TaxTMI 
TaxTMI 
2020 (1) TMI 461
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....Income Tax Act. Thereafter, a show cause notice no. F.No./10/CIT(E)/JPR/Withdwl-10(23C)(vi)/2015-16/648 dated 3.05.2016 was issued asking the assessee University to show cause as to why the exemption granted under Section 10(23C)(vi) of the Income Tax Act should not be withdrawn. The assessee University submitted its reply dated 06.06.2016 to the aforesaid show cause notice. However, the Ld. CIT(E) vide impugned order dated 14.09.2016 withdrawan the exemption given to the assessee University under Section 10(23C)(vi) of the Income Tax Act from the A.Y 2013-14 and onwards which is under challenge before us. 3. In its appeal, the assessee University has raised the following grounds of appeal: "1 That on the facts and circumstances of the case and in law, the CIT (Exemptions) erred in withdrawing, from assessment year 2013-14 onwards, exemption granted to the appellant under section 10(23C)(vi) of the Income-tax Act, 1961 (`the Act'). 2. That the CIT (Exemptions) erred grossly on facts and in law in treating the Appellant, a self-regulated autonomous statutory body established by an Act of State Legislature, as a society and passing the impugned order based on....
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.... report, relied upon by the CIT (Exemptions), itself. 6.2 That the CIT (Exemptions) erred on facts and in law in not appreciating that practical training and hospital teaching amounts to imparting education. 6.3 That the CIT (Exemptions) erred on facts and in law in overlooking that it is the function of the Appellant to provide for health care facilities to its staff and students." 4. At the outset, the ld. AR sought permission to raise the following additional ground of appeal:- "That the impugned order passed by CIT(E), Jaipur is bad in law as show cause notice dated 03/11-05-2016, U/s 10(23C)(vi) is issued and signed by the Income Tax Officer (Hqrs.) as it should have been issued and signed by CIT(E)." 5. The ld. AR of the assessee has submitted that the additional ground is legal in nature and all relevant facts are available on record as emerging out of the notice issued by the ITO (Hqr.) u/s 10(23C)(vi) of the Act. Since, no new facts are required to be evaluated nor any further enquiry is needed and the issue raised in the additional ground can be adjudicated on the basis of the facts and material available on record and by applying the prov....
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....ll take up the additional ground of appeal wherein the assessee University has challenged the validity of the show-cause notice. In this regard, the ld. AR has submitted that the show cause notice dated 03.05.2016 being signed and issued by the Income Tax Officer (Hqrs.) and not by the CIT(E), is not signed and issued by the prescribed authority and hence, the consequential impugned order dated 14.09.2016 passed by the CIT(E) is without jurisdiction, void ab-initio and the impugned order is liable to be quashed on this ground. 9. It was submitted by the ld AR that under law, the show cause notice dated 03.05.2016 being a statutory legal document is required to be issued and signed by the competent authority i.e. persona designata as laid down by this Tribunal in the case of Modern School Society v. CIT(E) (ITA No.1118/JP/2016 dated 20.12.2017). It was submitted that the case of the assessee University is squarely covered by the case of Modern School Society (supra) as paragraphs 2 and 6 of the impugned show cause notice dated 03.05.2016 are identical to the paragraphs considered by the Tribunal in the Modern School Society case (supra). Our attention was drawn to paragraphs 2....
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....ciety case, the show cause notice dated 03.05.2016 is invalid for want of jurisdiction and consequent jurisdiction obtained by the CIT(E) is invalid and therefore, the impugned order dated 14.09.2016 is liable to be quashed on this ground. 12. It was further submitted that reference to extraneous material such as internal noting etc. by the ld. CIT/DR is irrelevant as according to this Tribunal in the Modern School Society judgment (supra), what is relevant is the language and tenor of the show cause notice and it is the show cause notice itself that should bring out the thought process and application of mind of the CIT(E). Thus, reference to extraneous material is not relevant. Further, in cases where any matter is reduced in writing, then as per the Evidence Act, 1872 any extraneous matter such as internal noting etc. referred by the DR is neither relevant nor admissible. 13. It was accordingly submitted that the impugned show cause notice dated 03.05.2016 is not valid, the jurisdiction assumed by the prescribed authority is invalid and therefore, the consequential order passed by the authority is invalid and void abinitio for want of jurisdiction. It has been held by the ....
