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2016 (7) TMI 170 - AT - Income TaxExemption u/s 11 - Assessee society (registered u/s 12A) was running several educational institutions - During survey proceedings AO found that capitation fee/donation was collected by the assessee society from the students and such amount was disclosed in the return as voluntary donations and claimed exempt u/s 11. AO relied upon Apex Court ruling in the case of Islamic Academy of Education vs. State of Karnataka [2003 (8) TMI 469 - SUPREME COURT] wherein the Hon’ble Supreme Court heavily deprecated the practice of collecting capitation fee from students and held that the collection of capitation fee is contrary to the constitutional framework of India and collection of any such fee by educational institution cannot be recognized as a charitable activity within the meaning of section 2(15). The only issue in the present appeal is whether the amount collected by the management of the society over and above the prescribed fees charged by the Government is in the nature of capitation fees or voluntary contribution. It is undisputed fact that the assessee has been collecting amounts over and above the fee prescribed by the Government. Assessee-society had not led any evidence on record in support of the proposition that contributions are voluntary and made forming part of corpus of the society. Even before us, the assessee-society made no efforts to prove that the contributions are voluntary in nature. Therefore, the said capitation fees is not exempt u/s 11 - Decided against the assessee.
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