M/s. Madhya Pradesh Rajya Pathya Pustak Nigam, Bhopal v. The ACIT- 1(1), Bhopal

CO 57/IND/2013 | 2009-2010
Pronouncement Date: 22-10-2013 | Result: Allowed

Appeal Details

RSA Number 5722723 RSA 2013
Assessee PAN EYEAR2009W
Bench Indore
Appeal Number CO 57/IND/2013
Duration Of Justice 4 month(s) 26 day(s)
Appellant M/s. Madhya Pradesh Rajya Pathya Pustak Nigam, Bhopal
Respondent The ACIT- 1(1), Bhopal
Appeal Type Cross Objection
Pronouncement Date 22-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 22-10-2013
Assessment Year 2009-2010
Appeal Filed On 27-05-2013
Judgment Text
1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO. 192/IND/2013 A.Y. 2009-10 ACIT 1(1) BHOPAL :: APPELLANT VS MADHYA PRADESH RAJYA PATHYA PUSTAK NIGAM BHOPAL :: RESPONDENT CO NO. 57/IND/2013 (ARISING OUT OF ITA NO. 192/IND/2013) A.Y. 2009-10 MADHYA PRADESH RAJYA PATHYA PUSTAK NIGAM BHOPAL :: OBJECTOR VS ACIT 1(1) BHOPAL :: RESPONDENT DEPTT. BY SMT. MRUDULA BAJPAI ASSESSEE BY SHRI PRAKASH JAIN DATE OF HEARING 02.09.2013 DATE OF PRONOUNCEMENT 22.10.2013 O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL CHAL LENGING THE IMPUGNED ORDER DATED 7 TH DECEMBER 2012 OF THE LEARNED FIRST APPELLATE AUTHORITY WHEREAS THE ASSESSEE HAS PREFER RED CROSS 2 OBJECTION. FIRST WE SHALL TAKE UP THE APPEAL OF THE REVENUE WHEREIN THE ONLY EFFECTIVE GROUND RAISED PERTAINS T O DELETING THE ADDITION OF RS.15 10 38 400/- MADE BY THE ASSESSING OFFICER REJECTING THE CLAIMED EXEMPTION U/S 11 OF THE INCOM E TAX ACT. 2. DURING HEARING OF THIS APPEAL AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SHRI PRAKASH JAIN POINTE D OUT THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TR IBUNAL. HOWEVER THE LEARNED CIT DR MRS. MRUDULA BAJPAI DE FENDED THE ASSESSMENT ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A SOCIETY ORIGINALLY REGISTERED IN THE NAME OF M.P. STATE CORPORATION OF TEXT BOOK PRODUCTION AND EDUCA TION RESEARCH LATER ON CHANGED TO MADHYA PRADESH PATHYA PUSTAK NIGAM DECLARED NIL INCOME IN ITS RETURN FILED ON 3 0.9.2009. THE TOTAL INCOME WAS SUBSEQUENTLY DETERMINED AT RS.15 1 0 38 400/- U/S 143(3) OF THE ACT WHICH INCLUDES ALL ADDITIONS/ DISALLOWANCES WHICH WERE DELETED BY LEARNED CIT(A) AND THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. THE RELEVANT FINDING OF THE LD. CIT(A) IS REPRODUCED HEREUNDER: 3 ! ' #$%% & ! ! ' ! !% ( & ) ! * + ' ' & * + % & ' )- ' % . ' #. * + '/ 3.1 IF THE OBSERVATIONS MADE IN THE ASSESSMENT ORDE R DENYING THE CLAIMED RELIEF CONCLUSION DRAWN IN THE IMPUGNE D ORDER AND THE ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL AR E KEPT IN JUXTAPOSITION AND ANALYSED WE FIND THAT THERE IS N O FINDING IN THE ASSESSMENT ORDER REGARDING APPLICATION OF GROSS REC EIPTS AS PROVIDED IN THE ACT. THE LD. CIT(A) REACHED TO A CO NCLUSION WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSEE. IN V IEW OF THESE FACTS THIS ISSUE IS REMANDED BACK TO THE FILE OF T HE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND IF IT IS FOUND THAT 4 THE ASSESSEE HAS APPLIED THE GROSS RECEIPTS FOR THE OBJECTS OF THE ASSESSEE WITHIN THE PRESCRIBED LIMIT THEN THE CLAIM ED RELIEF MAY BE GRANTED TO THE ASSESSEE OTHERWISE THE ASSESSING OFFICER IS FREE TO DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE P ROVIDED OPPORTUNITY OF BEING HEARD. SINCE WE HAVE REMANDED THE APPEAL TO THE FILE OF THE ASSESSING OFFICER GROUND NO.1 & 2 REGARDING NOT FOLLOWING THE PROVISIONS OF SEC. 250(2) OF THE ACT IN NOT PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER ARE AUTOMATICA LLY DISPOSED OF. ACCORDINGLY THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES ONLY. 4. NOW WE SHALL TAKE UP THE CROSS-OBJECTION OF THE ASSESSEE IN WHICH IT HAS BEEN CONTENDED THAT THE LD. CIT(A) HAS NOT DECIDED THE APPEAL ON MERIT WITH RESPECT TO BENEFIT OF PROV ISIONS OF SEC. 10(23C) (IIIAB) OF THE ACT DETERMINING THE TOTAL IN COME AT RS.15 10 38 400/-. THE LEARNED COUNSEL FOR THE ASSE SSEE ALSO POINTED OUT THAT THE GROUNDS RAISED IN THE CROSS-OB JECTION ARE COVERED BY THE DECISION OF THE TRIBUNAL DATED 25.4. 2012. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 5.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE ASSERTION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF A FORESAID ORDER 5 DATED 25.4.2012 IN ITA NOS.375 TO 394/IND/2011 IN A SSESSEES OWN CASE FOR AYS 1988-89 TO 2006-07 AND 2008-09: THESE APPEALS FILED BY THE ASSESSEE ARISE OUT OF OR DER OF CIT(A)-I BHOPAL DATED 28.11.2011 FOR THE ASSESSME NT YEARS 1988 89 TO 2006-07 AND 2008-09 2. THE FOLLOWING COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ITA NO. 375 TO 385/IND/2011 :- 1) % 01 %'23 3 % 01%23 4 & * 5 % 01%23 & 5 % 01%230* #6 %% $ 7 5 % 0*01%23 ' 23 #6#1 89 5 % 01%23 *$ 7 !. !:) % ( %' & ; #6; 1 %' & 9 9 1 <1%!%=: 6 5 * 01%23 23 >7 23 ; & ? < %*. @ %= A @ 2* 3 231%<=+;%'& & .AA %=: 2=+3 23 ; %' & 9 9 1 0<1%.!%=:2;3 23%( %'& ;1&B% !.!:)4(@A! !:). =+;& & ;%'& 9 9 1 02; 3 23 %*7 23 ; & ? < %*. @ %= A @ 2* 3 231%<=+;%'& & .AA %=: 2=+3 23 ; %' & 9 9 1 0<1%.!%=:2;13 23 %( %'& ;1&B% !.!:)4 @A! !:). =+;& & ; %' & 9 9 1 0 2; 323%* 7 (1) E 23 ; ' . 7 . . E 23 ' ' ' + ' D D E 2A3 . . . . . ' . D 10 E 2)3 E 23 ' . ' . E 2:3 ' +E 2@3 . E 2!3D ' ' E 2*3 ' . E 2 3 E 23 .. ' E 23 E 2A3' . .'. . . . + ;E 2)3 .. .'. . E 23 . . E 11 23 . . E 2:3. . .' . E 2@3 ' . '. E 2!3 .. . . E 2 3 .' > 23 D 89 D >7 23 ; . F D D 89 23 E 23 D 8 9 & ; ? . B 9 ' G . E 23 ' .. + H % .* + H H I . I %* + 7 I + +;(I + +;(232 3 12 *+% + J 23 23 I 5 . . . * + I ' % +I . % + I 10. THE ASSESSING OFFICER FURTHER OBSERVED THAT ON THIS ISSUE THE ASSESSEE IN ITS WRITTEN REPLY DATED 6.12.2010 HAS STATED THAT : H% ' #6%%. K 1995-96 6> H% ' 23 . . . ' . 1 % . ' % . ' ' I % + . ' ? . % 1 4 *' H 13 % ' % ; ' ; D ' =+* B % #6 # 1 =+ 1% =+;%'& & 2 3 113 %' A3. #6 # 1 * ; ? & %*J!:5 86 %=A @3B & % %*B& %' & 2J!@ 3 %%C 481) ' 23 1&B% ' % %'7 ; ' L !7 @7!:) ( 184/26/75. 1&B%% %' ; ' 23 ; & ? %* (1972) @%= A @. * & * ? . 1953 . . ' ' ' 23 C #6 D # 1 1% VS ; & 9 & 1 0. 288 %= 352 2D 3. B #6; 1 ;& 9 & 1 0< 1%.J !C 319 %= 317 2;13 %#6; 1 >7 H#. # 1 . ' M; 23 % D . ; .1 & B %' ' 19 1975 % ( %' & ; 1 D 14 C 9 1973' / ' H ; 89.%' & 1 IS . ' ' 10. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT T HE ASSESSEES CONTENTION AND HELD THAT THE MAIN ACTIVI TY OF THE ASSESSEE SOCIETY IS MERELY PRINTING AND SALE OF BOO KS ON COMMERCIAL BASIS THEREFORE ASSESSEE IS NOT ELIGIB LE FOR CLAIM OF EXEMPTION U/S 10(22)/10(23C) OF INCOME-TAX ACT 1961. 