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....as visible from notings on order sheet on 14.06.2016 in his hand writing. 16. It was submitted by the ld CIT/DR that the notification U/s 10(23C)(vi) was withdrawn as per the 13th proviso to the said section. The said proviso reads as under:- "Provided also that where the fund or institution referred to in subclause (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; or (B) invested or deposited its funds in accordance with the provisions contained in clause (b) of the third proviso; or (ii) the activities of....
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.... the final show-cause issued. These show due application of mind on the part of CIT(E). Further, the CIT(E) has himself conducted the hearing on 14.06.2016 as evident from the order sheet noting of even date in his handwriting, which also shows due application of mind. It may also be noted that only uncorrected draft was put up before CIT(E) vide order sheet noting dated 03.05.2016 as evident from the noting "DFA (Draft For Approval) of show cause letter issued to the assessee is put up for kind perusal, approval and signature please." Thus, there is complete application of mind on the part of CIT(E). 18. It was further submitted that the provisions for issue of show cause notice u/s 263 and under thirteenth provision to section 10(23C) are pari materia vide a later judgement of this Tribunal in the case of Shri Hari Ram Yadav Vs PCIT (ITA No. 215/JP/2018 dated 31.12.2018) wherein the issue has been decided in favour of the Department and therefore, the decision in case of Modern School Society stand distinguishable. 19. The ld CIT/DR further drawn our attention to the Sec. 292BB of the IT Act, 1961, which read as under:- "292BB. Where an assessee has appeared in any....
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.... no further action appears to be necessary." 20. It was accordingly submitted by the ld CIT/DR that all the objections/claims should have been raised by the assessee before the ld. CIT(E) during rescinding/withdrawals proceedings, which was never done by the assessee. Instead of raising the objection before ld. CIT(E) the assessee raised this ground as additional ground in the appellate proceedings after lapse of so much time, which very well establishes the fact that it is an afterthought, and assessee fears to lose the ground on merit. It was accordingly submitted that the additional ground of appeal so taken by the assessee should be dismissed. 21. We have heard the rival contentions and pursued the material available on record. The ld AR has placed heavy reliance on the decision of the Coordinate Bench in case of Modern School Society Vs CIT(E), Jaipur (supra) and we therefore deem it appropriate to refer to its relevant findings which are reproduced in verbatim as under: "10. We have considered the rival submissions as well relevant material on record. The first objection of the assessee is regarding the validity of show cause notice that it was not signed by th....
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....ation of proceedings to withdraw the approval the mandatory pre-condition is the satisfaction of the prescribed authority. Undisputedly the prescribed authority is the ld. CIT(E) and the satisfaction of the prescribed authority is a must before issuing the show cause notice for withdrawal of the approval granted u/s 10(23C)(vi) of the Act. Therefore, what is material and mandatory condition is the satisfaction of the prescribed authority and non else. In case in hand the impugned show cause notice dated 08.07.2016 was signed by the DCIT (Hqr.) and issued as per directions of the ld. CIT(E). In paras 2 and 6 Of the show cause notice in our opinion are relevant to the issue and the same are reproduced as under:- "2. In this regard, I am directed to state that your institution/society has violated the provisions of Section 10(23C)(vi) of the Act in respect of following issues:- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 6. Your case is fixed for hearing before the Commissioner of Income Tax (Exemptions), Jaipur on 25.07.2016 at 12.30 P.M. in the Income Tax office (Exemptions) room No. 303, 3rd floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur. You may att....
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....tributed to the mistake of the consultant, in our considered opinion, assessee should not be penalized on this count. The case law referred by the Ld. counsel for the assessee also supports this proposition. Accordingly, we condone the delay. 5. As regards the matter in appeal, we note that the same is against order passed by the Ld. CIT u/s. 263 of the Act. At the outset, in this case, Ld. counsel for the assessee pointed out that the notice to the assessee u/s. 263 of the Act in these case, was issued by letter dated 06-03-2007. The said notice was signed by ACIT, Hqrs., Burdwan for Commissioner. Referring to this aspect, the Ld. counsel for the assessee pleaded that Section 263 of the Act provides for notice and adjudication by the Ld. CIT. Ld. counsel for the assessee claimed that since notice u/s. 263 of the Act has not been signed by the Ld. Commissioner. The jurisdiction assumed is defective and the order u/s 263 of the Act, is liable to be quashed on this ground itself. In this regard, Ld. counsel for the assessee referred to the decision of Hon'ble Allahabad High Court in the course of cit v. Rajesh Kumar Pandey (2012) 25 taxmann.com 242 (All.). The Ld. counsel fo....
