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SRI BALAJI EDUCATIONAL AND CHARITABLE PUBL IC TRUST Versus COMMISSIONER OF INCOME TAX, CENTRAL III, CHENNAI.

2015 (5) TMI 680 - ITAT CHENNAI

Registration granted to the assessee U/s.12A (a) withdrawn with retrospective effect - Held that:- the activities conducted by the assessee Trust are only promoting education within the ambit of Section 2(15) of the Act. The Trust was not engaged in any other activity other that promoting Education. The allegations of the Revenue that the Trust was collecting capitation fees, Donations, siphoning of undisclosed income of the Trust for the benefit of the Trustees can at the most be taxed in the h .....

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DIT Vs. Garden City Educational Trust, [2009 (7) TMI 832 - Karnataka High Court] wherein it was held that “where there is no dispute in respect of the objects of the trust, that of imparting education and also when there is no dispute regarding the fact that the trust has actually imparted education and not carrying any other activities, the trust is qualified for getting registration U/s. 12A as a charitable institution and the question regarding the application of funds and allowability of ben .....

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s thereby defeating the very purpose of these provisions of the Act, which are enacted with the intention of promoting education in the country. Therefore, we hereby quash the order of the Ld. CIT withdrawing the registration granted U/s.12A(a) - Decided in favour of assesse. - I.T.A.NO.1884/MDS./2014 - Dated:- 24-3-2015 - SHRI A.MOHAN ALANKAMONY AND SHRI S.S. GODARA, JJ. For The Appellant : Mr.S.Sridhar, Advocate For The Respondent : Mr.Pramod Nangia, CIT D.R ORDER PER A.MOHAN ALANKAMONY , ACCO .....

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of the Act with retrospective effect from 01.04.2006 vide order dated 09.06.2014. 3. The brief facts of the case are that the assessee is a charitable public trust engaged in running educational institutions having registration U/s.12A (a) of the Act. A search and seizure operation was carried out in the case of the Trust on 20.11.2009 wherein it was revealed that the assessee trust was collecting huge capitation fees from students at the time of admission. It was also revealed that the income .....

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he conditions laid down U/s. 12A (a) of the Act, are not satisfied in the case of the assessee trust and therefore, the registration already granted U/s. 12A(a) of the Act, dated 13.2.1998, cannot be cancelled. (i) The activities of the Trust are not genuine and (ii) Such activities are not being carried on in accordance with the objects of the Trust. Besides, in view of the number of students perusing the various Graduate and Post Graduate Courses and the number of Faculty Members working in th .....

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how-cause notice dated 2.3.2010, stand totally disproved by the appellant orders passed by the Ld. CIT (A)II Chennai dated 26.5.10 and later on, by the appellate order passed by the ITAT A Bench, Madras dated 5.4.2011 and hence the show-cause notice is required to be withdrawn. 4. The other allegations relating to survey on 20.11.2009 and the assessment order for assessment year 2009-10, are also factually incorrect. The aforesaid allegations relate to source of Income of the Trust and the sourc .....

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on, the allegations made, vide para (6) of the aforesaid letter dated 26.3.14, are also factually incorrect. Vide the aforesaid appellate order, it has been categorically and emphatically concluded by the ITAT Chennai Bench, Chennai, that there was no evidence or record to show that the assessee trust had accepted capitation fee against allotment of seats and accordingly, the aforesaid allegations stand totally disproved. 7. Besides, the violation of prohibition of capitation fees Act, could not .....

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pting capitation fees is not sustainable in law. In view of the aforesaid reasons, the impugned notice U/s. 12AA(3) of the Act dated 2.3.2010 and the letter dated 26.3.2014, containing additional allegations in this context, are totally erroneous and misconceived and therefore, the same are required to be withdrawn. 4. Thereafter, the Ld. CIT made the following observations:- (i) The trust has violated clause-viii (6) of the Trust Deed wherein it was stated that the trust shall not carry out any .....

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e trust has received anonymous donation to the tune of ₹ 3.86 crores. (vi) The trustees of the trust had diverted a major portion of the capitation fees received for personal benefits. (vii) The ITAT has confirmed the orders of the Revenue for not granting the approval U/s. 80G (5) of the Act. 5. On the aforesaid observations of the Ld. CIT, the assessee trust made the following submissions before the Ld. CIT:- (i) Once the registration is granted U/s.12A (a) of the Act, the same cannot be .....

