DDIT, Hyderabad v. Vyjayanthi Educational Soceity, Mahabubnagar

ITA 1194/HYD/2009 | 2006-2007
Pronouncement Date: 26-03-2010 | Result: Allowed

Appeal Details

RSA Number 119422514 RSA 2009
Bench Hyderabad
Appeal Number ITA 1194/HYD/2009
Duration Of Justice 3 month(s) 10 day(s)
Appellant DDIT, Hyderabad
Respondent Vyjayanthi Educational Soceity, Mahabubnagar
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 26-03-2010
Date Of Final Hearing 18-02-2010
Next Hearing Date 18-02-2010
Assessment Year 2006-2007
Appeal Filed On 16-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.:1194/HYD/2009 ASSTT. YEA R : 2006-07 THE DDIT(E I) HYDERABAD VS M/S VIJAYANTHI EDUCATIONAL SOCIETY MAHABOOBNAGAR (V-114) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H. PHANI RAJU RESPONDENT BY : NONE O R D E R PER: CHANDRA POOJARI ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-IV HYDERABAD DATED 30.10.2009 AND PERTAINS TO THE ASSESSMENT YEARS 2006-07. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE CIT(A) IS NOT ACCEPTABLE AS IT IS ERRONEOUS IN BOTH LAW AND ON FACTS. 2. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT OBTAINING APPROVAL U/S 10(23C) (VI) OF THE IT ACT OF THE PRESCRIBED AU THORITY IS MANDATORY SINCE THE GROSS RECEIPTS OF THE SOCIETY HAVE EXCEED ED RS. 1 CRORE. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT IT WAS SECTION 10 (23C) (VI) THAT PROVIDED FOR EXEMPTION OF THE EDUCA TIONAL INCOME OF THE TRUSTS SOCIETIES AND NOT SECTION 11. 4. THE DECISION OF THE ITAT RAJASTHAN SIKSHA SAMITHI H AS NOT BEEN ACCEPTED IN PRINCIPLE BUT THE APPEAL HAS NOT BEEN P REFERRED BEFORE THE HIGH COURT U/S 260A DUE TO THE FACT THAT THE TAX EF FECT IS BELOW THE MONETARY LIMITS. 5. IN THE CASE OF ST. THERESAS SOCIETY THE DECISION OF THE ITAT HAS NOT BEEN ACCEPTED AND APPEAL HAS BEEN FILED BEFORE THE HIGH COURT. 3. AFTER HEARING THE LEARNED AUTHORIZED REPRESENT ATIVE WE ARE OF THE OPINION THAT THIS ISSUE HAS BEEN SQUARELY COVERED BY THE ORDER OF 2 2 THE TRIBUNAL IN THE CASE OF M/S VASAVI ACADEMY OF EDUCAT ION HYDERABAD DATED 4 TH FEBRUARY 2010 IN ITA NO.1749/HYD/2009 WHEREIN IT WAS HELD THAT: 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE COVERED IN FAVOUR OF THE ASSESSEE B Y THE ORDER OF THE HYDERABAD BENCH A OF THE TRIBUNAL DATED 15.4.2009 IN ASSESSEES OWN CASES IN ITA NO.1133/HYD/2006 FOR THE ASSESSMENT YEARS 20 03-04 AND ORDER DATED 17.4.2009 IN ITA NO.1206/HYD/2007 FOR THE ASSESSME NT YEAR 2004-05. HOWEVER WE FIND THAT THE CONSTITUTIONAL BENCH OF A PEX COURT IN THE CASE OF T.M.A. PAI FOUNDATIONS AND OTHERS VS. STATE OF KARN ATAKA & OTHERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COLLECTION OF CAPIT ATION FEES FOR THE ADMISSION OF STUDENTS OVER AND ABOVE FEES PRESCRIBE D BY THE PRIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPITATION FEES FOR ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESC RIBED CANNOT BE CONSTRUED AS CHARITABLE/EDUCATION INSTITUTION. APEX COURT FURTHER OBSERVED