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2019 (11) TMI 1296 - AT - Income TaxExemption u/s 11 - Registration u/s 12AA(1)(b)(ii) denied - HELD THAT:- In this case as the appellant at the initial stage failed to disclose the relevant franchise agreement and relation with franchiser to the CIT(E) and has also not produced the details qua franchise agreement on the relation of the franchiser, therefore, this issue requires fresh consideration by the Ld. CIT(E). CIT(E) has also reasoned that the applicant society has been claiming exemption u/s 10(23C) (iiiad) of the Act till F.Y. 2013- 14, however from 2013-14 and 2015-16 claimed exemption u/s 10(23C) (vi) of the act without having any approval of the prescribed authority. From the Paper Book dated 25.06.2019 it appears that the Co-ordinate Bench in the case of applicant society [2018 (2) TMI 49 - ITAT AMRITSAR] directed the CIT(E) to grant registration to the applicant society u/s 10(23C)(vi) of the Act. Though, from the order it does not clear from which date and Financial Year, the order passed by the Co-ordinate Bench shall be applicable, therefore, this issue is also requires determination by the Ld. CIT(E) with regard to the claim of the appellant society u/s 10(23C)(vi) of the Act for the F.Y. 2013-14 to 2015-16. Applicant society has over the years, shifted to acquiring of buses and as evident from the financial statements of the record that the assessee has earned income of ₹ 30,43,010/- in the form of transportation fee during the financial year 2015-16 and the expenses under the head transportation charges was ₹ 16,00,236/- only i.e. almost 50% of the fees charged exemplifies the profit motive - In view of the law laid down by the Hon’ble Apex Court in Queen’s Educational Society vs. CIT [2015 (3) TMI 619 - SUPREME COURT] CIT(E) has to determine the quantum of the surplus amount and its utilization and is also at liberty to put any condition in accordance with law for utilization of the surplus amount and/or fixing the charges of buses/transportation on charitable basis. On the aforesaid analyzations and reasons, it would be proper to set aside the order passed by the Ld. CIT(E) and to remand the case to the file of the Ld. CIT(E) for decision afresh while taking into consideration the observation made above by us and law laid down by the Hon’ble Apex Court in the case of Queen’s Educational Society (supra) and Delhi Public School Society's case [2018 (4) TMI 714 - DELHI HIGH COURT] within six months, suffice to say while affording reasonable opportunities of being heard to the assessee.
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