TMI Blog2018 (9) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDICIAL MEMBER Appellant by : Sh. J.R. Hira (Ld. ITP) Respondent by : Sh. Sandeep Chauhan (Ld. DR) ORDER Per Bench These appeals have been preferred by the Assessees/Appellants, on feeling aggrieved against the orders dated 30.09.2015, 28.09.2017 29.09.2017 passed by the Pr. CIT (Exemptions), Chandigarh (Holding Additional Charge of CCIT, Ludhiana and the ld. CIT (Exemptions) respectively u/s. 10(23C)(vi) of the I.T. Act, 1961 (hereinafter called as the Act ). 2. The similar and identical issue involved in the aforesaid appeals, therefore, it is appropriate and proper to decide the both appeals simultaneously by a composite order. 3. In ITA No.624(Asr)/2015, the Assesses has raised the following grounds of appeal. 1. That order passed is invalid and against the law due to the fact that due to change of incumbent, a fresh notice was required to be issued but no such notice seems to have been issued and it is incorrect that the notice was issued on 29.09.2015 as mentioned in para 6 of the order because no such notice had been served on the appellant till today, even it was not possible to serve/comply the notice dated 29.09.2015 for hearing on 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted. 5. The Assessee has raised following grounds of appeal in ITA No.719(Asr)/2017. 1. That Ld. CIT (Exemptions), Chandigarh was not justified in rejecting the Application U/s 10(23C)(vi) for grant approval by observing that condition not for profit is impinged by the host of fees (more than twenty heads) being charged. 2. That Ld CIT (Exemptions) was also not justified by taking the ground for rejection that preponderance of fees collected in the name of 'development fee and building' is not sync with the conditions envisaging their redeployment in the fields of education but ignored the fact that such funds are necessary to meat the expenditure necessary expenses for education purposes. 3. That Land on which Building has been constructed has been given by Chairman Sant Baba Hazoora Singh and as per Rules and Regulations of the Society para (ii) and (iii) is binding on Chairman for success of Society. Society and he not supposed to take back the Land when he has to make all arrangements for success. 4. That para 8 of the order has also been misinterpreted. 5. That Ld. CIT (Exemptions) was also not justified by ignoring the Circular No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n covered under sub section 3 of section 13 of Income Tax Act, 1961. The applicant has simply stated that loans are taken from Dera when needed and given to Dera when funds are required by it. Thus, the funds of the institute are being utilized by person covered u/s 13(3) of the Income Tax Act, 1961 for his own benefit. The funds are not being exclusively used for educational purposes. 5. From the record, it appears that the appellant has filed an undertaking and contents of the same are reproduced herein below. UNDERTAKING I SANT HAZOORA SINGH S/o Sant Baba Bhag Singh Dera Bhore Wala Village Sukhanand District, Moga do here by undertake that the land measuring about 4/5 Acres situated in Village Sukhanand, and I had voluntarily given for running the Educational Institutes namely Sant Baba Bhag Singh Memorial Girls College, Sant Baba Bhag Singh Memorial Girls College of Education, Sant Baba Bhag Singh Memorial Girls Sr. Sec. School and Sant Baba Bhag Singh Memorial Public School all situated in Village Sukhanand District Moga without any lease agreement or Theka as the said land was given by donation 'HIBA NAMA}' by some land owners of Village Sukhanand. I und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit and not being used exclusively for the educational purposes because it was inter-se arrangement between the society/Dera and the appellant. 8. The appellant has also challenged the order under consideration on the ground that due to change of incumbent, a fresh notice was required to be issued but no such notice was issued because it was never been served upon the appellant till today and even otherwise was not probable to serve the notice dated 29th Sep., 2015 for hearing on 30.09.2015. 9. We have independently applied our mind such as on the change of incumbent, vide letter no. 2823 dated 29.09.2015, the case was fixed for hearing on 30.09.2015 which claimed to not been received by the appellant and even otherwise the order has been passed on 30th Sep., 2015 and there is a gap of only one day is issuing the notice and fixing the date of hearing which clearly reflects violation of the rule of audi-alteram-partem. Right of being heard is the fundamental right of every litigation which includes the appellant herein , therefore, not providing sufficient opportunities on change of incumbent and deciding the case ex-parte on very next date of issuing a notice, clearly refl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier on the basis of very relevant reasoning. 13. The impugned order passed by the ld. CIT(E), Chandigarh was challenged before us by filing the instant appeal. 14. We have hard the rival submission of the parties and perused the material available on record as well as the order impugned herein. 15. The first reason for declining the approval is that the earlier application rejected by the Pr. CCIT, Chandigarh (holding additional charge of CCIT, Ludhiana), we are in agreement with the appellant that every application is required independent adjudication on the basis of its facts and merits because every year exemption is required to be taken separately and subjected to assessment, therefore, we do not find any force in the aforesaid reasoning. However, observation of the ld CIT(E) to the effects the land on which the building of the college is situated belongs to Sant Baba Hazura Singh, No agreement has been signed with Sant Baba Hazura Singh as to what would happen to building in case the land is taken back by Sant Baba Hazura Singh, It has not been explained how the investment of applicant would be safe , has already dealt by us in ITA no. ITA No.624(Asr)/2015 in Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to get registered each and every institution as all are affiliated with their respective Authorities i.e. University and Central Board of Secondary Education. We find that the explanation offered by the ld. AR to be logical because Punjab Haryana High Court in the case of Pinegrove International Charitable Trust in CWP No.6031/2009 has already dealt with the similar and identical situation by holding that the educational institutions, which are registered as a Society, would continue to retain their character as such and would be eligible to apply for exemption u/s 10(23C)(vi) of the Act. 8.13 (4) The educational institutions, which are registered as a society, would be continue to retain their character as such and would be eligible to apply for exemption under Section 10(23C)(vi) of the Act . 18. On the aforesaid reasons and factual analyzation, we are of the considered view that the reasoning given by the ld. CIT(E) for rejection of the application u/s 10(23C)(vi) of the Act cannot be held as logical reasoning and therefore, considering the case of the appellant independently, the nature of its activities, 91.74 % of the gross receipts have been applied for educ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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