Modern School Society Delhi v. Cit Exemption Jaipur

Vk Dj Vihyh Vf Kdj K T Iqj U K Ihb T Iqj In The Income Tax Appellate Tribunal Jaipur Benche S Jaipur Jh Fot Iky Jko U Kf D Lnl Oa Jh Hkkxpan Ys Kk L Nl Ds Le K Before Shri Vijay Pal Rao Jm Shri Bhagchand A M Vk Dj Vihy La Ita No 1118 Jp 2016 Fu Kzkj K Ok Z Assessment Year 2011 12 Modern School Society C O Kapil Goel Adv F 26 124 Sector 7 Rohini Delhi 110085 Cuke Vs The Cit Exemptions Jaipur Lfkk H Ys Kk La Thvkbzvkj La Pan Gir No Aaatm 7045 H Vihykfkhz Appellant Izr Fkhz Respondent Fu Kzkfjrh Dh Vksj L S Assessee By Shri Kapil Goel Adv Shri Rajeev Sagoni C A Jktlo Dh Vksj Ls Revenue By Shri Varinder Mehta Cit Lquokbz Dh Rkjh K Date Of Hearing 15 11 2017 Mn Kksk Kk Dh Rkjh K Date Of Pronouncement 20 12 2017 Vknsk Order Per Vijay Pal Rao J M This Appeal By The Assessee Is Directed Against Th E Order Dated 17 11 2016 Of Ld Cit Exemptions Jaipur Passed U S 10 23 C Vi Of The Income Tax Act Whereby The Approval Granted To The Assessee Was Withdrawn 2 The Assessee Society Was Formed Vide Registratio N Certificated Dated 08 11 1976 Issued By Sub Registrar Of Societi Es Rajasthan The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 2 Assessee Is Running Various Schools At Different Ci Ties Of Rajasthan The Assessee Is Stated To Have Exclusively Engaged In P Roviding Quality Education To Its Students The Assessee Was Granted Approval U S 10 23 C Vi Of The Act Vide Order Dated 19 Th 20 Th May 2010 For The Assessment Year 2011 12 Onwards Subsequently Durin G The Assessment Proceedings For The Assessment Year 2013 14 The Ao Observed That The Assessee Does Not Satisfy The Con Ditions Laid Down U S 10 23 C Vi Of The Act To Enjoy The Benefit Of Exemption Accordingly The Ao Vide His Letter Dated 28 03 201 6 Sent A Proposal To The Ld Cit Exemptions To Withdraw The Approval Gr Anted U S 10 23 C Vi Of The It Act In Pursuant To The Repor T Proposal Of The Assessing Officer The Ld Cit Exemptions Jaipur Issued A Show Cause Notice To The Assessee Vide Letter Dated 08 07 2016 In Response The Assessee Vide Letters Dated 25 07 2016 10 08 2016 02 09 2016 Filed Its Reply The Ld Cit Exemptions Found That The Assessee Has Not Fulfilled The Conditions As Provided In The 3rd Pro Viso To Section 10 23 C Vi R W S 11 5 And 13 3 Of The Income Tax Act The Ld Cit Exemptions Noted That The Assessee Has Made Inves Tments Deposits Of Funds Which Is Not In The Prescribed Mode And As Per Sub Clauseb Of 3 Rd Proviso Of Section 10 23 C Vi The Assessee Was Re Quired To Invest Or Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 3 Deposit The Funds In The Modes Specified U S 11 5 Of The Act The Ld Cit Exemptions Noted That As Per Balance Sheet As On 31 03 2013 The Assessee Society Has Shown Loans And Advances Which Are As Follows S No Name Amount 1 Trumurti Colonisers Builders Pvt Ltd 1 38 00 000 2 A K Education Welfare Society 1 00 00 000 3 Ambience Land Developer 60 07 953 4 Surendra Kumar Meena 3 00 00 000 Thus The First Violation Was Found By The Ld Cit Exemptions Being Loans And Advances Given To Four Persons Which Are Not As Per Modes Specified U S 11 5 Of The Act And Hence In View Of The Ld Cit Exemptions The Assessee Not Fulfilled The Cond Itions As Provided U S 10 23 C Vi Of The Act The Second Violation No Ted By The Ld Cit Exemptions Is Regarding The Undue Benefit Give N To The Specified Persons In The Form Of Salary As Well As Foreign T Ravelling Expenses Incurred On The Tours Of Specified Persons The Det Ails Of The Salaries Paid To The Specified Persons As Given By The Ld C It Exemptions Are As Under 6 Undue Benefit Given To The Specified Persons A Salary Paid To The Specified Persons Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 4 The Society Has Following Office Bearers 1 Mr U S Suri President 2 Ms S Saxena Vice President 3 Mr B Bhandari Vice President 4 Dr Deepak Singh Treasurer 5 Mr Viabhav Singh Secretary Further Since The Assessee Has Shown Expenditure O N Foreign Travel Of Rs 17 69 526 Out Of Which An Amount O Rs 8 61 0 00 Contributed By The Staff Members Therefore The Balance Was Consi Dered As Undue Benefit Given To The Specified Persons On The Abov E Said Violations In The Form Of Loans And Advances And Undue Benefit Gi Ven To The Specified Persons The Ld Cit Exemptions Held That The Assessee Has Violated The Conditions Provided U S 10 23 C Vi As Well As The Conditions Of Approval Granted To The Assessee Whic H Deserved To Be Withdrawn By Exercising The Powers Given Under 13 Th Proviso Of Section 10 23 C Vi Of The Act Accordingly The Ld Cit Exe Mptions Withdrew The Approval Granted U S 10 23 C Vi Vide Impugned Orders 3 Aggrieved By The Impugned Order Of The Ld Cit E Xemptions The Assessee Filed This Appeal And Raised The Following Grounds 1 That On The Facts And In The Circumstances Of T He Case And In Law The Ld Cit Exemptions Jaipur Hereinafter C Alled As Cit Erred In Withdrawing Approval Granted U S 10 23 C V I Vide Show Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 5 Cause Dated 08 07 2016 With Retrospective Effect F Rom A Y 2011 12 Onwards On Basis Of Order Dated 17 11 2016 2 That On The Facts And In The Circumstances Of Th E Case And In Law The Ld Cit Erred In Initiating Withdrawal Proc Eedings On Basis Of Issues Relating To Assessment Which Have No Bearing With Registration U S 10 23 C Vi Namely Investmen T As Per Section 11 5 Application Of Section 13 Etc Whic H Are Issues On Basis Of Which Approval Registration Cannot Be Wit Hdrawn 3 That On The Facts And In The Circumstances Of Th E Case And In Law The Ld Cit Erred In Not Appreciating That Sinc E Inception Beginning Assessee Has Conducted And Engaged Itse Lf Solely And Exclusively For Purposes Of Education And Has Not Carried Any Activity Outside The Ambit Of Education Which Is V Eritable From Various Assessment Orders Where No Adverse Inferen Ce Is Drawn 4 That On The Facts And In The Circumstances Of Th E Case And In Law The Ld Cit Erred In Initiating Withdrawal Proc Eedings On Basis Of Proposal Received From Ao Based On Incorre Ct And Premature Hypothesis 5 That On The Facts And In The Circumstances Of Th E Case And In Law The Ld Cit Erred In Interpreting Section 11 5 Which Is Confined To Investment Or Deposit And Word Adv Ances Is Conspicuously Missing From The Same 6 That On The Facts And In The Circumstances Of Th E Case And In Law The Ld Cit Erred In Making Perverse Observatio Ns For Undue Benefit Given To The Specified Persons Which Is To Tally Against The Facts Of The Case The Assessee Has Also Raised The Additional Ground Which Reads As Under That Impugned Order Passed By Cit E Jaipur Is B Ad In Law As Show Cause Notice Dated 08 07 2016 U S 10 23 C Vi Is Signed By The Dcit Hqr As It Should Have Been Signed By Ci T Himself Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 6 Since The Assessee Has Raised A Legal Issue In Th E Additional Ground Challenging The Validity Of Show Cause Notice And C Onsequential Impugned Order Which Goes To The Root Of The Matter Therefore We First Take Up The Issue Raised In The Additional Ground 4 The Ld Ar Of The Assessee Has Submitted That Th E Additional Ground Is Legal In Nature And All Relevant Facts Ar E Available On Record As Emerging Out Of The Notice Issued By The Dcit Hqr U S 10 23 C Vi Of The Act Since No New Facts Are Required To Be Eva Luated Nor Any Further Enquiry Is Needed And The Issue Raised In T He Additional Ground Can Be Adjudicated On The Basis Of The Facts And Ma Terial Available On Record And By Applying The Provisions Of Law There Fore The Additional Ground Raised By The Assessee Be Admitted For Adjud Ication In Support Of His Contention He Has Relied Upon The Decision O F The Honble Supreme Court In Case Of National Thermal Power Co Ltd Vs Cit 229 Itr 383 Thus The Ld Ar Has Contended That The Ho Nble Supreme Court Has Held That U S 254 The Tribunal May Afte R Giving Both The Parties To The Appeal An Opportunity Of Being Heard Pass Such Orders Thereon As It Thinks Fit The Power Of The Tribunal In Dealing With Appeal Is Thus Expressed In The Widest Possible Terms The Re Is No Reason Why The Assessee Should Be Prevented From Raising That Question Before The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 7 Tribunal For The First Time So Long As The Relevan T Facts Are On Record In Respect Of That Item Both The Assessee As Well As Department Have A Right To File An Appeal Cross Objections Before The Tribunal And Therefore There Is No Reason Why The Tribunal Shou Ld Be Prevented From Considering The Questions Of Law Arising In As Sessment Proceedings Although Not Raised Earlier The Ld Ar Has Thus Pl Eaded That The Additional Ground May Be Admitted For Adjudication 5 On The Other Hand Ld Dr Has Objected To The Ad Mission Of The Additional Ground And Submitted That The Assessee D Id Not Raised This Ground Before The Ld Cit E Despite Appropriate O Pportunity Was Given To The Assessee 6 We Have Considered The Rival Submissions As Well As Relevant Material On Record There Is No Dispute That The Ad Ditional Ground Raised By The Assessee Is Purely Legal In Nature And Goes To The Root Of The Matter It Is Also Not Disputed