TMI Blog2011 (3) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate annual receipts" of each educational institution is relevant and if any assessee is having more than one educational institution then the aggregate annual receipt of each of such educational institution has to be considered separately - the income of these three institutions are also exempt u/s sub-clause(iiiad) of clause (23C) of section 10 because aggregate income of each of these institutions in each of these two years is below Rs. 1 crore. The requirement of approval of CCIT under sub-clause (vi) of clause (23C) of section 10 is for those who are not covered by sub-clauses (iiiab) or (iiiad) of clause (23C) of section 10. Since, these three institutions are covered by clause (iiiad), clause (vi) is not applicable. - ITA NOS. 3769 & 3770/DEL/2008 - - - Dated:- 11-3-2011 - SHRI I.P. BANSAL, JUDICIAL MEMBER SHRI A.K. GARODIA, ACCOUNTANT MEMBER Appellant : Shri K.L. Guglani, Advocate. Respondent: Shri A.K. Monga, DR ORDER A.K. Garodia, AM. - Both these appeals are filed by the assessee which are directed against the common order of Ld CIT(A), Rohtak dated 26.10.2008 for assessment years 2003-04 and 2004-05 . Both these appeals were heard together a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ld AR of the assessee that notice issued by the Assessing Officer u/s 148 was not served on the assessee properly. At this juncture, it was pointed out by the Bench that it has been noted by the Assessing Officer in para No.2(i) of the re-assessment order for assessment year 2003-04 that notice issued by the Assessing Officer u/s 148 was properly served upon the assessee on 14.12.2006 and in response to this notice, the assessee submitted before the Assessing Officer that the return already filed on 30.3.2005 may be considered in response to notice u/.s 148 of the Act. It is enquired by the Bench as to whether this observation of the Assessing Officer is not correct in the assessment order. It is also pointed out by the Bench that in the assessment order 2004-05 also on page No. 3 of the assessment order, it has been observed by the Assessing Officer that notice u/s 148 was issued and served upon the assessee and in response, the assessee has furnished a reply on 1.1.2007 stating that the return already filed on 30.3.2005 may be treated as a return submitted in response to notice u/s 148 of the Act. The query of the Bench was as to whether this observations of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t served upon the assessee. Service of notice is not dependent on the signature regarding acknowledgement of notice when the notice has been in fact received by the authorized person of the assessee. When the receipt of notice in question by an authorized person of the assessee is not being disputed, the dispute raised by the assessee on the basis of signature on acknowledgement of such notice is not valid. 7. In the light of these facts, now we would discuss and examine the applicability of various judgments cited by the Ld. AR of the assessee. The first judgment is the Tribunal decision rendered in the case of ACIT v. Vision Inc. ( supra ). This Tribunal decision is not applicable in the present case because the facts are different. In that case, it was reported by the Assessing Officer in the remand report that the notice was served upon the person who was available at the address and it is specifically noted by the Assessing Officer himself that Shri Manoj Gupta was not present since he was out of station. It is also noted by the Tribunal that there is no mention about the other partner Miss Shalu Gupta but the claim of the assessee is that both partners were out of sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Delhi High Court is based on this that even assuming that Shri Lal Mani is an employee of the assessee, it cannot be held that receipt of notice by Shri Lal Mani amounted to the service of notice on the assessee. In para No. 12 of the said judgment, it is observed by Hon ble Delhi High Court that regarding the request of the revenue that since the notice was not returned undelivered, it has to be presumed that it was actually served on the assessee and it is observed by Hon ble Delhi High Court that Their Lordships are not in a position to make any such assumption because of the categorical stand of the assessee that he had not received the notice. It is also observed by the Hon ble Delhi High Court in that case that the revenue has not been able to show that envelope containing notice was correctly addressed. Hence, it is seen that this was not a fact of that case that the notice in question was actually received by an authorized person of the assessee who has taken action also on the said notice as in the present case. Hence, this judgment is also of no help to the assessee in the present case. 10. In view of our above discussion, we have seen that none of the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer till assessment year 2001-02. Regarding assessment year 2002-03, it is already reported that remedial action is being taken in that year and merely on the basis of wrong view taken by the Assessing Officer in assessment year 2002-03, it cannot be held that the Department is precluded from taking a correct view of matter in subsequent years. Therefore, on this aspect also, the claim of the assessee is not acceptable that reopening is not valid because of change of opinion. Hence, all these grounds of the assessee are rejected in view of our above discussion. 