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TMI Blog2012 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel with Ms. Anusha Singh, Adv. SANJIV KHANNA,J: (ORAL) The Synodical Board of Health Services has invoked writ jurisdiction under Article 226/227 of the Constitution of India to challenge and question the order dated 30th April, 2009 passed by the Director General of Income Tax(Exemptions), respondent herein. By the impugned order respondent has dismissed the application filed by the petitioner in Form No.56D dated 11.4.2008 for registration under Section 10(23C)(iv) of the Income Tax Act, 1961 ( Act‟, for short) for assessment years 2009-2010 onwards. The respondent in the impugned order has referred to the accounts and details which were furnished by the petitioner for the assessment years 2005-06, 2006-07 and 2007-08. He has observed that there was variation of administrative expenses in the three assessment years. Under the heads administrative expenses‟, community health wing‟ and aids wing‟, the following expenses have been noticed : Administrative Expenses : Asstt.Year 2007-08 Asstt.Year 2006-07 Asstt.Year 2005-06 CNI Synd Evaluation Commission 3,00,000 Nil Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but this by itself cannot be a ground to hold that the fluctuations are abnormal and therefore, the registration should not be granted. 3. The respondent thereafter, has referred to vouchers of Chairman‟s office who was paid Rs.10,000/- in cash on 1.12.2004, 27.5.2005, 19.9.2005, 7.12.2005, 6.2.2006 and so on and so forth. He has observed that the external vouchers for such expenses incurred were not available, or the name and address of the recipient was not mentioned, or the amounts in the receipt were not mentioned in figures and words, or revenue stamp had not been affixed etc. Similarly, he has referred to vouchers relating to committee meeting expenses in which delegates were paid cash to meet travel expenses. These payments to the delegates of Rs.17,586/-, Rs.39,600/-, Rs.41,307/- and Rs.1,12,831/- paid on 20.9.2005, 20.9.2005, 20.9.2005 and 16.10.2005 respectively, have been adversely commented upon as the actual travelling expenses of the delegates were not ascertainable, external vouchers like air, bus, train tickets were not attached in all cases etc. Similar adverse comments have been made in respect of other travel expenses to Mumbai, Hyderabad, Chennai etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the effect of insertion of provisos to Section 10(23C)(vi) vide Finance Act, 1998. Section 10(23C)(vi) is analogous to Section 10(22). To that extent, the judgments of this Court as applicable to Section 10(22) would equally apply to Section 10(23C)(vi). The problem arises with the insertion of the provisos to Section 10(23C)(vi). With the insertion of the provisos to Section 10(23C)(vi) the applicant who seeks approval has not only to show that it is an institution existing solely for educational purposes [which was also the requirement under Section 10(22)] but it has now to obtain initial approval from the PA, in terms of Section10(23C)(vi) by making an application in the standardized form as mentioned in the first proviso to that section. That condition of obtaining approval from the PA came to be inserted because Section 10(22) was abused by some educational institutions/universities. This proviso was inserted along with other provisos because there was no monitoring mechanism to check abuse of exemption provision. With the insertion of the first proviso, the PA is required to vet the application. This vetting process is stipulated by the second proviso. It is importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions are actual existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application in the standardized form in terms of the first proviso. It is only if the pre-requisite condition of actual existence of the educational institution is fulfilled that the question of compliance of requirements in the provisos would arise. We find merit in the contention advanced on behalf of the appellant that the third proviso contains monitoring conditions/requirements like application, accumulation, deployment of income in specified assets whose compliance depends on events that have not taken place on the date of the application for initial approval. 34. To make the section with the proviso workable we are of the view that the Monitoring Conditions in the third proviso like application/utilization of income, pattern of investments to be made etc. could be stipulated as conditions by the PA subject to which approval could be granted. For example, in marginal cases like the present case, where appellant-Institute was given exemption up to financial year ending 31.3.1998 (assessment year 1998-99) and where an application is mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational Society Vs. Director General of Income Tax (Exemptions) 2010(10)AD (Delhi) 113. In the said case it was held that the principle of res judicata does not apply and for each period the question of grant of exemption has to be examined separately. The competent authority in the said case had brought on record evidence to show that the records and accounts were not properly maintained and were obviously subjected to manipulation which was decipherable. In the present case, we have examined the observations recorded by the respondent and we are not satisfied that the present case can be treated on par with the factual matrix in the cited case. The reasons given by the respondent in the impugned order do not appear to us to be germane to the conclusion he has reached. As indicated the explanation/justification of the petitioner has not been considered. 8. Keeping in view the aforesaid aspects we set aside the impugned order dated 30th April, 2009 and pass an order of remit and direct the respondent to decide the application for registration under Section 10(23C)(iv) afresh after giving hearing to the petitioner/authorized representative while deciding the matter the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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