Chaya Public School, New Delhi v. Addl. CIT, Ghaziabad

ITA 3160/DEL/2010 | 2005-2006
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 316020114 RSA 2010
Assessee PAN AAAAC2839C
Bench Delhi
Appeal Number ITA 3160/DEL/2010
Duration Of Justice 7 month(s) 2 day(s)
Appellant Chaya Public School, New Delhi
Respondent Addl. CIT, Ghaziabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-01-2011
Date Of Final Hearing 10-01-2011
Next Hearing Date 10-01-2011
Assessment Year 2005-2006
Appeal Filed On 25-06-2010
Judgment Text
3160-2010-C PS 1 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A. NO.3160/D/2010 ASSESSMENT YEAR : 2005-06 CHAYA PUBLIC SCHOOL VS. ADDL. C.I.T. DELHI MEERUT ROAD RANGE-1 MODINAGAR. GHAZIABAD. PAN NO.AAAAC 2839C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.K. SINGHAL CA RESPONDENT BY: SMT. MONA MOHANTY SR. DR ORDER PER K.G. BANSAL: AM: THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RET URN ON 30.10.2005 DECLARING NIL INCOME. THE RETURN WAS PRO CESSED U/S 131(1). SUBSEQUENTLY IT WAS SELECTED FOR SCRUTINY AND STATUTOR Y NOTICES WERE ISSUED. 1.2 THE ASSESSEE IS A SOCIETY REGISTERED WITH REGISTRAR OF SOCIETIES ON 11.06.2002. HOWEVER IT IS NOT REGISTERED U/S 12A( A) OF THE INCOME- TAX ACT 1961. IT HAS NOT BEEN APPROVED U/S 10(23C). 1.3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSIN G OFFICER FOUND FROM THE COPY OF ACCOUNTS FILED WITH T HE RETURN THAT THE ASSESSEE-SOCIETY SHOWED LOAN OF `2 LACS FROM SHRI ADHIRAJ DWIVEDI. IT WAS FURTHER FOUND THAT EXCESS OF INCOME OVER EXPENDITU RE AMOUNTED TO `2 92 879/-. IT MAY ALSO BE MENTIONED THAT TOTAL RE CEIPTS SHOWN IN THE ACCOUNTS AMOUNTED TO `64 68 540/-. THE ASSESSING OFFICE R REQUIRED 3160-2010-C PS 2 THE ASSESSEE TO PROVE THAT IT IS ENTITLED TO EXEMPTION U /S 10(23C)(IIIAD); AND TO PROVE THE GENUINENESS OF THE LOAN. IT WAS SUBMI TTED THAT THE RECEIPTS OF THE ASSESSEE AMOUNTED TO `64 68 540/- WHICH IS LESS THAN `1 CRORES. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS C ARRYING ON EDUCATIONAL ACTIVITIES ONLY AS IT IS RUNNING FOUR SCHOO LS; TWO AT MODINAGAR ONE AT VAISHALI AND ONE AT NOIDA UNDER T HE NAME OF CHAYA PUBLIC SCHOOL. SINCE IT IS CARRYING ON EDUCATIONAL ACTIVITIES AND SUCH ACTIVITIES ARE NOT FOR THE PURPOSE OF PROFIT THE SURP LUS WAS NOT LIABLE TO BE INCLUDED IN THE TOTAL INCOME U/S 10(23-C)(IIIAD). COMING TO THE ISSUE OF LOAN IT WAS SUBMITTED THAT IT WAS A DONATION AND NOT THE LOAN. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE THE ASSESSING OFFICER COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT `4 92 880 ; BEING THE SUM OF `2 92 879/- AND `2 LACS. 2. AGGRIEVED BY THIS ORDER THE ASSESSEE MOVED AN APPE AL BEFORE CIT(A) GHAZIABAD WHO DISPOSED IT OFF ON 29.03.2010 IN APPEAL NO.153/07-08. 