association (supra); Sri Vidyaranya Sewa Sangha (supra); and Novod....
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....e activities of the authority was violating the conditions of such proviso and therefore, the assessee's registration was cancelled from the date of inception. In this background, the Hon'ble High Court held that the registration cannot be cancelled from the retrospective date. However, the Hon'ble High Court by way of obiter dicta did observe that even after the amendment in Section 12AA (3), it does not indicate that the ld. CIT can cancel the registration with retrospective effect. At the same, there is a judgment of Hon'ble Karnataka High Court in the case of Navodaya Education Trust v. Union of India (supra) wherein it has been held that withdrawal can be made from retrospective date if the evidence and material has been found about the non-genuineness of the activities of the Trust. Similarly, the Hon'ble Delhi High Court in the case of U.P. Distillers Association (supra) have opined that the cancellation of registration on that particular case can relate back from the date of introduction of Section 12AA (3) of the Act w.e.f. 01/10/2004. Since in this case, the cancellation has not been done from the date of granting of registration, albeit we have held t....
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....run such type of charitable activities. 2. That Id. CIT (Exemption) was not justified in refusing approval u/s. 10(23C)(v) & (via) of IT Act to the assessee University by taking pretext of the followings: (a) Action u/s. 132 of IT Act in case of sponsoring body (Indian Medical Trust) in which no extra cash, no unexplained jewellery, no unexplained foreign currency or no other incriminating documents or material was found except recorded donations in diaries (used for construction of educational buildings) whereas no misuse of funds by Trustees or relatives was found, rather trustees had deposited their own interest free funds with it, did not charge any rent or other expenses for city office and always provided voluntary services without charging any remuneration. (b) Common application made for the purpose of approval under section 10(23C) (vi) and for 10 (23C) (via) of IT Act. (c) TV channel, which is being run by an independent company by the name M/s. Omega TV Media Pvt. Ltd. with different PAN. (d) Refusal of registration under section 12AA/10(23C) of IT Act to the Applicant University." 35. The aforesaid appeals have been filed ....
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....se notice to the assessee has made following observations: "In this connection, spot visit & verification report of inspector of this office is submitted herewith for kind perusal & necessary action. As per the spot visit report & other information's gathered, the NIMS University is engaged in educational and medical activities, in addition to the above, following facts are submitted herewith: - 1. As per the Gazette notification issued dated 29-03-2008 by the Rajasthan Government as well as prospectus of the University. The University having 60.67 acres of land comprising in Khasara Nos. 152, 514, 515, 516, 517, 518, 519, 528, 529, 530, 531, 532, 519/666, 519/668, 396, 397, 398 & 520 of Village Jugalpura, Tehsil- Amer. Shobha Nagar, Distt.- Jaipur (Rajasthan). During verification of the same, following discrepancies have been notice. 1.1 The Khasara No. 152 (Khata Sankhya-32) pertains to Goverdhan S/o Ghasi Ram, Cast - Meena. 1.2 Khasara No. 514 (Khata Sankhya- 169) pertains to Public Works Departments. 1.3 Khasara No. 515 (Khata Sankhya- 02) pertains to Agarwal Farms Pvt. Ltd. Registered office Raja Raoji ka Khurra, Ramganj Bazar, ....
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....ersity is not with the sponsoring body, the next question comes whether such issue can be examined while granting registration u/s 12AA of the IT Act, 1964 in present case where university came into existence in 2008, almost 9 years back. Section 12AA clearly empowers Commissioner of Income Tax to examine objects of the university as well as genuineness of the activities. Both the phrases "objects of the institution" and "genuineness of its activities" used in the act are coupled with the word "and" which clearly indicates that they should be satisfied simultaneously as well as independently. As in the present case, the ownership of land which is intended to be transferred from the sponsoring body to the university is in doubt, it cannot be held as genuine activity. As the activities of transfer to assets for creation of university does not seems to be genuine, it is not a fit case for registration u/s 12AA of the Act. 12. In the light of the above facts the application seeking registration u/s 12AA is hereby rejected and filed." 38. On the same reasoning also, approval U/s 10(23C) has been refused by the ld. CIT (E) by holding as under: - "Thus from 1.10.2016 ....
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....re held as non-genuine. 8. It is also important to note that the applicant University applied for approval under both the Sec./clauses 10(23C)(vi) & 10(23C)(via) by filing common form. On giving show cause regarding correct section under which approval is sought the applicant replied-"It is therefore requested that single application may please treated as application for approval under section 10(23C) (vi) as well as under section 10 (23C) (via) of IT Act." The section 10(23C)(vi) & 1O(23C)(via) are mutually exclusive because of world 'solely' used in both the clauses. The applicant can seek approval under one clause only. Seeking approval under both the clauses is technically and legally wrong. The reliance in this regard has been placed on the judgement of Hon'ble Rajasthan High Court in the case of CIT v. Maharaja Sawai Mansingh ji Museum Trust (1988) 169 1TR 379(Raj.) wherein it was held that It is amply clear from a bare reading of sec. 10(22) that the "educational institutions" must exist "solely" for educational purposes. "Solely" means exclusively and not primarily. The emphasis in sec. 10(22) is on word "solely." Section 10(22) has been inheri....
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....ll have 60.67 acres of land comprising of various khasras numbers in village Jugalpura, Teshil- Amber, district-Jaipur. The said schedule also enlists various buildings, academic facilities and various kinds of degrees run by the said University. In an enquiry conducted by the ld. CIT (E), it was found that certain 'Khasra' number as mentioned in the Government Notification for the allotment of land to the University was not in the ownership of the Indian Medical Trust or NIMS University. Solely on this ground, he has refused to grant registration. No where he has discussed the "objects" for which the said University is running; nor there is any whisper about the genuineness of the activities qua the objects. It is well settled position of law that at the time of granting registration u/s 12AA, the ld CIT(E) is required to examine the 'objects' of the Trust or institution as to whether they are for the charitable purposes or not and also to see the genuineness of the activities qua the objects. If certain 'Khasra' numbers as notified by the Government has not been acquired or is not owned by the Indian Medical Trust or by the NIMS University and it is standi....
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....Indian Medical Trust that it was receiving unaccounted capitation fee, the same was applicable till the date of search and that to be in the case of Indian Medical Trust for which we have already given our finding while deciding the case of the Indian Medical Trust. However, the same charge or allegation cannot be imported in the case of NIMS University also until and unless there is some incriminating material or any kind of enquiry has been conducted leading to any adverse inference, for instance, receiving of unaccounted capitation fee is still continuing or is permeating in the subsequent years also, that is, from the date when NIMS University has taken over by entire assets and liabilities of the Trust and also the educational activities. We are of opinion that the issue of grant of approval u/s 10(23C) needs to be examined afresh. On the issue of running of a news channel also, the issue needs to be examined under the scope of 3rd proviso to Section 10(23C) (vi) & (via) and Section 11(5) of the Act. The ld. CIT (E) shall examine this aspect also without getting prejudice with the finding given in the appeals of the Indian Medical Trust as decided above for the reason that her....