TMI Blog2023 (12) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... the trust while the approval u/s 10(23C)(vi) of the Act was granted in the year 2012. Argument of assessee that the approval originally granted is to be presumed to apply to this institute also considering the prevailing position of law that only one-time approval was required to be taken u/s. 10(23C)(vi) we find and hold, has been correctly rejected by the CIT(Exemptions). His finding that this relaxation provided by the legislature of seeking only one time approval does not imply that new institutions can be added by the assessee and the approval will suo moto will apply to the said institute, we hold is correct. 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 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. The contention of assessee before us that the approval is granted to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from claiming their incomes as exempt by virtue of any other provisions exempting income provided in Section 10 of the Act. Therefore, this argument of the ld. DR, we find, is incorrect that the assessee cannot alternatively seek exemption of their income u/s. 10(23C)(vi) and Section 11 of the Act. Thus CIT(Exemptions) has rightly found the assessment order to be erroneous in granting exemption u/s. 10(23C)(vi) of the Act to the income of an institute run by assessee-trust which was not granted approval for the said purpose and finding that as a consequence prejudice has been caused to the Revenue. Assessee appeal dismissed. - Mrs. Annapurna Gupta, Accountant Member And Shri Siddhartha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 143(3) of the Act was allowing exemption to income of an institution of the assessee trust u/s 10(23C)(vi) of the Act, which institution had not been granted approval for the said purpose. The ld. CIT(Exemptions) noted that in the certificate granting approval to the assessee-trust u/s 10(23C)(vi) of the Act, the Institute of School of Science run by the assessee-trust was not included; but, the assessee had claimed exemption of the income earned by the said institution u/s 10(23C)(vi) of the Act and was allowed by the Assessing Officer also. Accordingly, a show-cause notice was issued to the assessee u/s 263 of the Act asking as to why the assessment order was not erroneous for not subjecting the income of this Institute of School of Science to tax in the absence of any approval granted to it u/s 10(23C)(vi) of the Act. The contents of the notice so issued by the ld. CIT(Exemptions) are reproduced at paragraph No.3 of the order as under:- 3. On the perusal of case records, it is seen that the assessee Trust had claimed exempted income of Rs. 39,50,90,102/- u/s 10(23C)(vi) of the I. T. Act under year consideration. However, it is also noticed from the certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are requested to make submission in support of your claims on or before 17.03.2021 along with all relevant documents. In case of non-compliance, it will be presumed that you have nothing to say in your case and the matter will be decided on merits and on the basis of documents available on record . 4. The assessee responded to the said notice by contending that the Trust had been granted approval vide order dated 17.04.2012 in respect of various institutions working under the said Trust and in view of the Board s Circular No.7/2010 dated 27.10.2010 no further the approval was required as it was a one-time approval as per prevailing law. The School of Science, i.e. the specific institution referred to by the ld. CIT(Exemptions), it was pointed out, became part of the trust from AY 2014-15 and in lieu of the continuation of the approval granted to the assessee-trust u/s. 10(23C)(vi) of the Act, the said approval, it was contended by the assessee, applied to the School of Science also which was included in the assessee-trust subsequent to the grant of approval in 2012. It was also contended that ,without prejudice to the same, since the assessee was registered as a charitable tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act vide order dated 17.04.2012, the approval originally granted would continue to apply. 8. His contention with regard to no prejudice being caused to the Revenue was that since the assessee was registered as a charitable trust u/s 12A of the Act, its income was entitled to exemption u/s 11 of the Act, and since the financial statements of the assessee-trust for the impugned year revealed that it had applied its entire income earned in the School of Science for running the said institute, the entire income of School of Science was entitled to exemption u/s 11 of the Act; and, therefore, even if the said institute was not entitled to exemption u/s. 10(23C)(vi) of the Act its income was exempt u/s 11 of the Act thus causing no prejudice to the Revenue on account of the order granting exemption to the said institute u/s. 10(23C)(vi) of the Act. 9. The ld. DR, however, vehemently objected to the above contentions of the ld. Counsel for the assessee. His contention against the argument of the ld. Counsel for the assessee of there being no error in the assessment order was that the approval u/s. 10(23C)(vi) of the Act is required to be institute specific and it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the list of institute which was granted approval u/s. 10(23C)(vi) of the Act as being addition of this institute in the assessee-trust subsequent to the grant of approval i.e. in the year 2014 this institute was added to the trust while the approval u/s 10(23C)(vi) of the Act was granted in the year 2012. 12. In the light of these facts, the argument of the ld. Counsel for the assessee that the approval originally granted is to be presumed to apply to this institute also considering the prevailing position of law that only onetime approval was required to be taken u/s. 10(23C)(vi) of the Act, we find and hold, has been correctly rejected by the ld. CIT(Exemptions). His finding that this relaxation provided by the legislature of seeking only one time approval does not imply that new institutions can be added by the assessee and the approval will suo moto will apply to the said institute, we hold is correct. We do not find any infirmity in the same. For the sake of clarity, his findings in this regard at paragraph no.5 of the order are reproduced hereunder:- 5 The submission/ explanations furnished by the assessee (as summarized in preceding para no. 4 above) have been duly e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly granted to the institutes mentioned .The CIT is required to grant approval after examining the genuineness of activities carried out and therefore specifically having examined the activities of the then existing institutes the approval letter mentions each institute of the assessee trust found by him eligible to exemption u/s 10(23C) (vi) of the Act. This institute, i.e. School of Science added to the trust subsequent to grant of approval its activities needed to be examined and the assessee ought to have applied afresh for grant of approval to this specific institute. We agree with the ld. CIT(Exemptions) that the approval could not have extended to the new institute added subsequently. 15. With regard to the contention of the ld. Counsel for the assessee that there was no prejudice caused to the Revenue since it is otherwise entitled to exemption of income u/s 11 of the Act, the ld. CIT(Exemptions), we have noted, has rejected this contention of the assessee also stating that the assessee had never made any such claim in its return of income and, therefore, the claim needed to be verified and required scrutiny. His finding recorded in this regard at paragraph no. 6 of his o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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