THAT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIB ED FEE FOR ADMISSION OF THE STUDENT HAS TO BE CONSTRUCTED AS CAPITATION FEE. T HE APEX COURT FURTHER OBSERVED THAT THE CONCERNED UNIVERSITY AND REGULATE D BODY HAS TO TAKE ACTION FOR WITHDRAWAL OF THE RECOGNITION IN CASE IT IS FOU ND THAT THE EDUCATIONAL INSTITUTION RECEIVED ANY MONEY OVER AND ABOVE THE F EES PRESCRIBED FOR THE COURSES. SAME VIEW WAS TAKEN BY APEX COURT IN THE C ASE OF ISLAMIC ACADEMY OF EDUCATION AND ANOTHER VS. STATE OF KARNATAKA & A NOTHER (2003) 6 SCC 697. IF THE DONATIONS WERE RECEIVED COMPULSORILY FOR ADM ISSION OF STUDENTS THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITHER U/S 1 0(23C) OR U/S 11 OF THE IT ACT. SINCE THE LOWER AUTHORITIES WERE NOT EXAMI NED THE COLLECTION OF CAPITATION FEES IN THIS CASE IN OUR OPINION THE M ATTER REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER WHETHER THE ASSES SEE IS COLLECTING THE CAPITATION FEES FROM STUDENTS OR NOT AND IT IS NECE SSARY FOR BRINGING THE ACTUAL FACTS ON RECORD FOR DECIDING THE ISSUE EFFECTIVELY. SIMILAR VIEW WAS TAKEN BY US IN THE CASE OF M/S. JAMIA NIZAMIA IN ITA NO.763/ HYD/2007 DATED 30.6.2008 IN THE CASE OF INTERNATIONAL EDUCATIONAL ACADEMY HYDERABAD IN ITA NO.494/HYD/2007 AND 518/HYD/2008 FOR THE ASSESS MENT YEARS 2002- 2003 AND 2004-05 AND SRI SAI SUDHIR EDUCATIONAL SOC IETY HYDERABAD IN ITA NO.999/HYD/20-06 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT BACK THE MATTER TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO ASSESSING OFFICER THAT HE SHALL RECONSIDER THE ENTIRE ISSUE IN THE LIGHT OF JUDGEME NT OF SUPREME COURT IN THE CASE OF M/S ISLAMIC ACADEMY OF EDUCATION & ANOTHER VS. STATE OF KARNATAKA AND ANOTHER (SUPRA) AND IN THE CASED OF T.M.A. PAI FOUNDATION AND OTHERS VS. STATE OF KARNATAKA AND OTHERS (SUPRA) AND FIND OUT WHETHER THE ASSESSEE HAS RECEIVED ANY MONEY OVER AND ABOVE THE FEES PRESCRIB ED AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVIN G REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . WE MAKE IT CLEAR THAT TH E ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITHER U/S 11 OR U/S 10(23C) IN CASE IT COLLECTED ANY MONEY BY WHATEVER NAME IT IS CALLED I.E. DONATION BUILDING FUND AUDITORIUM FUND ETC. ETC. OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSI ON OF STUDENTS. 3 3 4. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY T HE TRIBUNAL IN THE ABOVE ORDER WE SET ASIDE THE ISSUE IN DISPUTE TO T HE FILE OF ASSESSING OFFICER ON SIMILAR DIRECTION FOR FRESH CONSIDERATION. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT : 26.2.2010 SD/- SD/- N.R.S. GANESAN CHANDRA POOJARI JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE FEBRUARY 2010 COPY FORWARDED TO: 1. THE DY. DIRECTOR OF INCOME TAX (E)-I 3 RD FLOOR AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 2. M/S VIJAYANTHI EDUCATIONAL SOCIETY 2-2-121/A NEA R OLD BUS STAND KIDWAIPET MAHABUBNAGAR. 3. CIT(A)-IV HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD.