TMI Blog2015 (3) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... only because the assessee is an educational institution ignoring the fact that as and when the gross receipts of the society exceeds ₹ 1 crore, the assessee-society requires approval from the prescribed authority for exemption of its income under section 10(23C)(iv) of the Act which neither the assessee nor his authorised representative has produced before any Revenue authority nor before us till the closing of hearing.Stand of the assessee is not tenable in the eye of law, because the gross receipts of the assessee-society is exceeded ₹ 1 crore which requires approval from the competent authority. Both institutions,namely, Vivekananda College of Education and Vivekananda Institute of Education Training and Research are under the society and its head office is at Kachi Chawni, Jammu, we are of the view that the Assessing Officer has completed the assessment under the law and rightly made the total taxable income of ₹ 69,27,948 and rightly held that the receipts of both institutions should have been clubbed and the society, which is the educational society, was required to file its return by clubbing the receipts of both institutes and to claim exemption of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income for the assessment year 2005-06. The Assessing Officer obtained the above information from the records of aforesaid two units of the society and issued notice, dated January 10, 2008, under section 148 of the Income-tax Act, 1961 (in short the Act ) to the assessee-society for the assessment year 2005-06. The society filed its return of income on December 26, 2008 declaring nil income during the last leg of assessment proceedings. Notices under section 143(2)/142(1) of the Act along with a questionnaire were issued and other queries were raised by the Assessing Officer. The authorised representative of the assessee attended the proceedings from time to time and produced books of account. The assessee also filed its written reply. 3. The Assessing Officer issued summons under section 131 of the Act, dated December 12, 2008 to the member of the assessee-society at his office Kachi Chhawni, Jammu, fixing the case for December 17, 2008. In response to these summons, Dr. Sudarshan Gupta, general secretary of the society along with his counsel appeared. The Assessing Officer recorded the statement of Dr. Sudarshan Gupta, in the presence of his counsel, wherein he has adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Trust [2001] 252 ITR 84 (Cal). In the abovereferred case it was observed that the trust and institution referred to in section 13 are not one and the same thing as they are different entities. In the present case it was observed that exemption to the trust is not denied on the grounds that some of the violation of the Act is being done by the institution. In the present case the decision of the Tribunal is upheld by the court that the trust and institution referred to in section 13 is independent of each other. Katra Education Society v. ITO [1978] 111 ITR 420 (All). In the abovereferred case it was observed that the word institution within the meaning of section 10(22) is not narrow in its scope and includes society which is running an education institution. The society is termed as an education institution only if runs an educational institution. In view of this the word used in the society 10(23C)(iiiad) is educational institution and not referred to as person in receipt of the receipts exceeding 1 crore. The institution referred there is individual institution and not the society as a whole. DIT (Exemption) v. A. M. M. Medical Foundation [2002] 257 ITR 292 (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-trust/society. In other words the institutions are not different from assessee-society. To put it differently there is a fusion of identity of the colleges which are admittedly institutions and the assessee-trust/society. The Assessing Officer supported his view by various decisions rendered by the hon'ble High Courts, which includes the decision of the hon'ble Gujarat High Court in the case of CIT v. Sindhu Vidya Mandal Trust [1983] 142 ITR 633 (Guj). So the claim of the assessee that receipt of individual institution is to be taken into consideration for applying for exemption under section 10(23C) of the Act is grossly incorrect in view of the case law, namely, Katra Education Society v. ITO [1978] 111 ITR 420 (All) and DIT (Exemption) v. A. M. M. Medical Foundation [2002] 257 ITR 292 (Mad). Lastly, the Assessing Officer has held that the receipts of both the institutes run by the assessee- society should have been clubbed and the society, which is the educational society was required to file its return by clubbing the receipts of both institutes and to claim exemption of income over expenditure, the society must have obtained exemption certificate under section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a College of Education and Vivekananda Institute of Education, Training and Research. 9. On the contrary, learned counsel for the assessee relied upon the impugned order passed by the learned Commissioner of Income-tax (Appeals) and stated that there are two separate institutions, namely, Vivekananda College of Education and Vivekananda Institute of Education Training and Research. As per section 10(23C)(iiiad) read with section 139., the income of any university or educational institution existing solely for educational purposes being exempt from tax, if its gross receipts does not exceeds ₹ 1 crore, and in such a case the institute is not required to file its return of income for the assessment year 2005-06. In the present case the individual receipts of the educational institutions is less than ₹ 1 crore. The Assessing Officer has misinterpreted the language of section 10(23C)(iiiad) and exemption under section 10(23C)(iiiad) is allowable to the income of an educational institution and not allowable to a particular person. He further stated that the learned first appellate authority has given sufficient opportunity to the Assessing Officer and passed the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the view that the learned first appellate authority has passed the impugned order only by reproducing the grounds of appeal, written submission of the assessee and the comments of the Assessing Officer on the written submission and held that the Assessing Officer was not justified in treating the assessee as association of persons and the Assessing Officer has no power to change the status of the assessee. Secondly, the learned first appellate authority has also held that the assessee-society is an educational institution, therefore, it is eligible for exemption under section 10(23C)(iiiad) of the Act. In our considered view, the findings of the learned first appellate authority is contrary to law and facts on the file and the same deserves to be cancelled on the ground that the learned first appellate authority is not justified in deleting the addition made by the Assessing Officer in spite of the fact that the gross receipts of the society exceeds ₹ 1 crore as admitted in the aforesaid paragraphs at the time of issuing notice under section 148 of the Act which was not verified by the assessee till date. Secondly, the learned first appellate authority is also not justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the assessee-society, namely, M/s. Vivekananda Society of Education and Research, Kachi Chawni, Jammu, running its two units, namely, Vivekananda College of Education and Vivekananda Institute of Education Training and Research and the total receipt in the relevant period were ₹ 1,62,04,513, having surplus of ₹ 69,27,948 during relevant period. In spite of these facts, the assessee- society has not filed any return of income for the assessment year 2005-06. The Assessing Officer has obtained these information from the records of the above two units of the assessee-society and after recording the reasons, he issued notice to the assessee under section 148 of the Act, dated January 10, 2008, declaring nil income during the last leg of assessment proceedings. 12. As a matter of record, the Assessing Officer issued summons under section 131 of the Act, dated December 12, 2008 to the member of the assessee-society and in response to same, Dr. Sudarshan Gupta, general secretary of the society appeared along with his counsel. The Assessing Officer recorded the statement of Dr. Sudarshan Gupta in the presence of his counsel, in which he has admitted that both the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
