TMI Blog2015 (2) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... t be deprived off of the benefit of registration granted by the DIT(E) u/s 11 of the Act. Being so, in our opinion, registration granted u/s 12AA of the Act cannot be cancelled. However, the aforesaid findings given by us are nothing to do with the allowability of exemption u/s 11 of the Act. In case any discrepancy or irregularity with regard to the allowability of exemption u/s 11 is noticed by the AO, he can make an independent enquiry/examination at the time of assessment for each assessment year and decide in accordance with law. - Decided in favour of assessee. - ITA No. 564/HYD/2012 - - - Dated:- 31-7-2013 - SHRI CHANDRA POOJARI AND SMT. ASHA VIJAYARAGHAVAN, JJ. For the Appellant : Shri Ajay Gandhi For the Respondent : Shri M.H. Naik ORDER PER ASHA VIJAYARAGHAVAN, J.M.: This appeal preferred by the assessee is directed against the order of CIT(Central), Hyderabad dated 29/03/2012 passed u/s 12AA(3) of the Act, for the assessment year 2011-12. 2. Briefly the facts of the case are that the assessee, M/s Sree Educational Society, was granted registration u/s 12A of the IT Act effective from 30/12/1996. The society is running an Engineering coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 11,12 12A of the IT Act and its accounts are being audited and the surplus funds being invested/deposited in the prescribed manner. The AR further submitted that all the fees collected are duly accounted in the books of account and none of the society members are aware of any collection of sum above the prescribed fees from students seeking admission under the management quota. 4. Referring to the seized material, it was stated that the amounts mentioned in the seized note books was maintained by an employee of the group concern. Though the notings and jottings in the said note book mention the name of the students, no where it is indicated that the amounts were collected by or on behalf of the society. It was stated that if at all these amounts were collected over and above the prescribed fees, such amounts were collected without the knowledge and without any connection with the society. It was submitted that the society has never collected any such amount from any student during any year since its inception and the allegation of collection of excess fees by the society is baseless. The AR further submitted that the unearthed estimated income of ₹ 16.50 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .), Hyderabad for rescinding the approval accorded earlier u/s 10(23C)(vi) of the IT Act, which entitles the assessee society to claim exemption on the income of the educational institution. After detailed discussion the DGIT has passed a speaking order withdrawing/rescinding the approval granted earlier u/s 10(23C)(vi) of the IT Act. The DGIT has also observed in the said order that there is evidence of collection of donations/capitation fees which has been credited to the account of the secretary/trustee. He further observed that there is no evidence to suggest that the sum collected by the society has been utilized wholly and exclusively for the purpose of the society and education. 6. Aggrieved, the assessee is in appeal before us. 7. The learned counsel for the assessee Shri Ajay Gandhi put forth his first argument that amendment to section 12AA(3) was brought into effect from 1st October, 2004 and the society has been registered u/s 12A much before 2004 and, hence, the CIT has no jurisdiction to pass the order u/s 12AA(3), where the charitable organization was registered before amendment to section 12AA(3). He relied on the following case laws for this proposition: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seized documents. It was submitted by the DR that it was an afterthought on the part of the society to disown collection of excess fund and attribute the same to have been collected by Shri K.T. Mahi. The learned DR submitted that benefit of exemption u/s 11 of the Act should be denied to the assessee. He also argued that acts done by the servant in the course of doing his duties on behalf of the master bind the master and the learned DR argued that Shri K.T. Mahi has collected the capitation fees on behalf of the society, therefore, the capitation fees is deemed to have been collected by the society. The learned DR relied on the following decisions: 1. Sai Vani Educational Society, Hyderabad in ITA No. 1369/Hyd/2012. 2. M/s Vasavi Academy of Education, Hyderabad in ITA No. 1120/Hyd/2009. 3. Vodithala Education Society, Hyd. in ITA No. 1138/H/06. 12. We have heard both the parties, perused the record and have gone through the orders of the authorities below as well as decisions cited. In the case of Ajit Education Trust Vs. CIT, [2010]134 TTJ (Ahd) 483, the Ahmedabad Bench held that amendment of subsection (3) of s. 12AA w.e.f. 1st June, 2010 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an entity existing solely for educational purposes. Following the ratios of the decisions as mentioned above, in the present case though excess fees has been collected by Shri K.T. Mahi, the society does not loose its character as the Institution which is existing for educational purposes. 15. We also fortified by the decision of Bangalore B Bench in the case of Shri M.J. Balachander Vs. DCIT in ITA Nos. 90 to 94/Bang/2012 and others vide order dated 21/12/2012 wherein similar issue has been considered and the Tribunal has held that M.J. Balachander was collecting (ETF) extra tution fees on his own without any authority or consent of the society and the conclusion of the CIT was that ETF was collected by M.J. Balachander on his own and the society has nothing to do with ETF collection. The ITAT confirmed the findings of the CIT. 16. In the present case no material has been brought on record to show that the assessee solely exists for profit motive. The department has not been able to discharge its onus of showing as to how the conditions for grant of registration have been breached by the assessee. The registration has been granted to the society for many years in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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