TMI Blog2014 (5) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... nts showing the receipts on account of building fund and infrastructure fund and its utilization for the purpose of construction and on that basis, pass suitable orders. - ITA Nos.1439 & 1554/Bang/2012 & ITA Nos.1657 & 1658/Bang/2012 & CO Nos. 50 & 51/Bang/2013 (A/o ITA Nos.1439 & 1554/Bang/2012) - - - Dated:- 30-5-2014 - SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER Revenue by : Ms. Priscilla Singsit, CIT-III (DR) Respondent by : Shri S. Venkatesan, C.A. ORDER Per Bench ITA No. 1439/B/12 is an appeal by the revenue and ITA No.1657/B/12 and CO 51/B/13 are appeal and cross objection by the assessee. These appeals and cross objections are directed against the order dated 5.9.2012 of the CIT(Appeals)-VI, Bangalore relating to assessment year 2008-09. ITA No.1439/B/12 2. We will first take up for consideration the appeal by the revenue. The grounds raised by the revenue read as follows:- Ground No.1. The learned CIT(A) erred in fact and in law in directing the A.O to adopt the status of the assessee as AJP . Ground No.2. The learned CIT(A) erred in fact and in law in directing the A.O to allow exemption t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aforesaid fund, even assuming it is to be treated as a revenue receipt, can be considered for availing exemption u/s. 11 of the Act subject to fulfillment of the other conditions. 6. The second issue was as to whether the amounts paid as donations by the assessee to other institutions can be considered as application by the assessee for charitable purposes. 7. The AO concluded the assessment in the following manner. With regard to the status in which the order of assessment should be framed, the AO found that in assessee s own case, the Tribunal in ITA Nos. 329 to 331/Bang/2008 for the A.Ys. 2003-04 to 2005-06, by order dated 11.7.2008, had held that the status of the assessee must be adopted as AJP and not as AOP. The AO, however, was of the view that the aforesaid decision of the Tribunal has not been accepted by the revenue and an appeal had been filed against the order of the Tribunal before the Hon ble High Court of Karnataka u/s. 260A of the Act and therefore, to keep the issue alive, the AO chose to adopt the status of the assessee as AOP. 8. On the issue of exemption u/s. 10(23C)(iiiad) of the Act, the AO noticed that in assessee s own case in ITA Nos. 329 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. 10. The assessee had pointed out before the AO that the Tribunal in ITA No.1145/Bang/2007 dated 11.7.2008 had held that the assessee was entitled to registration u/s. 12A of the Act. Based on the above order of the Tribunal the assessee requested the AO to consider its claim u/s. 11 of the Act. The AO, however, took the view that the order of the Tribunal had not been accepted by the revenue and an appeal had been filed before the Hon ble High Court of Karnataka. Since the issue had not become final, the AO chose to deny the claim of the assessee for exemption u/.s 11 of the Act for want of registration u/s. 12A of the Act. 11. On the issue of treating the building fund and infrastructure development fund as capital receipt, or in the alternative, consider the same as application of income for charitable purposes, the AO held that in the A.Y. 2006-07, similar claim of the assessee was rejected and confirmed by the CIT(Appeals). Following the same, the AO rejected the contention of the assessee. 12. With regard to the claim of the assessee for treating the donations given to institutions carrying on similar activity as that of the assessee as application o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, we find that the CIT(A) has gone wrong in relying on the judgement of Uttarkhand High Court in the case of Queen Educational Society delivered in a different factual context by overlooking the orders of the Tribunal passed in assessee s own case for earlier assessment years. 32. Therefore, we find that we have to follow the orders of the Tribunal for the earlier assessment years in assessee s own case on the same issue and hold that the assessee is entitled for exemption u/s. 10(23C)(iiiad). Accordingly, we set aside the orders of the lower authorities on this point and direct the assessing authority to grant exemption to the assessee u/s. 10(23C)(iiiad) . 2.4.4 Respectfully following the decision of the Hon ble ITAT in the appellant s own case for the assessment year 2006-07, I hold that the appellant is entitled to exemption under section 10(23C)(iiiad) of the Act and the same is allowed. The ground of appeal raised is allowed. 15.3 With regard to the grant of exemption u/s. 11 of the Act, the CIT(A) held that since the assessee is being granted exemption u/s. 10(23C)(iiiad) of the Act, the alternate plea for grant of exemption u/s. 11 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years 1999- 00, 2000-01, 2001-02 and 2002-03 dated 23.2.2006. After discussing the issue in detail and relying on the judgement of the Punjab and Harayana High Court in the case of CIT v. Duttom Enterprises (197 CTR 606) and the decision of the Supreme Court in the case of CIT v. Bijli Cotton Mills P. Ltd. (116 ITR 60), the Tribunal held that the assessing authority was not justified in making such an addition . 2.6.2 Respectfully following the decision of the Hon ble ITAT in the appellant s own case, the additions made of Rs.l0,31,785/- and ₹ 6,51,40,255/- are hereby deleted. The grounds raised are allowed. 15.5 With regard to the donations given by the assessee to other educational institutions, the CIT(A) found that in the A.Y. 2006-07, the Tribunal had allowed similar claim of the assessee. Following the same, the addition made by the assessee was directed to be deleted. Following were the relevant observations of the CIT(A):- 2.7.2 In para (37) of the order of the Hon ble ITAT in ITA No.140 141/Bang/2010 dated 20.05.2010, it has been held as follows :- 37. The eighth ground raised by the assessee is that the CIT(A) is not justified in uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such presumption cannot be the basis of not paying advance tax and will depend on the ultimate assessment to be framed. In that view of the matter, we hold that the levy of interest u/s. 234B of the Act is purely consequential. 18. We have heard the rival submissions. We find that the issues raised by the revenue in its ground of appeal have all been dealt with by the Hon ble High Court of Karnataka in the assessee s own case viz., Children Education Society, 358 ITR 373 (Kar). On the question of status of the assessee, the Hon ble High Court has held that the same has to be adopted as AJP. On the question of exemption u/s. 10(23C)(iiiad) of the Act, the Hon ble High Court has held that the assessee was entitled to the said exemption and that the receipts of each of the educational institutions have to be considered separately and not by aggregation. With regard to the receipts by way of building fund and infrastructure development fund, the Hon ble High court in para 28 of its order, remanded the same to the Assessing Officer for fresh consideration to look into the ledger books and other accounts showing the receipts on account of building fund and infrastructure fund and its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is entitled to a relief of being assessed in the status of AJP . However, the annulment of the assessment cannot be accepted. The ground of appeal raised is partly allowed and the A.O. is directed to adopt the status of the appellant as AJP . 23. In the light of the aforesaid decision of the Tribunal in assessee s own case, we are of the view that the relevant ground of appeal raised by the assessee in its appeal deserves to be dismissed. 24. With regard to the grievance of the assessee regarding not allowing the assessee exemption u/s. 11 of the Act, we have already seen that the CIT(Appeals) took the view that since the assessee was getting relief u/s. 10(23C)(iiiad) of the Act, exemption u/s. 11 of the Act does not survive. On this issue, we find that the various educational institutions run by the assessee do not get exemption u/s. 10(23C)(iiiad) of the Act, as the total receipts in some of the institutions exceed Rs. One crore which is the threshold limit fixed u/s. 10(23C)(iiiad) of the Act. Since the assessee has now been granted exemption u/s. 12A of the Act, it would be just and proper to direct the AO to examine the claim of exemption u/s. 11 of the Act afre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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