DCIT, Sonepat v. D.C. Jain Shiksha Samiti,, Sonepat

ITA 3678/DEL/2010 | 2008-2009
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 367820114 RSA 2010
Assessee PAN AAAAD4674J
Bench Delhi
Appeal Number ITA 3678/DEL/2010
Duration Of Justice 5 month(s) 4 day(s)
Appellant DCIT, Sonepat
Respondent D.C. Jain Shiksha Samiti,, Sonepat
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 07-01-2011
Date Of Final Hearing 24-11-2010
Next Hearing Date 24-11-2010
Assessment Year 2008-2009
Appeal Filed On 02-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `B: NEW DELHI BEFORE SHRI C.L.SETHI JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T. A. NO.3678/DEL/2010 ASSESSMENT YEAR: 2008-09 DY. COMMISSIONER OF INCOME-TAX D.C. JAIN SHIKSHA SAMITI CIRCLE SONEPAT. VS. C/O D.C. JAIN SR. SEC. S CHOOL MEHLANA ROAD SONEPAT. PAN: AAAAD4674J (APPELLANT) (RESPONDE NT) APPELLANT BY: MS. BANITA DEVI NAOREM SR. DR. RESPONDENT BY: SHRI PANKAJ JAIN ADVOCATE & S/SHRI GURMEET SINGH & K.K. JAIN CA. O R D E R PER C.L. SETHI JUDICIAL MEMBER: THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEA L FILED AGAINST THE ORDER DATED 26.05.2010 OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN THE MATTER OF AN ASSESSMENT MADE BY TH E ASSESSING OFFICER UNDER SEC. 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT) FOR THE ASSESSMENT YEAR 2008-09 IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN THE LAW AND FACTS IN ALLOWING THE EXEM PTION U/S 10(23C)(IIIAD) OF THE I.T. ACT IN RESPECT OF SURPLU S OF RS.23 02 857/- TO THE ASSESSEE FOLLOWING THE DECISI ON OF PUNJAB 2 AND HARYANA HIGH COURT IN THE CASE OF PINEGROVE INT ERNATIONAL CHARITABLE TRUST. THE DECISION OF THE HONBLE PUNJ AB & HARYANA HIGH COURT HAS NOT BEEN ACCEPTED BY THE DEP ARTMENT AND FURTHER APPEAL HAS BEEN FILED BEFORE THE HONBL E SUPREME COURT OF INDIA. MOREOVER THE ASSESSING OFFICER RE CORDED THAT THE ASSESSEE IS EARNING PROFITS BY WAY OF SURPLUS O F RS.23 02 857/- FROM ITS ACTIVITIES CARRIED OUT DURI NG THE YEAR AND HAS NOT APPLIED THE SAME SOLELY FOR EDUCATIONAL PURPOSES. 2. THE ASSESSEE SOCIETY IS RUNNING A SENIOR SECONDA RY SCHOOL AND B.ED. COLLEGE IN SONEPAT HARYANA. THE ASSESSEE IS AN ED UCATIONAL SOCIETY AND IS REGISTERED WITH THE REGISTRAR OF FIRMS AND SOCIETY HARYANA VIDE SR. NO.1030 OF 1990-91. IT HAS DECLARED TOTAL RECEIPT OF RS.52 03 671/- AGAINST WHICH EXPENSES OF RS.38 03 872/- WERE DEBITED IN THE PROF IT & LOSS ACCOUNT. THERE WAS A SURPLUS OF RS.23 02 857/- WHICH WAS CL AIMED BEING EXEMPTED FROM TAX UNDER SEC. 10(23C)(IIIAD) OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO MADE A REFERENCE TO SEC.10(23C) (IIIAD) AND OBSERVED THAT IN ORDER TO CLAIM EXEMPTION UNDER SEC. 10(23C) (IIIAD) THE FOLLOWING CONDITIONS ARE TO BE SATISFIED BY THE ASSESSEE SOCI ETY:- I) IT SHOULD BE EXISTING SOLELY FOR EDUCATION PURPOSE. II) IT SHOULD NOT BE FOR PURPOSES OF PROFIT. III) ITS AGGREGATE ANNUAL RECEIPTS SHOULD NOT EXCEED RS. ONE CRORE. 