13. The remaining grounds on merit are ground Nos. 4 5 which are indentical and hence the same are reproduced from assessment year 2003-04 in I.T.A. No.,3770/Del/2008: 4. On the facts and in law, the Ld. CIT(A) has erred in coming to the finding that the observations of Audit that assessee was not entitled to exemption u/s 10(23C)(iiiab) are those on facts and do not deal with any legal issue. 5. On facts and in law, the Ld CIT(A) has erred in confirming the conclusion of the Assessing Officer that income of institutions run by the society is to be taxed separately and not in the hands of the soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee and while examining the expenses incurred by these three institutions, it is noted by the Assessing Officer that regarding Jat Education Society, Rohtak out of total expenses of Rs. 11,98,883/-, an amount of Rs. 9.5 lakhs is salary diverted to Polytechnic and therefore the net expenses has been considered by him at Rs. 2,93,883/- and net surplus was assessed at Rs. 5,15,517/-. Regarding Jat MHA Sr. Secondary School, Rohtak deduction on account of expenses as per claim of Rs. 57,31,688/- was allowed and the net income assessed at Rs. 1,93,485/- for assessment year 2003-04. For CRM Public School, Rohtak, it is noted by the Assessing Officer that out of total expenses of Rs. 52,09,965/-, the amount of Rs. 19,87,949/- is on account of capital expenditure and hence the same is not allowable expenditure. After excluding this amount, he worked out the net surplus of this institution at Rs. 18,58,551/- for assessment year 2003-04. In this manner, he made total assessment of Rs. 25,67,553/- for assessment year 2003-04. 15. In assessment year 2004-05, he has assessed the total income of the assessee at Rs. 25,88,220/- on the basis of gross receipts and expenses claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational institution do not exceed the amount of annual receipts as may be prescribed 20. Regarding prescribed amount of annual receipt, we find that as per rule 2BC such prescribed limit is Rs. 1 crore. Now, we find that the Assessing Officer has considered the total receipts of three educational institution being run by the assessee society whereas the claim of the assessee is that the same should be considered separately and if it is done then, the income of these institutions is fully exempt u/s 10(23C)(iiiad). Here, we are in agreement with Ld. AR of the assessee that we have to consider the claim of the assessee on the basis of each educational institution separately. Hence, for the purpose of section 10(23C)(iiiad), the annual gross receipts of three educational institution being run separately by the assessee society cannot be clubbed together for examining the fulfilment of the conditions of receipt being less then the prescribed limit of annual gross receipts. If the annual gross receipts of these three educational institutions are considered separately, the same is below Rs. 1 crore in each year for each of these educational institutions. The same is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te annual receipts in this sub-clause, in our opinion, does not say that aggregate of all educational institutions should be considered together. In our opinion, this term is used here to aggregate annual receipts of each educational institutions from all sources and on all account and hence, we feel that the aggregate gross receipt of each educational institution has to be considered separately and if that is done, each of them is having annual gross receipts of less than Rs. 1 crore, in each of the year, which are under consideration before us. We also find that the applicability of sub-clause (iiiad) of clause (23C) of section 10 was not examined by the Assessing Officer or by the ld. CIT(A). In fact, the assessee has claimed exemption under sub-clause (iiiab) of clause (23C) of section 10 and the assessee also did not claim exemption under sub-clause (iiiad) of clause (23C) of section 10. The Assessing Officer and Ld. CIT(A) has considered the applicability of clause (vi) of clause (23C) of section 10 but they have also not discussed regarding applicability of sub-clause (iiiad) of clause (23C) of section 10 although the Assessing Officer has worked out the gross receipts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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