TMI Blog2017 (3) TMI 1765X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(E) has given another reason for declining registration, in para 9, that two of the institutions, namely, Doaba College and Kanya Maha Vidayalaya, run by the assessee society, have been declined registration u/s 10(23C)(vi) on the ground that they are not solely established for the purpose of imparting education and are making systematic profits. This finding of the CIT(E) cannot be sustained, since in cases of both the institutions, the ITAT has allowed the exemption u/s 10(23C)(iiiab) by giving a finding of fact that both the institutions are solely engaged for the purpose of education and are not set up for profit making. CIT(E) has given a wrong finding that from the examination of the accounts of the society, it is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been rejected on irrelevant erroneous and unwarranted considerations. 4. That the CIT(Exemption) has traveled beyond the scope of enquiry envisaged u/s 12AA for granting registration and as such his order is against the law and facts of the case. 5. That the CIT(E) failed to appreciate that the assessee was already enjoying exemption u/s 10(23C)(iiiad) and was considered as engaged in the sole object of imparting education and therefore registration u/s 12AA could not have been denied. 6. That the CIT exceeded his jurisdiction in giving a finding that since the assessee is enjoying exemption u/s 10(23C)(iiiad) for a number of years therefore there was no need to seek registration u/s 12AA withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing the claims exemption is available to any university or educational institutions. The judiciary in the case of pinegrove International has held that such institutions that are registered as societies are eligible for exemption u/s 10(23C) 9 Although the Judicial precedents have allowed alternative claims either for 12AA or 10(23C) but at the same time haven't allowed shifting from one provision to the other when the applicant has consistently availed benefits for a number of year under section 10(23C)(iiiad). Natural progression entails and entitles the educational societies to go for 10(23C)(vi) in such cases. There is no change in circumstances adduced by the applicant that would necessitate examination of exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;solely for education' and not for profits. This aspect of the institutes under it point towards proclivities towards profit- making an aspect that has been frowned upon by the judiciary and held to be not attuned to the noble task of education. 10. Notwithstanding the same the claims for registration u/s 12A were examined. The Audited accounts reveals that over the period of time the emphasis of the society is mainly on providing loan to schools which are under its aegis and to earn interest income no. No other activity in pursuance of objects have been done. This thing also gets exacerbated by the fact that the schools/institutions which are running under it are separately filing their return of income and separately fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust are genuine. However, the DCIT who examined the case tried to examine the application of the income, which is not permissible at the stage of granting of registration. 6. In CIT vs. Surya and Bahara Educational and Charitable Trust , 355 ITR 280 (P H), it has been held that u/s 12AA of the IT Act, the income tax Authorities are to examine the genuineness of the trust, whereas the application of the income of the trust is not to be considered. 7. In CIT vs. Vijay Vargiya Vani Charitable Trust , 369 ITR 360 (Raj), it has been held that at the time of registration of a trust, only the genuineness of the objects of the trust is to be seen, not the application of income for charitable purpose. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the choice should be left to the assessee and the assessee cannot be denied exemption u/s 11 on the ground that it ought to have claimed exemption u/s 10(23C), more so, when it has been granted the benefit of exemption u/s 11 in the past. 13. Further, the CIT(E) has given another reason for declining registration, in para 9, that two of the institutions, namely, Doaba College and Kanya Maha Vidayalaya, run by the assessee society, have been declined registration u/s 10(23C)(vi) on the ground that they are not solely established for the purpose of imparting education and are making systematic profits. This finding of the CIT(E) cannot be sustained, since in cases of both the institutions, the ITAT has allowed the exemption u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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