That No New Facts A Re Required To Be Examined Nor Any Further Enquiry Was Needed For Adj Udication Of The Issue Raised In The Additional Ground Further Thi S Is First Appeal Against The Impugned Order And Not A Case Of Raising Afresh Plea For The First Time Before The Tribunal Without Raising The Same B Efore The First Appellate Authority The Assessee Could Have Raised This Ground In The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 8 Original Grounds Of Appeal Without Seeking Any Leav E Of The Tribunal The Additional Ground Was Required To Be Filed Beca Use Of The Reason That The Assessee Could Not Raise The Same In The F Orm 36 Along With The Memo Of Appeals Therefore It Is Only Matter O F Revising The Grounds As This Issue Was Raised In The Additional Ground Which Was Missed In The Original Grounds Accordingly In The Facts And Circumstances Of The Case When The Additional Groun D Raised By The Assessee Is Purely Legal In Nature And Does Not Req Uire Any New Facts To Be Examined Or Further Enquiry To Be Conducted For Adjudication Of This Issue Then In View Of The Decision Of Honble Supr Eme Court In Case Of National Thermal Power Co Ltd Vs Cit Supra We A Dmit The Additional Ground Raised By The Assessee For Adjudication 7 On The Validity Of Show Cause Notice Issued U S 10 23 C Vi Of The Act The Ld Ar Of The Assessee Has Submitted That The Show Cause Notice Dated 08 07 2016 Has Been Issued And Signed By Dcit Hqr And Not By Ld Cit E Therefore Show Cause Notice Was Not Issued By The Competent Authority And The Proceedings Best On The Illegal Show Cause Notice And Consequential Order Passed By The Ld Ci T E Are Not Valid And Hence Liable To Be Quashed As Per The Provisio Ns Of Section 10 23 C Vi Of The Act The Prescribed Authority Can Examine And Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 9 Consider The Non Fulfillment Of The Conditions Und Er The Said Provisions By The Institutions Trust Etc And Therefore Befo Re Initiating The Proceeding U S 10 23 C Vi R W S 13 Th Proviso To The Said Section Only Competent Authority Can Issue A Show Cause Notice G Iving An Opportunity To The Assessee To Reply And Explain It S Case Since Show Cause Notice Is Not Issued By The Competent Authori Ty Therefore The Same Is Not Valid And In The Absence Of A Valid Not E The Provision Assumed By The Ld Cit E Is Bad And Void And Lad A Nd Hence The Order Passed U S 10 23 C Vi Of The Act Is Not Sustainabl E In Support Of His Contention He Has Relied Upon The Following Decisi Ons Kolkata Itat Decision Dated 20 03 2015 In Case Of A Run Kanti Order Ita No 1516 Kol 2014 Kolkata Itat Bench Decision Dated 15 01 2016 In Cas E Of M S Assam Bangal Carriers Order Ita No 706 Kol 2 016 Honble Allahabad High Court Decision Dated 02 07 2 012 In Case Of Rajesh Kumar Pandey Order Ita No 47 2011 The Ld Ar Has Also Relied Upon The Various Other D Ecisions In Support Of His Contention And Submitted That The Order Passed In Pursuant To Invalid Show Cause Notice Is Not Sustainable Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 10 8 Next Contention Of The Ld Ar Is That The Assess Ments For Prior Years I E Assessment Years 2011 12 2012 13 Were C Ompleted U S 143 3 And The Assessing Officer Had Not Found Any Violation Of The Provisions Of Section 11 5 Or 13 3 Or Any Other P Rovisions Of The Act While Completing The Scrutiny Assessment However Due To Impugned Order The Assessing Officer Has Reopened The Comple Ted Assessment Of The Earlier Assessment Years Therefore The Withdr Awal Of Approval With Retrospective Effect Is Not Valid As The Impug Ned Order Has Been Passed On The Basis Of The Report Of The Ao For The Assessment Year 2013 14 In Support Of His Contention He Has Relied Upon The Decision Of Honble Supreme Court In Case Of State Of Rajasthan And Others Vs Basant Agrotech India Ltd And Others 388 Itr 81 An D Submitted That Only A Legislation Can Make A Law Retrospective And Prospectively Subject Justifiability And Acceptability Within The Constitutional Para Meters The Subordinate Legislation Can Be Given Wi Th Retrospective Effect If A Power In This Behalf Is Contained In Th E Principle Act In The Absence Of Such Conferment Of Power The Government The Delegated Authority Has No Power To Issue A Notification With Retrospective Effect Therefore In The Absence Of Any Provision Containe D In Legislative Act The Delegatee Cannot Make A Delegated Legislation W Ith Retrospective Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 11 Effect The Ld Ar Has Thus Contended That When No Power Has Been Conferred By The Act On The Competent Authority To Withdraw The Approval Retrospectively Then The Withdraw Of The Approval U S 10 23 C Vi Of The Act Can Only Be Prospective 9 On Other Hand The Ld Dr Has Submitted That The Show Cause Notice Is Issued By The Cit E And The Dcit Hqr H As Signed The Same For And On Behalf Of The Cit E Hence No Fault Ca N Be Found In The Show Cause Notice Issued U S 10 23 C Vi R W S 13 Proviso The Decision Relied Upon By The Ld Ar Are Not Applicab Le In This Case Because In Those Cases It Was Show Cause Notice Iss Ued U S 263 For Revision Of The Order Of The Assessing Officer Wher Eas In The Case Of The Assessee It Was For Withdrawal Of The Approval Gran Ted U S 10 23 C Vi By The Same Authority Thus The Ld Dr Has Contend Ed That Mere Signing Of The Show Cause Notice By Dcit Hqr Woul D Not Render It Invalid When It Is Issued By Ld Cit E The Ld Dr Has Pointed Out That The Language And Contents Of The Notice Are Require D To Be Considered Not Mere Signature Further It Is Withdrawal Of Ap Proval And Therefore The Same Would Be From The Date Of Grant Of Approva L I E With Retrospective Effect Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 12 10 We Have Considered The Rival Submissions As Wel L Relevant Material On Record The First Objection Of The Asse Ssee Is Regarding The Validity Of Show Cause Notice That It Was Not Sign Ed By The Competent Authority And Therefore It Is Invalid The Power A Nd Jurisdiction To Withdraw The Approval Granted U S 10 23 C Vi Of Th E Act Is Provided Under 13 Th Proviso To The Said Section Which Reads As Under Provided Also That Where The Fund Or Institution Referred To In S Ub Clause Iv Or Trust Or Institution Referred To In Sub Clause V Is Notified By The Central Government 7 Or Is Approved By The Prescribed Authority As The Case May Be Or Any University Or Other Educational Institution Ref Erred To In Sub Clause Vi Or Any Hospital Or Other Medical Institution Referred To I N Sub Clause Via Is Approved By The Prescribed Authority And Subsequently That Gove Rnment Or The Prescribed Authority Is Satisfied That I Such Fund Or Institution Or Tru St Or Any University Or Other Educational Institution Or Any Hospital Or Other Medical Instit Ution Has Not A Applied Its Income In Accordance With The Provision S Contained In Clause A Of The Third Proviso Or B Invested Or Deposited Its Funds In Accordance With The Provisions Contained In Clause B Of The Third Pro Viso Or Ii The Activities Of Such Fund Or Institution Or Trust Or Any University Or Other Educational Institution Or Any Hospital Or Ot Her Medical Institution A Are No T Genuine Or B Are Not Being Carried Out In Accordance With All Or Any Of The Conditions Subject To Which It Was Notified Or Appr Oved It May At Any Time After Giving A Reasonable Oppor Tunity Of Showing Cause Against The Proposed Action To The Concerned Fund Or Institution Or Trust Or Any University Or Other Educational Institution Or Any Hospital Or Other Medical Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 13 Institution Rescind The Notification Or By Order Withdraw The Approval As The Case May Be And Forward A Copy Of The Order Rescin Ding The Notification Or Withdrawing The Approval To Such Fund Or Institutio N Or Trust Or Any University Or Other Educational Institution Or Any Hospital Or Other Medical Institution And To The Assessing Officer The 13 Th Proviso To Section 10 23 C Vi Confers The Power Jurisdiction To Withdraw The Approval To The Government Or The P Rescribed Authority It Further Postulates That The Prescribe D Authority If Satisfied That Such Fund Or Institution Has Not Complied Wit H The Conditions As Provided Thereunder Can Withdraw The Approval For Initiation Of Proceedings To Withdraw The Approval The Mandatory Pre Condition Is The Satisfaction Of The Prescribed Authority Undis Putedly The Prescribed Authority Is The Ld Cit E And The Satisfaction Of The Prescribed Authority Is A Must Before Issuing The Show Cause N Otice For Withdrawal Of The Approval Granted U S 10 23 C Vi Of The Act Therefore What Is Material And Mandatory Condition Is The Satisfactio N Of The Prescribed Authority And Non Else In Case In Hand The Impugne D Show Cause Notice Dated 08 07 2016 Was Signed By The Dcit Hqr And Issued As Per Directions Of The Ld Cit E In Paras 2 And 6 Of The Show Cause Notice In Our Opinion Are Relevant To The Issue And The Same Are Reproduced As Under Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 14 2 In This Regard I Am Directed To State That You R Institution Society Has Violated The Provisions Of Section 10 23 C