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TMI Blog2006 (9) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... t the learned CIT(A)-II, Dehradun, has erred in law and on facts in deleting the addition made on account of treatment of voluntary receipts as business receipts. 3. The order of the learned CIT(A)-II, Dehradun, be set aside and that of the AO be restored." 2. Rival contentions have been heard and record perused. The assessee is a society registered on 3rd Sept., 1996 by Registrar of Firms, Societies Chits, Uttar Pradesh, Garhwal Region, Dehradun. The society is also registered under s. 12A of the IT Act vide CIT's order dt. 31st May, 1999. The objects of the society are as under: (a) Advancement, promotion and spread of computer education, higher professional education, management studies and the establishment and support of colleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order that assessee is not entitled to exemption under s. 10(23C)(iiiad). The exemption has been denied because as per the AO, imparting of education is in return of huge fee and other charges and the motive is earning of profit and not charity. Moreover, as a result of disallowance of Rs. 1,85,000 made by the AO vide para 10, the gross receipts of the society, according to the AO, exceeded a sum of Rs. 1 crore. Therefore, approval of the Chief CIT, the prescribed authority is necessary and, therefore, the society was also not entitled to exemption under s. 10(23C)(iiiad). 4. As a result of survey, it was noticed by the AO that the salary paid for asst. yr. 1999-2000 as per salary register was Rs. 4,15,242 while in the P L a/c, a sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered under the Societies Registration Act, 1862. The society was formed with the main aim and object of advancement, promotion and spread of computer education. Higher professional education, management studies and the establishment and support of colleges, schools, reading rooms, etc. in this regard. The income which the appellant receives in the form of tuition fee and other receipts could not have been received but for the organization and therefore, the tuition fee and other receipts derived from other organizations is income derived from property held under trust. Such tuition fee and other receipts, received by the assessee is directly and substantially arising from the organization which is the property held under the trust. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services rendered against the charges made. It is like any other vocation that of doctor, chartered accountant and advocates who charge for the services rendered, doctor in his profession provides medical relief to the needy persons. Since he charges fee in return, he is said to be engaged in the professional and not engaged in charitable activity as defined in s. 2(15). The case of the assessee society, according to AO, is no different inasmuch as it is charging fee and imparting education in return. It is a case of sound business proposition in which assessee is engaged with the motive of earning profit and not doing any charity. 8. After carefully perusing the entire material placed on record, we found that the educational institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the society has committed itself that: "the above aims will not be commercial and under the UP Societies Registration Act, 1860". The institution is virtually Government managed. Therefore, the question of functioning like a commercial profit making institution is totally unfounded. Further, the assets of the society cannot be shared or distributed amongst its members at any point of time, even if the society is being wound up. Since the element of any personal gains is completely absent in the case of the society, its functioning cannot be based on the maxim of maximization of profit as assessed by the AO. Personal gains is main driving force behind any commercial activity, which is totally absent in the case of the assessee. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utility". In this definition per se is stated as constitution (of) a charitable purpose and there are no conditions prescribed such as imparting education for fee or at subsidized price. Thus, education may not be regarded as charitable activity in popular sense, it is a charitable purpose as defined in the IT Act, 1961. 13. We also found that jurisdictional High Court vide its order dt. 22nd Feb., 2000, had upheld the order of Tribunal, after going through all the objects clause of the assessee society held that CIT was not justified in withdrawing the order granting registration to the assessee's society under s. 12AA of the IT Act, 1961. 14. In view of the above discussion, we can safely conclude that assessee society fulfils all th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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