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....ncome-tax (technical), whereas in view of the provisions of powers under Section 263(1), it is only the Commissioner of Income-tax to issue notice. It is also relevant to add that pleas can be raised only out of the judgment passed by the Tribunal or other authorities, but the plea, which was not raised at any stage, cannot be raised for the first time before this Court. No other arguments have been advanced in respect of other questions framed in the memo of appeal." 8. Similarly, we note that in the case of Satish Kr. Keshari (supra), the Tribunal had held that when the notice u/s. 263 of the Act was not under the seal and signature of Ld. CIT and suffered for want of details on the basis of which Ld. CIT came into conclusion that the order of Assessing Officer is erroneous and prejudicial to the interest of Revenue, assumption of jurisdiction u/s. 263 of the Act by the Ld. CIT was invalid. ITA No.706/Kol/2013 M/s. Assam Bengal Carriers. A.Yr.2008-09 5 9. From the above discussion regarding the provision of law and the case law in this regard, it is clear that for a valid assumption of the jurisdiction u/s. 263 of the Act, the notice issued u/s. 263 of the Act should be ....
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....o for want of jurisdiction. Further, invalid show cause notice vitiates the proceeding and consequential order. Hence, we are of the considered opinion that the impugned order passed by the ld. CIT(E) is invalid and liable to quash on this ground." 22. The ratio decidendi of the above decision rendered by the Coordinate Bench is that the 13th proviso to section 10(23C)(vi) confers the power/ jurisdiction to withdraw the approval to the prescribed authority i.e, ld. CIT(E) and therefore, the satisfaction of the ld CIT(E) is a must before issuing the show cause notice for the proposed action of the withdrawal of the approval granted u/s 10(23C)(vi) of the Act. Therefore, what is material and mandatory condition is the satisfaction of the ld CIT(E) and no one else. Further, the language and tenor of the show cause notice must exhibit the thought process and application of mind by the ld. CIT(E) and thus an expression of the satisfaction of ld. CIT(E) even though the same may be signed by the DCIT (Hqr.) or any other subordinate authority. However, where the ld. CIT(E) has delegated his powers to any other authority to issue show cause notice and it is based on the satisfaction o....
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....e, we are unable to accede to the contention of the ld AR that the present proceedings are vitiated for want of signature of ld CIT(E) on the show-cause notice when the entirety of facts clearly demonstrate that the show-cause notice reflects the thought process and application of mind and the satisfaction so recorded of the ld. CIT(E). In the result, the additional ground so raised by the assessee is hereby dismissed. 24. Now, we refer to other grounds of appeal on merits of the case and the contentions advanced by both the parties. 25. The ld AR has submitted that the assessee University is established under a statute by the State of Rajasthan vide Act No. 6 of 2008 namely, Singhania University Pacheri Bari (Jhunjhunu) Act, 2008. It is submitted that a University is a different and distinct class from societies, trusts and other educational institutions. Unlike trusts, societies and other educational institutions that can have different objects and may undertake activities other than education, a University is established with the sole object of education. Similarly, the Appellant University is an autonomous, statutory, existing solely for the purpose of education and no....
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....ted by the ld AR that during the assessment proceedings for the A.Y. 2013-14, the AO also did not find that the Appellant University was pursing any activity other than education nor was the Appellant University found carrying any activity for profit only. Rather, all the receipts for the said assessment year were from education and all the application was towards education. However, the AO instead of finalising the assessment, and without any show-cause notice and without affording any opportunity of being heard in gross violation of principles of natural justice, made a reference to the Ld. CIT(E) for withdrawal of exemption under Section 10(23C)(vi) of the Income Tax Act. Thereafter, a show cause notice no. F.No./10/CIT(E)/JPR/Withdwl-10(23C)(vi)/2015-16/648 dated 03.05.2016 was issued by the Income Tax Officer (Hqrs.) asking the Appellant University to show cause as to why the exemption granted under Section 10(23C)(vi) of the Income Tax Act should not be withdrawn. The Appellant University submitted its reply dated 06.06.2016 to the aforesaid show cause notice. However, the Ld. CIT (E) vide impugned order dated 14.09.2016 passed order of withdrawal of the exemption given to....