Vi Of The Act In Respect Of Following Issu Es Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 6 Your Case Is Fixed For Hearing Before The Co Mmissioner Of Income Tax Exemptions Jaipur On 25 07 2016 At 12 30 P M In The Income Tax Office Exemptions Room No 303 3 Rd Floor Kailash Heights Lal Kothi Tonk Road Jaipur You May Attend Either Personally Or Through An Authorized Represen Tative In This Behalf Holding Valid Power Of Attorney Any Failu Re To Comply May Lead To The Conclusion That The Assessee Has No Thing Further To Say From His Side In This Regard And The Case M Ay Therefore Be Accordingly Decided The Language And Tenor Of The Show Cause Notice Do Not Exhibit Any Thought Process Of Ld Cit E But It Reveals It Was Issued And Signed By Dcit Hqr As Per Instructions And Directions Of Ld Cit E The Matter Would Have Been Different If The Show Cause Notice Brings Out The Thought Process And Application Of Mind By The Ld Cit E But Was Only Signed By The Dcit Hqr In Case In Hand It Is Ap Parent That The Ld Cit E Delegated Its Powers To Dcit Hqr To Issue Show Cause Notice And Therefore It Is Based On The Satisfaction Of The Dcit Hqr And Not Of Ld Cit E Para 2 And 6 Of The Impugned Show C Ause Notice Clearly Manifest That It Was Issued By The Dcit Hqr And Not By The Cit E The Language Of The Show Cause Notice Does Not Give Any Impression Or Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 15 Inference That It Is An Expression Of The Satisfact Ion Of Ld Cit E The Kolkata Bench Of This Tribunal In Case Of Arun Kant I Vs Cit Supra While Considering The Issue Of Validity Of Show Cau Se Notice Issued U S 263 Of The Act Not Signed By The Ld Cit Has Observ Ed In Para 5 And 5 1 As Under 5 Investment Deposits Of Funds Not In The Prescrib Ed Modes The Sub Clause B Of 3 Rd Proviso Of Section 10 23 C Requires The Society To Invest Deposit The Funds In The Modes S Pecified Under Section 11 5 Of The Act However It Is Noticed Th At The Society Has Made Advances Which Is Neither As Per The Objec Ts Nor In The Modes Prescribed U S 11 5 Of The Act In The Balance Sheet As On 31 03 2013 It Is Notice D That The Society Has Shown Loans And Advances In The Followi Ng Names S No Name Amount 1 Trumurti Colonisers Builders Pvt Ltd 1 38 00 000 2 A K Education Welfare Society 1 00 00 000 3 Ambience Land Developer 60 07 953 4 Surendra Kumar Meena 3 00 00 000 5 1 M S Trimurti Colonizers Builders Pvt Ltd On Perusal Of Ledger Accounts Of M S Trimurti Colon Izers Builders Pvt Ltd Produced During The Course Of Ass Essment Proceedings It Has Been Revealed That The Balance As On 31 03 2013 Was Of Rs 1 38 00 000 The Balance Adv Ances As On 31 03 2014 In The Name Of Aforesaid Company Is Also Shown As Rs 1 38 00 000 The Society Has Submitted That I T Has Given Advances To Aforesaid Company For Purchasing Of Lan D And Society Has Not Charged Any Interest On Such Advances Peru Sal Of Application Form Submitted By The Assessee In Res Pect Of Allotment Of Plot It Has Been Revealed That Date Amount And Place Etc Are Not Mentioned On The Said Form As P Er Submission Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 16 Of The Society Even Till Today Any Land Immovable Property Was Not Purchased Out Of These Advances On Giving Show Cause In This Regard Vide Its Reply Dated 25 07 2016 The A R Of The Assessee Submitted As Un Der I Advance Given To Trimurti Colonizers Builders Pvt Ltd The Society Has Given Advances To Trimurti Colonizers Builders Pvt Ltd For Purchasing Of Land At The Future City At P Hagi Jaipur The Advance Was Given For Setting Up An Educational Ins Titution At Jaipur M S Trimurti Colonizers Builders Could No T Give Us Converted Land Because They Could Not Get Land Conv Erted Your Good Self Has Mentioned That This Advance Give N Cannot Be Said For Charitable Activities And There Is Violati On Of Section 11 5 Of The It Act 1961 Sir This Advance Is Given For Acquisition Of Land For Opening Of School And In Accordance With T He Sole Object Of The Society Further Clause X Of The Section 1 1 5 Permits Investment In Immovable Property As One Of The Mo Des Of Investment Of Funds So There Is No Violation Of Se Ction 11 5 Of The Act Further Vide Reply Dated 10 08 2015 Submitted As Under The Above Party Has Informed Us The Final Hearing Of Gutab Kothari V S State Has Completed And They Are Waitin G For Decision However We Have Informed Them That Either They Should Give Us Land By End Of This Month Or Return Our Mon Ey Please Note That They Are No Way Connected To Us Or Neithe R We Have Any Business Relation With Them Except For This Par Ticular Deal Further Vide Reply Dated 02 09 2016 Submitted As Un Der Regarding Outstanding Amount As Informed In Our Let Ter Dated 10 08 2016 That We Had Given Time To Party Either T O Give Land Or Refund The Money Before The End Of August 2016 No W They Have Requested That The Present Time Is Very Bad For Con Struction Industries And They Wanted Time Till End Of This Ye Ar They Assured Us That They Will Certainly Fulfill Their C Ommitment In Fact We Also Do Not Have Any Other Option To Wait Till Y Ear End Or To File A Case Against Them Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 17 A Similar View Was Taken By The Kolkata Bench Of Th Is Tribunal In Case Of M S Assam Bangal Carriers Vs Cit Supra In Par As 7 And 8 As Under 7 We Have Considered The Rival Submissions A Per Usal Of The Records Shows That The Show Cause Notice U S 263 Of The Act Dated 26 02 2013 Was Signed By A C I T Hq Xxi Ko Lkata And Not By C I T The Question Regarding Validity Of Th E Order Passed U S 263 Of The Act When The Show Cause Notice U S 2 63 Of The Act Is Not Signed And Issued By C I T And Had Come For Consideration Before This Tribunal In The Case Of Bardhman Co Op Milk Producers Union Ltd Vs Cit Burdwan Supra This Tribunal On Identical Facts As In The Present Case Has Held As Follows 4 We Have Carefully Considered The Submissions And Perus Ed The Record And We Find That Delay Of 290 Days In Filing In The Se Cases Has Been Attributed To Mistake On The Part Of Assessee S Counsel The Counsel Has Clearly Admitted The Mistake On His Par T When The Delay In Filing Of These Appeals Is Attributed To T He Mistake Of The Consultant In Our Considered Opinion Assessee Sho Uld Not Be Penalized On This Count The Case Law Referred By T He Ld Counsel For The Assessee Also Supports This Proposition Ac Cordingly We Condone The Delay 5 As Regards The Matter In Appe Al We Note That The Same Is Against Order Passed By The Ld Ci T U S 263 Of The Act At The Outset In This Case Ld Counsel F Or The Assessee Pointed Out That The Notice To The Assessee U S 26 3 Of The Act In These Case Was Issued By Letter Dated 06 03 2007 The Said Notice Was Signed By Acit Hqrs Burdwan For Commi Ssioner Referring To This Aspect The Ld Counsel For The A Ssessee Pleaded That Section 263 Of The Act Provides For Notice And Adjudication By The Ld Cit Ld Counsel For The Assessee Claime D That Since Notice U S 263 Of The Act Has Not Been Signed By T He Ld Commissioner The Jurisdiction Assumed Is Defective And The Order U S 263 Of The Act Is Liable To Be Quashed O N This Ground Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 18 Itself In This Regard Ld Counsel For The Assesse E Referred To The Decision Of Honble Allahabad High Court In The Cou Rse Of Cit V Rajesh Kumar Pandey 2012 25 Taxmann Com 242 All The Ld Counsel For The Assessee Further Referred To The De Cision Of The Tribunal In The Case Of Satish Kumar Kashri V Ito 104 Itd 382 Pat Ita No 706 Kol 2013 M S Assam Bengal Carrie Rs A Yr 2008 09 4 6 Ld Dr On The Other Hand Submitte D That Above Is Not The Material Defect And He Submitted That Th Ere Is No Reason To Set Aside The Order U S 263 Of The Act On This Account 7 We Have Carefully Considered The Submissions And Perused The Record We Find That Section 263 1 Of The Act Prov Ides As Under The Cit May Call For And Examine The Record Of Any Proceeding Under This Act And If He Considers That Any Order Passed By The Ao Is Erroneous Insofar As It Is Prejudicial To The Interest Of Revenue He May After Giving The Assessee An Opport Unity Of Being Heard And After Making Or Causing To Be Made Such Inquiry As He Deems Necessary Pass Such Order Thereon As T He Circumstances Of The Case Justify Including An Ord Er Enhancing Or Modifying The Assessment Or Cancelling The Assessm Ent And Directing Fresh Assessment Now We Can Also Refer To The Notice U S 263 Of The Act Issued To The Assessee This No Tice Was Signed As Under Yours Faithfully Sd Vikramaditya Vi Kramaditdya Acit Hqrs Burdwan For Commissioner From The A Bove It Is Clear That The Said Notice U S 263 Of The Act Ha S Not Been Signed By The Commissioner Of Income Tax Rather It Has B Een Signed By Acit Hqrs Burdwan The Honble Allahabad High Court In The Case Of Rajesh Kumar Pandey Supra Has Expound Ed That When The Ld Cit Has Not Recorded His Satisfaction But It Was The Satisfaction Of The Income Tax Officer Technical Who Is Not Competent To Revise His Order U S 263 Of The Act The Order Passed Was Liable To Be Set Aside The Relevant Por Tion Of The Order Of Honble Allahabad High Court Reads As Unde R 6 