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tivities of the trust are absolutely genuine and the same are being carried on in accordance with the objects of the trust. (iv) The assessee has also placed reliance in the decisions of the case Tamilnadu Cricket Association reported in 98 DTR 299 (Mad.), CIT Vs. Sarvodaya Illakkiya Pannai, 343 ITR 300 (Mad.) and Padanilam Welfare Trust Vs. Dy.CIT 10 ITR (Trib.) 479(Chennai) etc. (v) The question of considering whether Section-11 would apply to exempt the trust income is a matter to be examined .....

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₹ 3.86 crores (anonymous donations) receipts have been issued to the contributors concerned. c) The contents of the assessee s letter addressed to the Assessing Officer dated 15.12.2011, also supports that the identity of all the donors were available with the trust and the only defect was that in some of the receipts, complete details viz. complete addresses of the donors were not available. d) There is ambiguity about the meaning of the term anonymous donation as such other particulars a .....

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and the trustees were persuaded to disclose the donations as anonymous donations. h) Therefore, the said disclosure was not the result of the aforesaid survey conducted on 20.11.2009 . (vii) The assessee trust also stated that there was no evidence in the record to show that it had accepted capitation fees against allotment of seats. 6. However the Ld. CIT after examining the issues withdrew the registration granted to the assessee U/s.12A (a) of the Act with retrospective effect from 01.04.2006 .....

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ssee trust. It is abundantly clear from the admission of Shri M K Rajagopalan, Chairman of the Trust, in his sworn statement U/s. 132(4) recorded on 14.8.2007(reproduced in this order), which is admissible as an evidence, that in the Financial Year 2007-07, donations amounting to ₹ 10 crores and around 2 to 3 crores were collected from Medical College and Engineering College respectively and in the next Financial Year 2007-08 (upto 14.8.2007) donation of ₹ 9 cores was collected from .....

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rds relevant to the F.Y 2006-07 (i.e. A.Y 2007-08). This fact is recorded without prejudice to the Department s stand before the Hon ble High Court defending the assessment orders for assessment years 2002-03 to 2006-07 relevant tot eh F.Ys 2001-02 to 2005-06 in which additions were made on the basis of extrapolation. 7. Ld. A.R. argued before us by making the following submissions:- i) Ld. CIT cancelled the registration granted U/s. 12A (a) of the Act by invoking the provisions of section 12AA .....

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(a) of the Act by the order of the Ld. CIT dated 13.02.1998, there has been no change/alteration in the objects of the Trust. Therefore, the objects of the Trust have remained the same as they were at the time of grant of registration U/s.12A (a) of the Act by the Ld. Ld. CIT. v) In all the assessment orders U/s. 143(3) of the Act for the assessment years 2002-03 to 2011-12, the Assessing Officer have categorically stated the Trust is mainly engaged in running educational institution for conduc .....

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facts that the Trust was established for promoting education. Nowhere in the order of the Ld. CIT U/s. 12AA (3) of the Act there is an allegation that the Trust was not running educational institutions. In any case, such an allegation could not be made by the Ld. CIT since the Assessing Officer in all the aforesaid assessment orders has held that the Trust is engaged in running educational institutions. vii) In the present context, it is also relevant to refer to the last para of the impugned o .....

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on the basis of extrapolation . (viii) In regard to the above mentioned reference of Ld. CIT , it is worth mentioning that for the assessment years 2002-03 to 2008-09 relevant to F.Y 2001-02 to 2007-08 also the Ld. Assessing Officer made additions to the total income of the trust by estimating alleged receipt of capitation fees. However, the Ld. CIT had not withdrawn registration granted U/s. 12A (a) of the Act. But on the same set of facts, the Ld. CIT has now withdrawn the registration thereby .....

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arvodaya Illakkiya Pannai, 343 ITR 300 (Mad.) and (iii) Padanilam Welfare Trust Vs. Dy.CIT 10 ITR (Trib.) 479(Chennai) (iv) Krupanidhi Eductional Trust Vs. Ld. CIT (E) [2013] 21 DTR (Trib) 373(Bom.) (v) DIT(E) Vs. N.H.Kapadia Education Trust [2012] 74 DTR(Trib) 233(Ahd.) (vi) Parkar Medical Foundation Vs. Dy. Ld. CIT [2014] 34 ITR (Trib) 286 (Pune) (xii) Further in the order of the ITAT Chennai Benches of the Tribunal in ITA Nos.1476 to 1482/Mds./2010 for the assessment years 2002-03 to 2008-09 .....

