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M/s Baberwad Shiksha Samiti Versus Commissioner of Income Tax, (Exemption) , Jaipur

2016 (4) TMI 76 - ITAT JAIPUR

Revision u/s 263 - denial of benefit U/s 11 and 12 and not allowing depreciation - Held that:- The scrutiny assessment has been completed by the Assessing Officer on 31/12/2012. The ld Assessing Officer issued detailed questionnaire on 17/10/2012, the assessee furnished requisite details/information/books of account etc. before him. The ld Assessing Officer held that the registration w.e.f. 23/08/2011 U/s 12AA have been granted by the ld CIT, Alwar. The society was working as per its byelaws and .....

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assessee’s returned income by order dated 31/12/2012. The ld Assessing Officer issued query letter on 17/10/2012 on both the issues in item No. 3,4 and 8, which was replied by the assessee vide letter dated 19/11/2012 at item No. 3 and 8. Thus, the Assessing Officer made detailed enquiry on both the issues and no adverse inference had been drawn by him. Further both the issues i.e. aggregate annual receipts and depreciation are also covered in favour of the assessee as various ITATs as well as H .....

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ion on assets is allowable. Now the law has been amended on this issue but which is operative prospectively. The case laws relied by the assessee are squarely applicable. We find that the Assessing Officer has formed one of the view but the ld CIT(Exemption) has formed another view on same facts and circumstances, therefore, change of opinion is not permissible under the law. Accordingly, we set aside the order of the ld CIT(Exemption) passed U/s 263 of the Act. - Decided in favour of assessee - .....

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is barred by limitation and hence, kindly be quashed. 2. The CIT (Exemption), Jaipur erred in law as well as on the fact of the case in invoking the provisions of Sec.263 of the Act. Therefore, the impugned order u/s 263 of the Act kindly be quashed. 3. The CIT (Exemption), Jaipur erred in law as well as on the fact of the case in assuming jurisdiction u/s 263 of the Act by wrongly and incorrectly holding that the subjected assessment order passed on dated 31.12.2012, was without making proper .....

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act and legally unsustainable and thus, thereby declining the benefit of the exemption to the Appellant Samiti to which it is otherwise entitled to. In view of such an interpretation which contrary to the provisions of law and also based on incorrect facts, the impugned order kindly be quashed and Appellant Samiti be held entitled to the exemption u/s 10(23C)(iiiad) of the Act, as claimed. 5. The CIT (Exemption), Jaipur erred in law as well as on the fact of the case in denying the benefit of Se .....

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ct pursuant to the registration granted u/s 12A of the Act, in this year also. 6. The CIT (Exemption), Jaipur further erred in law as well as on the fact of the case in holding that the depreciation is merely a notional expenditure and not an outgoing and same is not an application of income permissible u/s 11 (1)(a) of the Act, which is contrary to the provisions of law and facts and hence, to the extent of the depreciation, so disallowed, the income be treated as application eligible u/s 11 (1 .....

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t the declared income. The ld CIT(Exemption) on verification, found that the Assessing Officer had completed the assessment by allowing the exemption U/s 11 as well as U/s 10(23)(iiiad) of the Act and treated the assessee samiti as Trust registered U/s 12AA of the Act and receipts were below ₹ 1 crore. It has been held that the assessee samiti was not registered U/s 12AA before completion of assessment. He had also examined consolidated receipt and payment account, income and expenditure a .....

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ot eligible to claim exemption U/s 10(23C)(iiiad) of the Act. Accordingly, the assessee had been wrongly allowed exemption U/s 11 as well as U/s 10(23C)(iiiad) of the Act. Further the assessee had claimed depreciation of ₹ 7,62,298/-. This claim of depreciation is not allowable as the capital expenditure incurred has already been allowed in the year of purchase of the assets as application. According to him, the depreciation allowed on the same asset is double deduction on the same asset. .....

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n was granted vide order dated 23-08-2011. It may be noted that the proviso to section 12A(2) of the Act inserted by Finance (No.2) Act, 2014 w.e.f. 01.10.2014 provides that where registration has been granted to the trust or institution u/s 12AA, then the provision of section 11 and 12 shall apply m respect of any income derived from the property held under trust of any A.Y. preceding the aforesaid AY, for which assessment proceedings are pending before the AO as on the date of such registratio .....

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islative intent for which proviso to section 12AA(2) has been inserted. 2. The assessee society is an educational institution running educational institutions at Mahwa (Dausa) like, Mahatma Gandhi P.G. Mahavidhyala, Mahatma Gandhi Teachers Training College and Mahatma Gandhi ITI College to impart education to students of every caste, religion, etc. All the income of the society is applied for the fulfillment of the objects of the society. During the relevant year the gross receipts of the societ .....

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ount sanctioned for the scholarship, the name of the student and amount of scholarship to be given to that student is mentioned and the samiti is required to give the scholarship amount to the student as per the letter of the Government. Copy of few letters issued by the Government in this connection is enclosed. The samiti has no authority to retain any part of the scholarship amount for its own benefit in as much as if the scholarship is not claimed by any student for any reason, the same has .....