3. THE AO THEN OBSERVED THAT THE CONDITIONS MENTION ED ABOVE AT (I) & (II) WERE NOT SATISFIED IN THE PRESENT CASE INASMUC H AS THE SOCIETY HAS BEEN GENERATING SYSTEMATICALLY PROFIT AND NOT APPLYING P ROFIT TO ITS AIMS AND OBJECTS BUT CREATED FIXED ASSETS TO ENHANCE PROFITA BILITY. THE AO THEREFORE 3 ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WH Y SURPLUS INCOME OF RS.23 02 857/- SHOULD NOT BE BROUGHT TO TAX IN THE LIGHT OF JUDGMENT OF THE HONBLE UTTRAKHAND HIGH COURT IN THE CASE OF CIT VS . QUEENS EDUCATIONAL SOCIETY REPORTED IN 177 TAXMAN 326. THE AO THEN CO NCLUDED THAT THE ASSESSEE WAS EARNING PROFITS FROM ITS ACTIVITIES CA RRIED OUT DURING THE YEAR AND HAS NOT APPLIED THE PROFIT SOLELY FOR EDUCATION AL PURPOSES AND SINCE THE ASSESSEE EARNED PROFIT BY WAY OF SURPLUS AND UTILIZ ED THE SAME IN ACQUIRING CAPITAL ASSETS THE DECISION OF HONBLE UTTRAKHAND HIGH COURT IN THE CASE OF CIT VS. QUEENS EDUCATIONAL SOCIETY (SUPRA) IS CLEA RLY APPLICABLE TO THE ASSESSEES CASE. THE ASSESSING OFFICER THEREFORE DENIED TO THE ASSESSEE THE CLAIM OF EXEMPTION ON SURPLUS INCOME OF RS.23 02 85 7/- AND BROUGHT THE SAME TO TAX. 4. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LEARNED CIT(A). 5. BEFORE THE LEARNED CIT(A) THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE A SSESSEES CASE ARE QUITE IDENTICAL AND SIMILAR TO THAT OF ADARSH SHIKSHA SAM ITI ADARSH MAHAVIDYALAYA CIRCULAR ROAD HANSI GATE BHIWANI W HERE THE ORDER OF THE CIT(A) DECIDING THE ISSUE AGAINST THE ASSESSEE HAS BEEN REVERSED BY THE INCOME-TAX APPELLATE TRIBUNAL VIDE ORDER DATED 23.0 4.2010 IN ITA NO.3785 4 & 3786/DEL/2008 PERTAINING TO THE ASSESSMENT YEARS 2004-05 AND 2005-06 AND THUS SUBMITTED THAT THE MATTER IN ASSESSEES C ASE BE DECIDED IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CASE OF ADAR SH SHIKSHA SAMITI (SUPRA). AFTER HEARING THE ASSESSEE AND CONSIDERING THE ASSE SSING OFFICERS ORDER THE LEARNED CIT(A) ALLOWED THE ASSESSEES CLAIM. WHILE DECIDING THE ISSUE IN ASSESSEES FAVOUR THE LEARNED CIT(A) HAS OBSERVED AS UNDER:- QUOTE. 3. THE APPELLANT HAS SUBMITTED THAT ITS APPEALS FOR THE AYS 2004-05 & 2005-06 WERE DISMISSED BY THE UNDERSIGNED CONSIDERING THE ISSUE OF EXEMPTION ON MERITS VIDE O RDER DATED 28.11.2008; IT FILED APPEALS AGAINST THE AFORESAID ORDER BEFORE THE HONBLE ITAT. IN THE MEAN TIME A DECISION OF T HE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA IN TH E CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST VS UNION O F INDIA AND OTHERS WAS DELIVERED VIDE ORDER DATED 29.1.2010 IN CWP NO.6031 OF 2009. THE HONBLE ITAT CONSIDERED THE J UDGMENT OF THE HONBLE HIGH COURT IN PINEGROVE INTERNATIONA L CHARITABLE TRUST CASE AND APPLIED THE RATIO OF THE SAME IN THE APPELLANTS APPEAL AGAINST EH ORDER OF THE UNDERSIGN ED FOR THE AYS 2004-05 & 2005-06 IN ITS ORDER DATED 