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2013 (5) TMI 305 - AT - Income TaxExemption u/s. 10(23C)(vi) - denial of claim - Reopening of assessment - also for filing the returns belatedly for these assessment years there was levy of penalty u/s. 272A(2)(e) - Held that:- There cannot be one authority for levying of penalty on assessment at Kurnool and another authority for framing assessment. Being so, issue of notice u/s. 148 by the Hyderabad Range of the Department is not correct. As the issue of notice itself is bad in law by the Hyderabad Range of the Department, consequent framing of assessment is bad in law. Being so, the reopening of assessment for all the above four assessment years quashed. Even otherwise, the notice u/s. 148 was issued on the reason recorded that approval under provisions of section 10(23C)(vi) was mandatory and it was not obtained by the assessee though the gross receipts exceeded Rs. 1 crore and, therefore, income escaped assessment. However, the assessee could claim alternate deduction/exemption u/s. 11 and non-obtaining of approval u/s. 10(23C)(vi) is not fatal in view of the decision ADIT (Exemptions) vs. Rajasthani Siksha Samithi (2008 (3) TMI 501 - ITAT HYDERABAD) wherein held that institutions falling u/s. 10(23C)(vi) are eligible for exemption u/s. 11 also. Merely because section 10(23C)(vi) provides for exemption of the income of an educational institution it does not follow that such institution cannot avail exemption u/s. 11 subject to fulfilment of the conditions laid down. Being so, when the reasons recorded do not survive reopening of assessment is bad in law as decided in Ganga Saran and Sons (P) Ltd. vs. ITO & Ors. (1981 (4) TMI 5 - SUPREME Court), CIT v. Jet Airways (2010 (4) TMI 431 - HIGH COURT OF BOMBAY), Ranbaxy Laboratories vs. CIT (2011 (6) TMI 4 - DELHI HIGH COURT ) and CIT vs. ICICI Bank Ltd., Bombay (2012 (7) TMI 521 - BOMBAY HIGH COURT) . Accordingly the reopening of assessment quashed. Assessment of income by treating the development fee receipt as capitation fee thereby denying exemption u/s. 11 - Held that:- As decided in Vasavi Academy of Education case [2010 (2) TMI 970 - ITAT HYDERABAD] the 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 admission of students, thus remit the issue to the file of the AO to consider the entire issue afresh and verify the records whether the assessee collected capitation fees from students for the purpose of giving admission. If so, the assessee is not entitled for deduction u/s. 11 of the Act. In favour of assessee for statistical purposes.
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