9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 956 - AT - Income TaxEligibility to exemption u/s 10(23C)(iiiad) - whether the assessee could be treated as an educational institution? - assessee is a society imparting education in classical ballet dance, dance drama, music, choreography and related subjects, holding examinations thereon, arranging social and cultural functions, performances, promotion of the arts and culture etc - Held that - Respectfully following the co-ordinate bench decision of this tribunal in assessee s own case for the Asst Years 1986-87 to 1993-94 dated 11.7.2002 , which has been confirmed by the Hon ble Jurisdictional High Court, and in view of the fact that there is no change in the facts and circumstances of the case during the years under appeal, we hold that the assessee society is an educational institution existing solely for educational purposes and not for purposes of profit entitled for exemption u/s 10(23C)(iiiad) of the Act as the aggregate annual receipts in each of the years under appeal were less than ₹ 1 crore. Accordingly, the grounds raised by the revenue for the Asst Years 2002-03 , 2003-04 , 2007-08 , 2010-11 , 2011-12 & 2012-13 , are dismissed. - Decided in favour of assessee.
Issues Involved:
1. Applicability of CBDT Circular No. 21/2015 on low tax effect cases. 2. Whether the assessee qualifies as an educational institution under Section 10(23C)(iiiad) of the Income Tax Act, 1961. 3. Treatment of surplus income and whether it is subject to tax. Detailed Analysis: 1. Applicability of CBDT Circular No. 21/2015 on Low Tax Effect Cases: During the hearing of ITA No. 2131/Kol/2016 for the Assessment Year 1998-99, the assessee's counsel argued that the total addition made by the Assessing Officer (AO) was ?4,12,170, with a tax effect of ?92,329, which falls within the low tax effect threshold as per CBDT Circular No. 21/2015. The Circular specifies that appeals should not be filed if the tax effect does not exceed ?10,00,000 before the Appellate Tribunal. The Tribunal found that the Circular applies retrospectively to pending appeals and is binding on tax authorities, as confirmed by the Supreme Court in Commissioner of Customs vs Indian Oil Corporation Ltd. Consequently, the appeal by the Revenue was dismissed in limine due to low tax effect. 2. Whether the Assessee Qualifies as an Educational Institution under Section 10(23C)(iiiad) of the Income Tax Act, 1961: The common issue for the Assessment Years 2002-03, 2003-04, 2007-08, 2010-11, 2011-12, and 2012-13 was whether the assessee could be treated as an educational institution and thus exempt under Section 10(23C)(iiiad). The assessee, a society registered under the West Bengal Society Act since 1984, imparted education in classical ballet dance, dance drama, music, choreography, and related subjects. The AO denied the exemption, arguing that the institution was not solely for educational purposes and operated with a profit motive due to its fee structure. The Commissioner of Income Tax (Appeals) [CIT(A)] granted relief to the assessee, treating the appeals for the relevant years as allowed for statistical purposes, pending the outcome of a related High Court decision. The Tribunal found that the activities of the assessee during the years under appeal were consistent with those in earlier years, where the Tribunal and the Calcutta High Court had recognized the assessee as an educational institution. Citing the doctrine of merger and the Gujarat High Court's decision in Nirma Industries Ltd vs DCIT, the Tribunal held that the assessee is an educational institution existing solely for educational purposes and not for profit, thus entitled to exemption under Section 10(23C)(iiiad). 3. Treatment of Surplus Income and Whether it is Subject to Tax: For the Assessment Year 2006-07, the AO, referring to an earlier Tribunal decision against the assessee for the Assessment Year 1999-2000, concluded that the assessee was an educational institution existing for profit and brought the surplus to taxation. The CIT(A) upheld this decision. However, the Tribunal reiterated that the issue had been settled in favor of the assessee for other assessment years, confirming that the assessee's activities were consistent and there were no changes in facts and circumstances. Thus, the Tribunal allowed the appeal for the Assessment Year 2006-07, affirming the assessee's entitlement to exemption under Section 10(23C)(iiiad). Conclusion: - ITA No. 1300/Kol/2010 (AY 2006-07): Allowed. - ITA No. 2131/Kol/2016 (AY 1998-99): Dismissed. - ITA Nos. 2132/Kol/2016 to 2137/Kol/2016 (AYs 2002-03, 2003-04, 2007-08, 2010-11, 2011-12, 2012-13): Dismissed. Order pronounced in the Court on 02.08.2017.
|
