TMI Blog2022 (9) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised by the assessee are as follows:- 1. Because the Hon ble CIT(Appeals) has erred in law and on facts in treating the Hostel Transport facility to the students as purely commercial activity though it was the integral part of primary activity of the institution, which were not commercial activities rather than these were necessary activities ancillary to the attainment of the main objects. 2. Because the CIT(Appeals) has erred in law and on facts in alleging that the Appellant failed to maintain separate Books of Accounts in respect of Hostel Vehicle running expenses though it was clarified that the books of accounts were maintained on the basis of which the surplus from both the heads has been demarcated and declared in the Income Expenditure Account. 3. Because the Hon ble CIT(A) has erred in law on fact in not appreciating the fact that If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust. The test is very clear that, the genuineness of the purpose tested by the obligation created to spend the money excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well in time so that second appeal was filed before the Tribunal within stipulated time. Ld.AR for the assessee submitted that the assessee received order from the earlier Counsel on 25.12.2021 and second appeal was immediately filed on 17.01.2022. Therefore, delay caused due to the reasons beyond control of the assessee and omission on the part of the earlier Counsel for the assessee may kindly be condoned. 4. Ld. Sr. DR strongly opposed to the condonation of delay and submitted that the assessee should be vigilant about the application of the appeal and negligence therein, cannot be held as sufficient cause for explaining the delay. Therefore, condonation of delay should not be allowed to the assessee. 5. Placing re-joinder to the above objection, Ld. Counsel for the assessee submitted that the assessee noticed from the Income Tax Portal that outstanding demand of Rs.1,69,060/- was showing on 30.03.2022 then he immediately started to search the First Appellate Order but there was Corona Pandemic situation during that point of time and the assessee filed written application to Ld.CIT(A) on 06.09.2021 and thereafter, on 15.09.2021 requesting to supply certified copy of appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide order dated 15.11.2018 (supra) in assessee s own case wherein similar grounds of assessee have been decided in favour of the assessee with following observations and findings:- 5. First, we state the facts for assessment year 2006 07 and the facts for assessment year 2007 2008 are similar. The assessee filed its return of income for assessment year 2006 2007 on 31/10/2006 declaring nil income in the status of Association of the person in the assessment was completed under section 143 (3) of the act on the returned income vide order dated 12/11/2008. Subsequently it was noticed that the assessee is engaged in providing of hostel facilities and transportation facilities to the students during the year but has not maintained separate books of accounts for these business activities as per the provisions of section 11 (4A) of the act and therefore assessee was not eligible for exemption under section 11 on receipt from these activities and as such the assessee should have disclosed surplus generated from these activities for taxation in the return of income. such omission on failure on the part of the assessee to disclose truly and fully all material facts necessary for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income tax appeals. The learned commissioner appeals confirmed the assessment made by the learned assessing officer for assessment year 2006 2007 and 2007 08. Over and above he further enhanced the income of the assessee by applying the provisions of section 251 of the income tax act holding that the assessee is neither entitled to the benefit of exemption from incidence of tax under section 11 (1) (a) of the income tax act, 1961 nor under section 11 (1) (b) nor under section 12 of the income tax act in any manner. He therefore held that once the exception is withdrawn the entire income of the appellant was to be treated as taxable under the head income from other sources and not under the head business and profession. Accordingly he upheld that the gross receipt of the assessee of ₹ 344200 for assessment year 2006 07 and ₹ 931950/ for assessment year 2007 08 respectively has to be treated to be the income of the appellant liable to tax and not liable to the benefit of exemption from the incidence of tax under the provisions of section 251 (1) (a) read with the provisions of section 251 (2) of the income tax act 1961 and no further consideration of the action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned commissioner of income tax appeals with respect to the enhancement and stated that there is no infirmity in his order. 10. We have carefully considered the rival contention and perused the orders of the lower authorities. The brief facts of the assessee trust shows that it is a charitable society within the meaning of section 2 (15) of the income tax act 1961 which has been granted exemption under section 12 A of the income tax act. The assessee society runs an institute namely RV Northland Inst pharmacy and provides hostel and transport facilities to the students of R V Northland Inst pharmacy which is an integral part of the main activities of education but were not commercial activities rather than this were the necessary activities ancillary to the attainment of the main objectives , receipts for the respective year in the books of accounts were disclosed. It is not the case of the learned assessing officer that the hostel facilities and the transport facilities are provided to the persons who are neither the students nor the staff of the assessee trust. The identical issue has been decided by the coordinate bench in ITA No ITA No. 4639/Del/2015 Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and sale of food was an integral part of the objects of the Institute nor could the running of the hostel be treated as the principal activity of the Institute. The Institute could not be held to be doing business. Further meals being supplied in a hostel to the scholars, visitors, guest faculty etc. cannot be exigible to sales tax where main activity is academics as held in Scholars home Senior Secondary School 42 VST 530. Further, the reliance placed by the lower authorities on the decision of the Hon ble Madras High Court in case of DCIT versus Wellington charitable trust is also misplaced because in that case, the only activity of that particular trust was renting out of the property and not education. We are also not averse to considering the latest legal developments too where in the recently introduced new legislation of Goods and service tax it is provided that no GST would be chargeable on the hostel fees etc recovered from the Students , faculties and other staff for lodging and boarding as they are engaged in education activities. Therefore, we reverse the finding of the lower authorities and held that transport and hostel facilities surplus cannot be considered as bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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