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Society Vs. CIT in ITA No.134/Coch/2014 vide order dated 27.06.2014. (ii) Hon ble High Court of Kerala at Ernakulam in ITA No.194 of 2014 vide order dated 27.10.2014. (iii) In the case of Rajah Sir Annamalai Chettiar Foundation Vs. DIT(E) reported in (2011) 15 Taxmann.Com 313 (Chennai) (iv) In the case of CIT Vs. National Institute of Aeronautical Engg. Educational Society reported in (2009) 184 Taxman 264(Uttarkhand) (v) In the case of Vodithala Education Society Vs. ADIT(E) reported in (2008) .....

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ncil of India, a gist of the same is present herein below for reference:- Sl. No. Date Approval from Particulars 1. 02.01.2007 (PB-page 03) Ministry of Health & Family Welfare, New Delhi Approval of Mahatma Gandhi Medical College & Research Institute, Pondicherry for award of MBBS qualification (100 students) by Pondicherry University 2. 04.09.2012 (PB-page 05) -do Recognition/Approval of Mahatma Gandhi Medical College & Research Institute, Pondicherry against increased intake i.e. f .....

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of Central Govt. for starting of the MD(General Medicine) course at Mahatma Gandhi Medical College & Research Institute, Pondicherry (annual intake of 4 students) from academic year 2007-08 6. 23.03.2007 (PB-page 12) -do- Permission of Central Govt. for starting of the MD(OBG) & DGO courses at Mahatma Gandhi Medical College & Research Institute, Pondicherry (annual intake of 2 students) from academic year 2007-08 7. 16.04.2007 (PB-page 13) -do- Permission of Central Govt. for starti .....

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T) course at Mahatma Gandhi Medical College & Research Institute, Pondicherry (annual intake of 1 student) from academic year 2007-08 10. 23.03.2007 (PB-page 16) -do- Permission of Central Govt. for starting of the MS(Ophthalmology) & DG courses at Mahatma Gandhi Medical College & Research Institute, Pondicherry (annual intake of 1 student) from academic year 2007-08 11. 16.04.2007 (PB-page 17) -do- Permission of Central Govt. for starting of the MD(TB & Chest Diseases) & DTC .....

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al College & Research Institute, Pondicherry (annual intake of 1 students) from academic year 2007-08 14. 11.04.2008 (PB-page 21) -do Increase of seats in MD (General Medicine) course from 3(three) to 4(four) at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2008-09 15. 11.04.2008 (PB-page 22) -do Increase of seats in MD(Pediatrics) course from 32two) to 3(three) at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic y .....

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andhi Medical College & Research Institute, Pondicherry. (annual intake of 2 students) academic year 2008-09 19. 11.04.2008 (PB-page 26) -do Starting of MD(Anesthesia) & DA course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. (annual intake of 2 students) academic year 2008-09 20. 11.04.2008 (PB-page 27) -do Starting of DPM course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. (annual intake of 1 student) academic year 2008-09 21. 11.0 .....

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at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2010-11 24. 31.03.2009 (PB-page 42) -do Increase of seats in MD (Pediatrics)) [3 to 4] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2010-11 25. 31.03.2009 (PB-page 43) -do Increase of seats in MD (Dermatology, Venereology & Leprosy) [1 to 2] courses at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2010-11 .....

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T course) [1 to 2] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2011-12 29. Nil (PB-page 48) -do- Increase of seats in MD (Respiratory Medicine) [1 to 2] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2011-12 30. 31.5.2011 (PB-page 49) -do- Increase of seats in MD (Anaesthesiology) [2 to 3] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 201 .....

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mp; Research Institute, Pondicherry. from academic year 2011-12 34. 31.3.2011 (PB-page 53) -do- Increase of seats in MD (Anatamony) [3 to 4] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2011-12 35. 31.3.2011 (PB-page 54) -do- Increase of seats in MD (Community Medicine) [3 to 4] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2011-12 36. 31.3.2011 (PB-page 55) -do- Increase of seats in MD (Mi .....