11. IN ALL THE YEARS UNDER CONSIDERATION STARTING F ROM ASSESSMENT YEAR 1988-89 TO 2006-07 THE ISSUES INVOL VED ARE COMMON. CONSOLIDATED ORDER HAS BEEN PASSED BY THE ASSESSING OFFICER DATED 30 TH DECEMBER 2010 WHEREIN ASSESSEES CLAIM FOR EXEMPTION U/S 10(22) WAS DECLI NED ON THE PLEA THAT THE ASSESSEE DOES NOT DEPEND UPON ON GOVERNMENT GRANTS. THE ASSESSING OFFICER OBSERVED T HAT AS PER ANNUAL REPORTS FOR FINANCIAL YEAR 2002-03 TO 2 005-06 INITIALLY THE SOCIETY STARTED ITS OPERATION BY TAKI NG A LOAN OF RS. 10 LAKHS FROM THE STATE GOVERNMENT AND RS. 4.75 LAKHS FROM THE M.P. BOARD OF SECONDARY EDUCATION. T HE ASSESSING OFFICER FURTHER OBSERVED THAT WORK OF SOC IETY WAS CARRIED OUT FROM ITS OWN FINANCIAL SOURCES AND IT D ID NOT GET ANY FINANCIAL AID FROM THE CENTRAL OR STATE GOVERNM ENT. THEREFORE THE ASSESSEE SOCIETY IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT AND DOES N OT QUALIFY FOR EXEMPTION U/S 10(23C)(IIIAB ). 12. THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTI ON U/S 10(23C) (VI) FOR ASSESSMENT YEAR 1999-2000 AND SUBSEQUENT YEAR WAS DECLINED ON THE PLEA THAT APPLI CATION FILED BY THE ASSESSEE IN FORM NO. 56D FOR GRANT OF APPROVAL U/S 10(23C)(VI) FOR ASSESSMENT YEAR 2000-01 TO 2007 -08 STANDS REJECTED BY THE CCIT BHOPAL VIDE ORDER DAT ED 10.3.2008. THUS THE ASSESSEE SOCIETY WAS HELD TO B E NOT ELIGIBLE FOR ANY EXEMPTION U/S 10(23C)(VI) OF THE I NCOME-TAX ACT 1961. 13. THE ASSESSEES CLAIM FOR EXEMPTION U/S 11 & 12 WAS ALSO DECLINED ON THE PLEA THAT IN NONE OF THE R ETURN OF INCOME FILED U/S 139 FOR THE ASSESSMENT YEAR 1988-8 9 TO 2006-07 THE ASSESSEE HAD MADE SUCH CLAIM. BY RELYI NG ON THE VERDICT OF THE HON'BLE SUPREME COURT IN THE CAS E OF GOETZE (INDIA) LIMITED 204 ITR 182 THE ASSESSING OFFICER OBSERVED THAT NO CLAIM FOR DEDUCTION OTHER THAN BY WAY OF FILING A REVISED RETURN CAN BE ACCEPTED BY THE ASSE SSING OFFICER. THE ASSESSING OFFICER ALSO OBSERVED THAT A S PER 15 PROVISIONS OF SECTION 12-A(1)(B) READ WITH RULE 17- B THE ASSESSEE WAS REQUIRED TO GET ITS ACCOUNTS AUDITED A ND SUBMIT THE REPORT OF AUDIT IN FORM NO.10-B ALONGWIT H RETURN OF INCOME WHICH HAS NOT BEEN DONE IN THE IN STANT CASE. 14. BY THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING TH AT NOT ONLY CLAIM U/S 11 WAS NOT MADE IN THE RETURN BUT AL SO THE ESSENTIAL CONDITION OF STATUTORY AUDIT IN FORM NO.1 0-B WAS NOT CONDUCTED BEFORE FILING OF RETURN. THE LD. CIT( A) ALSO OBSERVED THAT THE ASSESSEES CLAIM FOR DEDUCTION U/ S 10(22)/10(23C) CANNOT BE ACCEPTED IN VIEW OF THE FA CT THAT THE ASSESSEE WAS NEITHER IMPARTING ANY FORMAL EDUCA TION NOR DOING ANY ORIGINAL WORK OF PRINTING OF TEXT BOO KS. 15. CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS THAT OBJECTS OF THE ASSESSEE SOCIETY ARE TO AID AND PROMOTE ADVANCEMENT OF EDUCATION IN GENERAL AND PRIMARY OR SECONDARY EDUCATION AND TO PRODUCE SCHOOL TEXT BOO KS AND BOOKS FOR TEACHERS AND WORK BOOKS FOR BHOPAL AND OT HER EDUCATIONAL INSTITUTIONS WHICH IS USEFUL IN PERFOR MING TEACHING LEARNING AND EVALUATION IN THE EDUCATIONA L INSTITUTION. TO PRINT TO PUBLISH TO DISTRIBUTE AN D SELL OR ENTER INTO ANY ARRANGEMENT FOR PRINTING PUBLISHING STOCKING DISTRIBUTION AND SELL OF TEXT BOOKS APPRO VED SANCTIONED OR ASSIGNED BY THE M. P. GOVERNMENT OR O THER APPROPRIATE AUTHORITIES. 