On Perusal Of The Aforesaid Provisions It Will Be Abu Ndantly Clear That The Provisions Of Section 299 Bb Deals With The Pro Cedure For Service Of Notice And In Case There Is A Defective Service Of Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 19 Notice It Provides That If The Assessee Has Cooper Ated It Will Not Be Open For Him To Raise The Plea Whereas In The I Nstant Case It Is Not The Case Of The Service Of Notice But The I Nitial Issuance Of Notice Which Has Not Been Signed By The Competent Authority As A Finding Has Been Recorded By The Tribunal That Th E Notice Has Been Issued Under The Signature Of Income Tax Tech Nical Whereas In View Of The Provisions Of Powers Under S Ection 263 1 It Is Only The Commissioner Of Income Tax T O Issue Notice It Is Also Relevant To Add That Pleas Can Be Raised Only Out Of The Judgment Passed By The Tribunal Or Other Authoritie S But The Plea Which Was Not Raised At Any Stage Cannot Be Raised For The First Time Before This Court No Other Arguments Ha Ve Been Advanced In Respect Of Other Questions Framed In Th E Memo Of Appeal 8 Similarly We Note That In The Case Of Satish Kr Keshari Supra The Tribunal Had Held That When Th E Notice U S 263 Of The Act Was Not Under The Seal And Signature Of Ld Cit And Suffered For Want Of Details On The Basis Of Wh Ich Ld Cit Came Into Conclusion That The Order Of Assessing Of Ficer Is Erroneous And Prejudicial To The Interest Of Revenu E Assumption Of Jurisdiction U S 263 Of The Act By The Ld Cit Was Invalid Ita No 706 Kol 2013 M S Assam Bengal Carriers A Yr 20 08 09 5 9 From The Above Discussion Regarding The Provision O F Law And The Case Law In This Regard It Is Clear That For A Val Id Assumption Of The Jurisdiction U S 263 Of The Act The Notice Is Sued U S 263 Of The Act Should Be Issued By The Ld Cit In This Ca Se It Is Undisputed That Notice Was Issued By Acit Hqrs Bu Rdwan Who Is Not Competent To Assume Jurisdiction U S 263 Of Th E Act Hence The Notice Was Not Under The Seal And Signature Of Ld Cit Hence As Per The Precedents Referred To Above The Assumption Of Jurisdiction U S 263 Of The Act In This Case Is Not Valid Accordingly The Order U S 263 Of The Act Passed I N These Cases Are Quashed 8 Facts Of The Present Case Being Id Entical To The Case Referred To Above Respectfully Following The Aforesaid Decision We Hold That The Assumption Of Jurisdictio N U S 263 Of The Act In The Present Case Is Not Valid Order U S 263 Of The Act Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 20 Is Accordingly Quashed And The Appeal Of The Assess Ee Is Allowed In View Of The Above Conclusion The Other Grounds Of Appeal Are Not Taken Into Consideration The Honble Allahabad High Court In Case Of Cit Vs Rajesh Kumar Pandey Supra While Dealing With The Validity Of N Otice And Applicable Of The Provisions Of Section 299 Bb Has Observed As Under 299 Bb Notice Deemed To Be Valid In Certain Circums Tances Where As Assessee Has Appeared In Any Proceeding Or Co Operated In Any Inquiry Relating To An Assessment O R Reassessment It Shall Be Deemed That Any Notice Un Der Any Provision Of This Act Which Is Required To Be Serv Ed Upon Him Has Been Duly Served Upon Him In Time In Accordance With The Provisions Of This Act And Such Assessee Shall Be P Recluded From Taking Any Objection In Any Proceeding Or Inquiry U Nder The Act That The Notice Was A Not Served Upon Him Or B Not Served Upon Time In Time Or C Served Upon Him In An Improper Manner Provided That Nothing Contained In This Section Sha Ll Apply Where The Assessee Has Raised Such Objection Before The C Ompletion Of Such Assessment Or Reassessment Thus It Is Settled Proposition Of Law That The Not Ice Issued By The Authority Other Than The Prescribed Authority Is No T Valid And Consequential Order Passed By The Ld Cit E Is Wit Hout Jurisdiction The Show Cause Notice Confers The Jurisdiction To Proce Ed And To Pass The Order In Case The Notice Itself Is Not Valid Then The Jurisdiction Assumed By The Prescribed Authority Based On The Invalid No Tice Become Invalid Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 21 And Consequential Order Passed By The Authority Is Invalid And Void Abinitio For Want Of Jurisdiction Further Invalid Show Cause Notice Vitiates The Proceeding And Consequential Order He Nce We Are Of The Considered Opinion That The Impugned Order Passed B Y The Ld Cit E Is Invalid And Liable To Quash On This Ground 11 On Merits Of Withdrawal Of Approval Granted U S 10 23 C Vi Of The Act The Ld Ar Of The Assessee Has Submitted Th At The Assessee After Successful Running The School At Kota Decided To Es Tablish A New School In Jaipur The Assessee Applied For Allotment Of La Nd By The Rajasthan Housing Board And Was Allotted Vide Allotment Lette R Dated 23 07 2007 The Plot Of Land Measuring 9050 Sq Ft In School S Ector 7 Shipra Path Mansarovar Was Allotted To The Assessee The Assess Ee Deposited A Sum Of Rs 3 48 91 144 And Took The Possession Of The Said Land From The Rajasthan Housing Board However At The Time Of Ha Nding Over The Possession Rajasthan Housing Board Hereinafter Re Ferred To As The Rhb Imposed The Condition Restricting The Constr Uction Of Building Subject To The Final Decision Of The Government Reg Arding The Nallah Thus Until And Unless The Government Finalized The Decision Regarding The Nallah The Assessee Could Not Construct The S Chool Building On The Said Plot Of Land The Assessee Accordingly Approac Hed The Honble Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 22 Rajasthan High Court By Way Of A Writ Petition Agai Nst The Said Restriction Imposed By The Rajasthan Housing Board The Honble High Court Vide Order Dated 12 01 2010 In Writ Petition No Cw 570 Of 2010 R 698 2010 Modified The Restriction And Allowed The S Ociety To Carry On The Construction Thereafter The Assessee Construct Ed The School And Started The Same In The Academic Year 2017 18 The Ld Ar Of The Assessee Has Explained That Due To The Said Restric Tion Imposed By The Rajasthan Housing Board Assessee Was Not Sure When It Would Be Able To Construct The School On The Said Plot Of Land An D Therefore The Assessee To Safeguard The Interest The Assessee Ha D Entered Into An Agreement To Purchase A Land From M S Trimurty Colo Nirsers Builders Pvt Ltd For Construction Of School And Accordingl Y Made Payment To The Tune Of Rs 1 38 00 000 The Ld Cit E Has Objected The Said Payment And Held That This Is An Investment Or Dive Rsion Of Fund Not As Per The Mode Prescribed Under The Act The Ld Ar O F The Assessee Has Submitted That This Is Not An Investment Nor Divers Ion Of Fund But The Assessee Society Made Banafide Efforts For Acquiri Ng Another Piece Of Land Which Is Wrongly Being Termed By The Ld Cit E As Investment In Violation Of Section 11 5 Of The Act After The Co Mmencement Of Construction On The Plot Of Land Allotted By The Ra Jasthan Housing Board Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 23 Pursuant To The Order Of Honble High Court The Ass Essee Received Back The Said Amount Of Rs 1 38 00 000 From The Build Er On 10 10 2016 The Ld Ar Has Further Pointed That Since The Build Er Could Not Get The Land Use Changed To Institutional Purpose Therefor E Even Otherwise The Said Land Could Not Have Purchased By The Assessee And Accordingly The Assessee Received Back The Advance Amount Of Rs 1 38 00 000 12 As Regards The Advance Of Rs 60 07 953 Given To Ambience Land Developer For Purchase Of Two Flats The Ld Ar Of The Assessee Has Submitted That After The Allotment Of The Land By T He Rajasthan Housing Board The Assessee Acquire The Flat For The Office Staff To Stay Their During The Construction And Further The Flat Was Pu Rchased For The Purpose Of Ensuring The School Come Into Existence It Was Also Proposed To Be Used For Residence Of The Principal Of The School Therefore It Was Not An Investment Or Diversion Of Fund But The Flat Was Purchase To Facilitate The Accommodation For Th E Office Bearers Visiting To Jaipur To Supervise And Overseeing The Construction Work The Ld Ar Has Further Submitted That Though The In Itially The Assessee Proposed To Purchase Two Flats However Finally One Flat Was Purchased For A Sum Of Rs 92 05 000 On 29 03 2013 The Adv Ance Of Rs 1 50 00 000 Was Given To The Developer For Purcha Se Of Two Flats And Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 24 When The Transaction Was Finally Concluded The Asse Ssee Purchase Only One Flat And The Balance Amount Was Received Back Hence He Has Contended That It Is Not In Violation Of The Provis Ions Of Section 11 5 Of The Act But The Flat Was Purchased Only For The Pur Pose Of Running The School And Residential Purpose Of School Principal 13 Advance To A K Education Welfare Soceity Of Rs 1 00 00 000 The Ld Ar Of The Assessee Has Submitted That A K Education Welfare Society Is Dully Registered Soci Ety Under The Provisions Of Rajasthan Societies Registration Ac T 1958 The Said Society Was Having Objects Of Imparting Education A Nd Is Granted Registration U S 12 Aa Of The Income Tax Act 1961 O N 16 12 2016 The Assessee Gave Advance To A K Education Welfare Soc Iety To Establish A School At