TMI Blog2013 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 246A several provisions have been mentioned in which if any order is passed by the Assessing Authority, it would be appealable order before the Commissioner (appeals). No remedy is provided if the CIT did not pass any order u/s. 12AA for filing the appeal before the CIT(A). According to section 253(1)(c), the order passed by the Commissioner u/s. 12AA is appealable before the Appellate Tribunal if the assessee was aggrieved against the order of the CIT u/s. 12AA. It would mean that no remedy lies for grant of registration or refusal to grant registration before the CIT(A). As from the 'Smriti Patra' of the assessee that the assessee did not exist solely for educational purpose and it has other objects also. When the annual receipts exceed Rs. one crore, the approval of prescribed authority is required in the above provisions. In the case of assessee, aggregate annual receipts of the assessee were found exceeding Rs.1,00,00,000/-. As noted above, in the case of assessee, there is neither any registration u/s. 12AA nor is there any evidence to support the case of the assessee that the donations were received with specific direction that it will form part of corpus of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 10(23C)(iiiad) would not apply in this case because it did not exist solely for educational purposes. The AO after considering the reply of the assessee and on the basis of material on record found that the assessee has received student fees in a sum of Rs.85,95,790/- and interest on FDR at Rs.86,121/- totalling to Rs.86,81,911/- and after deducting the expenditure, excess of income over expenditure come to Rs.38,54,310/- which has been taken to the income and expenditure account of assessee, Manav Sewa Samiti. It was further found from the income and expenditure account of the assessee that apart from the above income, the assessee also received donations/subscription of Rs.47,62,000/- and interest of Rs.18,151/- on FDR, totalling to Rs.47,80,151/-. Thus, the total receipts of the assessee come to Rs.1,34,62,060/-. Since the aggregate annual receipts were more than Rs.1.00 crore, therefore, the assessee was not eligible for exemption u/s. 10(23C)(iiiad) and further the assessee is also not eligible for exemption u/s. 10(23C)(vi), as there was no approval in favour of the assessee from the prescribed authority. In reply to show cause notice on the above issue, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the appeal of the assessee. His findings in appellate order in paras 7 to 8 are reproduced as under : "7. After having carefully considered appellant's submission and also the facts brought out by the AO in the assessment order as well as in the remand report, my conclusions/observations are as under : 7.1. I would start with delineation of 'Voluntary Contributors and when these are not 'Income'. It should be noted that section 11(1) discusses the exemptions available to charitable organizations and, therefore, when we discuss income under section 11(1) we discuss the incomes which are eligible for exemptions subject to the provisions of section 11, 12 13. Section 11(1)(d) excludes voluntary contributions received towards corpus from the scope of income under section 11(1). The exclusion of only voluntary contributions towards corpus creates an implicit openness towards other voluntary contributions, though section11 does not speak of voluntary contribution other than towards corpus. It is section 12(1), which provides that voluntary contributions would be deemed to be income derived from property for the purpose of section11. Voluntary contributions, by their inherent n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax, Aligarh did not refuse its application made u/s. 12A, so registration should be deemed to be granted. I am afraid, there is no such provision in the Act. The assessee is apparently referring to view taken by Special Bench, ITAT. But, as I have explained to the counsel, the appellant has to carry such grievance (no registration granted, nor refused) to ITAT. But, till that time, the registration u/s. 12A can NOT be assumed. And, as long as, by any reason, registration u/s 12A is not available to the assessee; the exemption u/s 11 12 is also not available. 7.4 That leaves the appellant only with the purview of Section 10(23C) (iiiad) which can be considered even if exemptions u/s 11 and 12 are not available. But, for consideration and approval of exemption u/s 10(23C)(iiiad), the total receipts, including the contribution being received by the society as well as the fee receipts being received by the society from running the 'Institute of Information Management and Technology', have to be aggregated. But, that implies, as pointed by AO, a total receipt of more than Rs.1 Crore (86,81,911 + 47,62,000), which implies that assessee that assessee would be outside the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon the order of ITAT Delhi, Special Bench in the case of Bhagwad Swarup Shri Shri Devraha Baba Memorial Shri Hari Parmarth Dham Trust v. CIT [2008] 111 ITD 175, in which following question was referred to the Special Bench : "Whether in a case where the CIT does not pass the order granting or refusing registration of trust within the period laid down in s. 12AA(2) registration would be deemed to have been granted to the trust or institution automatically on expiry of the period specified in s. 12AA(2) of the Act ?" The Special Bench concluded as under : "CIT has to mandatorily pass an order within 6 months from the end of the month in which the application for registration under s. 12AA is filed; CIT must be deemed to have allowed the registration if he does not pass any order within the prescribed time." 3.1 The ld. Counsel for the assessee also submitted that since the receipts of the assessee are less than Rs. one crore and donation do not form part of the annual receipts, therefore, the assessee is entitled for exemption u/s. 10(23C)(iiiad) of the IT Act. On the other hand, the ld. DR relied upon the orders of the authorities below. 4. We have considered the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the Commissioner u/s. 12AA is appealable before the Appellate Tribunal if the assessee was aggrieved against the order of the CIT u/s. 12AA of the IT Act. It would mean that no remedy lies for grant of registration or refusal to grant registration before the CIT(A). If any order is passed by the Commissioner u/s. 12AA and the assessee is aggrieved, the appeal directly lies to the Appellate Tribunal. Therefore, such an issue of deemed registration could not have been agitated before the ld. CIT(A) and rightly so, the ld. CIT(A) did not take cognizance of the same. The ld. Counsel for the assessee did not cite any decision if on the basis of deemed registration, any court has directed to grant exemption of income u/s. 11 of the Act. Since grant of registration is a condition precedent for grant of exemption u/s. 11 of the IT Act and in this case, there is no registration granted u/s. 12AA of the Act in favour of the assessee, no relief or exemption can be granted to the assessee u/s. 11 of the Act. The registration issue is thus, independent and distinct matter from the computation of income in the regular assessment and as such, the separate and distinct matter cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10 [or by an electoral trust. 6. Considering the facts of the case in the light of above provisions of law, it is clear that the assessee is also not entitled for deduction in the above provisions. The AO found from the 'Smriti Patra' of the assessee that the assessee did not exist solely for educational purpose and it has other objects also. When the annual receipts exceed Rs. one crore, the approval of prescribed authority is required in the above provisions. In the case of assessee, aggregate annual receipts of the assessee were found exceeding Rs.1,00,00,000/-. The assessee claimed that donation is not part of the total receipts, but the voluntary contributions provided u/s. 2(24)(iia) clearly includes the voluntary contributions received by the trust of different nature including the educational institution would be included in the definition of income. Thus, the total receipts of the assessee were more than Rs. one crore and if benefit of section 11(1)(d) could be granted, then voluntary contribution made with a specific direction that they shall form part of corpus of trust could be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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