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RAI UNIVERSITY Versus COMMISSIONER OF INCOME TAX (EXEMPTION) & 1

2015 (8) TMI 466 - GUJARAT HIGH COURT

Entitlement for exemption under Section 10(23C) (vi) - Held that:- It is an undisputed fact that the petitioner – University has been established under the provisions of the Universities Act, 2009, and accordingly, the same was included in the Schedule of the Universities Act, 23009 by publication in the Gujarat Government Gazette on 11.04.2012. We have perused the provisions of the Universities Act, 2009 as well as the First Statutes of the petitionerUniversity. Several aspects have been pleade .....

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Chief Commissioner of IncomeTax, before passing the impugned order dated 20.10.2014, ought to have perused the relevant materials with regard to the income and expenditure of the University and ought not to have decided the case on the reasons assigned in the impugned order having insufficient materials to come to the conclusion that the University is established for earning profit from imparting education to the students. The respondents authorities ought to have perused the powers of the Sta .....

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hereinabove and accordingly, quashed and set aside. The matter is remanded to the Chief Commissioner of IncomeTax for a fresh consideration with regard to the application dated 21.11.2013 submitted by the petitioner – University for grant of certificate under Section 10(23C)(vi) of the Act, after giving an opportunity of hearing to the petitioner - Decided in favour of assessee for statistical purposes. - SPECIAL CIVIL APPLICATION NO. 690 of 2015 - Dated:- 27-7-2015 - MR. A.J.DESAI AND MR. A.G.U .....

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as filed an affidavitinreply, to which, a rejoinder has been filed by the petitioner. 2 The brief facts arise from the record are as under: 2.1 The petitioner - University has been established under the Gujarat Private Universities Act, 2009 in the year 2012, and accordingly, the name of the petitioner was entered into the Schedule of the Universities Act, 2009. 3 The present petitioner - University submitted a Form No.56D under Rule 2CA of the Income Tax Rules and requested the authority to gra .....

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ai Foundation, New Delhi and one Bhandari Charitable Trust, Ahmedabad applied to the State of Gujarat for establishment of a University, namely, Rai University under the provisions of Universities Act, 2009. The application of the petitioner was scrutinized by the Scrutiny Committee, and ultimately, considered the applications submitted by the Charitable Trust as well as Rai Foundation, and accordingly, Rai University made one of the Scheduled Universities under Section 3 of the Universities Act .....

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o not disclose that the University has been established to earn profit from imparting education to the students. He would submit that the funds received by the University are used only for the benefit of the University in accordance with the provisions of the Universities Act, 2009. He would submit that the case of the petitioner - University was under the provisions of Section 10 (23C) (vi) of the Act, and therefore, the authority ought not to have refused exemption to the petitioner - Universi .....

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mit that the authority has misread the provisions of two Sections, namely, Sections 37 and 38 of the Universities Act by holding that the said Clauses do not restrain the University from not taking any profit. He would submit that Sections 37 and 38 binds the University established under the provisions of the Universities Act, 2009 as far as using funds received by the University and therefore, observations made therein are contrary to the provisions of Sections 37 and 38 of the Universities Act .....

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legal juridical person is only on presumption and that the Trustees are the members of the Board of Management of the University are not relevant while considering the objects of institution. He would submit that observations made in paragraphs 6 and 6.1 of the order that in case of winding up of the University, the entire assets will go back to the Sponsoring Body would mean that the University has been established for profit only is without any basis. He would submit that Section 41 of the Uni .....

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), Mr. Shah, learned advocate appearing for the petitioner would submit that if the object of the University is for imparting education to the students and if some profits are made would not necessarily establish that the University has been created to earn profit. He would therefore submit that the petition be allowed and the order impugned be quashed and set aside. 8 On the other hand, learned senior counsel Mr. M.R. Bhatt appearing for the Revenue has opposed this petition. It was argued by M .....

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rovide particulars of the income and expenditure account of the petitioner - University, is upto 31.03.2014. While the application was submitted on 21.11.2013. He would submit that though the objects of the University, as stated in the First Statutes, may be for the purpose of expansion/maintaining the University, and for imparting education to the students. Clause 8 of the First Statutes makes it clear that the University is controlled by those persons who are in control of Sponsoring Body. By .....

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re contrary to the provisions of the Universities Act, 2009. He would therefore submit that the authority has not committed any error in coming to the conclusion that the petitioner University has been established for profit, and therefore, the petition be dismissed. 9 We have heard the learned advocates appearing for the parties. 10 It is an undisputed fact that the petitioner - University has been established under the provisions of the Universities Act, 2009, and accordingly, the same was inc .....

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hat the Chief Commissioner of IncomeTax had no occasion to deal with the case of the petitioner in absence of sufficient materials i.e. final balancesheet showing income and expenditure account upto 31.03.2014 though the order has been passed on 20.10.2014. 11 We are of the opinion that the Chief Commissioner of IncomeTax, before passing the impugned order dated 20.10.2014, ought to have perused the relevant materials with regard to the income and expenditure of the University and ought not to h .....

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