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TMI Blog2012 (10) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... convenience. 2. To dispose of these appeals, we refer to the facts from AY 2003-04. The grounds raised in all the appeals are common, therefore, the same are extracted from AY 2003-04: "1. The order of the learned CIT(A) in so far as it is prejudicial to the interest of the appellant, is against law, weight of evidence and probabilities of the case and the following grounds are without prejudice to each other. 2. The learned CIT(A) grossly erred in confirming the denial of exemption to the appellant in terms of section 11 to 13 despite the fact that all the donations received were accounted for and applied for the attainment of the objectives of the appellant society. 3. The learned CIT(A) failed to appreciate that there was gross viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al addresses. A carefully analysis of the data furnished by the assessee, the AO noted that there is a clear nexus between each student admitted into the engineering course under management quota and a particular group of 'donors' who are shown to have made 'voluntary contributions' to the Development Fund. Thereupon, the AO issued summons u/s 131 of the IT Act were issued to the parents of these students and statements were recorded under oath. They testified that 1) there was no voluntariness in making the payments to the development fund, 2) some of the persons shown as donors were their close relatives and friends and funds were provided to them by the parents themselves, 3) their financial position did not permit them to donate volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee on 07/03/2006, wherein the contentions, inter-alia, mentioned as under:- "This fact of collection of large sums of money as quid pro quo for allotment of seats in your engineering college proves to the hilt that the institution does not exist solely for educational purposes but that it exists for purposes of profit. Such an educational institution, as per the condition prescribed in the sub-clauses (iiiab) and (vi) of clause (23C) of section 10, is not eligible for exemption under the said section. The income of the said college is not exempt, also for the reason that it has not obtained the mandatory approval from the prescribed authority even though its gross receipts exceeded the prescribed Rs. 1.00 crore. It is, therefore, propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careful considering the evidence on record and after taking into account the arguments/contentions of the assessee, the AO denied the exemption to the income of the engineering college. 6. On appeal, the CIT(A), following the decisions rendered by Hon'ble Supreme Court, High Courts and ITAT, it has been clearly established that the assessee had taken donations, which were found to be linked to the admission o students to the college, the assessee is not entitled for exemption either u/s 10(23) or u/s 11 of the Act. Aggrieved by the order of the CIT(A), the assessee is in appeals before us. 7. The learned counsel for the assessee Shri C.P. Ramaswamy relied upon the decision in the case of ACIT Vs. Balaji Education and Charitable Public Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion institution. Apex Court further observed that the fees collected over and above the prescribed fee for admission of the student has to be constructed as capitation fee. The Apex Court, further observed that the concerned university and regulated body has to take action for withdrawal of the recognition in case it is found that the educational institution received any money over and above the fees prescribed for the courses. Same view was taken by Apex Court in the case of Islamic Academy of Education and another Vs. State of Karnataka & another (2003) 6 SCC 697. If the donations were received compulsorily for admission of students, the assessee is not entitled for exemption either u/s 10(23C) or u/s 11 of the IT Act. Since the lower au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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