23.4.2010. THE TRIBUNAL HAS HELD THE APPELLANT ELIGIBLE FOR EXEMPT ION U/S 10(23C) (IIIAD) OF THE IT ACT AFTER DISCUSSING THE ISSUE IN DETAIL. SINCE THE FACTS AND CIRCUMSTANCES INVOLVED IN THE A PPEALS UNDER CONSIDERATION FOR THE 2002-03 & 2006-07 ARE SIMILAR THE ACTION OF THE AO IN DISALLOWING EXEMPTION TO THE AP PELLANT U/S 10(23C)(IIIAD) OF THE IT ACT IS HELD AS `NOT IN ORD ER IN VIEW OF THE AFORESAID PRONOUNCEMENTS OF THE HONBLE HIGH CO URT AND THE HONBLE ITAT. THE INCOME OF THE APPELLANT IS H ELD AS ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE IT ACT. THE APPEALS ARE ALLOWED. UNQUOTE SINCE THE FACTS AND CIRCUMSTANCES IN THE APPEAL UN DER CONSIDERATION ARE SIMILAR TO THE FACTS AND CIRCUMST ANCES FOR THE 5 APPEALS OF M/S. ADARSH SHIKSHA SAMITI THE APPEAL F OR THE APPELLANT UNDER CONSIDERATION I.E. M/S. D.C. JAIN S HIKSHA SAMITI FOR THE A.Y. 2008-09 IS ALSO ALLOWED. 6. HENCE THE DEPARTMENT IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. 8. FROM THE GROUND OF APPEAL RAISED BY THE REVENUE IT BECOMES CLEAR THAT THE DEPARTMENT HAS FILED THIS APPEAL MERELY FOR THE REASON THAT THE DECISION OF JURISDICTIONAL HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST SINCE REPO RTED IN (2010) 327 ITR 73 (P&H) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D AN APPEAL HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT OF INDIA. M ERELY BECAUSE THE DEPARTMENT HAS FILED AN APPEAL BEFORE THE HONBLE S UPREME COURT OF INDIA THAT BY ITSELF CANNOT BE A GROUND FOR NOT TO FOLLOW THE DECISION OF HONBLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT THE OPE RATION OF WHICH HAS NEITHER BEEN STAYED NOR MODIFIED BY THE HONBLE SUP REME COURT. WE ARE THEREFORE INCLINED TO FOLLOW THE DECISION OF HONB LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARIT ABLE TRUST (SUPRA) AND DECIDE THE PRESENT APPEAL. FROM THE ORDER OF THE L EARNED CIT(A) IT IS CLEAR TO US THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL AND SIMILAR TO THAT OF ADARSH SHIKSHA SAMITI (SUPRA). THIS IS NOBODYS CASE THAT THE FACTS OF THE PRESENT CASE ARE NOT IDENTICAL TO THE FATS OF ADARSH SHIKSH A SAMITI (SUPRA). IN THE 6 CASE OF ADARSH SHIKSHA SAMITI (SUPRA) THE ITAT DE LHI BENCH `A NEW DELHI HAS DECIDED THE ISSUE AFTER FOLLOWING THE DEC ISION OF HONBLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE C ASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST VS. UNION OF INDIA ( SUPRA) HOLDING THAT CAPITAL EXPENDITURE WHOLLY AND EXCLUSIVELY TO THE OBJECT OF EDUCATION IS ENTITLED TO EXEMPTION AND WOULD NOT CONSTITUTE PART OF THE TOTA L INCOME AND MERELY BECAUSE THERE ARE SURPLUSES IN THE HANDS OF THE EDU CATIONAL INSTITUTION THAT WOULD NOT IPSO FACTO LEAD TO AN INEVITABLE CONCLUSI ON THAT SUCH AN EDUCATIONAL INSTITUTION EXISTS FOR MAKING PROFITS A ND NOT SOLELY FOR EDUCATIONAL PURPOSES. IN THE CASE OF PINEGROVE INT ERNATIONAL CHARITABLE