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e it is not the income of the society, the AO has rightly allowed exemption to the assessee u/s 10(23C)(iiiad) as income of the assessee is less than ₹ 1 crore. 3. The assessee society has claimed depreciation of ₹ 7,62,298/- during the relevant year. The society has not claimed any capital expenditures as application of income in as much as in all earlier years society has claimed exemption u/s 10(23C)(iiiad). Therefore, the depreciation is allowable to the assessee. Otherwise also, .....

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te of Banking Personnel Selection 265 ITR 110 (Bom.)(HC) In view of above and considering the fact that all the issued raised by you has been considered by the AO while framing the assessment u/s 143(3), the order passed by the him is neither erroneous nor prejudicial to the interest of the revenue and therefore it is requested your honour to please drop the proceedings initiated u/s 263 and oblige. The assessee society had also submitted reply and he held that the assessee society had received .....

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ion purposes. (iii) It must not exist for the purpose of profit. (iv) Its aggregate receipts must not exceed the prescribed limits (i.e. ₹ 1 crore). The ld CIT(Exemption) had held that scholarship receipts by the assessee samiti were not disbursed fully during the year under consideration, therefore, it is includable in the aggregate annual receipt. For exclusion of receipts, there is specific clause for corpus donation, which is not the case of the assessee. Thus, the assessee was not ent .....

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had not been made, the matter is also required to restore back to the Assessing Officer for making proper enquiry. Therefore, he held that order of the Assessing Officer is erroneous and prejudice to the interest of revenue on the issue of scholarship receipt not shown in the receipt and payment account as well as claim of depreciation. 3. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that U/s 263 of the Act, the twin conditions are to be specified by the ld C .....

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ssessing Officer has adopted one of the two or more courses permissible in law and it has resulted in loss of revenue, or where two views are possible and Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order and prejudicial to the interest of the revenue. For which he relied on the decision in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC). He also relied on the decision in the case of CIT Vs. Max India Ltd. (2 .....

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he state government and had been distributed the amount to the eligible student. The appellant kept such receipts in the fiduciary capacity as a trustee of the State Government as a liability, which has been shown in the balance sheet. He has drawn our attention on page No. 9 to 37 of the paper book and argued that most of the scholarship receipts had been distributed but partly had not been distributed. It is a continuous process in every year to carry forward certain undistributed scholarship .....

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s. The ld Assessing Officer consistently allowed the assessee s claim up to A.Y. 2009-10. He has further relied on the decision of Hon ble ITAT, Japur Bench in the case of ACIT Vs. Public Rose Shiksha Samiti in ITA No. 363/JP/2013 order dated 11/08/2015 wherein, it has been held by considering the Hon ble Madras High Court decision in the case of CIT Vs. Madrasa-ebakhiyath- us-salihath Arabic College (2015) 120 DTR 238/278 CTR 0374 (Mad) that other receipts are not part of the aggregate annual r .....

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12) 53 SOT 500 (Jp), CIT v/s Institute of Banking Personnel Selection (2003) 185 CTR (Bom) 492, CIT v/s Market Committee, Pipli (2011) 238 CTR (P&H) 103, CIT v/s Tiny Tots Education Society (2011) 330 ITR 21 (P&H), DIT (Exemption) v/s Framjee Cawasjee Institute (1993) 109 CTR (Bom) 463, CIT v/s Raipur Pallottine Society(1989) 80 CTR (MP) 127, CIT v/s Society of the Sisters of St. Anne (1984) 39 CTR (KAR) 9, and CIT v/s Institute of Banking (2003) 264 ITR 110 (Bom). The case laws cited by .....

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y. The ld CIT(Exemption) has not given show cause notice on proper enquiry, even then he has decided that the Assessing Officer has not made proper enquiry. He has drawn our attention on the show cause letter issued by the ld CIT(Exemption) at page 47 to 53 of the paper book and argued that no such issue was raised by the ld CIT(Exemption). Therefore, findings given by the ld CIT(Exemption) U/s 263 are against the principles of natural justice, for which he relied on the decision in the case of .....

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countant. The issue of scholarship has been considered by the Assessing Officer for which he has drawn our attention on page No. 41 of the paper book, which is a copy of letter dated 19/11/2012 addressed to the ACIT, Circle-Bharatpur. When case was scrutinized U/s 143(3) of the Act, the CIT, Alwar has been investigating the case for registration No. 12A of the Act. He has further relied on the following case laws:- (i) CIT Vs Ganpat Ram Bishnoi (2005) 198 CTR 546 (Raj). (ii) CIT Vs Rajasthan Fin .....

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passed U/s 263 of the Act. 4. At the outset, the ld CIT DR has vehemently supported the order of the ld CIT(Exemption). 5. We have heard the rival contentions of both the parties and perused the material available on the record. In this case, the scrutiny assessment has been completed by the Assessing Officer on 31/12/2012. The ld Assessing Officer issued detailed questionnaire on 17/10/2012, the assessee furnished requisite details/information/books of account etc. before him. The ld Assessing .....

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