TaxTMI 
TaxTMI 
2020 (10) TMI 713
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the learned Assessing Officer on the facts and in the circumstances of the case. 3. For that the order of learned CIT (A)-1, Bhubaneswar confirming the A.O's addition of the income of Rs. 26,06,930 /- (being excess of income over expenditure claimed as exemption by the appellant) after rejecting the exemption status of the appellant Trust & treating the appellant as AOP on the ground that the appellant Trust had collected fees in excess of the fees prescribed by the authority which is not a fact & against the materials available on record. 4. For that the order of learned C1T (A)-1, Bhubaneswar confirming the A.O's addition of Rs. 5,61,504/- (being the salary paid to Smt.Ragoor Sujatha, Managing Trustee of the Trust) after observing that the salary paid to the Managing Trustee is liable to be disallowed since the status is taken as AOP after rejecting the benefit of exemption U/S-11 of the l.T Act 1961 is not just and correct on the facts and in the circumstances of the case. 5. For that without prejudice to the grounds mentioned above the learned A.O is wrong in not allowing the exemption U/s.11 of l.T.Act,1961 on the wrong grounds witho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssion with relevant documents and additional evidences, which were sent to the AO for a remand report u/s.250(4) of the Act. The remand report furnished by the O dated 6.8.2019 is as under: ""Facts of the case :-01. Fee Structure:- The assessee is a trust created by virtue of trust deed on 08.12.2006. It runs a degree engineering college in the name and style of "Indus College of Engineering" and imparting technical education. During the academic year 2009-10 approval has been accorded to the trust for imparting diploma engineering courses under the name and style of "Indus School of Engineering". The assessee has been registered u/s 12AA of the IT Act, 1961 w.e.f 09.04.2007 vide order dtd.27.06.2008 by the then Commissioner of Income-Tax, Bhubaneswar. .,Return of income for the A/Y 2010-11 relevant to the F/Y 2009-1Q was filed on 30.09.2010, showing 'nil' income. Case has been picked up for scrutiny' through CASS. Assessment was completed on 01.03.2013 determining the total income at Rs. 31,68,430/-(r.f.). While determining the total income the AO denied exemption u/s 11 of IT Act 1961, to the tune of Rs. 26,06,930/- due to violation of colle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essmaterials Subsidizedlunch Employability training Hostel fees Total B.Tech 2007 40,000 2,500 1,900 10,000 ~- 3,750 4,800 33,000 98,950 B.Tech 2008 64,500 2,500 4,900 10,000 - 3,750 4,800 33,000. 123450 B.Tech 2009 64,500 2,500 4,900 10,000 - 3,750 4,800 33,000 123450 Diploma 2009 23,700 10,000 - 3,750 31,000 68,450 All Govt. Engineering colleges/Polytechnics/Engineering Schools are. under the administrative control of the Director of Technical Education &-- Training, Industries Department of Govt, of Odisha, whereas the private Engineering colleges/poly techniques are unaided institutions affiliated to BPUT/state council for Technical Education & Vocational Trainings Odisha and approved by AICTE/State Government A reference to Government notification dated 17.12.2007 ( No.I-IT-141/2007 (pt.) 18488 which speaks about fee structure for the academic session 2007-08 which also hold good its validity for the academic year 2009-10. Extract of the notification is as under: "In pursuance of the provision of the Orissa P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the I.T.Act, 1961 and taxing Rs. 26,06,930/- being excess of income over and expenditure: That the AO has completely misread the notification and recommendation of the Govt. and concluded as under: a) The assessee has collected fees over and above the prescribed fees like course fees, hostel fees, and employability training fees etc which are not as per the norms of AICTE Act 1987. b) The assessee trust though is running educational activities, the actual generation of surplus year after year spent in expansion of infrastructure I facilities proved that the activities are in realistic sense meant to earn profit and no charity is genuinely involved. 6.1 That to understand the issue in greater clarity the provision of Sec- 2(15) of the Act is worth mentioning. a) That according toSec-2(15) of the act, expression "Charitable purpose" has been defined by way of inclusive definition so as to include relief to the poor, education, medical and advancement of any other object of genera! public utility. 6.2 That Imparting education is coming under the definition of charitable purpose under the provision of Sec-2(15) of the Act. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the fees. 6.9 That the fees committee without due consideration & without giving opportunity to the appellant, arbitrarily & unilaterally had finalised the fees from time to time. The appellant had agitated this matter before appropriate authority vide its letter dated 14.07.2008, 15.04.2010 & 25.06.2010 the copies of which are enclosed herewith & marked as Annexure-C,D & E respectively for your honour's kind perusal. 6.10 That this matter was also brought to the notice of Hon'ble Odisha High Court vide Writ Petition No.3824 of 2009 by Orissa Private Engineering College Association (OPECA). Hon'ble Odisha High Court vide its order dated 15.04.2009 directed as under: "The representation shall be disposed of by the Fee Structure Committee before expiry of its life. The aforesaid order is subject to the condition that the representation under Annexure-4 and the representations of the other member institutions pursuant to the resolution of the Fee Structure Committee are pending disposal." The copy of the order of the Hon'ble Odisha High Court is enclosed herewith & marked as Annexure-F. 6.11 That due to the unjust fixation of Fee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....per fees structure has been decided by Fee structure Committee which is entangled with many litigations pending before Hon'ble Odisha High Court. Thus learned A.O's observation of charging fees in excess of prescribed is against the materials available on record. 6.14 That without prejudice to the argument preferred above the appellant is to state that the fees charged to the student is in no way excess if we compare the fees charged by other contemporary institutions imparting the same course. Sr.No Institution B.Tech Institution MBA 1 C.V Raman College, BBSR 67,000/- Academy of Business, Balasore 76,000/- 2 Gandhi engineering college, BBSR 70,000/- Ajay Binoy Inst,Cuttack 65,000/- 3 Krupajal Engg college, BBSR 64,000/- Bijupatnaik Inst, of U & MGT, BBSR 95,000/- 4 Silicon Inst Of Techno, BBSR 68,000/- NIST, Berhampur 78,000/- 5 NIST, Berhampur 68,000/- Gandhi Inst, Gunupur 73,000/- 6 Gandhi Inst, BBSR 67,000/- - DRIEMS , CUTTACK/ 76,000/- 7 Jagannath Inst, Gajapati 67,000/- NM Inst, BBSR 76,000- 8 Gandhi Inst, Gunupur 70,000/- Srusti Aca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;-vis the reply to remand report by the assessee and the recommendation of fees structure committee, the ld CIT(A) confirmed the action of the Assessing Officer. Hence, the assessee is in appeal before us. 8. Ld A.R. of the assessee reiterating the submissions made by the assessee in the rejoinder to the remand report and submitted that assessee trust is providing education which is coming as a charitable object under the definition of Sec-2(15) of the LT. Act, 1961. The appellant enjoys the status of a valid charitable Trust by virtue of registration U/S 12AA of the Act. As long as the charitable status is intact the A.O does not have authority to withdraw the benefit available to a charitable organization U/s. 11 of the Act except for violation as provided in Sec 11 to 13 of the Act. No such violation has been established. The Hon'ble ITAT, Cuttack Bench, Cuttack has observed that even the administrative CIT does not have unbridle powers to withdraw the registration of a charitable organization U/s-12AA(3) of the Act as is decided in the case of Kalinga Institute of Information Technology (KIIT) vs. CIT (2008)23 SOT 74. Obviously, the AO does not enjoy any such power un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee. 12. Undisputedly, assessee trust enjoys registration u/s.12AA of the Act and it is also not a case of the AO that the activities of the assessee are not in accordance with its objects stated in the trust deed or assessee is doing or conducting any activities beyond its objects which is in the nature of commercial activities for profit motive. The only basis and allegation of the AO against the assessee for denying the benefit of section 11 of the Act is collecting of extra fees over and above the prescribed fees. At the same time, we also observe that the AO has noted that the surplus of funds arising out of the receipts from students have been utilized for expansion of infrastructure by the assessee trust but denied exemption u/s.11 of the Act that carrying of educational activities cannot be considered as solely for charitable purposes. In my considered and respectful opinion, in view of interim orders passed by Hon'ble High Court of Orissa, copies placed at pages 79 to 88 of assessee's paper book, I have no hesitation to hold that the Hon'ble High Court has allowed the assessee to retain extra amount of fees from prescribed limit till disposal of writ petitions. Even if a....