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....itself claiming that the hospital is being run by the university for the medical courses, the courses which are not permitted to be run by the university and are not part of the objects approved under Section 10(23C)(vi). 6.3 As the medical courses are being run by the university without any legal authority, it cannot be held as genuine courses and once the courses itself are held not as genuine, the hospital cannot be held part of the educational courses. As the university is running a hospital, it cannot be held to be existing solely for education." From the above, it may be seen that the withdrawal of exemption by the CIT(E) is on the primary ground that the Appellant University is running some courses like A.N.M., G.N.M. and B.Ed. without legal authority and hence, these courses cannot be held to be genuine courses. It is not the case of the CIT(E) that the Appellant University is doing any activity other than education or that the hospital is being run for commercial purpose or any purpose other than teaching as a lab for medical courses and taking care of the health and welfare of the students and staff of the Appellant University. 32. It was submitted that the....
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....lly recognized and needs no recognition by any other authority (Sunil Bishnoi (supra) Page 792 Paper Book 5)." "7. After hearing the counsel for the parties and after perusing the record, this Court finds that the precedent law cited by the learned counsel for the petitioner is absolutely covering the present dispute as this Court has held in the aforementioned precedent law that the respondent Singhania University is a University established under the Statute and, therefore, in view of the precedent law, it is automatically recognised and needs no recognition by any other authority... (Shanti Lal (supra) Page 800 Paper Book 5)." It was submitted that when it is settled proposition of law that degree/diplomas or any other qualification awarded by the Appellant University are sui-generis and self-validating and need recognition of no other authority, it naturally follows that the Appellant University can run and impart education in those courses. It cannot be said that running of courses is not valid but resulting degrees are valid. Thus, it is settled position of law that the Appellant University can run all courses of education. 34. It was submitted that reference t....
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....nd 22 of the UGC Act, 1956 which empowers a university to grant degrees in all courses of education and therefore, the said clause is ultra vires and beyond the competence of the State Government. The Hon'ble Apex Court further held that it is the fundamental right of a university to impart education in all courses of education and it is the fundamental right of the students to receive education in any course of education of their choice guaranteed under Article 14, 19 and 21 of the Constitution and any such provision which requires a university to take prior approval of the State Government before starting any course is ultra-vires and hence, null and void and of no effect. The relevant portion of the Maharshi Mahesh Yogi judgment are extracted hereinbelow for convenience of ready reference: "68. Having heard the learned senior counsel for the Appellant, as well as the learned Counsel for the State, and having bestowed our serious consideration to the respective submissions and having perused the scholarly judgment of the Division Bench and other material papers, at the very outset we are of the view that providing education in an University is the primary concern and....
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....nd therefore, Section 4 and all other provisions of the State Act which are inconsistent with the Central Act are overridden by the UGC Act and thus, wholly irrelevant. 38. It was submitted that reference to Section 4 of the Singhania University Pacheri Bari (Jhunjhunu) Act, 2008 ("University Act") is misplaced and not relevant as it deals with "undertaking of research and studies in disciplines". Thus, it speaks of "disciplines" and not "courses". Regarding "running of courses" there is another provision i.e. Section 5(e) in the Singhania University Act which provides that the Appellant University may provide instructions in all such courses as it may determine. Section 5(e) of the Singhania University Act is reproduced as under: "5. Powers and functions of the University: The University shall have the following powers and functions, namely: (e) to provide instruction, including correspondence and such other courses, as it may determine" 39. It is fundamental principle of law that no words can be added or deleted from the statute and literal and plain interpretation should be given to the provisions of the statute. Thus, Section 4 cannot be held to be regar....
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....ducive to the attainment of all or any of the objects of the University." 41. It was submitted that the Appellant University, being a university established under the State Act, is established for the sole object of education. It is not in dispute that the Appellant University is undertaking any activity other than education. It is submitted that it has been held in a catena of judgments that so long as the university is imparting education and its existence is not for profit only, it is entitled for exemption under Section 10(23C)(vi). Reference in this regard may be made to the judgment of the Hon'ble Supreme Court in the case of Queen's Educational Society v. CIT reported in 372 ITR 699 (SC). wherein it was held as under: "24. ...The Income Tax Act, 1961 does not condition the grant of an exemption under Section 10(23C) on the requirement that a college must maintain the status quo, as it were, in regard to its knowledge based infrastructure. Nor for that matter is an educational institution prohibited from upgrading its infrastructure on educational facilities save on the pain of losing the benefit of exemption under Section 10(23C). Imposing such a condition whi....