16. WITH REGARD TO ASSESSEES ELIGIBILITY U/S 11 T HE CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS AS UNDER :- % ' % 23 %0* >7 23% ! !2)3 % 23 2323 :& %= &= !@@7@! 7 : 23%01%23 ' >7 9 1%23 >7 16 2323 % I ' ' ' ' 723 @@ 4 . = :& %= 4 ( :&% ' I % . & . #$ 1 & # . 4 ( & = :& . 4 ( & % .. . 4 ( & .$. 4 ( & % ' ' % + N9 8<1% ! %= : 2D +3 . 4 (* & . ' 17 . ' % . 4 01%23 4 ( & + #$ D + #1 N9 8< 1% !%=:2D +3 >7 23 % N9 8 4 ( & 23%01%23 232323 % 01%23 #$ %% % ( ! ! ! : @!@ ! & !@@7@! @7 ! 23 ; D 1 ID8 .D * F ' . ' 23% 4 ( &% F 1&B% A@J4 (@:A@::7% 29 35 ! !:@ >7 %& ' 23 ' 18 ( . $ . ' ..# . ' $ %* 23 % $ + #1 >7 23 1%<802 3 %=))A 2893#$C #1 >7 9)):9 * .% + . % . @ 723 % 01 % .% @ 723 7%' 231%<# % 2!!3!@ %=) 213 ' 7 % * ' % * 19 . ' 23 . . ' # . . '& . ' . . * (C) ; ' + # 1 #1 1 %< B 8D% 2!!@3 %= : A 2893.1% < 9 ; = 1 2 3 @) %= A: 293 . 1% < = & 88 % 2!!3!)% =@) 213.1%<;F1 % 2!!@3 A) 1%=A!29I#3.1% 2 :3@!%=A)2=+3 1%2!!3 %=)2D +3 1 % < & 9 2 3 0 2 3 :A 1%= 213 !> 2 3)A%=) 213.#1 1%<0 9 ? ;2 !3 @%= 23 4 ( & 23 %' = % 4 ( & % 4 & 4 :7 @ 20 %% 01 %' ! : @!@ #$ %%. 4 & % 23 4 & O % 0* 0* 23 ' 0* 4 (* & . 0* # 4 & = A 01% 2301%23 0* A A 1% 23P 23 ' * 4 & :7 @ & 1 ( : .) 8. : . & 1 ' I % . ' / 17. ON THE OTHER HAND CONTENTIONS OF THE LD. CIT DR WAS THAT THE ASSESSEE WAS ONLY PRODUCING SCHOOL TEX T BOOKS FIXED FOR TEACHERS AND WAS NOT CARRYING ON AN Y 21 EDUCATIONAL INSTITUTION. UNDER THESE CIRCUMSTANCES HON'BLE M.P. HIGH COURT HAS NOT APPROVED ASSESSEES CLAIM FOR DEDUCTION U/S 10(22)/10(23C) AND THE ORDER OF T RIBUNAL WAS SET-ASIDE BY REMANDING THE CASE TO THE ASSESSIN G OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NEVER CLAIMED ANY EXEMPTION U/S 11 12 & 13 AND THIS CLAI M WAS MADE FOR THE FIRST TIME IN THE SECOND ROUND ONLY A FTER TRIBUNAL HAS GRANTED REGISTRATION U/S 12AA IN THE Y EAR 2009 WITH RETROSPECTIVE EFFECT FROM THE DATE OF ESTABLISHMENT OF THE ASSESSEE I.E. 1968. AS PER THE LD. CIT DR U/S 11 12 & 13 IT IS NOT ONLY MANDATORY TO GET THE ACCOUNTS AUDITED BUT THE REPORT OF SUCH AUDIT IN TH E PRESCRIBED FORM 10-B DULY SIGNED AND VERIFIED BY C. A. SHOULD BE FILED WITH THE RETURN. SINCE THE ASSESSEE GOT REGISTRATION U/S 12AA ONLY IN THE YEAR 2009 THEREF ORE ALL THE YEARS UNDER CONSIDERATION I.E. ASSESSMENT YEAR 1988- 89 TO 2006-07 AND 2007-08 PRESCRIBED AUDIT REPORT IN FORM 10-B WAS OBTAINED BY THE ASSESSEE ONLY ON 10.10.2010 WHICH IS VIOLATION OF STATUTORY PROVISI ONS U/S 12A(1)(B) WHICH REQUIRED GETTING AFORESAID AUDIT RE PORT FROM THE AUDITOR BEFORE FILING OF RETURN. 18. FURTHER CONTENTION OF THE LD. CIT DR WAS THAT THE ASSESSEE IS NOT APPROVED BY PRESCRIBED AUTHORITY AN D THEREFORE EXEMPTION U/S 10(23C)(VI) IS NOT AVAILAB LE TO THE ASSESSEE FROM ASSESSMENT YEAR 1999-2000 ALWAYS. FUR THER SINCE THE ASSESSEE IS NOT FULLY OR SUBSTANTIALLY FI NANCED BY THE GOVERNMENT THEREFORE EVEN BENEFIT U/S 10(23C) (IIIAB) IS NOT AVAILABLE TO THE ASSESSEE. RELIANCE WAS PLAC ED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SO LE TRUSTEE LOKA SHIKSHAN TRUST 101 ITR 234 WHEREIN EDUCATION HAS BEEN DEFINED AS PROCESS OF TRAINING A ND DEVELOPING THE KNOWLEDGE SKILL MIND AND THE CHARA CTER OF THE STUDENTS BY NORMAL SCHOOLING. HE FURTHER SUBMIT TED THAT IN THE LATER DECISION OF THE HON'BLE SUPREME C OURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PU BLICITY CORPORATION LIMITED 319 ITR 317 THE PRINTING AND PUBLICATION OF TEXT BOOKS FOR STUDENTS BY GOVERNMEN T CONTROLLING COMPANY WAS HELD AS EDUCATIONAL INSTITU TION NEITHER MEANING OF WORD EDUCATION U/S 2(15) OF TH E ACT WAS EXAMINED NOR DECISION OF LOKA SHIKSHAN TRUS T 101 ITR 234 WAS CONSIDERED. 