TaxTMI 
TaxTMI 
2014 (1) TMI 1944
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....g the claim of the assessee u/s 10(23C)(iiiab) of the IT Act by holding that the issue of allowance of claim u/s 10(23C)(iiiab) had already been settled by the CIT, Bathinda as per order u/s 263 dated 23.03.2012 wherein the CIT has dropped the proceedings initiated u/s 263 for the A.Y. 2007- 08; without deciding the case on merits. 2. Facts narrated by the Revenue Authority are that the assessee filed its return of income on 10.09.2009 declaring income at Rs. Nil which was processed by the Assessing Officer under Section 143(1) of the Income Tax Act, 1961 (in short "the Act") on the same figure. The case of the assessee was selected for compulsory scrutiny and notice under Section 143(2) of the Act was issued on 24.09.2010 which was duly served upon the assessee. Subsequently, notices under Sections 143(2) and 142(1) of the Act along with questionnaire were issued and duly served on the assessee. In response to the same, the Authorized Representative of the assessee appeared from time to time and filed written submissions/details and also produced books of account, which was examined by the Assessing Officer. 3. The assessee derives income from running an educational institute in....
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.... Section 10(23C)(iiiab) of the Act at all because any educational institution which is established for educational purpose and not for purpose of profit can be considered for exemption under that section, but the condition for such exemption is that the institution must be wholly or substantially financed by the Government. In the instant case, it is clear that the Government of Punjab has established the assessee-institute and further allowed to get registered under the Societies Registration Act, 1860 only, but did not finance the institute during the year under consideration or even in last 5 years at all, as admitted by the assessee-institute in its reply. The Assessing Officer was also of the view that the assessee has shown receipt of Rs. 6,71,72,043/- against which it has claimed various expenses as per income and expenditure account for the year ending 31.03.2009 and thereby has declared net income of Rs. 2,27,57,756/- and has also claimed major expenses, which the Assessing Officer has mentioned at page nos. 5 and 6 of the assessment order. The Assessing Officer also mentioned the fee structures for MBA, B.Tech and B. Pharma as furnished by the assessee at page no. 6 of th....
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.... the exemption under Section 10(23C)(iiiab) of the Act for the following reasons, which the Assessing Officer has mentioned at page nos. 7 and 8 of the assessment order and the same are reproduced as under: i. The Institute is charging fees from the students at impugned prescribed rates as stated earlier, out of which it incurs expenditures for its day to day affairs including salary payments to the teaching staff. ii. The Institute is running colleges and is earning systematic profits which are accumulated year after year. iii. The surplus funds have not been utilized for the development of infrastructure needed for the students whose parents/guardians have paid their hard earned money iv. The Institute has parker its surplus profits in FDRs with banks which is in crores i.e. Rs. 11,27,93,116/- as on 31.03.2009. v. As per sub-clauses (vi) & (xiv) of clause -2 of the Memorandum of the Institute, the intention of the assessee was to collect fees and other charges, to receive grants, gifts, donations, benefactions, bequests or transfer and all moneys in any other manner or from any other source authorities below authorities ab-initio i.e. at the time of inception of the Soc....
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....pproved by the Govt. of Punjab and utilized for the utilized for the Development of the campus for the students, if any. Rest of the Funds are kept in Bank(s) separate from other receipts. After considering the reply filed by the assessee, the Assessing Officer was of the view that the assessee cannot show this fund separately for the purpose of total receipts received by it during the year and this fund is not controlled by the students like Student Funds, and the statement of the assessee is misleading one because every development is meant to impart education to the students which is main object of the Institute. The assessee cannot show this fund separately for the purpose of total receipts received during the year. Therefore, the total receipt of Rs. 1,18,09,000/- under the head Development Fund received during the year is added to the receipts of the assessee and similarly the amount of accrued interest of Rs. 20,71,559/- on FDRs for the year under consideration, which he also added to the income of assessee and finally he completed the assessment under Section 143(3) of the Act on the total income of Rs. 3,67,47,183/- by passing the impugned order on 29.07.2011. 12. Aggriev....