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....he earlier wrong Form 10B filed by the auditor, it was submitted as under: i. It is submitted that the auditor had inadvertently filed the audit report on wrong form 10B which is applicable to an assessee availing benefit under Section 11 & 12 of the Income Tax Act. During assessment, the Assessing Officer required the Appellant University to ask the auditor to refile the audit report in the correct Form 10BB and the auditor filed the correct audit report in Form 10BB as per Section 10(23C). ii. It is submitted that the figure of Rs. 1,61,05,529/- shown as accumulation in Column No.11 of the Form 10BB is given after proper and correct calculation as prescribed under Section 10(23C) of the Income Tax Act and the figure is calculated as under: S. No. Particulars Amount 1. Total receipts of the Appellant in the previous year Rs. 21,44,86,849/- 2. Amount of receipts of the previous year applied during the previous year Rs. 16,62,08,293/- 3. Amount to the extent of 15% of the total receipts = 15% of Rs. 21,44,86,849/- Rs. 3,21,73,027/- 4. Amount of receipts exceeding 15%, accumulated in accordance with clause (a) of the third p....
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.... prior approval of UGC for setting up a new department or commencing a new course to confer degrees specified in Notifications issued under Section 22(3)." 47. It was submitted that reference may be made to Section 2(f) and Section 3 of the UGC Act which defines two separate categories of universities. One category under Section 2(f) of the UGC Act consists of those universities that have been established under a Central, Provincial or a State Act i.e. like the Appellant University which is established by the State Act viz. Singhania University Act; the second category under Section 3 of the UGC Act consists of institutions that are not statutory bodies but their status has been upgraded to be deemed to be a University i.e. like the Sam Higginbottom University, a Deemed University. Thus, both are two different and distinct classes. Reference may be made to paragraph 1of the Sam Higginbottom case (supra). The finding of the Hon'ble Court that prior approval of UGC is required for running courses applies to Deemed Universities. Regarding the universities which have been established by a State Act, such as the Appellant University, the position is very clear that no prior ap....
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....ity because it is a University established by a State Act for the sole object of education and it continues to exists for sole object of education and not for profit. In view of the aforesaid, it is submitted that the impugned order dated 14.09.2016 is without jurisdiction, against law, based on irrelevant considerations and may be quashed and the exemption of the Appellant University under Section 10(23C)(vi) of the Act may be restored. 50. Now, coming to the contentions advanced by the ld CIT DR. It was submitted by the ld CIT DR that the ld AR has contended that approval u/s 10(23C)(vi) of the Act has been granted to it because of its status of being a "university", as it was established by an Act of State Legislature and so long, it is imparting education and its existence is not for profit only, it is entitled for exemption u/s 10(23C)(vi) of the Act. In this regard, it was submitted that in the case of Visvesvaraya Technological University vs ACIT [2016] 68 taxmann.com 287 (SC), the assessee-University had been constituted under the Visveswaraiah Technological University Act, 1994 ('VTU Act') and the issue before the Hon'ble Apex Court was whether the assessee u....
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....pronouncements as relied upon by the Ld. AR are related to technical institutions providing technical education, which are regulated by All India Council for Technical Education Act, 1987 (AICTE Act). 53. It may be mentioned that in the case of Bharathidasan University & Ors. Vs AICTE AIR 2001 SC 2861, as relied upon by the ld AR, the issue before the Hon'be Apex Court was that: Whether the appellant University created under the Bharathidasan University Act, 1981 should seek prior approval of AICTE to start a department for imparting a course or programme in technical education or a technical institution as an adjunct to the University itself to conduct technical courses of its choice and selection? The Hon'ble Apex Court after analyzing the provisions of AICTE Act has concluded that the said Act has made a distinction between a "University" and a "technical institution". The Hon'ble Apex Court has also held that the Regulations made by the AICTE under section 10(1)(k) of AICTE Act requiring a University also to seek its prior approval for starting a new programme or course in technical education cannot be enforced against a "University" as it is not in consonance wi....
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....lant University. The ld CIT/DR also took us through the provisions of Singhania University Act and submitted that the appellant University is conducting courses without the approval of the State Government. The ld. CIT/DR referring to the findings of the ld. CIT(E) has submitted that once the assessee university is approved by the State Legislature, certain framework of rules are to be observed in verbatim and if any amendment is required then it has to go to the competent authority. Although, the university is an autonomous body yet it is always regulated through the clauses of the respective Act passed by legislature for its enactment and it cannot perform any activity beyond its respective Act. It is not only the approval granted by the State Government but the approval U/s 10(23C)(vi) of the Act which was also granted based on the objects presented before the prescribed activity. Any Departure from the approved objects needs prior approval of the prescribed authority and in the present case, the assessee university has violated the regulations laid down in the Act beyond its approved objects, which were definitely the subject matter of approval of exemption U/s 10(23C)(vi) of t....
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....re-requirement of hospital setup are the courses for which the assessee university is not entitled to run and these are also not part of the objects which were approved by the prescribed authority U/s 10(23C)(vi) of the Act. 58. The ld. CIT/DR has further submitted that they were other discrepancies also which were noticed by the ld. CIT(E) such as non- maintenance of student attendance register and the documentary evidence in support of actual classroom activities, in absence of which it cannot be ascertained whether income is being applied for the stated objects or not. Further, certain discrepancies were noticed in Form 10BB regarding accumulation of the funds under Section 11(2) of the Act and the assessee has failed to offer any explanation in that regard and our reference was drawn to the contents of para 9 and 10 of the order of the ld. CIT(E) wherein he has finally concluded his observations which are reproduced as under:- "9 In the case of applicant the condition mentioned in the clause (vi) of Sec. 10(23C)(vi) that the society must exists solely for education is violated and also the university has not carried out the activities as per the objects by running c....
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....se (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority; or Provided that the fund or trust or institution ^87[or any university or other educational institution or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v) ^87[or sub-clause (vi) or sub-clause (via)] shall make an application in the prescribed form^88 and manner to the prescribed authority^89 for the purpose of grant of the exemption, or continuance thereof, under sub-clause (iv) or sub-clause (v) ^90[or sub-clause (vi) or sub-clause (via)] : ^91[Provided further that the prescribed authority, before approving any fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), may call for such documents (including audited annual accounts) or information from the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as it thinks necessary in order to satisfy itself about the genuineness of the activities ....
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....e Official Gazette, specify, for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11:] Provided also that the exemption under sub-clause (iv) or subclause (v) shall not be denied in relation to any funds invested or deposited before the 1st day of April, 1989, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 5[1993] : ^6[Provided also that the exemption under sub-clause (vi) or subclause (via) shall not be denied in relation to any funds invested or deposited before the 1st day of June, 1998, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 2001:] ^7[Provided also that the exemption under sub-clause (iv) or subclause (v) 6[or sub-clause (vi) or sub-clause (via)] shall not be denied in relation to voluntary contribution, other than voluntary contribution in cash or voluntary contribu....
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....nt which is not chargeable to tax in any previous year, such trust or institution or any university or other educational institution or any hospital or other medical institution shall get its accounts audited in respect of that year by an accountant as defined in the Explanation below sub-section (2) of section 288 and furnish along with the return of income for the relevant assessment year, the report of such audit in the prescribed form14 duly signed and verified by such accountant and setting forth such particulars as may be prescribed:] ^15[Provided also that any amount of donation received by the fund or institution in terms of clause (d) of sub-section (2) of section 80G 16[in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or] which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister's National Relief Fund on or before the 31st day of March, 17[2004] shall b....
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....her educational institution or any hospital or other medical institution, rescind the notification or, by order, withdraw the approval, as the case may be, and forward a copy of the order rescinding the notification or withdrawing the approval to such fund or institution or trust or any university or other educational institution or any hospital or other medical institution and to the Assessing Officer:] ^21[Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the first proviso makes an application on or after the 1st day of June, 2006 for the purposes of grant of exemption or continuance thereof, such application shall be 22[made on or before the 30th day of September of the relevant assessment year] from which the exemption is sought :] ^23[Provided also that any anonymous donation referred to in section 115BBC on which tax is payable in accordance with the provisions of the said section shall be included in the total income :] ^24[Provided also that all pending applications, on which no notification has been issued under sub-clause (iv)....
