TaxTMI 
TaxTMI 
2021 (10) TMI 26
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...."The facts of the case are that return of income declaring Nil was filed on 29/09/2013. The assessee society is registered under section 12A vide letter dated 01/07/1996 and is also registered under section 80G (5)(vi) vide order dated 26/09/2007 for the period from 01/04/2007 to 31/03/2010. The society is registered higher education and is running courses in Engineering and MBA. The main object of the society is to provide education. 3.2. During the course of examination of accounts of the assessee it was noted that 82 students were admitted in the NRI quota against the intake of 550 students who are resident Indians. Details of student admitted in the financial year 2012-13 were submitted which included details of NRI students also. With the view to examine the NRI status of the students admitted under the NRI quota, the society was asked to furnish details of documentation, admission policy of the college and receipts of fee issued NRI quota students. Further to ascertain the genuineness of the students admitted under the NRI quota summons under section 131 was issued along with questionnaire to which responses were received from 29 students. 3.3. The assessee was specific....
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....an (NRI)/Foreign National (FN)/Persons of Indian origin (PIO) category / quota in AICTE approved institutions) Regulations, 2002, the Assessing Officer held that it is mandatory on the part of the institution that only a person who is NRI himself/herself may seek admission and no other candidates without NRI status would be eligible. The Assessing Officer also relied upon Regulation 4.5 of the said AICTE Regulations which provided that there is no provision for admission of NRI sponsored students and observed that the institution has not cared to adhere to this mandatory rule and continued with admission under NRI quota by accepting the application forms sponsored by certain persons who were holding either the Indian passport or foreign passports. The Assessing Officer also noted that the institution made its own rules for admission under NRI quota and by passed statutory instructions and guidelines issued by AICTE which is a body of the Ministry of Human Resource Development, New Delhi. The Assessing Officer then relied on various judgements of Hon'ble High Courts on the issue of admission and technical courses under the NRI quota and, it was held that the assessee institution....
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.... chat activity carried out by the assessee during the period into consideration is not charitable and, therefore, the assessee would not be entitled for exemption under sections 11 and 12. Only depreciation on fixed assets purchased during the year was allowed and depreciation on assets purchased in earlier years would not be allowed because a assets would have been claimed as application of income in earlier years. Income was computed at Rs. 4, 19,80,320/-." 3. Aggrieved against this, the assessee preferred appeal before Ld. CIT(A) who after considering the submissions, partly allowed the appeal of the assessee. Thereby, Ld.CIT(A) directed the Assessing Officer to allow exemption u/s 11 & 12 of the Act with all consequential benefits. 4. Aggrieved against this, the Revenue is in appeal before this Tribunal. 5. Ld. Sr. DR strongly relied on the decision of the assessment order and submitted that the assessee has violated the guidelines issued by the Regulatory authority and admitted 82 students in NRI quota against intake of 550 students. Ld.Sr.DR submitted that the Assessing Officer has categorically observed that there is no provision for admission of NRI sponsors of students....
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.... that for the purpose of section 1023C)(vi), failure of the assessee educational institution to provide admissions strictly in accordance with the prescribed rules, regulations and statute could not lead to its losing character as an entity existing solely for the purpose of education. In this case the Commissioner noticed that the High Court had passed an order in assessee's case that admission to medical course had not been made on the basis of system approved by the Medical Council of India and, thus, those admissions were illegal. Relying on the aforesaid order, the Commissioner held that since the assessee-trust had violated the procedure of admission as laid down by the Government/Medical Council, it did not qualify as an institute within the meaning of section 10(23C)(vi) and (via). It was held that: * A plain reading of the provisions of section 10(23C)(vi) would reveal that what is required for the purpose of seeking approval thereunder is that the University or other educational institution should exist 'solely for educational purposes and not for purposes of profit'. It is nowhere the case and/ or finding of the CCIT that on account of the said defect in t....