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TMI Blog2012 (7) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... or Respondent: Sh. Abhishek Maratha, Sr. Standing Counsel with Ms. Anshul Sharma, Advocates. R.V.EASWAR, J.: (ORAL) These are two writ petitions filed by Mahavira Foundation under Article 226/227 of the Constitution of India. In WP(C) No.13620/2009 the petitioner seeks the quashing of the impugned order dated 29th July, 2009 passed by the Director General of Income Tax (Exemption), Delhi by which he refused to grant approval to the petitioner under Section 10(23C)(vi) of the Income Tax Act, 1961 (hereinafter referred to as the Act‟). WP(C) No.5113/2010 is directed against the order passed on 8th May, 2010 by the DGIT(E) under Section 154 of the Act by which the approval granted to the petitioner by order dated 19th March, 2010 under Section 10(23C)(vi) of the Act was treated as non-est. 2. The petitioner is a society registered on 27th February, 1978 under the Societies Registration Act, 1860 in the name of Mahavira Foundation . It is engaged in imparting education and runs a school in Delhi by the name Mahavir Senior Model School for the past 25 years or more. It is being regularly assessed under the Act in respect of its returns filed with the Trust Ward-IV a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(23C)(vi) of the Act. There are other conditions to be fulfilled by an educational institution such as not carrying on business unless such business is incidental to the attainment of these objects and separate books of accounts are maintained for the business, getting the books of accounts audited by a Chartered Accountant and furnishing the audited report along with the return of income, and so on, but these conditions are not relevant for the purpose of the present writ petitions. It may also be noted that as per the Finance Act, 2006, a proviso was inserted with effect from 1st June, 2006 stipulating that an educational institution, seeking approval on or after 1st June, 2006, had to make the application on or before 30th September of the relevant assessment year from which the exemption was sought. These are the gist of the provisions relating to the approval of an educational institution for the purposes of Section 10(23C)(vi) of the Act. 5. In terms of the powers vested by these provisions on the respondent, he called upon the petitioner to produce its books of accounts and vouchers in order to verify the genuineness of the activities carried on by the petitioner. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the educational institution has applied its income wholly and exclusively to the object for which it is established, namely, education. 7. We may, therefore, proceed to examine whether the conclusion drawn by the respondent that the petitioner manipulated and fabricated its books of accounts and vouchers and also debited personal, bogus and exaggerated expenses is well founded and logically follows from the records produced before him for examination. 8. So far as payments made to Mahavir Video Studio is concerned, there are three payments referred to in para 3 of the impugned order. The petitioner was asked to produce the proprietor of Mahadev Video Studio for examination together with the bill books, cash books, ledger and bank passbooks. The three payments in question aggregated to Rs. 39,222/-. In respect of these payments, though the petitioner could not produce the proprietor of the Video Studio, it produced the relevant bill books from which the three bills were issued to the petitioner. The irregularities noticed by the respondent are only that one bill for Rs.35,950/- was not dated. However, the bill produced by the petitioner contained the date as 31st March, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the payment after issue of bills at a later date. Such things are not strange or unknown to take place. Such a serious charge as that the articles were appropriated for personal purposes, does not follow from the material placed before the respondent. 10. Similar is the approach by the respondent with reference to the payments made to Shankar Halwai in connection with the expenses incurred on the annual day function for the financial year 2007-08. These are caterers of food/snacks/refreshments and it would be too much of a nit-picking to expect them to have regular printed bills. Serious allegations such as the signature on the voucher was forged and that they were fabricated or manipulated or doctored have been made by the respondent. The other allegation regarding bills issued by one Deepa Seth are also quite serious, but we have our own doubts as to whether on the material produced before the respondent, he could have drawn such serious inferences against the petitioner and whether he could conclude that the account books were manipulated or fabricated merely because of certain irregularities in the evidence adduced in support of the payments. The books of accounts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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