19. IN VIEW OF THE ABOVE SUBMISSIONS HE CONTENDED THAT SINCE THE ASSESSEE WAS NOT IMPARTING EDUCATION TO THE STUDENTS THROUGH NORMAL SCHOOLING THEREFORE AS PE R DECISION OF LOK SHIKSHAN TRUST (SUPRA) EXEMPTION I S NOT AVAILABLE TO THE ASSESSEE. HE FURTHER CONTENDED THA T THERE WAS HUGE PROFITS TO THE ASSESSEE EVERY YEAR THEREF ORE SUCH 22 EDUCATIONAL INSTITUTION CANNOT BE SAID TO BE NOT FO R THE PURPOSE OF PROFIT. 20. HE FURTHER SUBMITTED THAT THE CASE CITED BY THE ASSESSEE OF BIHAR STATE TEXT BOOKS PUBLISHING 56 IT R 178 GOES AGAINST THE ASSESSEE BECAUSE IN THAT CASE GOVERNMENT EXTENDED CASH INCENTIVE TO THE ASSESSEE FOR PRINTING AND SELLING OF TEXT BOOKS AT LOW RATE TO R EACH THE CHILDREN OF DEPRIVED SECTION OF THE SOCIETY TO CARR Y OUT THE DIRECTIVES PRINCIPLES OF CHAPTER IV OF THE CONSTITU TION BUT IN THE PRESENT CASE THE ASSESSEE DID NOT GET ANY GOVERNMENT SUBSIDY NOR IT HAS SUPPLIED TEXT BOOKS TO THE CHILDREN OF DEPRIVED SECTION AT CHEAPER RATE. HENCE CASE LAWS APPLY AGAINST THE ASSESSEE WHO FAILED TO FULF IL CONDITIONS LAID DOWN U/S 10(23C)(IIIAB) OF THE INCO ME-TAX ACT 1961. 21. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS ORDER OF THE CO-ORDINA TE BENCH AS WELL AS DECISION OF THE JURISDICTIONAL HIGH COUR T AS REFERRED ABOVE. WE HAVE ALSO DELIBERATED UPON THE J UDICIAL PRONOUNCEMENTS REFERRED BY RESPECTIVE A.R. AND D.R. DURING THE COURSE OF HEARING BEFORE US AS WELL AS D ECISIONS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE O RDERS IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FROM TH E RECORD WE FOUND THAT THE ASSESSEES CLAIM FOR EXEMPTION U/ S 10(22)/10(23C) WAS DECLINED BY LOWER AUTHORITIES ON THE PLEA THAT THE ASSESSEE SOCIETY IS EARNING PROFIT YE AR TO YEAR AND THAT PRINTING AND PUBLISHING OF PRESCRIBED TEXT BOOK AND PROVIDING TO THE STUDENTS AT A CHEAPER RATE IS NOT AN EDUCATIONAL ACTIVITY. 22. FIRST WE DEAL WITH THE OBSERVATION OF THE LOWER AUTHORITIES TO THE EFFECT THAT PRINTING AND PUBLISH ING OF PRESCRIBED TEXT BOOK AND PROVIDING THE SAME TO THE STUDENTS IS NOT EDUCATIONAL ACTIVITY. IN THIS REGAR D THERE IS A LATEST DECISION OF THE HON'BLE SUPREME COURT IN T HE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPORATION 319 ITR 317 DATED 20 TH OCTOBER 2009 WHICH IS SUBSEQUENT TO THE DATE OF DECISION OF THE JURISD ICTIONAL HIGH COURT IN ASSESSEES CASE WHICH WAS DATED 21.4 .2009. SINCE THE DECISION OF THE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE WAS PRIOR TO DECISION OF THE H ON'BLE SUPREME COURT IN THE CASE OF ASSAM STATE TEXT BOOK (SUPRA) IN THE FITNESS OF THINGS THE LOWER AUTHORI TIES WHILE AGAIN DECIDING THE ISSUE IN REMAND PROCEEDINGS SHOU LD HAVE TAKEN INTO ACCOUNT THE VERDICT LAID DOWN BY TH E HON'BLE SUPREME COURT IN THE LATTER DECISION IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPORATION (SUPRA). HON'BLE SUPREME COURT IN THIS CASE WAS DECIDING THE CASE OF SOCIETY WHICH WAS ENGAGED IN 23 SIMILAR ACTIVITY TO THAT OF THE ASSESSEE I.E. PRINT