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TMI Blog2023 (12) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... r. CIT"] is bad and illegal and requires to be quashed. 3. Ld. Pr. CIT erred in law and on facts in exercising revisional jurisdiction ignoring the fact that AO made full inquiry and satisfied with the reply/submission of the appellant and accordingly the order passed by Pr. CIT is required to be quashed and may kindly be quashed. 4. The ld. Pr. CIT erred on facts as also in law in alleging that the order u/s 143(3) is erroneous and prejudicial to the interest of revenue as the AO had not made proper verification of applicability of approval u/s 10(23C)(vi) to the trust particularly for unit of school of science, which is not included in approval u/s 10(23C)(vi) and thereby setting aside the order passed u/s 143(3) of the Act dated 30.10.2017. The order passed u/s 263 of the Act by the learned Pr. CIT is totally unjustified on facts as also in law therefore the same may kindly be quashed. 5. The ld. Pr. CIT failed to point out as to how the order is erroneous and prejudicial to the revenue. As per the material on record, considering the provisions of Section 11, 12 and 13 and more specifically in view of approval granted u/s 12A, income of the trust is exempt and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the approval U/s 10(23C)(vi) of the I. T. Act. Therefore, assessment order u/s 143(3) of the Act dated 30.10.2017 appears to be erroneous and prejudicial to the interest of the revenue as there is under assessment of income to the tune of Rs. 1,03,29,317/- which is worked out as following: Excess of income over expenditure (I&E A/c of School of Science) 71,25,997 Add-Income shown in the accounts of R. K. University School of Science (i) Affiliation Fee Income - Rs. 4,63,000 (ii) Enrollment Fee Income - Rs. 1,79,250 (iii) Exam Fee Income (M.Sc.) - Rs. 3,83,250 (iv) Exam Fee Income (B.Sc.) - Rs. 22,98,250 33,23,750 Less: Expenses shown in the accounts of R. K. University regarding School of Science (i)Paper setting expenses Rs. 34,805 (ii) Examination expenses (B.Sc.) Rs. 55,075 (iii)Examination expenses (M.Sc.) Rs. 30,550 1,20,430 Net Profit chargeable tax 1,03,29,317 4. In light of the above facts, it is to inform you that proceeding U/s 263 of the Act is initiated in your case for the A.Y. 2015-16. In this connection, it is asked to show cause as to why assessment order dated 30.10.2017 should not be revised u/s 263 of the Act in view of the above extent of ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer having granted exemption to income of the institute run by the assessee which was not granted approval u/s. 10(23C)(vi) of the Act, the assessment order was in error. He set aside the assessment order and restored it back to the Assessing Officer to examine the claim of the assessee of exemption of the income afresh after allowing due opportunity of hearing to the assessee. 6. Before us, ld. Counsel for the assessee contended that neither of the twin conditions required to be fulfilled for invoking Section 263 of the Act, that is of the assessment order being erroneous and causing prejudice to the Revenue, were fulfilled. 7. His contention regarding the assessment order not being erroneous briefly put was:- (i) the approval granted u/s. 10(23C)(vi) of the Act was to the Trust and was not institution specific; (ii) that the requirement of law, as existing at the relevant point of time, was one-time grant of approval u/s. 10(23C)(vi) of the Act, doing away with the requirement of seeking approval repeatedly by assesses therefore this specific institution, i.e. School of Science, which was added to the institutions already being run by the assessee-trust and to which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 10(23C)(vi) of the Act it is debarred from claiming exemption of the same income u/s 11 of the Act. Ld. DR contended that an order does not become erroneous merely because there is anything wrong with the order if all facts stated therein are assumed to be correct. He contended that it becomes erroneous also on account of failure to make an inquiry which ought to have been made in the circumstance. For the said proposition, he relied on the order of the ITAT Ahmedabad Benches in the case of Babulal S. Solanki Vs. ITO in ITA No. 3493/Ahd/2016 dated 04.03.2019. 11 We have carefully heard the contentions of both the parties and have also gone through the orders of the ld. CIT(Exemptions). As stated above, the error in the assessment order found by the ld. CIT(Exemptions) was grant of exemption u/s. 10(23C)(vi) of the Act to an institute run by the assessee-trust which was not granted approval u/s. 10(23C)(vi) of the Act. The fact that the School of Science was not included in the list of institutes run by the assessee-trust which was granted approval u/s. 10(23C)(vi) of the Act vide order dated 17.04.2012 is not disputed. We have noted that the assessee had explained the non-inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t new institutions can be added by the assessee and it can suo-motto claim approval u/s 10(23C) (vi) in respect of institutions not covered by the order dated 17.04.2012. This approval has imposed certain conditions which are mentioned in the approval order itself. Thus the contention of assessee on this issue is not acceptable." 13. We are in complete agreement with the ld. CIT(Exemptions) that the approval granted to the assessee-trust in the year 2012 cannot apply to a new institution added to the trust subsequently. Therefore, the argument of the ld. Counsel for the assessee that the approval u/s. 10(23C)(vi) of the Act would apply to the new institute also and hence there was no error in the order granting exemption to the income of the new institute is dismissed. The findings of the ld. CIT(Exemptions) in this regard are confirmed by us. 14. The contention of the ld. Counsel for the assessee before us that the approval is granted to a trust and not a specific institute is also rejected since the certificate granting approval specifically mentions each institute which was being run by the assessee-trust at the relevant point of time. The approval obviously is specifically gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this contention of the ld. Counsel for the assessee. 17. At the same time, we may add that the argument made by the ld. DR before us that this contention of the assessee is not acceptable since the CBDT vide its Circular No.1/2015 dated 21.01.2015 has debarred assessees from making alternative claim of exemption u/s. 10(23C)(vi) and Section 11 of the Act, we hold, is not correct. We have gone through the relevant CBDT circular and we find that what has been debarred by virtue of the said circular, which is explanatory notes to the provisions of the Finance Act, 2014, is that assessees' claiming exemption of their income u/s. 10(23C)(vi) of the Act or Section 11 of the Act are debarred from claiming exemption of such income under any other provision of Section 10 of the Act. What has been introduced by virtue of amendment made by Finance Act, 2014 is that assessees' claiming exemptions of their income on account of carrying out charitable activities or running educational institutions are entitled to claim exemption under the relevant sections 11 and 10(23C)(vi) of the Act only subject to fulfillment of conditions specified therein. Such assessees have been disentitled/debarred fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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