2022 (5) TMI 774

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.... registered under the M.P. Societies Registration Adhiniyam and is running educational institutions, being Schools & Colleges. It, vide its' applied to the CIT(E) on 25/08/2018 for granting approval under section 80G(5)(vi) of the Income Tax Act, 1961 ('the Act'). The CIT(E) vide order dated 28-02-2019 rejected the said application. 2.2 The principal ground cited by the ld. CIT(E) for the said rejection is that the society is generating huge surpluses out of the fee charged to the students from year to year, toward which he refers to the assesseee's declared results, as under: F.Y. Total Receipts (Rs.) Surplus % Surplus % Capital Expendi--ture (Rs.) 2015-16 27405959 8495885 31% 2255216 2016-17 31314100....

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....ome Amount applied 34584327 32046523 Amount accumulated 4807978 0 2.5 The ld. CIT(E) accordingly denied approval u/s. 80G(5)(vi) to the society, leading to the instant appeal. 3. Like contentions were raised by either side before us, with the assessee relying on the following case law: 1. Order by Hon'ble Jabalpur Bench dated 07-09-2020 in the case of Mannulal Jagannath Das Trust Hospital v. CIT (Exemption) 2. Addl. CIT v. Surat Art Silk Cloth Manufactures Association [1979] 13 CTR (SC) 378 : (1980) 121 ITR 1 (SC) 3. CIT v. Rajmala Educational Society (2012) 65 DTR (P&H) 307 4. Judgment in the case of Pradeep Education Society v. CIT (Exemption) ITAT Delhi 5. Judgment in t....

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....the assessee-society, including that per the latest amendment therein, i.e., on 28/12/2020 (PB-1, pgs. 1-7), to find that there is no embargo in its' charter on the earning of profits. None such is also observed either u/s. 80G(5) or the relevant rule, being r. 11AA. The same therefore does not serve as a valid ground for denial of approval. 4.2 We have also perused each of the decisions cited by the Revenue, to find them as inapplicable. The same are, firstly, in respect of an Approval u/s. 10(23C)(vi), which provision clearly stipulates the condition of the educational institution as existing solely for the educational purpose and not for the purpose of profit, so that in the facts of a given case, it could be contended that the pre-do....