TMI Blog2013 (10) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, 1961, (hereinafter referred to as 'the Act' for brevity), in respect of the contribution made to the Model Chit Fund and that there is no violation of the provisions of Section 11(5) of the Act. 3. The assessee is a charitable society running an educational institution. The assessee made an application for grant of approval in the prescribed form on 21.9.1999 for grant of recognition and for exemption of income under section 10(23C)(vi) of the Act, for the assessment years 1999-2000; 2000-2001 and 2001-2002. By an order dated 12.5.2004, the Central Board of Direct Taxes accorded approval to the assessee-society for the purpose of Section 10(23C)(vi) of the Act. It imposed certain conditions on the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's appeal and directed grant of exemption under Section 11 of the Act. Inspite of the same, the Assessing Authority declined to grant the exemption on the ground that the assessee had made investments in violation of the conditions stipulated by the Board. Therefore, the approval granted by the Board was withdrawn by the Assessing Officer. In the said assessment order, the Assessing Authority referred to an advance of ₹ 10 lakhs to Kammavari Sangha and the contributions to the chits conducted by Model Chit Fund of ₹ 15 lakhs. Aggrieved by the said order, the assessee - society preferred an appeal to the Commissioner of Income Tax (Appeals). The Appellate Authority accepted the contention of the assessee insofar as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of the aforesaid facts, the following substantial questions of law do arise for our consideration in this appeal: (1)Whether the Tribunal was correct in holding that when exemption under Section 10(23C)(vi) of the Act is granted, the Assessing Authority has no jurisdiction to deny the exemption on the ground that the assessee has not complied with the terms of the grant of exemption? (2) When the Assessing Officer has issued an intimation under Section 143(1) of the Act and when he initiates proceedings under Section 147, whether the Tribunal was justified in holding that re-opening of assessment, is bad? 5. The learned Counsel appearing for the Revenue assailing the impugned order contended that the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion itself and therefore, he submits that there is no merit in these appeals. He also submitted that even on merits, rightly the Tribunal has held that there is no contravention of law and therefore, the assessee is entitled to the benefit. In fact, before granting the permission, the Board itself has considered the very same aspect and same did not come in the way of granting permission. Therefore, the Assessing Authority could not have recorded a finding contrary to the same. Point No. 1: 7. From the aforesaid facts, it is not in dispute that the assessee is a charitable society running an educational institution. The DIT (Exemption) registered the assessee-society under Section 12AA of the Act on 5.5.2003. By an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made by the Assessing Officer, without giving effect to the provisions of Section 10 unless - (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) or clause (23C) of section 10 as the case may be, by such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place, and (ii) the approval g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at where, by any Central Act or Regulations a power to issue notifications, orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions, if any, to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued. Therefore, the argument that prior to 1.4.2003 when there was no express provision for recession of the approval granted once, the Assessing Authority was vested with the power to deny the exemption without seeking for recession of the approval granted, is without any substance. 10. Accordingly, the substantial question of law No.1 is answered in favour of the assessee and against the Revenue. Point ..... X X X X Extracts X X X X X X X X Extracts X X X X
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