ING AND PUBLISHING OF SCHOOL TEXT BOOKS. IT WAS ALSO ENGAGE D IN PRINTING AND PUBLISHING OF TEXT BOOK FOR SCHOOL STU DENTS CONFIRMING TO THE NORMS PRESCRIBED BY THE EDUCATION DEPARTMENT OF STATE. THE MAIN ISSUE BEFORE THE HON' BLE SUPREME COURT WAS WHETHER THE ASSESSEE CORPORATION COULD BE TERMED AS EDUCATIONAL INSTITUTION IN TERMS OF SECTION 10(22) OF THE INCOME-TAX ACT 1961. THE ASS ESSING OFFICER HELD THAT SINCE THE ASSESSEE HAD INCOME EXC LUSIVELY FROM PUBLICATION AND SELLING OF TEXT BOOKS TO THE S TUDENTS EXEMPTION U/S 10(22) WAS NOT ADMISSIBLE AND THE ASSESSING OFFICER HELD THAT THE ASSESSEE DID NOT EX IST SOLELY FOR EDUCATIONAL PURPOSES. THE ASSESSING OFFICER ALS O STATED THAT IN VIEW OF THE CLAUSE 21 OF THE MEMORANDUM OF ASSOCIATION WHICH PROVIDES FOR DISTRIBUTION OF DIV IDENDS HENCE ITS INCOME WAS NOT EXEMPT U/S 10(22) OF THE ACT. THIS DECISION OF THE ASSESSING OFFICER WAS UPHELD B Y THE LD.CIT(A). IN A FURTHER APPEAL BY THE ASSESSEE IT WAS HELD BY THE TRIBUNAL THAT THE CORPORATION WAS AN EDUCATI ONAL INSTITUTION AND CONSEQUENTLY ENTITLED TO THE BENEFI T OF EXEMPTION U/S 10(22) OF THE ACT. HOWEVER IN AN APP EAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF TRIBUN AL THE HON'BLE HIGH COURT HELD THAT THE ASSESSEE DID NOT E XIST SOLELY FOR EDUCATIONAL PURPOSES AND THAT ITS INCOME WAS ONLY FROM PUBLISHING AND SELLING OF TEXT BOOKS WHI CH CONSTITUTED A PROFIT EARNING ACTIVITY THEREFORE T HE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION U/S 10(22) OF THE AC T. IN FURTHER APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF HON'BLE HIGH COURT THE HON'BLE SUPREME COURT SET A SIDE THE ORDER OF HIGH COURT AND OBSERVED THAT THE HIGH COURT HAS NOT TAKEN INTO ACCOUNT THE PRIOR HISTORY OF THE CASE THE AIM OF THE SAID CORPORATION TO IMPLEMENT THE STATE S POLICY ON EDUCATION. HON'BLE SUPREME COURT OBSERVED THAT I N THE YEAR 1975 IN A SIMILAR SITUATION THE CENTRAL BOAR D OF DIRECT TAXES ( C.B.D.T.) HAD GRANTED EXEMPTION U/S 10(22) OF THE ACT VIDE LETTER DATED 19 TH AUGUST 1975 TO THE TAMIL NADU TEXT BOOK SOCIETY WHICH PERFORMED ACTIVITIES SIMILAR TO THOSE OF THE ASSESSEE. HON'BLE SUPREME COURT FUR THER OBSERVED THAT HON'BLE RAJASTHAN HIGH COURT IN THE C ASE OF CIT VS. RAJASTHAN STATE TEXT BOOK BOARD 244 ITR 66 7 HAS REFERRED THE LETTER DATED 19 TH AUGUST 1975 WHILE ALLOWING ASSESSEES CLAIM FOR EXEMPTION U/S 10(22). THE HON' BLE SUPREME COURT OBSERVED THAT BEFORE THE RAJASTHAN HI GH COURT SIMILAR QUESTION AROSE AS TO WHETHER RAJASTHA N STATE TEXT BOOK BOARD WAS ENTITLED TO EXEMPTION U/S 10(2 2) OF THE INCOME-TAX ACT 1961. IN THIS CASE ALSO BEFORE THE RAJASTHAN HIGH COURT THE ARGUMENT ON BEHALF OF THE REVENUE WAS THAT THE ASSESSEE WAS MAKING PROFIT ON ACCOUNT OF PUBLISHING AND SALE OF TEXT BOOKS AND 24 CONSEQUENTLY IT WAS NOT ENTITLED TO THE BENEFIT O F EXEMPTION U/S 10(22) OF THE ACT. HOWEVER THE HIGH COURT NOTICED THE LETTER ISSUED BY THE CBDT ON 19 TH AUGUST 1975 IN THE CASE OF TAMIL NADU TEXT BOOK SOCIETY WHICH IN SIMILAR CIRCUMSTANCES HAD GRANTED EXEMPTION TO THE TAMIL NADU TEXT BOOK SOCIETY AS AN EDUCATIONAL INST ITUTION WITHIN THE MEANING OF SECTION 10(22) OF THE ACT. TH E JUDGMENT OF THE HIGH COURT FURTHER RECITES THAT UND ER SIMILAR SITUATION THE CBDT HAD ALSO EXTENDED THE B