9911796707
TMI Blog2016 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (hereinafter "the Act"). 2. The only issue in this appeal of the Revenue is as regards to the order of the CIT (A) in allowing exemption u/s 11 and u/s 10(23C) (vi) of the Act, the assessee being an Educational Institute. The assessee has contested confirmation of disallowance of exemption in respect of payment of penalty by the assessee to AICTE, New Delhi amounting to Rs. 63 lacs and disallowance of exemption in respect of rental income in its Cross Objection. 3. Briefly stated facts are that the assessee is a Public Charitable Trust engaged in educational activities. The assessee is running the following Institutes:- S. No. Name of Institutions Courses 1 Chetana's H. S. College of Commerce & Economics & Smt. Kusumatai Chaudhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties for the reason that the assessee is not existing solely purpose of education because it is running unapproved courses of Chetana's Institute of Management & Research for the courses of PGDBM,PGDCM, PGDBA and PGPRM. According to the AO, the assessee has also violated the terms of land allotted by the Government and for this penalty was levied by AICTE on the institution amounting to Rs. 63 lacs. According to the AO, profiteering is the main motive of the assessee as it has earned a fee of Rs. 1.75 crores for the above mentioned courses, which are unrecognized. He also noted that the assessee's expenditure on Amrut Mahotsav on the 75th Birth Day of the Founder Trustee Mr. Madukarrao Chaudhary and publishing of souvenir like biography doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on account of penalty levied by AICTE, New Delhi amounting to Rs. 63,00,000/-. 5. Aggrieved by the order of the CIT (A), the Revenue challenged the allowance of exemption u/s 11 and Section 10(23C) (vi) of the Act on deficit arising out of the expenditure out of the income of which exemption has already been claimed and allowed set off of deficit of earlier years against the income of the current year. The assessee has challenged the order of the CIT (A) on the issue of confirmation of addition by disallowing exemption of rental income and addition of penalty levied by ACITE, New Delhi amounting to Rs. 63,00,000/-. 6. We have heard the rival contentions and have also gone through the facts and circumstances of the case. The fact of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee stated that the assessee celebrated Amrut Mahotshav on account of completion of 75 years of age of its Founder, Shri Madhukar Rao Choudhary, in the assessment year 2003-04 and the expenditure incurred was debited in the account of Chetana Institute of Management (Computer Division). The balance of Rs. 3,00,000/- out of the advance given to the said Institute remained outstanding in the books of Chetana Computer Division which was carried forward till assessment year 2007-08. An amount of Rs. 93,952/- incurred by the assessee itself on this account which was to be reimbursed by the Chetana Institute of Management remained as credit balanced in the assessee's books and thus, the net balance amount of Rs. 2,06,048/- was written off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's case. 8. We find from the facts of the case that the assessee is already registered as a Trust u/s 12A and also u/s 80G of the Act. The assessee is also granted exemption u/s 10 (23C) (vi) of the Act by the CCIT, Mumbai vide Order dated 08-05-2008 for and from the assessment year 2008-09. We find that the objects of the assessee Trust were to promote, support, establish and conduct college or colleges, schools and institutions for advancement of education and other assistance to students. The assessee stands allowed approval u/s. 10(23C)(vi) of the Act by the CCIT w.e.f A.Y. 2008-09, i.e., the current year, and which obtains. There is no material on record, nay, not even a charge in its respect, i.e., of the withdrawal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the assessee's income under the Act. The assessee's 'income' would thus stand to be arrived at on the basis of principles of commercial accountancy (as is the case for a charitable institution registered u/s. 12A). The issue, we may though clarify, becomes academic in view of the assessee's entire income (other than the rental income supra) being exempt u/s. 10(23C)(vi). There is under the circumstances no scope for application of the decision in CIT vs. Institute of Ranking Personnel Selection [2003] 264 ITR 110 (Bom). The non-exempt income would stand to be brought to tax. We decide accordingly. 9. In the result, the assessee's appeal and cross-objection are allowed, and the Revenue appeal is partly allowed as indicated above. Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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