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Sengunthat Matriculation Higher Secondary School Versus The Chief Commissioner of Income Tax, Tiruchirappalli

2016 (3) TMI 1066 - ITAT CHENNAI

Entitlement to exemption u/s.10(23C)(vi) - Held that:- Merely because the Assessee School does not have power to purchase, acquire, or sell the property, does not mean that the school will cease to exist as an Institution. Thus the ‘STATUS’ of the Assessee could be A.O.P. in the absence of any Memorandum of Association or Trust Deed. Considering the above decision of the I.T.A.T.Delhi Bench, in the present case also the above Matriculation School which is managed by Education Board and granted p .....

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har, Advocate For The Respondent : Mr.Suneel Verma,CIT, D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal is filed by the Assessee is directed against the order of the Learned Chief Commissioner of Income Tax, Trichy dated 12.08.2015 pertaining to the assessment year 2014-15. 2. The assessee has raised the following grounds:- 1) The order of the learned CCIT is bad and erroneous in law and against the principles of natural justice. 2) The learned CCIT erred in not at all considering .....

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nd treated as a separate entity under Tamilnadu Recognized Private Schools (Regulation) Act, 1973. 4) The learned CCIT erred in not considering the very vital fact that the relevant section 10(23C)(vi) uses only the word Institution , which is not defined under IT Act,1961, which is clearly considered under Tamilnadu Motor Vehicles Taxation Act,1974 and that the appellant institution fits into the same in all force. [relying on 358 ITR 373 (Kar)] 3. The brief facts of the case are that the asses .....

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of the Director of School Education, Chennai dated 7.10.1997. As per permission by State Government, the school has been granted Provisional permission to open Matriculation School at Tharamangalam, Salem District for classes standard to 7th standard during the year1996-97. While proceedings, dated 21.2.2007, the assessee school has been granted further permission confirming the earlier permission and granting extension of classes from Vth to 12th Standard from 1.7.2005 to 30.6.2008. As per the .....

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ith the Secretary Cum Correspondent of the school and Asst. Secretary of the school. Excess of income earned was credited to the Capital fund account. The school was started with Zero Corpus Fund. As per the assessee, no initial contribution or subsequent contribution as capital was given by the Founders of the institution. As per the assessee, the school is conducted in the building belonging to Sengunthar Educational Board which has been registered under the Societies Registration Act in the y .....

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/Articles of the Assessment/Rules for the Institution exists. The school is governed by the Tamilnadu Private Schools Act and Rules. The assessee has forwarded copies of Financial statements from the year 31.3.1997 to 31.3.2014 before CCIT. As per the assessee, wherever surplus was made by Educational Institution, it was ploughed back for Educational purposes. According to AR the Sengunthar Institution was held to be existing solely for Educational purpose and not for the purpose of profit. The .....

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retary and Assistant Secretary of this school are appointed by Sengunthar Educational Board, which is the separate entity of its own. No memorandum of the Association or the Articles of the Schools or bye laws exists for the school. There was zero corpus fund for the start of the school. For Regulation purposes, permission has been taken from the Director of School Education, Chennai. In the absence of any objective in constitution of the AOP, school cannot said to be existing only for education .....

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separate memorandum, article, bye laws is not proved at all. According to CCIT, the assessee is not having independent existence with clear cut objectives. Hence, the CCIT refused to grant approval u/s.10(23C)(vi) of the Act. Against this, the assessee is in appeal before us. 4. We have heard both the parties and perused the material on record. It is admitted fact that the assessee was granted permission to run the school by the Director of School Education, Chennai dated 07.10.1997 vide R.C.No. .....

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14 in proceedings No.5526/A-1/2014, the permanent recognition has been granted from L.K.G to 8th Standard for the period 01.06.2014 to 31.05.2017 and for the 9th to 12th Standard from the same period recognition granted from 01.06.2014 to 31.03.2017. It is also admitted fact that the present assessee has been filing the return of income under the status of AOP (Educational Institution). Now the objection of the Department is that the assessee is not having independent existence with clear cut ob .....

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for educational purpose and for the purpose of profit as such the assessee would fall under the provisions of Section 10(23C)(vi) of the Act. 4.1 Section 10(23C)(vi) reads as follows:- (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority ; or Further it is appropriate to provision of section 10(23C)(i .....

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ts as may be prescribed ; or The primary condition u/s.10(23C)(vi), the assessee shall exist solely for educational purposes and not for purposes of profit. The Chief Commissioner of Income Tax without observing that the assessee not solely existing for educational purpose, he went on proposition that the assessee is not having Memorandum of Association or Trust deed so as to carry on the function of the assessee. But the fact brought on record suggests that the assessee is an AOP , managed by S .....

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