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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 ..... of Karnataka and Another [2003 (8) TMI 469 - SUPREME COURT ] and in the cased of T.M.A. Pai Foundation and Others Vs. State of Karnataka and Others [1993 (10) TMI 308 - SUPREME COURT]. The assessee is not entitled for exemption u/s 11 in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc. etc., over and above the prescribed fee for admission of students. - ITA Nos. 1285, 1286 & 1287/Hyd/2010 - - - Dated:- 16-7-2012 - CHANDRA POOJARI AND SMT. ASHA VIJAYARAGHAVAN, JJ. Appellant by : Shri C.P. Ramaswamy Respondent by : Shri M.S. Rao ORDER Per Asha Vijayaraghavan, Judicial Member: These three appeals pertaining to same assessee are directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of M/s Vodithala Educational Society in ITA No. 1138/H/06 for assessment year 2003-04, in which case there were unaccounted cash donations received whereas in the case of the appellant all donations received have been accounted for and applied for the attainment of the objectives of the society. 3. Briefly the facts of the case are that the assessee is a society registered u/s 12A of the Act and filed its return of income for the year under consideration on 28/10/2003 admitting Nil Income. In the course of assessment proceedings, the AO noticed that the assessee collected Development Fund to the tune of Rs. 61,99,000/- during the year and taken the same directly to the Balance Sheet without admitting it as income. Details of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng capitation fee etc., by private engineering colleges for prevention of exploitation by these colleges. Though soliciting and obtaining voluntary donations from philanthropic minded citizens may fall outside the scope of these government requisitions, conduct of the assessee in demanding and accepting additional fee in the garb of voluntary donations . It was observed that this unlawful activity on the part of the charitable institution smacks of profiteering and cannot be said to be part of its charitable activity. Exemption under the provisions of sec. 10(23C) is available to those colleges or institutions which are run solely for educational (philanthropic) purposes and not for the purposes of profit. For this proposition, the AO refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ense of the actions of the society/college by stating that the college had no other go than to seek donations in the absence of any kind of aid or assistance from the Government. He tried to give a different meaning to the word voluntary by stating that the parents were never forced to take admission in their college alone. He steadfastly maintained the stand that the parents requested the management to collect donations from them and that the society merely obliged them. 5. The AO held that the arguments of the assessee were clearly untenable. The action of the blackmarketeer in exploiting the situation by demanding twice or thrice the normal price of the ticket cannot be justified even if there is a huge demand for tickets for a popul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Tribunal dated 15.4.2009 in the cases of Vasavi Academy of Education, Hyderabad in ITA No.1133/Hyd/2006 for the assessment year 2003-04 and order dated 17.4.2009 in ITA No.1206/Hyd/2007 for the assessment year 2004-05, wherein it was held that if donations are received compulsorily for the admission of students, by whatever name it may be called, i.e. donation, building fund, auditorium fund, etc. over and above the prescribed fee, from the students, the assessee would not be entitled for exemption either under S.10(23C) or under S.11 of the Act. Further, we find that the Constitutional Bench of Apex Court in the case of T.M.A. Pai Foundations and others Vs. State of Karnataka Others (2002) 8 SCC 481 examined the issue of collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demy, Hyderabad in ITA No.494/Hyd/2007 and 518/Hyd/2008 for the assessment years 2002- 2003 and 2004-05 and Sri Sai Sudhir Educational Society, Hyderabad in ITA No.999/Hyd/20-06 for the assessment year 2003-04. Therefore, we set aside the orders of the lower authorities and remit back the matter to the file of assessing officer with a direction to assessing officer that he shall reconsider the entire issue in the light of judgment of Supreme Court in the case of M/s Islamic Academy of Education Another Vs. State of Karnataka and Another (supra), and in the cased of T.M.A. Pai Foundation and Others Vs. State of Karnataka and Others (Supra), and find out whether the assessee has received any money over and above the fees prescribed and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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