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ar 2012-13 39. 28.3.2012 (PB-page 59) -do- Increase of seats in MD (Radio diagnosis) [4 to 6] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2012 40. 31.3.2012 (PB-page 60) -do- Increase of seats in MD (Anesthesia) [3 to 6] course at Mahatma Gandhi Medical College & Research Institute, Pondicherry. from academic year 2012 41. 15.04.2014 (PB-page 62) -do- Increase of various PG courses at Mahatma Gandhi Medical College & Research Institu .....

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ed out as to any change in the objects of the Trust for which it is created. All the objects of the Trust at the time of inception of the trust remains the same based on which Ld. CIT has granted exemption U/s.12A(a) of the Act. The only allegation of the Revenue is that the trust is receiving capitation fees/donations etc., and conducting its activities in a manner so as to earn profit. It is also the allegation of the Revenue that the Trust has been receiving anonymous donations. Further, the .....

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ties and it has not reached finality. At the present stage it is only the allegation made by the Revenue and yet to withstand the testimony of the law. Further there is no finding by the Revenue that the assessee Trust was indulging in any other activity other than promoting education. Moreover it is obvious that any educational institutions cannot exist without inflow of funds. To run these institutions, enormous funds are required which has to be either generated by the institution itself or o .....

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business etc., however even for such trust the second proviso to Section 2(15) of the Act restricts caps for receipt of income derived from any activity of trade/commerce/business. Therefore it is evident that educational institutions falls outside the scope of first proviso and second proviso to Section 2(15) of the Act. Further, there are various provisions in the Act to bring to tax the income of the charitable trust, if it violates the conditions provided in the Act. For example, if a trust .....

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he Governmental governing body of the educational institutions run by the assessee trust. Needless to mention that in the case of the assessee which is running educational institutions such as Medical colleges, etc., requires enormous funds for subsistence. The admissions to students in these institutions are also regulated by the Government governing bodies, which permit them to collect fees from students or other funds in a prescribed manner. The fees/donations/capitation fees structure etc., .....

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in the general category, Management Quota, Non Resident Indian Students, etc. The Revenue has not made any findings as to from which category of students the Trust had received capitation fees/Donations and to what extend it is impermissible. Another allegation of the Revenue is that, the trustees of the assessee trust have siphoned out the undisclosed income of the trust for their personal benefits. It is pertinent to mention here that all the income of the charitable trust belongs to the trus .....

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do not find any such actions taken against the trustees of the Trust or the same is not brought to our knowledge by the Revenue. It is pertinent to mention here that the charitable trust is an entity by itself having certain charitable objects to comply with based on the trust deed. The recognition U/s. 12A (a) of the Act is given only to the Trust. The trustees are different entities who manage the trust according to the objects of the Trust. Therefore, we do not understand as to why the Trust .....

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ities of the trust not being in accordance with the objects of the trust, the question of cancellation under Section 12AA of the Act does not arise. We further hold that at the time of grant of registration on 28.3.2003, the same was made taking into consideration the objects of the institution fitting in with the definition of 'charitable purpose' defined under Section 2(15) of the Act and the substitution of the Section itself came only 2008, with effect from 01.04.2009. As rightly poi .....

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ation under Section 12AA of the Act satisfying itself as to the objects of the association befitting the status as charitable purpose as defined under Section 2(15), as it stood in 2003 and after granting the registration, if the registration is to be cancelled, it must be only on the grounds stated under Section 12AA(3) of the Act with reference to the objects accepted and registered under Section 12AA, as per the law then stood under the definition of Section 2(15) of the Income Tax Act. Even .....

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elf, herein lead to the conclusion that the registration granted under Section 12AA is bad and hence, to be cancelled. It may be of relevance to note the language used in the definition "charitable purpose" in Section 2(15) of the Act, which states that charitable purpose includes relief of the poor, education, medical relief and advancement of any other object of general public utility. The assessee's case falls within the phrase of the definition general public utility . (Paras 4 .....

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ue and it incurs expenses for the conduct of the matches. BCCI earns revenue by way of sponsorship and media rights as well as franchisee revenue for IPL and it distributes 70% of the revenue to the member cricket association. Thus the assessee is also the recipient of the revenue. Thus, for invoking Section 12AA read with Section 2(15) of the Act, Revenue has to show that the activities are not fitting with the objects of the Association and that the dominant activities are in the nature of tra .....

