TaxTMI 
TaxTMI 
2021 (3) TMI 223
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....on of financial statements, the CIT(Exemption) was of the opinion that there is huge surplus in last three assessment years i.e. (A.Ys. 2016-17, 2017-18 and 2018-19) and no details have been furnished regarding the status of return of income filed for the said respective years, no individual receipts and payment details or individual income and expenditure statement regarding surplus from pre-primary and primary school income filed. The CIT(Exemption) sought remand report from ITO (E), Ward, Kolhapur regarding the status of returns filed for A.Ys. 2014-15 to 2018-19. The CIT(Exemption) considered the factual remand report of ITO and opined that the assessee cannot be said to have engaged in the educational activities for charitable purposes and the trust failed to establish charitable nature of education in view of the excess generation huge surplus from the school fees and the assessee made false claim of exemption u/s. 11(1) of the Act in the absence of registration u/s. 12AA of the Act. 4. Aggrieved by the order of CIT(Exemption), now, the assessee is before us. 5. The ld. AR, Mrs. Arati Vissanji submits that the assessee was registered on 21-01-1974 under the Societies Regist....
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....s of the assessee are not charitable is not justified and conclusion of CIT(Exemption) has no base in this regard. She referred to para 11 in the case of Queen's Educational Society (supra) and ratio laid down by the Hon'ble Supreme Court is squarely applicable to the case on hand and submits that the assessee is entitled to registration u/s. 12AA of the Act and she prayed to set aside the order of CIT(Exemption). 7. On the other hand the ld. DR, Shri Deepak Garg submits that the assessee generated huge surplus for F.Ys. 2015-16, 2016-17 and 2017-18 which was examined by the CIT(Exemption) and not satisfied with the accounts, held the activities of the assessee trust is not charitable in nature and rejected registration sought u/s. 12AA of the Act. The assessee also not filed details of receipts and payment details or individual income and expenditure statement of pre-primary and primary school from which surplus are generated and the CIT(Exemption) rightly held the assessee's trust cannot be said to have engaged in the educational activities for charitable purposes as it failed to establish charitable nature of education when the excess is generated from the school fees. 8. Furt....
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....petuity unless specifically withdrawn. Therefore, it is clear the assessee was enjoying claim of exemption u/s. 11 of the Act from A.Y. 2000-01 onwards and granting of certificate u/s. 80G from 01-04-2012 onwards till date. The CIT(Exemption) did not dispute the same. We note that the returns of income filed by the assessee have also been accepted by the respondentrevenue. The contention of Revenue is that no assessment from A.Ys. 2014-15 to 2018-19 selected for scrutiny and since the CIT(Exemption) found during the process of application for registration u/s. 12AA of the Act reopened the assessments from A.Ys. 2014-15 to 2018-19. We note that the AO filed its factual report in response to direction of CIT(Exemption) which is reproduced in page Nos. 3 and 4 of the impugned order which clearly shows that the respondent-revenue allowing the claim u/s. 11 of the Act prior to A.Y. 2016-17. Therefore, no dispute in respect of granting exemption u/s. 11 of the Act treating the assessee having got registration u/s. 12AA of the Act and u/s. 80G of the Act. 10. Coming to the decision of Hon'ble Supreme Court in the case of Queen's Educational Society (supra), the brief facts therein are th....
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....re was a difference of opinion among various High Courts on the aforesaid issue. While summarizing the law, this Court approved the judgments of Punjab and Haryana High Court, Delhi and Bombay High Courts and reversed the view taken by the Uttarakhand High Court. Insofar as the judgment of the Punjab and Haryana High Court is concerned, it was given in the case of Pinegrove International Charitable Trust v. Union of India (2010) 327 ITR 73. The relevant para in this behalf which also states as to how such cases are to be dealt with reads as under: "25. We approve the judgments of the Punjab and Haryana, Delhi and Bombay High Courts. Since we have set aside the judgment of the Uttarakhand High Court and since the Chief CIT's orders cancelling exemption which were set aside by the Punjab and Haryana High Court were passed almost solely upon the law declared by the Uttarakhand High Court, itis clear that these orders cannot stand. Consequently, Revenue's appeals from the Punjab and Haryana High Court's judgment dated 29.1.2010 and the judgments following it are dismissed. We reiterate that the correct tests which have been culled out in the three Supreme Court judgments stated abov....