TMI Blog2018 (2) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... e main objects. We direct the Ld. CIT(E) to grant registration to the society u/s 10(23C)(vi) of the Act. - Decided in favour of assessee. - I.T.A. No. 624/(Asr)/2016 - - - Dated:- 5-12-2017 - Sh. T. S. Kapoor, Accountant Member And Sh. Ravish Sood, Judicial Member For the Appellant : Sh. P. N. Arora (Adv.) For the Respondent : Sh. S. S. Kanwal (D.R.) ORDER PER T. S. KAPOOR (AM): This is an appeal filed by assessee against the order of Ld. CIT(E) Chandigarh dated 28.10.2016 passed u/s 10(23C)(vi) of the Act. 2. At the outset, the Ld. AR submitted that complete documents were filed before the Ld. CIT(E) for registration u/s 10(23C)(vi) but the Ld. CIT(E) has dismissed the application of assessee by observing irrelevant objections. It was submitted that the first objection of Ld. CIT(E) is that the assessee had earned income of ₹ 30,43,110/- in the form of Transportation fee during financial year 2015-16 and had also earned income by way of sale of bags, dresses, books etc. and which do not support the charitable intent of the applicant for the cause of promoting education. In this respect the Ld. AR submitted that a reply was filed before Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Association included help and provision of financial assistance to poor and needy girls for their marriages and to raise homes for destitute women and there were several others aims and claim of the society that it existed only for education was wrong. In this respect, the Ld. AR submitted that the assessee had filed revised amended copy of memorandum and articles of association and in this respect our attention was invited to P.B. page 12 to 30 where a copy of the amended MOA was placed. The Ld. AR submitted that the Ld. CIT(E) himself has noted for para 2 that appellant had submitted an amended copy of Memorandum of Association, however he misguided himself and included the objects of the original Memorandum of Association also and therefore the findings of Ld. CIT are not sustainable. The Ld. AR submitted that at the time of granting approval u/s 10(23C)(vi), the Ld. CIT(E) needs to satisfy himself only about two things that the society exists solely for education purpose and not for the purpose of profit and reliance in this respect was placed on the following case laws: 1. Decision of Punjab Haryana High Court in the case of CIT(Exemptions) Chandigarh vs. Shri Shirdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration u/s 12AA or section 10(23C)(vi), the requirement to be examined by Ld. CIT(E) remain same. The Ld. AR further submitted that the ITAT Amritsar Bench decision in the case of Arya High School, Mansa in ITA No. 469/Asr/2016 placed at P.B. page 17 to 24 relates to exemption u/s 10(23C)(vi) and this directly is applicable to the assessee. The Ld. AR further submitted that the decision of the Hon'ble Punjab Haryana High Court in the case of Pinegrove International Charitable Trust and Ors reported in 327 ITR 73 is also directly applicable to the facts and circumstances of the assessee as the Hon'ble Punjab Haryana High Court has also dealt with the exemption u/s 10(23C)(vi) of the Act. 6. We have heard the rival parties and have gone though the material placed on record. We find that the objections raised by Ld. CIT(E) for rejecting the application of the assessee are not sustainable in law as at the time of registration, the Ld. CIT(E) has to examine the objects of the society and also has to examine the genuineness of activities with respect to the object clause. In the present case, it is correct that in the earlier Memorandum of Association filed by asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned and to carry out these objects, the assessee started school to fulfill the main objects. We further find that at the time of registration u/s 10(23C)(vi), the Ld. CIT(E) has to examine the objects and the genuineness of activities. The Hon'ble Punjab Haryana High Court in the case of Pinegrove International Charitable Trust and Ors reported in 327 ITR 73 vide its judgment dated 29 Jan., 2010 has held as under: Exemption under s. 10(23C)(vi)-Educational institution-Profit motive-At the initial stage when the application for exemption is filed by an educational institution the scope of inquiry is restricted only to ascertain the genuineness of the activities of such institution-Once approval is granted for exemption, the monitoring provisions come into play and the AO has to examine whether the conditions on which the approval has been given are fulfilled or not-Fact that an institution has earned profit would not be deciding factor to conclude that the educational institution exists for profit-Even if there remains a surplus at the hands of the educational institution, it would be entitled to exemption under s. 10 (23C)(vi) provided the educational institution s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption granted under s. 10 (23C)(vi) are quashed. We further find that Amritsar Bench in the case of Arya High School under similar facts and circumstances has allowed registration u/s 10(23C)(vi) by holding as under: 6. We have gone through with the facts and circumstances of the case specially the documents filed and from the details of assets as on 31st March, 2013 it shows that the assessee has incurred expenses on the purchase of land which goes to show that the assessee was earlier utilized the fund for the development of institution and of its extension. Further according to the judgment passed by the Hon ble Apex Court in the case of Chief Commissioner vs. St. Peter s Educational Society, 385 ITR 66 (SC) as relied upon by the assessee society whereby it was held that the institution makes profit does not necessarily mean it exists for profit and an overall view in year in question object was to make profit as opposed to educating persons to be seen. Further, the Hon ble Apex Court in the case of Visvesvaraya Technological University vs. ACIT, 384 ITR 37 (SC), whereby it was held that there could be no manner of doubt that the surplus accumulated over the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act in the year 1946 vide Registration No.S/8/1946. The above education board is managing the assessee school with the committee Members of the said Education Board and constituted the office Bearers of the institution and duly filing the return of income. It is to be observed that there is no expressed definition for Institution under the Income Tax Act. Hence, we have to consider the General meaning defined in the Webster s New Dictionary, the word Institution means an established or organized Society or Corporation, an establishment, especially one of Public Character, or one effecting a community; a Foundation. Further, this Tribunal, Delhi Bench G Bench in I.T.A.NO:3360(DEL) of 2008 dated 30.04.20 10 in deciding the Appeal in the case St.Thomas Girls Senior Secondary School, New Delhi Vs. Director of Income Tax(Exemption), New Delhi have held that the word Institution is wide enough to include a school, which has been established for imparting Education. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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