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n as to whether the activities are genuine or carried on in accordance with the objects of the Association. We can only say that the Income Tax Appellate Tribunal rested its decision on consideration which are not relevant for considering the test specified under Section 12AA(3) to impose commercial character to the activity of the Association. In the circumstances, we agree with the assessee that the Revenue has not made out any ground to cancel the registration under Section 12AA(3) of the Act .....

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ove the approach of the Tribunal in this regard. In the above said circumstances, we set aside the order of the Income Tax Appellate Tribunal. 2) CIT Vs.Sarvodaya Illakkiya Pannai 343 ITR 300 (Mad.) Held, that under section 12AA , the Commissioner is empowered to grant or refuse the registration and after granting registration, would be empowered to cancel it, but only on the two conditions laid down under section 12AA(3) . Whether the income derived from such transaction would be assessed to ta .....

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Held, allowing the appeal, that the violation of the Prohibition of Capitation Fees Act could not be a ground to take away the registration of a charitable organization. The cancellation of registration by the Commissioner under section 12A on the ground of accepting capitation fees was not sustainable in law. As far as the assessee-trust was concerned, the violation was that of the Anti Capitation Fees Act which was not a violation under the provisions of the Income-tax Act. There was no appar .....

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as application of funds was concerned, there was no case made out by the Department against the assessee. According to the details furnished by the assessee-trust, the assessee had spent its entire receipts for the purposes of creating infrastructure facilities to run its educational institutions. The registered office of the trust was the residence of the trustees. Therefore, it was very premature to hold that the cash found in the registered office/residential houses amounted to diversion of f .....

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s daughter as reflected in the account maintained with bank. All these transactions were reflected in the books of account. Therefore the action of the Commissioner in withdrawing the registration granted to the assessee under section 12AA was not sustainable in law. Accordingly, the registration granted under section 12AA was to be restored. 4. Krupanidhi Eductional Trust Vs. Ld. CIT (E) [2013] 21 DTR (Trib) 373(Banglore) Held: In impugned order there is no finding on satisfaction that the acti .....

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cise power u/s.12AA (3) without giving a finding that the appellant s objects are no longer charitable. (para16) The DIT(E) in the order u/s 12AA(3) of the Act, do not make out any case, which can show the activities of the assessee are not genuine or that the activities of the assessee are not being carried out in accordance with the objects of the trust or institution. The fact that the Assessee was paying commission to persons who solicit students for studying in the Assessee s institution ca .....

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enuineness of the activities of the trust or as to whether the object of education was not pursued by the Assessee as its main and predominant activity. In fact, the order of the DIT(E) does not anywhere show that the assessee is not imparting education. The complaint of the revenue seems to be that education is being imparted but on commercial lines. The definition of Charitable Purpose is given in Sec.2(15) of the Act. The same refers to "relief to poor, medical relief, education and the .....

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ducation and medical relief". As rightly pointed out by the learned counsel for the assessee, eleemosynary element is not essential element of charity. It is also not a necessary element in a charitable purpose that it should provide something for nothing or for less than it costs or for less than the ordinary price. The surplus generated, if it is held for charitable purpose and applied for charitable purpose of the assesse, and then the Assessee has to be considered as existing for a char .....

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Vs. N.H.Kapadia Education Trust [2012] 74 DTR(Trib) 233(Ahd.) Tribunal in its order had observed that the core contention of the Revenue was that the contributions aggregating made by the parents/students at the time of admission in the institution were in consideration of the services to be rendered by the school to the students. In contrast, the documentary evidences, adduced by the assessee proved that the amounts were, in fact neither fixed nor identical in all the cases and to illustrate th .....

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ipt from the parents/students. Apart from such contributions towards 'corpus funds', it was noticed that the students had also paid towards tuition fees every year. It was held by tribunal that had the contribution collected been towards education to be imparted by the school as alleged by the Revenue, the institution would not have resorted to charge separately the monthly/quarterly tuition, term and computer fees. Another salient feature noticed from the evidences produced was that the .....

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t purposes, viz,, library, buildings, sports curriculum activities etc. whereas the tuition fees so collected would be spent for academic field such as education to be imparted to the students by way of stationary, workshop, computer education etc. It was further observed that the Board of Trustees were empowered to accept any money for the objects of the trust and, thus, the voluntary contributions given by the parents/students were the exclusive property of the trust which required to be utili .....