TRUST VS. UNION OF INDIA (SUPRA) THE HONBLE PUNJA B & HARYANA HIGH COURT HAS OBSERVED AND HELD AS UNDER:- EXTRACTED FROM HEADNOTES AN EDUCATIONAL INSTITUTION WOULD NOT CEASE TO EXI ST SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPO SES OF PROFIT MERELY BECAUSE IT HAS GENERATED SURPLUS INCO ME OVER A PERIOD OF FOUR OR FIVE YEARS AFTER MEETING ITS EXPE NDITURE. RULE 2BC OF THE INCOME-TAX RULES 1962 HAS PRESCRIBED TH E LIMIT OF RS.1 CRORE WHERE THE REQUIREMENT OF SEEKING APPROVA L FOR EXEMPTION WOULD NOT BE APPLICABLE. IF THE TURNOVER IS MORE THAN RS.1 CRORE EXEMPTION IN TERMS OF SECTION 10(23 C)(VI) IS REQUIRED. THE THIRD PROVISO POSTULATES THE INVESTM ENT AND DEPOSITS OF SURPLUS FUNDS. AN EDUCATIONAL INSTITUT ION COULD MAKE DEPOSITS AND CAN ALSO EARN INTEREST WHICH IS PERMISSIBLE. THERE ARE CERTAIN LIMITS IMPOSED ON THE ACCUMULATIO NS WHICH OF COURSE HAVE TO BE MET. 7 THE WORDS NOT FOR THE PURPOSES OF PROFIT ACCOMPANYING THE WORDS EXISTING SOLELY FOR EDUCATI ONAL PURPOSES HAVE TO BE READ AND INTERPRETED IN VIEW O F THE THIRD PROVISO TO SECTION 10(23C)(VI) WHICH PRESCRIBES TH E METHODOLOGY FOR THE UTILIZATION AND ACCUMULATION OF INCOME AT THE HANDS OF THE EDUCATIONAL INSTITUTIONS BY IMPOSI NG TWO RESTRICTIONS NAMELY (I) THAT ACCUMULATION OF SURP LUS UP TO 15 PER CENT. CAN BE FOR ANY NUMBER OF YEARS BY THE EDU CATIONAL INSTITUTION FOR THE PURPOSES FOR WHICH IT IS ESTABL ISHED; AND (II) IF THE ACCUMULATION IS MORE THAN 15 PER CENT. OF THE I NCOME IT CAN BE ACCUMULATED FOR A MAXIMUM PERIOD OF FIVE YEARS T O BE UTILIZED FOR ACHIEVING THE OBJECTS OF THE INSTITUTI ON. THE INEVITABLE CONSEQUENCE IS THAT 85 PER CENT. OF THE INCOME HAS TO BE APPLIED FOR ITS OBJECTS BY THE INSTITUTION. ON A TRUE AND PROPER INTERPRETATION OF THE PROVISI ONS OF SECTION 10(23C)(VI) READ WITH THE THIRD PROVISO THE RETO CAPITAL EXPENDITURE INCURRED BY THE INSTITUTION FOR THE ATT AINMENT OF THE OBJECTS OF THE INSTITUTION HAS TO BE DEDUCTED FROM ITS GROSS RECEIPTS/INCOME. THIS IS BECAUSE THE THIRD PROVISO CONTAINS THE EXPRESSION APPLIES ITS INCOME OR ACCUMULATES IT F OR APPLICATION OR WHOLLY AND EXCLUSIVELY TO THE OBJEC TS FOR WHICH IT IS ESTABLISHED. THE WORD WHOLLY REFERS TO THE Q UANTUM OF EXPENDITURE AND THE WORD EXCLUSIVELY REFERS TO TH E MOTIVE OBJECT OR THE PURPOSE OF EXPENDITURE. EVEN OTHERWISE UNLIKE THE PROVISIONS OF SECTIONS 37 AND 36(1)(XII) OF THE ACT IN THE CASE OF AN EDUCATIONA L INSTITUTION CAPITAL EXPENDITURE IS TO BE DEDUCTED WHENEVER THE INSTITUTION APPLIES ITS INCOME FOR THE ACHIEVEMENT OF ITS OBJEC T. THE WORDS APPLIES ITS INCOME MEAN TO PUT TO USE OR TO TU RN TO USE OR TO MAKE USE OR TO PUT TO PRACTICAL USE. IN CLAUSE 11 OF FORM 56D OF THE RULES IT IS MENTIONED THAT THE AMOU NT OF INCOME OF AN UNIVERSITY OR OTHER EDUCATIONAL INSTIT UTION THAT HAS BEEN OR DEEMED TO HAVE BEEN UTILIZED WHOLLY AND EXC LUSIVELY FOR ITS OBJECTS SHALL