TMI Blog2012 (10) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the disallowance under section 40A(3) became academic - appeal decided in favour of assessee. - ITA Nos.221, 222, 223 & 224/Agr/2011 - - - Dated:- 5-10-2012 - SHRI BHAVNESH SAINI, AND SHRI A.L. GEHLOT, JJ. Appellant by : Shri Waseem Arshad, Sr. D.R. Respondent by : Shri P.K. Sehgal, Advocate ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: All these four appeals have been filed by the Revenue against four separate orders, all dated 07.03.2011, passed by the Ld. CIT(A), Ghaziabad for A.Ys. 1997- 98, 1997-98, 1998-99 1998-99 respectively. 2. Common grounds have been raised by the Revenue as all these appeals are based on identical set of facts. Therefore, for the sake of convenience, all these appeals are decided by this common order. 3. Two appeals pertain to merit of the case and two appeals pertain to levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ( the Act hereinafter). Since common grounds have been raised by the Revenue in both the appeals, therefore, for the sake of convenience, the grounds raised for A.Y. 1997- 98 are reproduced as below :- Grounds of ITA No.221/Agr/2011 for A.Y. 1997-98:- 1. The Ld. CIT (Appeals) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est under different section of the Act. 5. The CIT(A) decided the first issue in favour of the assessee as under :- (Paragraph nos.7.4, 7.5 7.6, page nos.22, 23 24) 7.4 No other purpose of the appellant has been alleged (I would refer to aspect of not for profit purpose, little later). Further, the CIT, Aligarh has himself granted the appellant registration under section 12A of the Act on the ground that it was an educational institution within meaning of section 2(15) of the Act . Further, the appellant is conducting course upto the level of B.Ed. and is recognized by various Universities and Government bodies and thus imparting regular education. Nothing has been brought on record that, it has been doing something else otherwise than imparting education. The observation of the AO that the degree of this instruction have been derecognized by the Aligarh Muslim University is also found to be factually wrong. On my direction during appellate proceedings, the appellant has placed documents of AMU Curriculum and Prospects which clearly establish that in time periods, both before the survey action as well as after it; the courses conducted and degrees awarded by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that merely because the employee of the institution has gained personal benefit on account of his position or misappropriate funds of the institution, it can be said that the character of institution as a whole was changed from non profit to profit. Thus, this consideration of misappropriation of funds or utilization of facilities for personal gains by any employee, to hold the institution itself as existing for profit would not be correct. The institution (i.e., the appellant) and its registrar are two separate and distinct entities. While the Registrar is paid employee on regular rolls of the institute, who has later been removed and various criminal proceedings and other actions were taken against him may have profit motive, but his motive cannot be imported as the motive of the institution. No other case has been made out by AO to hold the appellant as existing for profits . I have also gone through the decisions cited by learned AR reproduced in earlier part of this order and agree with him in this regard. I am not reproducing those judgments for the sake of brevity, but the conclusion has been arrived by me on the basis of guidance of those judgements. 7.6. Thus, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantive basis. Even on merit, the CIT(A) found that merely because the employee has gained personal benefit, it cannot change the character of the Institution as a whole from non-profit Institution to a profit making Institution. 8. As regards the disallowance under section 40A(3) of the Act, we find that the CIT(A) has rightly deleted the addition holding that the income of the Institution is exempt under section 10(22) of the Act. Therefore, the disallowance under section 40A(3) of the Act became academic. 9. One more ground raised in Revenue s appeal is in respect of assessment made under section 144 of the Act. This ground does not carry any substance because the case of the assessee has been travelled number of times before the appellate authorities in respect of registration under section 12A of the Act as well as merit of the case. The case of the assessee was also subject to survey under section 133A of the Act. Further the books of account of the assessee is also subject to audit under section 142(2A) of the Act. The CIT(A) has given finding that the A.O. himself has considered in the Assessment Order itself that the assessee is an Educational Institution. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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