TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 401
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..../78 dated 25/05/1978. The assessee is also registered as a Public Charitable Trust under Bombay Public Trust Act, 1950 since 24/10/1978. As per the predominant objects in the Memorandum of Association and Rules and Regulations of the society, the assessee society has been established solely for the purpose of education. The objects of the assessee society as per the Memorandum of Association dated 31/03/1978 are as under:- a) To encourage and spread education among all people irrespective of caste, creed and religion, by providing facilities for education, pre-primary, primary, secondary, collegiate, technical, physical and the like. b) To found, conduct, aid and take over educational institutions with Marathi, Hindi, English, Gujarati and Punjabi medium of instructions from K.G. to college level or higher technical courses. c) To establish educational institutions and facilities etc. viz. Hostels, libraries, reading rooms, play grounds, Halls, Coaching classes and dispensaries etc., and provide educational and vocational guidance. d) To give text books, scholarships to deserving students and refundable scholarship, loans for higher education in India and abroad. e) To ar....
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....should be for a minimum effective term of five years, with an appropriate renewal clause up to minimum of 30 years. Accordingly, in order to fulfil the requirements prescribed by CISCE in its affiliation rules and in view of the fact that assessee society did not have enough resources to purchase the land on its own to the extent of minimum of 2000 sq.mtrs, had resorted to take the land belonging to that trustees of the trust, on lease. Vide lease deed dated 31/03/2017, the assessee took land measuring 2200 sq.mtrs. on lease from Shri Amarjit Singh Nandrajog and Shri Charanjit Singh Nandrajog (trustees of the trust) for a period of 60 years from January 1988 valid till 31/12/2047 on a monthly rent of Rs. 2 lakhs chargeable from F.Y.2018-19 relevant to A.Y.2019-20. The stamp duty of Rs. 58,67,000/- was duly paid on the above registered lease deed. The said lease deed also provided for escalation of lease rent from time to time. 2.3. For the A.Y.2019-20, an application in Form 56 D was electronically filed by the assessee trust on 25/09/2019 with all the relevant documents for grant of exemption u/s.10(23C)(vi) of the Act. All the details called for by the ld. CIT(E) from time to ti....
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.... again are only incidental to the attainment of the main object of educational purpose. Hence, we summarily dismiss the first ground of rejection of the ld. CIT(E) for denying exemption u/s. 10(23C)(vi) of the Act as it is without any basis. 2.7. We have perused the income and expenditure account together with the audited financial statements for the year ended 31/03/2016 to 31/03/2019 of the assessee trust. From the perusal of the same, we find that assessee trust had derived income only from educational activity and not otherwise. Hence, even the financial statements of the assessee support the contention of the ld. AR that the trust is existing solely for the purpose of education only and not of any other purpose. Even otherwise during the year under consideration, i.e. F.Y.2018-19 relevant to A.Y.2019-20, for which claim of 10(23C)(vi) of the Act is sought by the assessee trust, the assessee trust had carried all activities only with respect to education and not otherwise at all. Accordingly, the other incidental objects provided in the Memorandum of Association for smooth attainment and fulfilment of the main objects, was not even carried out by the assessee during the year u....
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....ure cannot be decisive. An institution cannot be considered to be existing for profit, if some surplus is generated over its expenditure. It is not possible to carry on educational activity in such a way that the expenditure exactly balances the income and there is no resultant profit. Even otherwise, we find that the CBDT vide its Circular No.14/2015 dated 17/08/2015 had issued clarification on certain issues related to grant of approval and claim of exemption u/s. 10(23C)(vi) of the Act wherein it had categorically stated that the educational institution is entitled to generate surplus out of its gross receipts and mere generation of surplus by educational institution from year to year cannot be a basis for rejection of application u/s. 10(23C)(vi) of the Act if the said surplus is used for educational purpose and not distributed to private individuals as dividend. Even this CBDT Circular, which is binding on the ld. CIT(E), has not been followed by him while rejecting the claim of exemption u/s. 10(23C)(vi) of the Act. 3.2. We find that the ld. CIT(E) had merely looked into income and expenditure account of the assessee trust for coming to the conclusion that assessee had earne....
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.... Late Mr. Jaidev Singh Nandrajog and Late Mr. Tara Singh Nandrajog. The trust started educational instituteion on the present premises at Shivaji Talav, Bhandup West, Mumbai - 400 078 in the year 1988. 10.1. Sardar Pratap Singh was owner of the land on which the school building was constructed. Sardar Pratap Singh expired on 20.11.1973 leaving behind Sardar Jaidev Singh Nandrajog and Sardar Tara Singh Nandrajog who succeeded the said property. 10.2. Smt. Rampyari Pratap Singh wife of Sardar Pratap Singh, Sardar Jaidev Singh Nandrajog and Sardar Tara Singh Nandrajog were trustees of the applicant society which was formed in the year 1978 and operated the school of the society. 10.3. Sardar Jaidev Singh Nandrajog expired on 31.12.2015 leaving behind Mr. Amarjit Singh Nandrajog and Mr. Charanjeet Singh Nandrajog as legal heirs. 10.4. A deed of partition dated 01.09.2016 was executed between Mr. Amarjit Singh Nandrajog and Mr. Charanjeet Singh Nandrajog as legal heirs of Sardar Jaidev Singh Nandrajog on the part and Sardar Tara Singh Nadrajog on the other part. By virtue of the deed of partition Mr. Amarjit Singh Nadrajog and Mr. Chandrajeet Singh Nandrajog became owners of the....
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....onsideration which was never incurred in earlier years. This shows that there is change in the manner in which the society is being run now. The society had applied for exemption u/s.10(23C)(vi) for the F.Y.2017-18 / A.Y.2018-19 however it later withdrew its application. Therefore, the F.Y.2018-19/A.Y.2019-20 is the first year in which application for exemption u/s.10(23C)(vi) is being pursued and decided upon. 4.1. From the aforesaid history recorded by the ld. CIT(E) in his order in pages 15 & 16 thereon, it could be seen that the main grievance of the ld. CIT(E) is that assessee trust has paid lease rent of Rs. 24 lakhs to two trustees of the trust for taking lease on rent admeasuring 2200 sq.mtrs on which building of the school is constructed and on which the school is functioning as on date. We find that assessee trust had to ensure that it has minimum 2000 sq. mtrs on land, for functioning its school and for getting affiliation with CISCE as per the rules and regulations by CISCE. These documents are enclosed in pages 61 & 62 of the paper book filed before us. From the aforesaid history recorded by the ld. CIT(E), it could be seen that the registered lease deed was duly exe....