2.1 IN RESPECT OF CLAIM U/S 10(23C)(IIIAD) HE REFERR ED TO THE FINDINGS OF THE ASSESSING OFFICER THAT THE SURPLUS HAS TO BE UTILIZ ED ONLY FOR EDUCATIONAL PURPOSES. IT HAS ALSO NOT BEEN PROVED THA T THE SOCIETY IS EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PU RPOSE OF PROFIT. THEREFORE THE FINDING OF THE ASSESSING OFFICER WAS UPHE LD. 2.2 COMING TO THE ADDITIONAL OF `2 LACS IT WAS HELD THAT SINCE THE ASSESSEE-SOCIETY IS NOT REGISTERED U/S 12A THE DONATION OF `2 LACS IS LIABLE TO BE TAXED. 3. AGGRIEVED BY THE AFORESAID ORDER THE ASSESSEE IS IN A PPEAL BEFORE US. IT HAS TAKEN TWO GROUNDS IN THE APPEAL. G ROUND NO.1 IS THAT THE ADDITION OF `4 92 879/- SHOULD BE WAIVED AND GR OUND NO.2 IS THAT 3160-2010-C PS 3 THE SURPLUS OF `2 92 879/- SHOULD BE TREATED AS NOT INC LUDIBLE IN THE TOTAL INCOME U/S 10(23C). IT MAY BE MENTIONED HERE THAT THE LEARNED COUNSEL MADE SUBMISSIONS IN RESPECT OF GROUND NO.2. THE REASON SEEMS TO BE THAT THE SURPLUS IS ONLY `2 92 879/- AFTER T AKING THE RECEIPT OF DONATION INTO ACCOUNT. 3.1 BEFORE US THE LEARNED COUNSEL DREW OUR ATTENTION TOWARDS PAGE NOS.30 TO 36 OF THE PAPER BOOK WHICH CONTAIN COPIES OF THE RETURN OF INCOME FOR THIS YEAR AND AUDITED ACCOUNTS OF CHAYA PU BLIC SCHOOL MODI NAGAR. THESE ACCOUNTS SHOW TOTAL RECEIPTS OF `64 68 54 0/- MAJOR PORTION OF WHICH IS BY WAY OF FEES RECEIVED FROM STUDE NTS. THE ACCOUNTS DO NOT SHOW THAT THE SUM OF `2 LACS HAS BEEN INCLUDED IN THE AFORESAID RECEIPTS. THEREAFTER THE LEARNED COUNSEL D REW OUR ATTENTION TOWARDS THE PROVISION CONTAINED IN SECTION 10(23C)(III AD) WHICH EXCLUDES THE INCOME FROM THE TOTAL INCOME OF ANY PER SON OF : ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTI NG SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SUCH UNIVE RSITY OR EDUCATIONAL INSTITUTION DO NOT EXCEED THE AMOUNT OF ANNUAL RECEIPTS AS MAY BE PRESCRIBED; OR 3.2 THE CASE OF THE LEARNED COUNSEL IS THAT THE ASSESSEE-SO CIETY IS AN EDUCATIONAL INSTITUTION WHICH IS EXISTING SOLELY FOR E DUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT. ITS AGGREG ATE ANNUAL RECEIPTS DO NOT EXCEED THE SUM OF `1 CRORE AS PRESCRIBE D. THEREFORE IT IS ENTITLED TO BENEFIT OF THE PROVISION CONTAINED IN SECTION 10(23C)(IIIAD). IN ORDER TO SHOW THAT IT IS AN EDUCA TIONAL INSTITUTION OUR ATTENTION IS DRAWN TOWARDS THE OBJECTS WHICH READ AS U NDER:- 1. TO WORK FOR RISE AND CONSTRUCTION OF EDUCATIONAL MO RAL & PHYSICAL DEVELOPMENTS OF THE STUDENTS. 2. TO ORGANIZE FOR LITERACY ARTISTIC SCIENTIFIC COMME RCE AND TECHNICAL EDUCATIONS TO THE STUDENTS AS PER SITUATION. 3160-2010-C PS 4 3. TO UPLIFT THE STANDARD OF EDUCATION OF THE SCHOOL AND TO ENFORCE THE NEW EDUCATIONAL POLICIES DECLARED BY TH E GOVERNMENT. 4. TO ORGANIZE THE USEFUL ARTISTIC CLASSES TO MAKE THE STUDENTS SELF DEPENDENT AND SELF RELIANT. 5. TO CONDUCT THE EDUCATION IN HINDI & ENGLISH OF SPORTS & CULTURAL TO THE STUDENTS FOR THEIR OVERALL DEVELOPMEN T & BRIGHT FUTURE. 3.3 IN ORDER TO PROVE THAT IT IS NOT EXISTING FOR PRO FIT OUR ATTENTION IS DRAWN TOWARDS THE DISSOLUTION CLAUSE OF THE RULES AND RE GULATIONS. THESE ARE IN HINDI LANGUAGE WHICH ARE TRANSLATED BY US AS UNDER:- IN THE CASE OF DISSOLUTION THE PROPERTY OF THE SOCIE TY SHALL BE DEALT IN ACCORDANCE WITH RULES 13 & 14 OF THE SOC IETIES REGISTRATION RULE. 3.4 IN REPLY THE LEARNED DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 4. THE FIRST QUESTION IN THIS CASE IS-WHETHER THE SOCIETY IS AN EDUCATIONAL INSTITUTION EXISTING FOR SOLELY EDUCATIONA L PURPOSES? FROM THE OBJECTS IT IS CLEAR THAT ALL OF THEM ARE EDUCATI ONAL IN NATURE. IN ANY CASE THE ASSESSEE HAS RUN FOUR SCHOOLS IN THIS YEAR. THERE IS NO OTHER ACTIVITY TAKEN BY THE ASSESSEE. THUS IT CAN BE SAID THA T IN SO FAR AS THIS YEAR IS CONCERNED ONLY EDUCATIONAL PURPOSE HAS BE EN PURSUED. THEREFORE IT IS HELD THAT THE SOCIETY IS AN EDUCATION AL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES. NEEDLESS TO SA Y THAT THIS CONCLUSION APPLIES ONLY TO THIS YEAR AND IT HAS TO BE E XAMINED FROM YEAR TO YEAR. 4.1 THE SECOND QUESTION IS-WHETHER IT IS NOT EXISTING FO R THE PURPOSES OF PROFIT? WE FIND THAT THE LEARNED COUNSEL HAS REL IED ON THE DISSOLUTION CLAUSE. HOWEVER RULES 13 & 14 OF THE SOC IETIES REGISTRATION RULES HAVE NOT BEEN PLACED BEFORE US SO T HAT IT COULD BE 3160-2010-C PS 5 ASCERTAINED AS TO WHETHER THE NET SURPLUS AFTER MEETING OF LIABILITIES SHALL IN NO WAY BE DISTRIBUTED AMONG THE MEMBERS. FUR THER THE ASSESSEE HAS NOT DRAWN OUR ATTENTION TOWARDS ANY CLAUSE O F ITS RULES AND REGULATIONS OR ANY STATUTORY PROVISIONS WHICH FORB ID THE SOCIETY FROM DISTRIBUTING ANY PROFIT TO THE MEMBERS. OF COUR SE IT IS SEEN THAT THE SURPLUS OF THIS YEAR IN SO FAR AS MODI NAGAR SCHOOL IS CONCERNED HAS NOT BEEN DISTRIBUTED AMONG THE MEMBERS. 4.2 THE THIRD QUESTION IS WHETHER ITS AGGREGATE ANNU AL RECEIPTS EXCEED `1 CRORE? THE ASSESSEE HAS RELIED ON THE ANNUAL ACCOUNTS OF CHAYA PUBLIC SCHOOL MODI NAGAR. HOWEVER THE ASSESSEE IS RUNNING FOUR SCHOOLS AND THIS IS ONLY ONE OF THOSE FOUR SCHOOLS. THEREFORE THE AGGREGATE ANNUAL RECEIPTS OF THE ASSESSEE ARE NOT ASCERTA INABLE FROM THE ACCOUNTS PLACED BEFORE US. 4.3 AS THE FACTS OF THE CASE HAVE NOT BEEN FULLY ESTAB LISHED IT WILL BE NOT PROPER TO GO INTO VARIOUS CASE LAWS RELIED UPON BY THE LEARNED COUNSEL. IN SUCH CIRCUMSTANCES WE THINK IT FIT TO REST ORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE WH OLE MATTER AGAIN. THE ASSESSEE SHALL FILE EVIDENCE IN REGARD TO AFORESAID M ATTERS BEFORE HIM. THE ASSESSING OFFICER SHALL CONSIDER ALL FACTS HEAR THE ASSESSEE AND PASS A FRESH ORDER AS PER LAW. 5. NO SUBMISSION HAS BEEN MADE REGARDING DONATION OF ` 2 LACS. THEREFORE THE GROUND TO THIS EXTENT CONTAINED IN GR OUND NO.1 IS DISMISSED. 6. IN RESULT THE APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 28.01.201 1. SD/- SD/- ( RAJPAL YADAV ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER DT. 28/01/2011 NS 3160-2010-C PS 6 COPY FORWARDED TO:- 1. CHAYA PUBLIC SCHOOL DELHI MEERUT ROAD MODINAGAR. 2. ADDL. CIT RANGE-1 GHAZIABAD. 3. THE CIT 4. THE CIT (A) NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DEL HI. TRUE COPY BY ORDER (ITAT NEW DELHI).