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...., Bathinda relating to assessment year 2007-08. In the 2nd paper book, containing pages from 11 to 23, he has attached Copy of Notice dated 16.10.2012 issued by the Commissioner of Income Tax, Bathinda, under Section 263(1) of the IT Act, 1961, relating to assessment year 2008-09; Copy of reply filed before the Commissioner of Income Tax, Bathinda in response to notice issued u/s 263(1) relating to assessment year 2008-09; Copy of order u/s 263 dated 15/11/2012 passed by Commissioner of Income Tax, Bathinda relating to assessment year 2008-09, Copy of assessment order u/s 143(3) dated 15.03.2013 passed by the ACIT, Circle-I, Bathinda in the case of the assessee relating to assessment year 2010-11; and Copy of Decision of Supreme Court of India in the case of CIT Vs. Excel Industries Ltd, reported in 358 ITR 295. He further stated that the documents contained in the paper books have already been filed before learned CIT(A) and learned CIT(A) has passed a well reasoned order, therefore, he requested that the impugned order may be upheld by dismissing the appeal filed by the Revenue. 15. We have heard both the parties and perused the relevant records available with us, especially the....
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.... for taking up consultancies, organizing short term training courses, seminars, workshops etc. in the areas mentioned in 2(ii) in the furtherance of the objectives of the Society. xii. To acquire and hold property in the interest of the Society. xiii. To deal with or dispose off or write off any property or loss therein belonging to or vested in the Society in such manner as the Society may deem fit for advancing its objects. xiv. To generate funds for the Society through government grants all fees and other charges received by the Society, all moneys received by the Society by way of grants, gifts, donations, benefactions, bequests or transfer and all moneys received by the Society in any other manner or from any other source. xv. To meet the expenses of Society including expenses incurred in the exercise of its powers and discharge of its functions out of its funds. xvi. To do all other legal things considered necessary to achieve the aims and objects of the Society." 16. The assessee has also filed statement of income with the return of income and it is very much necessary to reproduce the computation of income of the assessee, which the Assessing Officer has mentione....
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....come of previous year of any person, any income falling with in any of the following clauses shall not be included- (1) ............................................................ ...................................... (23C) any income received by any person on behalf of- (i) ........................... ..................................... (iiiab) any university or other educational institution existing solely for educational purpose and not for purpose of profit, and which is wholly or substantially financed by the Government or ..........................." 18. Keeping in view the provisions of Section 10(23C)(iiiab) of the Act as well as the reply filed by the assessee, we are of the view that the Assessing Officer has rightly held that any educational institute which is established for educational purpose and not for purpose of profit can be considered for exemption under that section, but the condition for such exemption is that the institution must be wholly or substantially financed by the Government. In the instant case, it is clear that the Government of Punjab has established the assessee-institute and further allowed to get registered under Societies....
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....63 of the Act dated 23.03.2012. These documentary evidences are not helpful to the assessee because notice under Section 263 of the Act and its reply thereto, and the order dated 23.03.2012 have no relevance with the exemption claimed by the assessee. 22. Learned First Appellate Authority has deleted the addition in dispute by passing an unreasonable order only on the basis of the order dated 23.03.2012 passed by learned CIT, Bathinda. The relevant portion of the impugned order at pages 6 & 7, are reproduced as under: "I had carefully examined the assessment order passed by the A.O., grounds of the appeal and written submission filed by the assessee. As per assessment order and grounds of appeal, I find that issue involved in this case is only whether the institution is covered by the provisions of section 10(23C)(iiiab) or covered by the provisions of section 10(23C)(vi) or section 11, section 12 of the Act. As per submissions, I found that the institution has come into existence in 1998 and till assessment year 2008-09 the exemption to the institution is being granted under section 10(23C)(iiiab) of the Act. In the assessment year 2009-10 the Assessing Officer is of the view t....
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....eing granted under Section 10(23C)(iiiab) of the Act and on the basis of order passed under Section 263 of the Act dated 23.03.2012 wherein learned CIT, Bathinda, has dropped the proceedings initiated under Section 263 of the Act. In our considered view, the learned First Appellate Authority has deleted the addition in dispute contrary to the law and facts and on the file and without going through the provisions of law as well as documentary evidence establishing that the assessee is entitled for the exemption claimed under Section 12(23C)(iiiab) or Section 11 and 12 of the Act. 23.1 As regards to the deletion of addition in dispute on the basis that the same exemption has been allowed by the Revenue Authority in the earlier year and the learned First Appellate Authority has granted the same in the year in dispute also, we are of the view that every assessment year is an independent assessment year. In the income tax proceeding, there can be no question of res-judicata. The decision given by one Assessing Officer for one assessment year cannot affect or bind his decision for another year. This view is supported by various judgments rendered by Hon'ble Supreme Court of India, w....