HAVE THE MEANING ASSIGNED TO IT I N SUB-SECTIONS (1) AND (1A) OF SECTION 11. BOTH ON PRINCIPLE AND PRECEDENTS THE CAPITAL EXPENDITURE IS TO BE DEDUCTED FROM THE GROSS INCOME OF THE EDUCATIONAL INSTITUTIONS. HAD IT BEEN THE IN TENTION OF THE LEGISLATURE TO EXCLUDE CAPITAL EXPENDITURE WHILE AP PLYING THE 8 INCOME OF THE INSTITUTION UNDER THE THIRD PROVISO T O SECTION 10(23C)(VI) THE PROVISO WOULD HAVE CONTAINED AN EXP RESS EMBARGO AGAINST SUCH EXCLUSION. THE DETERMINATION OF THE EXISTENCE OF EDUCATIONAL INSTITUTION SOLELY FOR EDUCATIONAL PURPOSES IS REQU IRED TO BE DONE ON THE BASIS OF ITS OBJECTS INCLUDING THE UTIL IZATION OF ITS INCOME IN ACCORDANCE WITH THE CONDITIONS LAID DOWN IN THE THIRD PROVISO TO SECTION 10(23C)(VI) OF THE ACT. MERELY BECAUSE THERE ARE SURPLUSES IN THE HANDS OF THE EDUCATIONAL INSTI TUTION THAT WOULD NOT IPSO FACTO LEAD TO AN INEVITABLE CONCLUSI ON THAT SUCH AN EDUCATIONAL INSTITUTION EXISTS FOR MAKING PROFIT S AND NOT SOLELY FOR EDUCATIONAL PURPOSES. 9. FROM THE SAID DECISION IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST (SUPRA) IT IS CLEAR THAT AN EDUCA TIONAL INSTITUTION WOULD NOT CEASE TO EXIST SOLELY FOR EDUCATIONAL PURPOSES AN D NOT FOR PURPOSES OF PROFIT MERELY BECAUSE IT HAS GENERATED SURPLUS INC OME OVER A PERIOD OF FOUR OR FIVE YEARS AFTER MEETING ITS EXPENDITURE. IT HA S FURTHER OBSERVED IN THIS CASE THAT MERELY BECAUSE THERE ARE SURPLUSES IN THE HANDS OF THE EDUCATIONAL INSTITUTION THAT WOULD NOT IPSO FACTO LEAD TO AN IN EVITABLE CONCLUSION THAT SUCH AN EDUCATIONAL INSTITUTION EXISTS FOR MAKING P ROFITS AND NOT SOLELY FOR EDUCATIONAL PURPOSES. THE HONBLE HIGH COURT FURTH ER OBSERVED THAT ON A TRUE AND PROPER INTERPRETATION OF THE PROVISIONS OF SECTION10(23C)(VI) READ WITH THIRD PROVISO THERETO CAPITAL EXPENDITURE INC URRED BY THE INSTITUTION FOR THE ATTAINMENT OF THE OBJECTS OF THE INSTITUTION HA S TO BE DEDUCTED FROM ITS GROSS RECEIPTS/INCOME BECAUSE OF THE REASON THAT TH E THIRD PROVISO CONTAINS 9 THE EXPRESSION APPLIES ITS INCOME OR ACCUMULATES IT FOR APPLICATION OR WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS ESTABLISHED. THE WORD WHOLLY REFERS TO THE QUANTUM OF EXPENDITURE AND T HE WORD EXCLUSIVELY REFERS TO THE MOTIVE OBJECT OR THE PURPOSE OF EXPE NDITURE. THE HONBLE HIGH COURT FURTHER HELD THAT EVEN OTHERWISE UNLIKE THE PROVISIONS OF SECTIONS 37 AND 36(1)(XII) OF THE ACT IN THE CASE OF AN EDUCAT IONAL INSTITUTION CAPITAL EXPENDITURE IS TO BE DEDUCTED WHENEVER THE INSTITUT ION APPLIES ITS INCOME FOR THE ACHIEVEMENT OF ITS OBJECT. IN THE PRESENT CASE THE AO HAS REJECTED THE ASSESSEES CLAIM MERELY BECAUSE THERE WAS A CAPITAL EXPENDITURE OF RS.15 69 256/-. THE AO HAS NOWHERE BROUGHT ANY MAT ERIAL OR EVIDENCE ON RECORD TO SHOW THAT THE CAPITAL EXPENDITURE INCURRE D BY THE ASSESSEE WAS NOT MADE FOR THE ATTAINMENT OF THE OBJECTS OF THE INSTI TUTION. THE AO HAS MERELY