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e instant case, there was no such finding given by the Ld.CIT that the activities of the trust was not genuine or are not being carried out in accordance with the objects of the trust. While granting registration u/s.12A on 03-12-2002, the then CIT, Kolhapur had gone through the objects of the trust and the genuineness of the activities. There was no change in the objects of the trust in the meantime. The Ld.CIT had not brought on record any material to show that the activities of the Trust were .....

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n section 13(3), then he has ample power to deny exemption to that extent u/s.13 (1)(c) of the I.T. Act 11. From the above decisions, it is apparent that the jurisdictional high court in the case of Tamilnadu Cricket Association has categorically held that:- (a) The power regarding cancellation has to be seen with reference to the registration and the object satisfying the definition of 'charitable purpose', as it stood at the time of registration and not by the subsequent amendment to S .....

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be cancelled. (c) For invoking Section 12AA read with Section 2(15) of the Act, Revenue has to show that the activities are not fitting with the objects of the Association and that the dominant activities are in the nature of trade, commerce and business. We do not think that by the volume of receipt one can draw the inference that the activity is commercial. • Further in the case CIT Vs. Sarvodaya Illakkiya Pannai 343 ITR 300 the jurisdictional High Court held as follows:- (a) The Commissi .....

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also held as follows:- (a) That the violation of the Prohibition of Capitation Fees Act could not be a ground to take away the registration of a charitable organization. The cancellation of registration by the Commissioner under section 12A on the ground of accepting capitation fees was not sustainable in law. • The Pune Bench of the Tribunal in the case Parkar Medical Foundation Vs. CIT [2014] 34 ITR (Trib) 286 as follows:- (a) Once registration is granted to the trust/institution and if s .....

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, borrowings from private financial institutions, non-maintenance of regular books of accounts, payment of enormous salary, are not sufficient cause to invoke section 12AA of the Act for cancelling the registration granted under Section 12A(a) of the Act. (b) The surplus generated, if it is held for charitable purpose and applied for charitable purpose by the assessee then, the Assessee has to be considered as existing for a charitable purpose. There are enough safeguards provided in Sec.12 and .....

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Tribunal in the case M/s.Travancore Educational Society Vs. CIT (Central) Cochin ITA No.134/Coch./2014:- In this decision the Tribunal held that when the capitation fees collected for admission of students over and above the prescribed fees which was shared amongst trustees, then the recognisation U/s. 12A(a) of the Act can be withdrawn by invoking the provisions of section 12AA of the Act. However, as rightly pointed out by the Ld. A.R in the case before us, there is no such finding by the Reve .....

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ch trust cannot be held to be existing for charitable purpose and therefore registration U/s. 12AA of the Act was rejected. However, in the case of the assessee the registration was granted by the Revenue on examining the objects of the Trust, which is education. Therefore, the facts in the case of the assessee are different from the facts of the case decided by the Chennai bench of the Tribunal. (iii) Hon ble High Court of Uttaranchal in the case CIT Vs. National Institute of Aeronautical Engin .....

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on but subsequently wants to invoke Section 12AA(3) of the Act on the premises that activity of the such trust or institutions are not genuine or are not being carried out in accordance with the objects of the trust or institutions. Further in the case of the assessee, it is evident from the sanctions granted by the concerned Government regulatory authority permitting the assessee to run educational institutions, the trust has been carrying on its activities for promoting education. For any viol .....

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reported in [2008] 20 SOT 353 (Hyd.) has held that when money is collected over and above the prescribed fees by the concerned authority for admission of students, then such amount should be classified as capitation fee and it could be said that the assessee s case is a clear case of sale of education by the assessee and therefore, it cannot be considered as charitable institution U/s. 2(15) of the Act. As against this, we find from the order of the Tribunal in ITA No.1476 to 1482/Mds./2010 date .....

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that the amount paid by the parents of the students admitted to the assessee-educational institution was not to the corpus donation account, but it was collected only by way of capitation fee, such amount of capitation fee was not exempt in hands of the assessee-institution. In this case, the Hon ble jurisdictional Madras High Court has only held that the capitation fees received by the assessee would not be exempt from tax. Therefore, the facts in this case are not identical to the case before .....

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