Rainbow International Society for Education (RISE), Kangra v. CIT(Exemption), Chandigarh

ITA 245/CHANDI/2020 | 2017-2018
Pronouncement Date: 30-03-2021 | Result: Allowed

Appeal Details

RSA Number 24521514 RSA 2020
Assessee PAN AAABR1376E
Bench Chandigarh
Appeal Number ITA 245/CHANDI/2020
Duration Of Justice 1 year(s) 17 day(s)
Appellant Rainbow International Society for Education (RISE), Kangra
Respondent CIT(Exemption), Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-03-2021
Date Of Final Hearing 17-03-2021
Next Hearing Date 17-03-2021
Last Hearing Date 11-01-2021
First Hearing Date 11-01-2021
Assessment Year 2017-2018
Appeal Filed On 13-03-2020
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE: SMT.ANNAPURNA GUPTA ACCOUNTANT MEMBER AND SHRI R.L. NEGI JUDICIAL MEMBER ITA NO. 245/CHD/2020 (ASSESSMENT YEAR: 2017-18 RAINBOW INTERNATIONAL SOCIETY FOR EDUCATION(RISE) VILLAGE BARI BHAWARNA TEHSIL PALAMPUR DISTT. KANGRA (H.P.) THE CIT (EXEMPTIONS) CHANDIGARH. ./PAN NO: AAABR1376E /ASSESSEE BY: SHRI PARIKSHIT AGGARWAL CA / REVENUE BY : SHRI SANDEEP DAHIYA CIT /DATE OF HEARING: 17.03.2021 !' /DATE OF PRONOUNCEMENT: 30.03.2021 (HEARING THROUGH WEBEX) /ORDER PER ANNAPURNA GUPTA ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) [IN SHORT THE LD.CIT(E)] CHANDIGARH DATED 19.06.2019 DENYING GRANT OF APPROVAL U/S 10(23C(VI) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2. THE BRIEF FACTS RELATING TO THE CASE ARE THAT T HE APPLICANT/ASSESSEE IS A SOCIETY RUNNING A SCHOOL N AMELY ITA NO.245/CHD/2020 2 RAINBOW WORLD SCHOOL. THE STATED AIMS AND OBJECTS O F THE SOCIETY AS MENTIONED IN PARA 2 OF THE CIT(E)S ORDE R ARE AS UNDER: 2. THE STATED OSTENSIBLE AIMS AND OBJECTS OF THE SOCIETY ARE TO ADMIT AND TEACH THE STUDENTS FROM NURSERY TO XII CLASS OF UNDEVELOPED RURAL AND OF URBAN AREAS UP TO RANGE OF 25 KILOMETERS; TO ADMIT AND TEACH STUDENTS OF ALL COMMUNITY WITHOUT ANY DISCRIMINATION INCASE COLOUR CREED POOR AND RICH ETC; TO ESTABLISH RUN AND MANAGE SENIOR SECONDARY SCHOOLS SECONDARY SCHOOLS NURSERY SCHOOLS DEGREE COLLEGES PHARMACY COLLEGES COLLEGE OF NURSING PHYSICAL EDUCATION COLLEGE ETC; PROVIDING VOCATIONAL TRAINING TO THE UNEMPLOYED YOUTH WOMEN WIDOWS ADOLESCENT GIRLS ETC. ON SEWING HANDICRAFT AND OTHER VOCATIONAL COURSES. 