TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 1877
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....nied registration u/s 12A ignoring the facts available on record and the position of law thereon. It was submitted that the assessee had filed an application in form No. 10A seeking Registration where admittedly assessee was an ongoing entity and has been in operation since 13.03.2003. Referring to the impugned order itself, it was submitted that the assessee society has been engaged in charitable activity by way of running a school in the rural area to educate the children of surrounding villages and Kurukshetra and other nearby places. The said activity is in compliance to the stated aims and objects of the society to educate the rural children with the latest and modern techniques of educational practices, to prepare the coming generation as good and worthy citizens of the country. The society also aims to make an all-round development of the personalities of rural children. The society further aims to bring the children of the poor and weaker section of the society at par with the children of the upper strata of the society with the aim to open a good school which has been done in the rural and also urban areas meant for children from all strata and make available all possible ....
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....y on adding to their fleet of vehicles. The present emphasis on this aspect and thereby generation of another source of income doesn't fit into the definition of education as laid down by the Apex Court in the case of Sole Trustee Lok Sikshan Trust. Moreover from the object clause it is evident that undertaking transportation doesn't feature as one of the objects of the society. 9. Moreover, the Salary and Fee structure of the society is not in sync with the instruction issued by the CBSE while providing affiliation. The salary structure is pitiably low. In response to the query whether the salary paid has been guided by the TDS provisions it has been stated that the amount of salary is below the taxable limits. It clearly leads one to conclude that society is not following the instruction issued by the CBSE at the time giving affiliation certificate compromising thereby with the quality of education. Legislative intent behind granting exemption to entities in education has been to improve the quality and not merely to impart education with no emphasis on quality. 10 It is seen that no evidence has been provided vis-à-vis land owned by the society except a refe....
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....n the rural area. 2.3. Inviting attention to the respective schedule of assets at pages 26,33 and 39, it was his submission that the expenditure has exclusively been on building, furniture, electric fittings, computers, lab equipments, musical instruments, sports equipment, Smart Class Board, generator, library books etc. and also vehicles consisting of school busses and not high end luxury cars. So the assessee can by no standards be said to be carrying out educational activity as a casual exercise. Inviting attention to Paper Book pages 118 to 120 which was a list of staff in the respective three years, it was submitted it can be seen that apart from employing Librarian and Assistant Librarian and Principal, the assessee has a staff of about 35 to 37 TGT( Trained Graduate Teachers) and PRT. Apart from that, there are three clerks, four bus drivers, two peons, watchman and gateman etc. Thus, the presumptions of the Department that the assessee was only interested in the creation of assets and not on re-deployment of funds towards education, it was submitted, is completely misconceived and prejudicial de horse fact. The objections that there is no evidence of land owned, it was s....
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....10(23C)(iv) of the Act, cannot be accepted because after the notice was issued for withdrawing the exemption on the said ground, reply was filed by the petitioner(s) asserting that in view of the law laid n by various High Courts and Hon'ble the Supreme Court such a ground was not tenable. The Chief Commissioner thereafter did not issue any notice to the assessee making the aforesaid ground as the basis for withdrawal of exemption nor there is any finding recorded in the impugned orders. Thus, the said ground on which there is no finding in the impugned Order is not sustainable in view of the law laid down by Hon'ble the Supreme Court in the case of Mohinder Singh Gill v. Chief Election Commissioner AIR 1978 SC 851 (para 8). Secondly, such a plea in any case would not sustain the impugned order, in as much as, in the case of Aditanar Educational Institution (supra) it has been held that :- " . . . We are of the view that an educational society or a trust or other similar body running an education institution solely for educational purposes and not for the purpose of profit could be regarded as "other educational institution" coming within section 10(22) - See CIT v. Doon....
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....nce was placed upon the following head-note : Thus, the law common to section lQ(23C)(iiiad) and (vi) may be summed up as follows: (1) Where an educational institution carries on the activity of education primarily for educating] persons, the fact that it makes incidental 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. ................................. ................................. 2.7 Referring to the said decision, it was submitted, that the decision of the Uttrakhand High Court in the case of Queens Educational Society has been reversed and of the Hon'ble Punjab & Haryana High Court in the case of Pinegrove International Charitable Trust (supra) has been approved. 2.8 Reliance was also placed upon the order dated 18.01.2017 in the case of Labana Sikh Educational Society Vs CIT(Exemptions) Chandigarh 163 ITD 87 (Chandigarh -Trib.), copy placed at pages 44-49 which is again in the context of assessee society running educational institution. Reference was also placed upon decision of the Pune Bench in the case of Bharati Vidyapeeeth Medical Foundation Vs....
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....urt in the case of Yash Society Vs CCIT, Mumbai (2015) 375 ITR 152 (Mum). Inviting specific attention to para 27 of the said decision wherein reliance had been placed upon the decision of the Apex Court in the case of S.H. Medical Centre Hospital V State of Kerala (2014) 11 SCC 381. It was submitted that the following para of the said decision of the Bombay High Court, has been extracted where on heavy reliance has been placed upon by the Revenue : "17. Now, we will examine the question of what "charitable purpose" means. The Oxford English Dictionary defines "charitable "as of or relating to the assistance of those in need". In the present case, it can be argued that all medical services relate to the assistance of those in need. This is a valid interpretation but cannot be accepted for the purposes of tax. If these medical services in the present case were being offered free to a majority of the patients rather than a minority of patients, then the conclusion could have been reached that the buildings are principally used for charitable purpose. Further, an amount of approximately Rs. 26,00,000 of the expenses are towards "social work and / charities" as per the income and exp....
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....for making profit in the garb of charity activity and therefore, registration has correctly been denied. 4. The ld. AR in reply stated that he would not want to repeat the facts. The assessee, it was submitted, runs only one school for education in a village area where public transport is not available and it's a means to carry the students to and fro from their villages to school and vice versa and is a necessity. The decision of the Bombay High Court relied upon by the CIT-DR, it was submitted, is not of any relevance as it pertains to a hospital and in the facts where charitable activity could not be demonstrated by that assessee. It was again reiterated that the conclusions drawn by the CIT(Exemption) are contrary to facts and based on suspicions and surmises as there is no excess of income as the assessee has retained a meager amount of Rs. 2 lacs odd after deploying the funds for improving the infrastructure and ensuring that the children can come to school and be dropped back to their homes from the school. Teachers have been employed and infrastructure has been made available. None of these facts, it was submitted, have been negatively commented upon. 5. We have heard t....
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....ng with the copies of Return of FCRA and the specified bank account. (xii) Note on Right to Education Act and how the same was being implemented in institute. (xiii) Details of corpus fund and whether the same were -with any specific written directions. (xiv) Details regarding charitable activities being conducted by the society. Along with clarification as regards which specific limb under section 2(15) of the I,T. Act was being pursued, (xv) Copy of Receipts and payment accounts of the entity for the last three years along with corroboration through bank entries. (xvi) Explanation as regards to sudden need for seeking exemption u/s 12A and not 10(23c)(vi) when till date society have been claiming exemption u/s 10(23c)(iiiad) which entails that the entity solely for educational purposes and not for profit till now. 5.1. It is not the case of the Revenue that those details were not made available. We have taken into consideration the relevant pages of the Paper Book to which our attention has been invited by the parties. We have also taken note of the judicial precedent relied upon before us by the parties and we note that apart from the decision of the Bombay High....