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.... of the conditions subject to which it was notified or approved initially. These are the only scenarios which have to be examined in the facts of each case by the ld CIT(E) before he decides to invokes the exemption granted earlier. In other words, the power to withdraw the exemption is circumscribed by and subject to satisfaction of one or more of the above conditions and the ld CIT(E) cannot travel beyond the same. Similarly, we also note that the cancellation of registration granted to any educational institution under Section 12AA(3) of the Act can happen in two scenarios; one where the activities of the educational institution are not genuine and secondly, where the activities of the educational institution are not being carried out in accordance with the objects for which the educational institution has been established. 62. The legislature has thus envisaged a distinction between an activity not being genuine and an activity which is not in accordance with the stated objects. An activity therefore could be genuine even though the same may not be in accordance with the stated objects. Therefore, merely because an activity is not in accordance with the stated objec....
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....stration under section 12AA was granted on 28.06.2017 with effect from April 1, 2016. 65. Though these are two independent provisions, there are similarities in the sense that at the time of grant of registration/approval, the genuineness of the activities are examined by the ld CIT(E) in both the cases and similarly, at the time of withdrawal, the test of non-genuineness is applied in both the cases, as we have noted earlier. In the instant case, we wonder how the University can be said to be carrying on non-genuine activities by conducting such courses resulting in withdrawal of exemption under section 10(23C)(vi) and conducting the same courses as genuine activities resulting in grant of approval under section 12AA of the Act within a span of less than a year when the same courses are being conducted during this period. Interestingly, the registration granted under section 12AA is with effect from 1.4.2016 even covering the period prior to date of withdrawal of approval under section 10(23C)(vi) of the Act and the same has been granted by the same ld CIT(E) who has withdrawn the approval earlier. 66. Further, we find that the show-cause notice dated 23.06.2017 issued by....
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.... the same could not be ruled out, rejected the assessee's application filed under section 10(23C)(vi) of the Act. In the above facts, the Hon'ble High Court has ruled in para 5 to 10 which are reproduced as under:- "5. Having heard the learned counsels, this Court is of the opinion that the since question of legality of the admissions made by the petitioner Trust is still a matter sub judice before the Apex Court, of course, the Rajasthan High court has held against the petitioner Trust that such admissions were not made in accordance with law vide judgment of learned Single Judge as aforesaid and affirmed by the Division Bench, it cannot be said finally yet that petitioner has committed any such illegality and no such opinion could be formed by the learned Chief Commissioner of Income Tax so long as the matter is pending before the Supreme Court of India and is not decided against the petitioner Trust. 6. Right to litigate a particular issue in the Court of Law is a legal right of any Institution or a Charitable Trust, who is seeking exemption from income tax for which sanction is required by the competent authority within the parameters like no profit motive....
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....ome tax, Udaipur hereby accord approval to M/s. Geetanjali University Trust, Udaipur (PAN: AAATG9525E) for the purpose of the said section for the assessment year 2010-11 and onwards subject to conditions mentioned hereunder:" 8. If the alleged illegal admissions made by the petitioner Trust in the year 2008-09 could be a valid criteria or relevant consideration for denying approval under section 10(23C) of the Act, such alleged illegal admissions continued in the subsequent years also as those students continued to be in the college for subsequent years also and the same authority on the same set of facts, once denied the approval and subsequently granted such approval for subsequent years. This incongruity in the two orders itself repels the argument of learned counsel for the respondent Revenue. 9. In the opinion of this court also, this ground alone as such could not be relevant and a valid basis for refusing the approval under Section 10(23C) of the Act to the petitioner Trust especially since the matter is still pending before the Hon'ble Supreme Court. Of course, the authority concerned is free to apply its mind and take into account the relevant consid....
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....ate authority and the Hon'ble High Court has held that: "if the alleged illegal admissions made by the petitioner Trust in the year 2008-09 could be a valid criteria or relevant consideration for denying approval under section 10(23C) of the Act, such alleged illegal admissions continued in the subsequent years also as those students continued to be in the college for subsequent years also and the same authority on the same set of facts, once denied the approval and subsequently granted such approval for subsequent years. This incongruity in the two orders itself repels the argument of learned counsel for the respondent Revenue." 72. We find that the facts of the instant case are pari-materia in the sense that in the instant case, same educational courses were being conducted when the approval was withdrawn under section 10(23C)(vi) and subsequently approval was granted though under section 12AA of the Act which clearly bring out the incongruity which cannot be sustained in the eyes of law. Further, in the instant case, there is no adverse material against the assessee University rather the latter has submitted the decisions of the Hon'ble Rajasthan High Court where the....