ENEFIT OF EXEMPTION U/S 10(22) OF THE ACT TO THE ORISSA SE CONDARY BOARD EDUCATION REPORTED AT 86 ITR 408. AFTER TAKIN G INTO ACCOUNT THESE CIRCULARS/LETTERS ISSUED BY THE CBDT RAJASTHAN HIGH COURT CAME TO THE CONCLUSION THAT TH E ASSESSEE IN THAT CASE NAMELY RAJASTHAN STATE TEXT BOOK BOARD WAS ENTITLED TO CLAIM THE BENEFIT OF EXEMPTI ON U/S 10(22) OF THE ACT. THE COURT OBSERVED THAT IT IS NO T DISPUTED BEFORE US THAT THE AIMS AND OBJECTS OF THE TAMIL NA DU TEXT BOOKS SOCIETY AND THOSE OF THE RESPONDENT-ASSESSEE ARE ALMOST IDENTICAL. IT IS ALSO NOT SHOWN TO US THAT T HE SURPLUS AMOUNT IF ANY OF THE RESPONDENT-ASSESSEE IS USED FOR ANY OTHER PURPOSE OR DISTRIBUTED TO OTHER MEMBERS. THE CIT(A) AS WELL AS THE TRIBUNAL HAVE NOTICED THAT EVEN IF S OME AMOUNT REMAINS SURPLUS THE SAME WAS UTILIZED ONLY FOR THE PURPOSES OF EDUCATION. 23. BY CONSIDERING THE ABOVE JUDGMENTS AND CBDT LETTER THE HON'BLE SUPREME COURT SET-ASIDE THE OR DER OF THE HIGH COURT AND MATTER WAS REMANDED TO THE ASSES SING OFFICER TO CONSIDER IT DE NOVO IN THE LIGHT OF THE JUDGMENT OF RAJASTHAN HIGH COURT AND ORISSA HIGH COURT PARTICU LARLY WITH REFERENCE TO THE LETTER OF CBDT DATED 19 TH AUGUST 1975 REFERRED TO IN THE JUDGMENT OF RAJASTHAN HIGH COURT IN THE CASE OF RAJASTHAN STATE TEXT BOOK BOARD REPO RTED AT 244 ITR 667 AS ALSO THE LETTER OF CENTRAL GOVERNME NT DATED JULY 9 1973. HOWEVER IN THE ASSESSEES CASE AFTER VERIFICATION OF AUDITED ACCOUNTS WE FOUND THAT IN NONE OF THE PERIOD OF SE VEN YEARS I.E. 2000-01 TO 2007-08 SURPLUS OF ASSESSEE EXCEEDED 15 % OF THE GROSS RECEIPTS. AS PER THE OBJ ECT CLAUSE AN ACTIVITY ACTUALLY UNDERTAKEN BY THE ASSES SEE WE FOUND THAT THE ASSESSEE SOCIETY IS PRINTING PUBLIS HING AND PROVIDING TEXT BOOKS TO THE STUDENTS OF CLAUSE I TO XII AS PRESCRIBED BY THE GOVERNMENT OF MADHYA PRADESH AT CHEAPER RATE. THE PRICE OF THE TEXT BOOK IS FIXED A T 70:30 FORMULA THAT IS TO SAY OUT OF SELLING PRICE OF TEXT BOOK 70% IS THE COST OF PAPER AND PRINTING AND 15%. COMMISS ION OF THE BOOK SELLER/VENDOR AND BALANCE OF 15 % IS RETAI NED BY THE ASSESSEE ON ACCOUNT OF ESTABLISHMENT EXPENSES. AFTER MEETING OUT ESTABLISHMENT EXPENSES IF THE SURPLUS ARISES THE SAME IS INCIDENTAL AND WHICH IS ALSO UTILIZED A S 25 GRANT/AID TO THE GOVERNMENT SCHOOL FOR THE CONSTRUC TION OF BUILDING REPAIR AND RENOVATION ETC. AND ALSO FOR G IVING SCHOLARSHIP TO THE STUDENTS OF WEAKER SECTIONS AND MERIT HOLDER AS PER THE DIRECTIONS OF THE GOVERNMENT OF M .P. THROUGH DISTRICT COLLECTOR WHICH IS CLEAR FROM THE AUDITED ACCOUNTS OF THE SOCIETY FOR THE FINANCIAL YEAR 1987 -88 TO 2007-08 AS PLACED IN THE RECORD. 24. AFTER CAREFUL ANALYSIS OF THE GROSS RECEIPTS AN D EXPENDITURE AS PER THE AUDITED ACCOUNTS WE FOUND T HAT YEAR-WISE EXCESS OF INCOME OVER EXPENDITURE AND PERCENTAGE THEREOF WORKS OUT TO BE AS UNDER :- S.NO. F.Y. GROSS RECEIPTS EXCESS OF INCOME OVER EXPENDITURE PERCENTAGE OF INCOME OVER RECEIPT 01. 2007-08 1266746577 144196585 11.38% 02. 2005-06 738791535 545133818 7.38 % 03. 2004-05 722303396 66977658 9.27% 04. 2003-04 583113633 49472558 8.48 % 05. 2002-03 487091387 37037975 7.60 % 06. 2001-02 496300946 12043170 2.43 % 07. 2000-01 377317263 30556884 8.10 % ) % D . . . ; * D 89 & D ;. ; B 89D . 4 . + # ; 1 ;. 1%= A . 8 ; ? % .A1%D=A << % . : %= . . ; 23 213234 . %' D . . ' ; 26 213 % =+ # 1 $ + 2! AA%=3> + %( %'& ; 7 . . 7 . %1%23% . F % . 1%23% 1&B% . % .' ' / : #6; 1 7Q7 =+ # 1 =+;%'& & 2 3 * #1 * ; & ? 2 3. 1&B% ! . !:). 1 D ! C .!:. D 89 & D 8 ? 1 & ; ? . 89 . B ;. ;I? . + ' G D 89 . ' 23 !@@7@!!!@!!! A!!!; 23 ; 213.123 M ' . D ' ; 23 ; 2 13 M ' . 23 23 % . ' D . ; D . . 27 ' ' 2713 $ 2 3. >7 ' D / % . !!!7 @7 !. ' 2 1323 28. AS THE OBJECT OF THE ASSESSEE SOCIETY VIS--VI S ITS CONSTITUTION REMAINS THE SAME FOR THE ASSESSMENT YE AR 1999- . 21323 7'. ! ! . . & ; ? .D 89 % % ' . % % . * O 89;1 ? = % . 89&;?* 89&;? 7 FINANCIAL YEAR AMOUNT OF ROYALTY PAID (IN RS.) 2007-08 48 09 507 2006-07 16 00 000 2005-06 16 10 623 2004-05 10 04 050 2003-04 10 04 050 2002-03 9 73 313 28 2001-02 11 30 196 1999-2000 12 10 054 1998-99 28 37 672 1997-98 10 70 794 1996-97 7 73 362 1995-96 7 82 584 1994-95 12 65 307 % 0 D 89 . ;D ; ; / ( 99 < K+ />7 FINANCIAL YEAR ENDED ON AMOUNT OF ADVANCE 31.03.2008 60 04 17 713 31.03.2007 35 96 23 390 31.03.2006 52 45 85 713 31.03.2005 40 43 93 518 O #6 # 1 %% . + 9 9 %' & 1G ' 7 A 1 . . >7 77= R% 4 .A ARTICLE 41 : % ; . . / 9 ' / % ' A. 29 8 9 D 1 G ; 89% + D . % . + A 1 . ; . 4 . + ; < 1 . ; D ; D + ' 1G ; D + . ;+ ' % ; 7Q7 ! I! !@@7@! @7 ! ' 7 ? . ' 7 % . F F + 23. ' . . . ' . ' ' + D *+(2A3. . . D 2)3 23 ' 30 ; 89. %( .= +. B. * . & '% # 1 #6 =+ # 1 =+;%'& 1 .A %=@' 23 7 ' .!#6#1 @ %( %'& ; %( %'& ; . 1&B% !@!:)%( %'& ; ' 23 7'% >7 * & % %'& ; ' ; 23 7'/ A 1&B% F ' 23. )( * ; +. %= !!. #6 ; 1 0 ; % . %= A. % ; 2)3 . # .' ; 23 % . ' 23 . % . . ' ? ; +2 3 1%23.#61 >7 % . % F / . % 1 31 % . ' 23 ;% .0 ; % 2 3. ;1 ' . . . + . PRINTING AND PUBLICATION OF NEWS PAPER 2)3 # . ' PRINTING AND PUBLISHING TEXT BOOKS FOR STUDENTS OF CLASS I TO XI I % . = * /# . . . ' D . ; ' 23% . + ' 23 213? D ? .) %= ). 1. # . . ' 23 : 4(@A:)77'.!.7 ! .!:). 1&B%. 1&B%* . & % ( %' & ; ' ; 23 7'/ @ 1&B%. ' 2 3 . #6; 1 ;%'& 9 9 2 3. . #6; 1 >7 32 # .#1 1&B% !.!:). %( %' & ;. ` ' % ( %' & ; ; 23 % + # 1 .1&B%' ' 23 * ; & ? ; & ? %*.2!:3@%=A @2* 3. 1&B%. =+#1 =+ # 1 % =+ ; %' & ! ' 23 / ! + 7 Q7+ . + ' 23 213 7 ' . !. . ''''''''''''''''''' ''''''''''''''''''' % ) . / ON CONSIDERATION OF RIVAL SUBMISSIONS WE FIND THAT THE TRIBUNAL VIDE ORDER DATED 25.4.2012 (SUPRA) IN ITA NOS.375 TO 394/IND/2011 IN ASSESSEES OWN CASE FOR AYS 1988-89 TO 2006- 07 AND 2008-09 HAS MADE AN ELABORATE DISCUSSION AFT ER PLACING RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS HOLDI NG THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DECLINING T HE EXEMPTION TO THE ASSESSEE SOCIETY U/S 10 (22)/10(23C) OF THE ACT . THEREFORE THE ASSESSING OFFICER IS DIRECTED TO FOLLOW THE ORD ER OF THE 33 TRIBUNAL DATED 25.4.2012. SINCE THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL AND NO CONTRARY DECISION WAS BROUGHT T O OUR NOTICE NO USEFUL PURPOSE WILL BE SERVED IN REMANDING THE I SSUE BACK TO THE FILE OF THE LD. CIT (A).THEREFORE THE CROSS-OB JECTION OF THE ASSESSEE IS ALLOWED. FINALLY THE APPEAL OF THE REVENUE IS ALLOWED FOR S TATISTICAL PURPOSES AND CROSS OBJECTION OF THE ASSESSEE IS ALL OWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22.10.201 3. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 22.10.2013 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYAS!