ADIT(Exemptions)-II, Hyderabad v. Hyndavi Educational Society, Janagaon, Hyderabad

CO 64/HYD/2011 | 2008-2009
Pronouncement Date: 16-11-2011 | Result: Dismissed

Appeal Details

RSA Number 6422523 RSA 2011
Assessee PAN AAAAH1156M
Bench Hyderabad
Appeal Number CO 64/HYD/2011
Duration Of Justice 1 month(s) 27 day(s)
Appellant ADIT(Exemptions)-II, Hyderabad
Respondent Hyndavi Educational Society, Janagaon, Hyderabad
Appeal Type Cross Objection
Pronouncement Date 16-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 16-11-2011
Assessment Year 2008-2009
Appeal Filed On 19-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI AM & SMT. ASHA VIJAYARAGHAVAN JM ITA NO.1341/HYD/2011 ASSESSMENT YEAR 2008-09 THE ADIT(EXEMPTIONS)-II HYDERABAD VS M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL (PAN AAAAH1156M) APPELLANT RESPONDENT AND CO.NO.64/HYD/2011 IN ITA NO.1341/HYD/2011 ASSESSMENT YEAR 2008-09 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL (PAN AAAAH1156M) VS THE ADIT(EXEMPTIONS)-II HYDERABAD APPELLANT RESPONDENT ASSESSEE BY : SHRI V. SRINIVAS REVENUE BY : SHRI V. RAMA RAO DATE OF HEARING : 2.11.2011 DATE OF PRONOUNCEMENT : 16.11.2011 ORDER PER ASHA VIJAYARAGHAVAN JM. THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF T HE CIT(A)- IV HYDERABAD DATED 29.4.2011 FOR THE ASSESSMENT YEA R 2008-09. ITA NO.1341/H/2011 CO.64/H/2011 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL 2 2. THE ASSESSEE TRUST FILED ITS RETURN OF INCOME O N 29.9.2008 ADMITTING NIL INCOME BY CLAIMING EXEMPTIO N U/S 11 OF THE IT ACT. THE ASSESSING OFFICER HELD THAT EXEMPTION U/S 11 OF THE ACT IS NOT AVAILABLE IN A CASE WHERE THE PROVISIONS OF SECTION 10(23C) ARE APPLICABLE. TH E ASSESSING OFFICER DETERMINED THE INCOME AT RS.1 37 39 557/- AGAINST WHICH THE ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). THE ASSESSEES SOCIETY I S REGISTERED U/S 12A W.E.F. 17.3.2003. IT HAS BEEN ESTABLISHED FOR EDUCATIONAL PURPOSES ONLY AND RUNS AN ENGINEERING COLLEGE VIZ. VIDYA BHARATI INSTITUTE O F TECHNOLOGY AT PEMBARTHI VILLAGE. THE ASSESSING OFF ICER WAS OF THE OPINION THAT SINCE THE ASSESSEE WAS RUNNING EDUCATIONAL INSTITUTIONS THE PROVISIONS OF SECTION 10(23C) WOULD BE APPLICABLE TO IT AND IN THE ABSENCE OF NOT IFICATION U/S 10(23C) (VI) THE CLAIM OF EXEMPTION IS TO BE DE NIED. ACCORDINGLY THE SURPLUS WAS BROUGHT TO TAX. 3. BEFORE THE CIT(A) THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE INSTITUTION IS REGISTERED U/S 12 AA OF THE ACT AND HAD THEREFORE CLAIMED EXEMPTION U/S 11 OF T HE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE CLAIMED THAT T HE ENTIRE INCOME OF THE TRUST HAD BEEN UTILISED AND THEREFORE THE ASSESSEE IS ENTITLED TO EXEMPTION U/S 11 AND THE AS SESSING OFFICER WAS WRONG IN CONSIDERING THE CLAIM OF THE A SSESSEE ONLY U/S 10(23C)(VI). THE CIT(A) AFTER DISCUSSING THE ISSUE AT PARA 5 TO 5.3 HELD AT 5.4. THAT THE TRIBUNAL IN THE CASE OF M/S JAMIA NIZAMIA IN ITA NO.763/HYD/2007 DATED 30.6.2008 OF INTERNATIONAL EDUCATIONAL ACADEMY HYDERABAD IN ITA NO.494/H/2007 & 518/HYD/2008 AND OF SHRI. SAI SUDHEER EDUCATIONAL SOCIETY HYDERABAD IN ITA ITA NO.1341/H/2011 CO.64/H/2011 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL 3 NO.999/HYD/2006 HAS HELD THAT IF DONATIONS ARE REC EIVED COMPULSORILY FOR THE ADMISSION OF STUDENTS BY WHATE VER NAME THEY MAY BE CALLED VIZ. DONATIONS BUILDING FUND AUDITORIUM FUND ETC. OVER AND ABOVE THE PRESCRIBED FEE FROM THE STUDENTS FOR ADMISSION ASSESSEE WOULD NOT BE ENTITLED FOR EXEMPTION EITHER U/S 10(23C) OR U/S 11 OF THE IT ACT. THE CIT(A) ACCORDINGLY HELD THAT IN CASE IT IS FOUND THAT BESIDES FULFILLING THE OTHER PREREQUISITE FOR EXEMPTION UNDER SECTION 11 THE ASSESSEE HAS NOT CHARGED ANY FEES FROM THE STUDENTS OVER AND ABOVE THE PRESCRIBED FEE S THE ASSESSEE WOULD BE ENTITLED FOR EXEMPTION U/S 11 EVE N THOUGH THE NOTIFICATION U/S 10(23C)(VI) HAS NOT BEE N RECEIVED BY IT. THE CIT(A) THUS ALLOWED THE GROUND TAKEN BY THE ASSESSEE SUBJECT TO SUCH VERIFICATION . 3. AGGRIEVED THE DEPARTMENT IS IN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FA CTS AND IN LAW. 2. THE CIT(A) ERRED TO HOLD THAT THE ASSESSEE IS EL IGIBLE FOR CLAIM UNDER SECTION 11 IN ABSENCE OF APPROVAL UNDER SUB CLAUSE (VI) TO THE SECTION 10(23C). 3. THE CIT(A) FAILED TO SEE THAT SUB CLAUSE (VI) TO THE SECTION 10(23C) AS INSERTED BY THE FINANCE ACT 199 8 W.E.F. 1.4.1999 STATES THAT THE UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATI ONAL PURPOSES MAY BE APPROVED BY THE PRESCRIBED AUTHORITY. THE ISSUE IS EXPLICITLY DEALT WITH BY T HE ACT ITSELF AND THE INTENTION OF THE LEGISLATURE IS QUIT E CLEAR FROM IT. ITA NO.1341/H/2011 CO.64/H/2011 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL 4 4. THE CIT(A) ERRED IN RELYING UPON THE DECISION O F THE APEX COURT IN THE CASE OF CIT VS BAR COUNCIL OF MAHARASHTRA WHICH WAS MADE IN THE YEAR 1981 WHICH IS PRIOR TO THE INTRODUCTION OF THE SUB CLAUS E (VI) TO SECTION 10(23C) INSERTED BY THE FINANCE ACT 199 8 W.E.F. 1.4.1999. 5. THE CIT(A) FAILED TO SEE THAT IN THE CTED CASE OF AMERICAN HOTEL AND LODGING ASSN./EDUCATIONAL INSTITUTE VS. CBDT(2008) (170 TAXMAN 306) (SC) T HE HONBLE SC SET ASIDE THE ORDER OF THE CBDT DECLININ G APPROVAL U/S 10(23C) (VI) AND RESTORED THE APPLICAT ION OF THE ASSESSEE FOR FRESH DISPOSAL AND DID NOT DISP ENSE WITH THE REQUIREMENT OF APPROVAL U/S 10(23C)(VI). I N THE CONTRARY THE DECISION OF THE APEX COURT STRENGTHEN ED THE VIEW THAT THE APPROVAL U/S 10(23C)(VI) BY THE PRESCRIBED AUTHORITY IS A PREREQUISITE FOR ENJOYIN G EXEMPTION BY ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION. 4. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF ST. LOUIS EDUC ATIONAL SOCIETY IN ITA NO.1418/HYD/2010 DATED 28.1.2011. 5. THE CIT(A) MERELY FOLLOWED THE ORDER OF THE TRI BUNAL IN THE CASE OF ADIT(EXEMPTIONS)-III VS. SAINT LOUIS EDUCATIONAL SOCIETY IN ITA NO.1418/HYD/2010 DATED 28.1.2011 WHEREIN IT HAS BEEN HELD THAT: SINCE THE ASSESSEE CLAIMED EXEMPTION U/S 11 OF THE ACT THE ASSESSING OFFICER MAY EXAMINE WHETHER THE ASSESSEE IS COLLECTING ANY AMOUNT OVER AND ABOVE TH E FEES PRESCRIBED FOR ADMISSION OF STUDENTS AND ALSO EXAMINE THE VIOLATION OF SECTION 11 12 AND 13 OF T HE ACT. IF THE ASSESSEE VIOLATES ANY OF THE PROVISION S OF ITA NO.1341/H/2011 CO.64/H/2011 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL 5 THE ACT AS PROVIDED IN SECTION 11 12 AND 13 OF THE ACT THE ASSESSEE MAY NOT BE ENTITLED FOR EXEMPTION. THE CIT(A) FURTHER HELD THAT THE ASSESSEE WAS ENTI TLED TO EXEMPTION U/S 11 SUBJECT TO SUCH VERIFICATION. 6. WE FIND THAT THE ISSUES INVOLVED IN THE APPEAL ARE COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL HYDERABAD IN ITA NO.1418/HYD/2010 FOR TH E ASSESSMENT YEAR 2005-06. HENCE RESPECTFULLY FOLLOW ING THE DECISION OF THE TRIBUNAL WE DISMISS THE APPEAL OF THE REVENUE. 7. IN THE CROSS OBJECTION PREFERRED BY THE ASSESSE E ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE CIT (A) OUGHT TO HAVE GRANTED RELIEF U/S 10(23C) OF THE IT ACT. THE LEAR NED COUNSEL FOR THE ASSESSEE SHRI A. RAMA RAO ADMITTED AT THE TIME OF HEARING U/S 10 (23C) THE APPLICATION OF TH E ASSESSEE HAS BEEN REJECTED BY THE AUTHORITIES. TAKING THIS FACT INTO CONSIDERATION WE DISMISS THE CO FILED BY THE ASSES SEE. 8. IN THE RESULT THE REVENUE APPEAL AS WELL AS TH E CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 16.11.2011 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH NOV. 2011 ITA NO.1341/H/2011 CO.64/H/2011 M/S HYNDAVI EDUCATIONAL SOCIETY WARANGAL 6 COPY FORWARDED TO: 1. THE ADIT (EXEMPTION)-II ROOM NO.307A HYDERABAD 2. M/S HYNDAVI EDUCATIONAL SOCIETY PEMBARTHI VILLAGE JANGAON (M) WARANGAL (DISTT.) 3. THE CIT(A) IV HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/