Bharatpur In Collaboration And In The Nam E Of Modern School He Has Pointed Out That Presently A K Education We Lfare Society Runs Modern School At Bharatpur Under Franchisee From The Assessee Society Therefore This Amount Was Given To Anothe R Education Society For Establishing A School At Bharatpur Which Is Ver Y Much In Accordance With The Object Of The Assessee Society And Cannot Be Said In Violation Of The Provisions Of Section 11 5 Of The Act Or An Y Other Provisions Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 25 14 Advance To Surendra Kumar Meena The Ld Ar Of The Assessee Has Submitted That The Assessee Society Al So Purposed To Open Another School In Jaipur At A Different Location Of The City In Pursuit Of That To Acquire Property In North Jaipur The Asses See Entered Into An Agreement With Surendra Kumar Meena For Purchase O F Land For The Purpose Of Construction Of School However The Said Transaction Could Not Materialized And The Entire Money Given As Ad Vance Of Rs 3 Crores Was Received Back In The Financial Year 2014 15 The Ld Ar Of The Assessee Has Referred To The Agreement For Purc Hase Of The Land From Surendra Kumar Meena Under Which The Said Adva Nce Was Paid Thus He Has Contended That This Payment Was Made F Or Purchase Of Land For Constructions And Running The School And C Annot Be Termed As Investment Or Diversion Of Fund 15 Undue Benefit Given To The Specified Persons Salary Paid To Specified Persons The Ld Ar Of The Assessee Has Submitted That The Salary Was Paid To The Pers Ons Who Are Duly Qualified And Have Requisite Experience In The Fie Ld Of Education And Therefore The Salary Was Paid For The Services Re Ndered By These Persons He Has Further Contended That Due To The E Fforts Of These Persons The Assessee Society Could Grow And Establi Sh Schools At Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 26 Different Cities The Salary Paid Was Commensurate To The Qualification And Experience And Was As Per The Need Of The Asses See Society Once Services Rendered By These Persons Are Not Denied T Hen The Payment Of Salary Cannot Be Termed As Undue Benefit He Has Fu Rther Contended In The Earlier Assessment Year A Similar Remuneration Paid To These Persons Was Found To Be Reasonable By The Ao While Completing The Assessment U S 143 3 Therefore The Department Is Expected To Adopt Consistency In Its Approach And Cannot Take A Oppos Ite View That The Salary Paid To These Persons Is Undue Benefit In S Upport Of His Contention He Has Relied Upon The Following Decisio N Radhasoami Satsang V Cit 193 Itr 321 Sc Acit E V Mahima Shiksha Samiti 2017 79 Taxmann Com 38 Jaipur Trib Thus The Ld Ar Of The Assessee Has Submitted That This Tribunal In Case Of Mahima Shiksha Samiti Has Analyzed The Issue Of Payment Of Salaries And Held That The Qualification And Experience Of P Ersons And Their Services To Manage The Affairs Of The Society Since Inception As Well As Managing Day To Day Affairs The Salary And Allowan Ces Paid To Them Is Reasonable Vis A Vis Legitimate Needs Of The Assess Ee Society Thus The Ld Ar Of The Assessee Has Submitted That The Salar Y Paid These Persons Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 27 Who Were Rendering The Services And Managing Affair S Of The Assessee Society Cannot Be Held To Be Undue Benefit 16 Expenses Incurred On The Tours Of Specified Persons The Ld Ar Of The Assessee Has Submitted That The Asses See Society Sent A Group Of Staff For Study Tour To Dubai This Group Of Staff Consists Of 23 Persons Out Of Which 21 Are Teachers Of The Assesse E Society Only And Two Are Director And Vice Principal The Said Visit Was To Enhance The Teaching Skill And Administrative Capacity Of The S Taff Also To Update Them About The Latest Development In The Field Of E Ducation Thus The Ld Ar Of The Assessee Has Submitted That It Is Not The Case Of Travelling Of Specified Persons Alone But It Is A Group Of 23 Persons Mostly Teachers Except One Sent For Study Tour And Therefo Re The Same Cannot Be Held As Undue Benefit He Has Relied Upon The De Cision Of The Coordinate Benches In Case Of Acit E V Mahima Shik Sha Samiti Supra 17 Thus The Ld Ar Has Submitted That When The As Sessee Has Not Violated Any Provisions Or Conduction Prescribed U S 11 13 Of The It Act Or The Conditions Of Granting Approval U S 10 2 3 C Vi Of The Act Then Withdrawal Of The Approval Is Patently Illega L He Has Relied Upon The Decision Of Honble Delhi High Court In Case Of Dcit Vs Alarippu Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 28 244 Itr 358 As Well As Baidya Nath Plastic Industri Es P Ltd Vs K L Anand Income Tax Officer 230 Itr 522 And Submitted That The Honble Delhi High Court Has Defined Expression Investment Deposit And Loan And Held That These Words Have Different Meanings The Advance Given Resulting No Income Or Return Cannot Be Termed As I Nvestment Or Loan It Cannot Be Said To Be Deposited As It Is Not Made Fo R Safe Keeping Or Earning Any Interest Income Thus The Ld Ar Has S Ubmitted That The Impugned Order Is Not Sustainable And The Same May Be Set Aside 18 On The Other Hand Ld Dr Has Submitted That Th E Assessee Has Given A Sum Of Rs 1 38 00 000 To Trimurty Coloni Zers Builders Pvt Ltd Without Charging Any Interest The Ld Cit E Has Examined The Record And Found That This Amount Was Shown In The Balance Sheet As On 31 03 2013 And It Remained Outstanding Even On 3 1 03 2014 Thus The Assessee Has Diverted Its Fund For Giving This Amount To Trimurty Colonizers Builders Pvt Ltd Without Charging In Terest Though The Assessee Has Claimed That This Amount Was Given As An Advance Payment For Purchase Of Additional Plot However Si Nce May 2011 Neither Any Plot Was Purchased By The Assessee Soci Ety Nor Any Interest Has Been Received On Such Advances Therefore Even If It Is Not An Investment By The Assessee The Same Is In Contraven Tion Of The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 29 Provisions Of Section 11 5 As Well As The Conditio Ns Of Granting Approval U S 10 23 C Vi When The Assessee Has Not Received Any Reciprocal Benefit Over The Period On This Advance Then It Is A Clear Case Of Diversion Of Fund He Has Relied Upon The Impug Ned Order Of The Ld Cit E 19 As Regards The Payment To A K Education Welfar E Society The Said Payment Was Given In The Financial Year 2010 1 1 And The Assessee Has Shown The Balance Advances Even As On 31 03 201 4 Thus The Assessee Has Given Interest Free Funds To The Said Society Out Of The Capital Of The Trust Which Cannot Be Accepted As A Charitable Activity The Assessee Explained That This Amount Was Given T O The A K Education Welfare Society For Starting And Running A School In Bharatpur However No Such Education Activities Wer E Started By The Said Society Till The End Of 2016 Therefore This Is Also A Diversion Of Fund Of The Assessee In Contravention Of The Provis Ions Of Section 11 5 As Well As Other Conditions Of Granting Approval U S 10 23 C Vi Of The Income Tax Act 20 The Ld Dr Has Then Submitted That The Assessee Has Again Given An Advance Of Rs 1 5 Crores To Ambience Land Devel Oper India Pvt Ltd For Purchase Of Two Flats However The Assesse E Has Purchased Only Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 30 One Flat For Rs 92 05 000 On 29 03 2013 Therefo Re The Balance Amount Of Rs 60 07 953 Is Nothing But Diversion Of Fund Without Charging Any Interest He Has Relied Upon The Findi Ng Of The Ld Cit E And Submitted That The Flat Was Purchased For The P Ersonal Purpose Of Office Bearer Of The Assessee Society And Not For T He Society Purpose 20 The Ld Dr Has Submitted That The Assessee Has Also Given An Amount Of Rs 3 00 00 000 To Shri Surendra Kumar Meena During The Financial Year 2007 08 In The Garb Of Purchase Of S Ome Land However No Land Was Purchased By The Assessee Till Date And Therefore This Amount Was Given Free Of Interest In Violation Of Provisions Of Section 11 5 Till It Was Received Back By The Assessee In The Financial Year 2014 15 It Is A Clear Case Of Diversion Of Fund Fo R Non Charitable Or Education Purpose These Advances Are Clearly In Vi Olation Of Section 11 5 Of The Income Tax Act As Well As In Violation Of The Conditions Subject To Which The Approval U S 10 23 C Vi Was G Ranted Thus These Violations Itself Are Sufficient For Invoking The P Rovisions Of 13 Th Proviso To Section 10 23 C Vi For Withdrawal Of The Approv Al 21 As Regards Undue Benefit Given To The Specified Persons The Ld Dr Has Contended That The Assessee Society Has Paid Salary To The Persons Which Are Covered U S 13 3 Of The I T Act Therefore This Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 31 Payment On Account Of Salary Is Unreasonable Benefi T Given To The Specified Persons The Ld Cit E Has Given Finding That The Director Chairman And Other Trustee Performed Only Supervising And Managerial Role To The Public Service And Therefo Re This High Payment Given As Salary Is Nothing But Giving Undue Benefit To The Specified Persons In Violations Of The Provisions Of Section 13 3 R W The Provisions Of Section 10 23 C Vi 3 Rd Proviso And 13 Th Proviso He Has Relied Upon The Finding Of The Ld Cit E And