3. THE APPLICANT/ASSESSEE HAD APPLIED FOR GRANT OF APPROVAL FOR THE PURPOSE OF CLAIMING ITS INCOME EXE MPT AS PER THE PROVISIONS OF SECTION 10(23C)(VI) OF THE AC T VIDE ITS APPLICATION IN FORM NO.56D DATED 04.06.2018. THE LD .CIT(E) AFTER TAKING NOTE OF THE AIMS AND OBJECTS OF THE AP PLICANT SOCIETY PROCEEDED TO DETERMINE WHETHER ITS ACTIVITI ES WERE IN SYNC WITH THE STATED OBJECTS AND ACCORDINGLY SOUGH T CERTAIN CLARIFICATIONS/DOCUMENTS TO BE PROVIDED BY THE ASSE SSEE WHICH FIND MENTION AT PARA 3 OF THE ORDER. DUE REPL Y OF THE SAME WAS FILED BY THE APPLICANT/ASSESSEE AS NOTED A T PARA 4 OF THE ORDER. THAT AFTER GOING THROUGH THE SAME THE LD.CIT(E) NOTED THAT IN THE PRECEDING TWO YEARS THE AGGREGATE RECEIPT OF THE APPLICANT/ASSESSEE HAD EXC EEDED RS.1 CRORE WHILE THE ASSESSEE HAD CLAIMED EXEMPTIO N OF ITS ITA NO.245/CHD/2020 3 INCOME U/S 10(23C)(IIIAD) OF THE ACT INCORRECTLY. H E FURTHER HELD THAT THE APPLICANT/ASSESSEES EDUCATIONAL INST ITUTE IS NOT REGISTERED AS A SOCIETY IN THE SPIRIT OF THE RA TIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST AND THERE FORE WAS NOT ELIGIBLE FOR APPROVAL U/S 10(23C)(VI) OF THE AC T. HE RELIED UPON THE DECISION OF THE ITAT CHANDIGARH BENCH IN T HE CASE OF M/S PRAKASH EDUCATION SOCIETY VS. CIT IN ITA NO.1083/CHD/2016 IN THIS REGARD. THE LD.CIT(E) NOTE D THAT INADMISSIBLE CLAIM OF EXEMPTION IN PAST BY THE ASSE SSEE IMPINGED ON THE EXTENT AND QUALITY OF SURPLUSES BEI NG GENERATED BY THE APPLICANT SOCIETY AND WHETHER THEY WERE BEING REDEPLOYED INTO EDUCATION. CONSIDERING ALL OF THE ABOVE HE HELD THAT IT WAS DIFFICULT TO VERIFY THE A CTIVITIES OF THE APPLICANT SOCIETY AND ARRIVED AT THE CONCLUSION WHETHER IT EXISTED SOLELY FOR EDUCATION. ACCORDINGLY HE RE JECTED THE APPLICATION FILED BY THE ASSESSEE FOR GRANT OF APPR OVAL U/S 10(23C)(VI) OF THE ACT. THE RELEVANT FINDINGS OF TH E LD.CIT(E) AT PARAS 4 TO 7 OF THE ORDER ARE AS UNDER: 4. ON 02.04.2019 SH. PAWAM SINGH C-A COUNSEL FOR THE APPLICANT ATTENDED THIS OFFICE AND FILED WR ITTEN SUBMISSIONS IN RESPONSE TO ABOVE NOTED QUERIES. AFT ER PERUSAL OF SUBMISSIONS IT GOT EMERGED THAT THE APPLICANT SOCIETY HAD AGGREGATE RECEIPTS ABOVE RS.I CRORE IN LAST TWO YEARS. THE SUMMARY OF AGGREGATE RECEIPTS OF APPLICANT SOCIETY IS GIVEN BELOW:- ITA NO.245/CHD/2020 4 F.Y. GROSS RECEIPTS (RS.) 2016-17 1 51 10 795 2017-18 2 02 80 586 5. A FURTHER PERUSAL OF THE COPY OF THE ITRS WITH REFERENCE TO THE INCOME AND EXPENDITURE ACCOUNTS REVEALS THAT APPLICANT HAS CLAIMED INADMISSIBLE EXEMPTION U/S 10(23C)(IIIAD) IN THE PRECEDING YEARS AS ITS AGGREGATE RECEIPTS HAD EXCEEDED RS.01 CRORE IN F.Y 2016- 17 AND F.Y 2017-18. 6. FURTHER IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST THE HON'BLE HARYANA HIGH COURT IN CWP NO. 6031 OF 2009 HAS CLEARLY ADDRESSED THE QUESTION THAT WHETHER AN INSTITUTION REGISTERED AS A SOCIETY UNDE R THE SOCIETIES REGISTRATION ACT 1860 LOSE ITS CHARACTE R AS AN EDUCATIONAL INSTITUTION ELIGIBLE TO APPLY FOR EXEM PTION UNDER SECTION 10(23C)(VI) OF THE ACT? THE HON'BLE A T PARA 8.13(4) OF THE ORDER IN THE CASE OF PAR