GUIDED BY THE FACT THAT THERE WAS A SURPLUS INCOME OF RS.23 02 857/- BUT HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE SURPLUS I NCOME OF RS.23 02 857/- WAS NOT APPLIED TOWARDS THE ATTAINMENT OF THE OBJEC TS OF THE INSTITUTION. MERELY BECAUSE THERE WERE SURPLUSES OF RS.23 02 857 /- IN THE HANDS OF THE ASSESSEE OUT OF WHICH THE ASSESSEE INCURRED CAPITAL EXPENDITURE OF RS.15 69 256/- THAT BY ITSELF WOULD NOT IPSO FACTO LEAD TO AN INEVITABLE CONCLUSION THAT SUCH AN EDUCATIONAL INSTITUTION IS EXISTING FOR MAKING PROFITS AND NOT SOLELY FOR EDUCATIONAL PURPOSES. WE HAVE G ONE THROUGH THE 10 MEMORANDUM OF THE PRESENT ASSOCIATION AND FOUND THA T UNDER CLAUSE 5 IT HAS BEEN STATED THAT THE INCOME AND THE PROPERTY OF THE SAMITI SHALL BE APPLIED SOLELY TOWARDS THE PROMOTION OF THE OBJECTS OF THE SAMITI AS SET FORTH IN THE MEMORANDUM OF SAMITI AND NO PORTION THEREOF SHALL B E PAID OR TRANSFERRED DIRECTLY OR INDIRECTLY BY WAY OF DIVIDEND BONUS OR OTHERWISE BY WAY OF PROFIT TO THE MEMBERS OF THE SAMITI. THE AIMS AND OBJECTS OF THE SOCIETY MENTIONED IN THE MEMORANDUM OF ASSOCIATION ARE TO S PREAD THE EDUCATION LITERAL COMMERCIAL TECHNICAL AND BASIC AND NOT TO DO THESE ACTIVITIES FOR ANY PROFIT. UNDER CLAUSE 18 DISSOLUTION OF THE HOUSE IT HAS BEEN STIPULATED THAT IN THE EVENT OF DISSOLUTION OF THE SAMITI THE GENERAL BODY SHALL BE COMPETENT TO DIRECT RESIDUAL FUNDS OR OTHER ASSETS AND PROPERTY OF THE SAMITI TO BE DELIVERED ANY OTHER ORGANIZATION WHOSE AIMS A ND OBJECTS ARE SIMILAR TO THOSE OF THE ASSESSEE SAMITI AND SEC. 14 OF THE SOC IETIES REGISTRATION ACT 1860 SHALL APPLY IN THE MATTER PERTAINING TO DISSOL UTION. BE IT MENTION HERE THAT HONBLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF PINEGROVE INTERNATIONAL CHARITABLE TRUST (SUPRA) HAS DISSENTE D FROM THE DECISION OF HONBLE UTTRAKHAND HIGH COURT IN THE CASE OF CIT VS . QUEENS EDUCATIONAL SOCIETY (SUPRA). THIS CASE IS BEING WITHIN THE JUR ISDICTION OF THE HONBLE PUNJAB & HARYANA HIGH COURT THE DECISION OF THE HO NBLE PUNJAB & 11 HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNA TIONAL CHARITABLE TRUST (SUPRA) SHALL GOVERN THE MATTER. 10. FOR THE REASONS GIVEN ABOVE AND IN THE LIGHT OF THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PINEGROVE INTERNATIONAL CHARITABLE TRUST (SUPRA) WHICH HAS B EEN FOLLOWED BY THE ITAT DELHI BENCH `A NEW DELHI IN THE CASE OF AD ARSH SHIKSHA SAMITI WE UPHOLD THE ORDER OF THE CIT(A) IN ALLOWING THE ASSESSEES CLAIM OF EXEMPTION UNDER SEC. 10(23C)(IIIAD) OF THE ACT IN R ESPECT OF THE SURPLUS INCOME OF RS.23 02 857/-. THE ORDER OF THE LEARNED CIT(A) IS THUS UPHELD. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. 11. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 7 TH JANUARY 2011. SD/- SD/- (K.G. BANSAL) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH JANUARY 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.