2014 (3) TMI 469 - HC - Income Tax

Computation of total income for the purpose of exemption u/s 10(23C)(iiiad) of the Act - Registration u/s 12A of the Act - The decision in Commissioner of Income Tax v. St.Mary s Malankara Seminary 2012 (3) TMI 263 - KERALA HIGH COURT followed - imparting training to students in Seminary is also education and it is also with reference to very same assessee now it need not ponder much over the issue or the controversy regarding the registration under Section 12A to be given to the assessee. Whether Section 12A registration should be given for the assessment 2005-06 Held that - The Tribunal opined that the amount shown under the other income head cannot be added to the receipts it cannot be understood what exactly the Tribunal meant by making a statement that no man can make profit of himself - the Tribunal has not explained what exactly this Rs. 17 lakhs amounts to - The order of the Tribunal does not provide a clear picture as to what this amount of Rs. 17 lakhs represents - If Rs. 17 lakhs is not counted as receipts, the total receipt would come within one Crore. If Rs. 17 lakhs is added, it crosses one Crore - Thus if this Rs. 17 lakhs is added, the entire scenario would change - In the absence of any particulars, the matter is remitted back to the Tribunal for clarification - It has to consider the source of Rs. 17 lakhs alone so as to consider the controversy under Section 10 (23C)(iiiad) of the Act Decided partly in favour of Revenue.

Summary

Issues:
1. Assessment of tax and interest payable by the assessee.
2. Status of the assessee - trust or association of persons.
3. Rejection of registration under Section 12A.
4. Exemption under Section 10(23C) (iiiad) for the assessment years.
5. Consideration of training program as an educational institution.
6. Book limit extension for the assessment year 2005-06.
7. Clarification on the amount of Rs. 17 lakhs in receipts.

Analysis:

1. The appeal involved the assessment of tax and interest payable by the assessee for the year 2005-06. The Assessing Officer treated the assessee as an association of persons due to the lack of registration under Section 12A, resulting in a tax and interest amount of Rs. 23,80,404.

2. The primary issue was the status of the assessee - whether it qualifies as a trust or an association of persons. The Assessing Officer concluded that the assessee did not have Section 12A registration, thus considering it as an association of persons for taxation purposes.

3. The rejection of registration under Section 12A by the Assessing Officer was a significant contention. The assessee claimed to be entitled to registration as a trust running an educational institution, which was initially rejected but later supported by the Tribunal.

4. The issue of exemption under Section 10(23C) (iiiad) for the assessment years 2003-04, 2004-05, and 2005-06 was considered together by the Tribunal. The Tribunal directed the Assessing Officer to modify the assessment orders to provide exemption to the appellant for the relevant years.

5. The debate over whether the training program conducted by the assessee qualified as an educational institution was crucial. The Tribunal ruled in favor of the assessee, granting Section 12A registration based on the educational nature of the training program.

6. Regarding the book limit extension for the assessment year 2005-06, the Tribunal analyzed the total receipts, including interest and voluntary contributions. However, the Tribunal's decision on the inclusion of Rs. 17 lakhs in receipts raised ambiguity, leading to the need for clarification.

7. The ambiguity surrounding the Rs. 17 lakhs amount in receipts required clarification. The Court found it necessary to remand the matter back to the Tribunal for a detailed explanation on the inclusion or exclusion of this amount in the total receipts to determine compliance with Section 10(23C)(iiiad) for the assessment year.

In conclusion, the judgment addressed various issues related to the assessment, status, registration, and exemptions of the assessee, emphasizing the need for clarity on specific amounts and compliance with relevant tax provisions.