Submi Tted That The Payment Given To These Persons Is Not Justified Whe N The Assessee Society Is Doing A Charitable Activity Apart From The Salary The Assessee Has Also Incurred Expenditure On The Foreign Tour O F Specified Persons The Expenditure Incurred On The Tour Cannot Be Trea Ted As Expenditure Incurred For Educational Purpose And Therefore It Is In Violation Of The Provisions Of Section 13 3 As Well As 3 Rd Proviso To Section 10 23 C Vi Of The Income Tax Act Thus The Ld Dr Has Submitt Ed That There Are Multiple Violations Of Provisions Of Sections 11 5 13 3 As Well As Section 10 23 C Vi R W Proviso 3 Rd And 13 Th And Therefore The Ld Cit E Is Justified In Withdrawing Approval Granted U S 10 23 C Vi Of The Income Tax Act Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 32 22 We Have Considered The Rival Submissions As Wel L As Relevant Material On Record The Ld Cit E Withdrew The App Roval Primarily On Two Grounds Viz I Investments Deposits Of Fund No T In Prescribed Mode And Ii Undue Benefit Given To The Specified Perso Ns As Per Section 13 3 Of The I T Act First We Will Deal With The Issue Of Investments Deposits In Violation Of The Provisions Of Section 11 5 Of The Income Tax Act The Details Of Such Deposits Are Given By The Ld Cit E In Para 5 Of The Impugned Order As Under S No Name Amount 1 Trumurti Colonisers Builders Pvt Ltd 1 38 00 000 2 A K Education Welfare Society 1 00 00 000 3 Ambience Land Developer 60 07 953 4 Surendra Kumar Meena 3 00 00 000 Thus There Are Four Transactions Of Alleged Invest Ments Deposits Before We Proceed To Examine Each Of These Transact Ions The Relevant Provisions Of The I T Act Are Required To Be Analy Zed For Exercising The Power Under 13 Th Proviso To Section 10 23 C Vi The Prescribed Authority Has To Satisfy Itself About The Existence Of The Default Violation Committed By The Assessee As Contemplated Under Clause I B Of The Said Proviso The Said Requirement Is Mandat Ory For Invoking The Jurisdiction And Powers Provided Under 13 Th Proviso To Section 10 23 C Vi Of The I T Act The Violation And Defa Ults As Alleged By The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 33 Ld Cit E In The Impugned Order Fall Under Clause I Sub Clause A And B Of The Said Proviso To Section 10 23 C Vi Of The I T Act There Is No Allegation Of The Activity Of The Assessee Society Are Not Charitable Or Not Genuine Or Not Carried Out In Accordance With A Ll Or Any Of The Conditions Subject To Which It Was Granted Approval The Two Grounds On Which The Ld Cit E Withdrew The Approval Are F Alling Under Clause I Of The 13 Th Proviso To Bring The Case Of Investments Deposi Ts Of Fund In The Purview Of Clause I B Of 13 Th Proviso To Section 10 23 C Vi Of The I T Act It Is Primary Condition There Must Be An Investment Or Deposit Of Funds Of The Institution Therefore In Order To Ascertain Whether Such Investment Deposit Is In Violation Of The Mode Prescribed U S 11 5 Of The I T Act There Must Be Investment Or Deposit Of Funds For Ready Reference We Quote The Provisions Of Sect Ion 11 5 As Under 5 The Forms And Modes Of Investing Or Depositing The Money Referred To In Clause B Of Sub Section 2 Shall Be The Following Namely I Investment In Savings Certificates As Defined In Cl Ause C Of Section 2 50 Of The Government S Avings Certificates Act 1959 46 Of 1959 And Any Other Securities Or Certificates Issued By The Central Government Under The Small Savings Schemes Of That Government Ii Deposit In Any Account With The Post Office Savings Bank Iii Deposit In Any Account With A Scheduled Bank Or A C O Operative Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 34 Society Engaged In Carrying On The Business Of Bank Ing Including A Co Operative Land Mortgage Bank Or A Co Operative Land Development Bank Explanation In This Clause Scheduled Bank Means The St Ate Bank Of India Constituted Under The State Bank Of I Ndia Act 1955 23 Of 1955 A Subsidiary Bank As Defined In The S Tate Bank Of India Subsidiary Banks Act 1959 38 Of 1959 A Corresponding New Bank Constituted Under Section 3 Of The Banking Compa Nies Acquisition And Transfer Of Undertakings Act 197 0 5 Of 1970 Or Under Section 3 Of The Banking Companies Acquis Ition And Transfer Of Undertakings Act 1980 40 Of 1980 O R Any Other Bank Being A Bank Included In The Second Schedule T O The Reserve Bank Of India Act 1934 2 Of 1934 Iv Investment In Units Of The Unit Trust Of India Esta Blished Under The Unit Trust Of India Act 1963 52 Of 1963 V Investment In Any Security For Money Created And Is Sued By The Central Government Or A State Government Vi Investment In Debentures Issued By Or On Behalf Of Any Company Or Corporation Both The Principal Whereof And The I Nterest Whereon Are Fully And Unconditionally Guaranteed By The Central Government Or By A State Government Vii Investment Or Deposit 51 In Any 52 Public Sector Company 53 Provided That Where An Investment Or Deposit In Any Public Sector Company Has B Een Made And Such Public Sector Company Ceases To Be A Public Sector Company A Such Investment Made In The Shares Of Such Company Shall Be Deemed To Be An Investment Made Under This Claus E For A Period Of Three Years From The Date On Which Such Pub Lic Sector Company Ceases To Be A Public Sector Company Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 35 B Such Other Investment Or Deposit Shall Be Deemed To Be An Investment Or Deposit Made Under This Clause For Th E Period Up To The Date On Which Such Investment Or Deposit Becomes Repayable By Such Company Viii Deposits With Or Investment In Any Bonds Issued By A Financial Corporation Which Is Engaged In Providing Long Term Finance For Industrial Development In India And 54 Which Is Eligible For Deduction Under Clause Viii Of Sub Section 1 Of Section 36 Ix Deposits With Or Investment In Any Bonds Issued By A Public Company Formed And Registered In I Ndia With The Main Object Of Carrying On The Business Of Providing Long Term Finance For Construction Or Purchase Of Houses In India For Res Idential Purposes And 54 Which Is Eligible For Deduction Under Clause Viii Of Sub Section 1 Of Section 36 55 Ixa Deposits With Or Investment In Any Bonds Issued By A Public Company Formed And Registered In India With The Main Object Of Carrying On The Business Of Providing Long Term Finance For Urban Infrastructure In India Explanation For The Purposes Of This Clause A Long Term Finance Means Any Loan Or Advance Where The Terms Under Which Moneys Are Loaned Or Advanced Provide For Repayment Along With Interest Thereof During A Period Of Not Less Than Five Years B Public Company Shall Have The Meaning Assigned To It In Section 3 56 Of The Companies Act 1956 1 Of 1956 C Urban Infrastructure Means A Project For Providin G Potable Water Supply Sanitation And Sewerage Drai Nage Solid Waste Management Roads Bridges And Flyovers Or Urban Transport Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 36 X Investment In Immovable Property Explanation Immovable Property Does Not Include Any Machi Nery Or Plant Other Than Machinery Or Plant Instal Led In A Building For The Convenient Occupation Of The Bui Lding Even Though Attached To Or Permanently Fastened To Any Thing Attached To The Earth 57 Xi Deposits With The Industrial Development Bank Of In Dia Established Under The Industrial Development Bank O F India Act 1964 18 Of 1964 58 Xii A Ny Other Form Or Mode Of Investment Or Deposit As M Ay Be Prescribed 59 In Light Of The Requirement Of The Provisions Of La W We Will Examine Each Of This Transactions One By One Advance Given To Trimurty Colonizers Builders Pvt Ltd The Assessee Explained The Purpose And Intent For Giving The Said Amount Of Rs 1 38 0 0 000 To Purchase Education Plot For Construction Of School It Is No T In Dispute That The Said Payment Was Made Under An Agreement To Purchas E Which Was Executed On 27 05 2011 For Purchase Of Educational Plot Of Measuring 9680 Yards This Amount Was Paid As Booking Advance S To The Builder The Assesse Has Explained That Since Rajasthan Hous Ing Board Restrain The Assessee From Constructing The School Building And Put A Condition That The Assessee Society Can Carry Out The Constru Ction Subject To The Decision To Be Taken By The Government Inrespect O F Nallah Therefore Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 37 Due To The Uncertainty Of Construction Of The Schoo L Building On The Plot Allotted By The Rajasthan Housing Board The Assesse E Took The Decision In The Best Interest Of The Institution And For Ach Ieving The Objects Of The Society The Facts Explained By The Assessee Are No T In Dispute That After The Allotment Of The Land For New School The Assessee Challenged The Conditions Imposed By The Rajasthan Housing Boa Rd Before The Honble High Court And Only After The Order Of The Honble High Court Modifying The Said Conditions The Assessee Was All Owed To Start The Construction Work On The Allotted Site Therefore The Allotment Of Site Itself Was Under Dispute And To Safeguard The Inter Est Of The Assessee Institution In The Eventuality Of Any Adverse Outco Me Of The Litigation And Dispute Regarding The Plot Allotted By The Raja Sthan Housing Board The Assessee Made These Arrangements Of Acquiring A Substitute Plot Of Land Vide Agreement Dated 27 05 2011 Thus This Pa Yment For Purchase Of Educational Plot For Construction Of Th E School As Per Agreement Cannot Be Regarded As An Investments Or D Eposits But The Same Was Payment For Purchase Of Land In Accordance With The Objects And Purpose Of The Assessee Society The Payment Un Der The Agreement Is Not In Dispute But The Long Duration F Or Which This Amount Remained With Other Party Was The Reason For Consid Ering The Same As Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 38 Investments Deposits In Violation Of Provisions Of Section 11 5 Of The Act While Passing The Impugned Order By The Ld Cit E It Is Also Not In Dispute That The Said Agreement Was Consequently Ca Ncelled And This Amount Was Received Back By The Assessee On Cancell Ation Of The Agreement Therefore Until And Unless The Agreemen T Dated 27 05 2011 Is Held As Bogus Or Non Est The Payment Under The S Aid Agreement Cannot Be Considered As An Investments Or Deposits The Honble Delhi High Court In Case Of Dcit Vs Alarippu Supra Has Observed That The Investment Means To Lay Down Money In Business With A View To Obtain An Income Or Profit Or The Said Amount Should Be Ca Pable Of Result Of Income Return Or Profit To The Investor In Every Case Of Investment The Intention And Positive Act On Part Of The Investor To Earn Such Income Return Profit The Word Deposit Does Not Cover Tra Nsaction Of Loan Being The Advance Given For Purchase Of Asset Furt Her In The Absence Of The Intention To Earn The Income Out Of Such Tra Nsaction The Same Cannot Be Termed As Investments Deposits Therefor E When The Advance Was Paid For Purchase Of Education Plot For Construction And Running Of School Which Is In Accordance With The O Bjects And Purpose Of The Assessee Society Then The Same Cannot Be Tr Eated As Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 39 Investments Or Deposits And Therefore There Is No Violation Of Provisions Of Section 11 5 Of The Income Tax Act 23 Similarly The Payment Of Rs 1 Crore A K Educa Tion Welfare Society It Is Not Disputed By The Department That T He Said Society Is Duly Registered Under The Provisions Of Rajasthan Societ Y Act And Also Granted Registration U S 12 Aa Of The Income Tax Act The Assessee Filed A Copy Of Order Of Granting Registration U S 12 Aa Dated 16 12 2016 The Objection Of The Ld Cit E Regardi Ng This Payment Is That Despite The Laps Of Consideration Time No Scho Ol Was Started At Bharatpur As Claimed By The Assessee However The A Ssessee Has Produced The Browser As Well As Admission Applicati On Form And Submitted That A Modern School Has Been Dully Start Ed In Bharatpur In The Collaboration And Under The Franchise Of The A Ssessee The Assessee Has Given This Amount To Start A School In Bharatpur And A K Education Welfare Society Has Now Started The Schoo L Which Is Fully Functional And Imparting Education Thus This Paym Ent Made Only For Achieving The Objects Imparting Education We Find That The School At Bharatpur Is Also In The Name Of Modern School As The Other Schools Of The Assessee Society Therefore When The Paymen T Was Given To The Education Society Which Was Granted Registration U S 12 Aa And Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 40 Modern School Has Been Started In Bharatpur Unde R The Franchise Of The Assessee And In The Collaboration With A K Ed Ucation Welfare Society Then The Said Payment Cannot Be Held As An Investment Or Expenditure Other Than The Expenditure Laid Down Fo R Achieving The Objects Of The Assessee Hence There Is No Violati On Of Section 11 5 As Regards This Payment Of Rs 1 Crore Was Made To Th E A K Education Welfare Society 24 The Payment To Ambience Land Developers India Pvt Ltd The Ld Cit E Noted That The Assessee Initially P Aid An Advance Of Rs 1 5 Crores To The Developer For Purchase Two Flats However Finally The Assessee Purchase Only One Flat Of Rs 92 05 000 Therefore The Balance Rs 60 07 953 Was Treated As Diversio N Of Fund In Violation Of Section 11 5 Of The Income Tax Act It Is Not I N Dispute That The Said Payment Of Rs 1 5 Crores Was Paid Under The Agreem Ent To Purchase Two Flats The Assessee Has Explained That The Asse Ssee Acquired The Flat At Jaipur So That The Office Bearers Visiting To Jaipur For Supervising And Overseeing Can Stay There The Flat Was Finall Y To Be Used For Residence Of The Principal Of The School Therefore Even If The Assess As Originally Proposed To Purchase Two Flats And Subs Equently Acquired Only One Flat The Excess Amount Paid At The Time Of Initial Agreement Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 41 Cannot Be Treated As Investment Or Deposit In Viol Ation Of The Provisions Of Section 11 5 Of The It Act Though T He Ld Cit E Doubted The Use Of The Flat However When The Flat Was Fina Lly Used For The Residence Of Principal Of The School Then It Cannot Be Treated As Diversion Of Fund But The Fund Was Applied Only For The Purpose Of Education Which Is The Primary Object Of The Assess Ee Society Hence This Transaction Cannot Be Termed Either Investment S Or Deposits And Therefore There Is No Violation Of Provisions Of S Ection 11 5 Of The I T Act 25 The Payment To Shri Surendra Kumar Meena The Assessee Has Made An Advance Of Rs 3 00 00 000 To One Shr I Surendra Kumar Meena For Purchase Of Land In Jaipur Vide Agreement Dated 04 04 2007 It Is Clear That The Said Land Was To Be Purchased For The Purpose Of Construction And Running Of A New School Subsequen Tly When The Land Was Not Converted To Non Agricultural Use For The P Urpose Of Education As There Was A Public Interest Litigation Filed Aga Inst The Said Land Then The Assessee Decided To Cancel The Said Agreement A Nd Received Back The Amount The Agreement Dated 04 04 2007 Is Not I N Dispute It Is Also A Matter Of Fact And Record That A Public Inte Rest Litigation Was Filed In The Honble High Court Challenging The Use Of La Nd Other Than The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 42 Agricultural Purpose And Thus Until And Unless The Land Was Finally Converted For Non Agricultural Use The Assessee Cou Ld Not Acquire The Same After Waiting For A Reasonable Period The As Sessee Finally Received Back The Amount And Cancelled The Agreemen T The Intent And Purpose For The Payment Was Acquisition Of The Land For Opening A New School Cannot Be Doubted As The Assesses Entered In To Agreement Dated 04 04 2007 And Thereafter Subsequent Agreemen T On 18 03 2008 These Payments Were Made On Two Occasions At The Ti Me Of These Two Agreements And Therefore The Said Payment For Acqu Iring The Land Will Not Fall In The Category Of Investment Or Loan Or D Eposit Hence The Said Payment Is Not Hit By The Provisions Of Section 11 5 Of The Income Tax Act 26 Undue Benefit Given To The Specified Persons The Ld Cit E Noted That The Assessee Made Payment On Acco Unt Of Salary To The Persons Allegedly Covered U S 13 3 Of The Act The Details Of The Payments Are Given In Para 6 1 Of The Impugned Orde R As Under Sl No Name Of Person Salary Amount Qua Lification Duties Assigned 1 Dr Deepak Singh 48 78 418 B Sc M A Phd B Ed Director Treasurer 2 Seema D Singh Wife Of 10 84 775 B A B Ed Teacher Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 43 Deepak Singh 3 Vaibhav Singh 9 52 831 M A Secretary Principal There Is No Dispute That These Payments Are Not Mad E First Time During The Year Under Consideration But Are Regular Paymen Ts Of Salary To These Persons From The Financial Years 2008 09 To 2 012 13 The Assessing Officer While Completing The Assessment U S 143 3 Never Doubteded Or Question These Payments As Excessive O R Unreasonable As It Is Clear From The Facts That These Payments Are Remuneration Paid To These Persons For Rendering Services And Not Merely Payments For Being The Specified Persons Once The Qualification Of Th Ese Persons And Rendering Of Service By Them Is Not In Dispute Then The Quantum As Per Provisions Of Section 13 2 Can Be Examined To Asce Rtain That There Are Not Excessive Payment To These Persons For Ready R Eference We Quote Section 13 2 As Under 2 Without Prejudice To The Generality Of The Pro Visions Of Clause C 17 And Clause D Of Sub Section 1 The Income Or The Property 18 Of The Trust Or Institution Or Any Part Of Such In Come Or Property Shall For The Purposes Of That Clause Be Deemed To Have Been Used Or Applied For The Benefit Of A Pers On Referred To In Sub Section 3 A If Any Part Of The Income Or Property 19 Of The Trust Or Institution Is Or Continues To Be Lent 19 To Any Person Referred To In Sub Section 3 For Any Period During The Previous Year Without Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 44 Either Adequate Security 19 Or Adequate Interest Or Both B If Any Land Building Or Other Property 19 Of The Trust Or Institution Is Or Continues To Be Made Available For The Use Of Any Person Referred To In Sub Section 3 For Any Period During The Previous Year Without Charging Adequate Rent Or Other Compen Sation C If Any Amount Is Paid By Way Of Salary Allowance O R Otherwise During The Previous Year To Any Person Referred To In Sub Section 3 Out Of The Resources Of The Trust Or Institutio N For Servi Ces Rendered By That Person To Such Trust Or Institutio N And The Amount So Paid Is In Excess Of What May Be Reasonab Ly Paid For Such Services D If The Services Of The Trust Or Institution Are Mad E Available To Any Person Referred To In Sub Section 3 During The Previous Year Without Adequate Remuneration Or Other Compens Ation E If Any Share Security Or Other Property Is Purchas Ed By Or On Behalf Of The Trust Or Institution From Any Person Referred To In Sub Section 3 During The Previous Year For Consideration Which Is More Than Adequate F If Any Share Security Or Other Property Is Sold By Or On Behalf Of The Trust Or Institution To Any Person Referred To In Sub Section 3 During The Previous Year For Consideration Whic H Is Less Than Adequate 20 G If Any Income Or Property Of The Trust Or Instituti On Is Diverted During The Previous Year In Favour Of Any Person Re Ferred To In Sub Section 3 Provided That This Clause Shall Not Apply Where Th E Income Or The Value Of The Property Or As The Case May Be T He Aggregate Of The Income And The Value Of The Property So Div Erted Does Not Exceed One Thousand Rupees Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 45 H If Any Funds 21 Of The Trust Or Institutio N Are Or Continue To Remain Invested 21 For Any Period During The Previous Year Not Being A Period Before The 1st Day Of January 1971 In Any Concern 21 In Which Any Person Referred To In Sub Section 3 Has A Substantial Interest As Per Section 12 2 C Of The It Act Only When An Amount Is Paid By Way Of Salary Allowance Or Otherwise To Any Person Specified In Sub Section 3 The Amount So Paid In Excess Of What M Ay Be Reasonably Paid For Such Services Would Be Deemed To Have Been Used Or Applied For The Benefit Of Such Specified Persons The Ld Cit E Has Not Given A Finding That The Payment Of Salary To These Persons Is More Than The Fair Market Price Of The Services Rendered By Them Thou Gh The Justification Of Payment Is Questioned By The Ld Cit E Further The Salary In Question Were Being Paid Since Long Time And Reason Ableness Was Not Question By The Ao While Completing The Scrutiny A Ssessment For The Earlier Years As Well As Subsequent Year I E 2013 14 The Coordinate Bench Of This Tribunal In Case Of Acit E V Mahima Shiksha Samiti Supra Has Held In Para 73 As Under 73 In Our View Given The Qualification And The Exper Ience Of These Persons And The Fact That These Persons Have Managed The Affairs Of The Society Since Its Inception And They Are Closely And Actively Involve In Management And Day To Affairs O F The Assessee Society The Salary And Allowances Paid To Them Is Reasonable Vis A Vis Legitimate Needs Of The Assessee Society And Benefit Derived Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 46 Or Accruing To The Assessee Society We Do Not See Any Justifiable Reason To Disturb The Decision Which Has Been Taken By The Management Of The Assessee Society In Terms Of Dete Rmining The Appropriate Remuneration Payable To These Persons The Only Scenario Where One Can Think Of Disturbing The Said Decision Taken By The Management Of The Assessee Society Is Where People Holding Similar Position And Having Similar Experience And Qualification Have Been Drawing Lesser Remuneration Compared To What Has Been Paid To These Persons By The Assessee Society In Other Words The Test Of Reasonableness Can Be Invo Ked Where There Is Contemporary Data In Terms Of Identifiable Third Party Transactions In Similar Area Of Operation Of Educat Ion In The Instant Case The Revenue Has Not Brought On Record Any Such Contemporary Data In Terms Of Other Educational Ins Titutions Of Same Scale And Size And Having Similar Strength Of Student And Infrastructure Wherein Keep Managerial Person Havin G Been Paid Lesser Salary Further The Courts Have Held From Ti Me To Time That The Reasonableness Of The Expenditure Is To Be Adju Dged From The Point Of View Of An Business Man And Not Of The Rev Enue In Other Words The Reasonableness Has To Be Seen Vis A Vis Legitimate Needs Of The Assessee Society And Be Nefit Derived Or Accruing To The Assessee Society And As Determin Ed By The Assessee Society It Is Also Noted That In The Past Consistently Over The Years The Matter Relating To Reasonableness Of The Salary Paid To The Members Of The Bakshi Family Have Been Raised By The Revenue And The Coordinate Benches Have Consistentl Y Held In Favour Of The Assessee Society And Have Not Seen An Y Justifiable Basis For Such Action On The Part Of The Revenue F Or One Of The Years I E A Y 2009 10 The Revenue Has Accepted T He Order Of The Ld Cit A Upholding The Salary Paid To These P Ersons In The Entirety Of The Facts And Circumstances Of The Case We Are Of The View That The Salary Paid To The Members Of Bakshi Family Are Commensurate With Qualifications And Experience As Well As Area Of Their Responsibility In Terms Of Management And Day To Day Affairs Of The Assessee Society And Commensurate Vi S A Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 47 Vis Legitimate Needs Of The Assessee Society And Be Nefit Derived Or Accruing To The Assessee Society In The Result We Do Not See Any Violation In Terms Of Section 13 And The Disall Owance Made By The A O Which Has Been Deleted By The Ld Cit A I S Upheld In The Result Ground No 3 Of The Revenue Is Dismissed Thus When The Qualification And Experience Of The Persons Who Were Managing The Affairs Of The Society And Also Involv Ed In The Day To Day Affairs And Teaching Work Is Not Denied Then Salari Es And Allowances Or Remuneration Paid To These Persons Cannot Be Held As Unreasonable Or Excessive Following The Decision Of The Coordinate Benches Of This Tribunal Supra We Hold That The Payment Is Made O N Account Of Salary Against The Services Rendered By These Persons And Not Merely On Account Of Their Status Then The Same Cannot Be Sai D To Be A Undue Benefit To Attract The Provisions Of Section 13 3 Of The Income Tax Act 27 Next Undue Benefit Was Considered On Account Of The Expenditure Incurred On Foreign Tour Of Specified Persons The Assessee Furnished The Details Of 23 Persons Who Have Gone On Educatio N Tour The List Of These Persons Is As Under S No Name Of Staff Post 1 Vaibhav Singh Director 2 Sunita Bali Vice Principal 3 Sn Vaishav Post Graduate Teacher 4 Rk Jain Post Graduate Teacher Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 48 5 Sa Tish Gosain Trained Graduate Teacher 6 Arun Sahoo Trained Graduate Teacher 7 Ravina Anand Trained Graduate Teacher 8 Mona Jain Trained Graduate Teacher 9 Reva Jain Primary Teacher 10 Usha Gosain Primary Teacher 11 Pratima Dhar Trained Graduate Teach Er 12 Alka Sharma Trained Graduate Teacher 13 Neelam Madan Trained Graduate Teacher 14 Asha Singh Trained Graduate Teacher 15 Deep Mala Trained Graduate Teacher 16 Lla Singh Trained Graduate Teacher 17 Kalpna Ojha Trained Graduate Teacher 18 H Raute La Primary Teacher 19 R Kukreti Primary Teacher 20 Zu Khan Post Graduate Teacher 21 Madi Modi Primary Teacher 22 Rekha Vajpai Trained Graduate Teacher 23 Anil Trained Graduate Teacher It Is Apparent From The List That Except One Person All Others Are The Teachers Of The Assessee Society And Not Falling In The Category Of Specified Persons As Per Section 13 3 When The Ex Penditure Was Incurred For The Tour Of The Entire Group Then It C Annot Be Considered As Undue Benefit Only One I E Director It Is Not A C Ase Of The Department That All 23 Persons Are Falling In The Category Of The Specified Persons We Find That Only The Director Namely Shri Vaibhav Singh Was Considered By The Ld Cit E As Specified Persons W Hile Raising The Objection Of Payment Of Salary Therefore Out Of T He Group Of 23 Persons The Director Cannot Be Picked Out To Invok E The Provisions Of Section 13 3 Of The Income Tax Act Further It Is Not The Finding Of The Ita No 1118 Jp 2016 Modern School Society V Cit E Jaipur 49 Ld Cit E That The Tour Was Undertaken For Their P Ersonal Trip Then The Education Tour By The Teaching Staff Along With The Director Has To Be Considered As One Event And Expenditure Hence We Are Of The View That The Expenditure Incurred On This Tour Of Group Of Teacher Along With Director Cannot Be Held As Undue Benefit To On E Person In View Of The Above Facts And Circumstances Of The Case As Di Scussed Above The Impugned Order Passed By The Ld Cit E Is Set Asid E And Consequently The Approval U S 10 23 C Vi Granted To The Asses See Is Restored In The Result The Appeal Filed By The Assessee Is Allowed Order Pronounced In The Open Court On 20 12 2017 Sd Sd Hkkxpan Fot Iky Jko Bhagchand Vijay Pal Rao Ys Kk Lnl Accountant Member U Kf D Lnl Judicial Member Tk Iqj Jaipur Fnukad Dated 20 12 2017 Santosh Vknsk Dh Izfrfyfi Vxzsfkr Copy Of The Order Forwarded To 1 Vihykfkhz The Appellant Modern School Society Delhi 2 Izr Fkhz The Respondent Cit E Jaipur 3 Vk Dj Vk Qdr Cit 4 Vk Dj Vk Qdr Cit A 5 Fohkkxh Izfrfuf K Vk Dj Vihyh Vf Kdj K T Iqj Dr Itat Jaipur 6 Xkmz Qkbzy Guard File Ita No 1118 Jp 2016 Vknskkuqlkj By Order Lgk D Iathdkj Asst Registrar