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TMI Blog2014 (2) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is distinct from registration u/s 12A of the IT Act – Held that:- It is mandatory on the part of the assessee in terms of section 11(4A) of the Act to maintain separate set of books of account for letting out of function hall - The assessee taken a plea that the assessee has maintained separate books of account - if the assessee maintained separate books of account for letting out the function hall it has to be produced before the Assessing Officer. Assessee had collected money over and above prescribed by concerned authority for admission of student, such an amount was to be classified as capitation fee and it could be said that assessee's case was a clear case of sale of education by assessee – thus, it could not be considered as charitable institution under section 2(15) of the Act because the purpose of the organisation as a whole was to make profit - The issue remitted back to the AO to consider the entire facts and verify the records whether the assessee collected capitation fees from students for the purpose of giving admission – Decided partly in favour of Revenue. - ITA No. 268/Hyd/2013 - - - Dated:- 2-1-2014 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) erred in holding that the assessee is eligible for exemption u/s 11 of the Act. 2. Briefly the facts of the case are that the assessee filed its return of income on 14/09/2009 for the year under consideration declaring Nil income after claiming exemption u/s 11 of the IT Act. The assessee society is registered u/s 12A of the IT Act vide order No. Hqrs.II/12A 80G/102/91-92, dated 09/11/1992. The Assessing Officer rejected the claim of exemption u/s 11 since the assessee was not notified u/s 10(23C)(vi) and since the assessee had amended its bye-laws without an approval from the CIT. He also held that the honorarium of Rs. 2,30,000/- paid to Smt. J. Jyothi Rao and of Rs. 60,000/- paid to Ms. J. Aparna Rao was in violation of section 13(3). The Assessing Officer, therefore, assessed the excess of income over expenditure of Rs. 1,30,09,580/- to tax. 3. On appeal, the CIT(A) allowed the appeal of the assessee by observing as under: "5.0 I find that similar issues had been adjudicated upon by my predecessor in the case of the appellant for the AY 2008- 09 vide his order in ITA No. 470/ADIT(E)-I/CIT(A)-IV/2010-11, dated 29/12/2011. 6.0 With regard to the alternate applicabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2008-09 in ITA No. 440/Hyd/2012 vide order dated 22/03/2013 wherein the coordinate bench held as follows: "2. We have heard both the parties and perused the material on record. The first objection in this case by the Department is with regard to non obtaining of approval u/s. 10(23C)(vi) of the Act. In our opinion, obtaining approval u/s. 10(23C)(vi) is not mandatory. This Tribunal again and again held in various cases that assessee could claim exemption either u/s. 10(23C)(vi) or u/s. 11 of the Act. It is left to the assessee to opt either 10(23C)(vi) or section 11 of the Act. The Assessing Officer cannot force the assessee to opt for particular deduction or exemption. In the present case, the assessee opted for exemption u/s. 11 of the Act. Being so, it is not necessary to the assessee to obtain approval u/s. 10(23C)(vi) of the Act. For this purpose we place reliance on the judgement of co-ordinate Bench in the case of St. Theresa Convent Society in ITA No. 844/Hyd/2008 and also in the case of ADIT (Exemptions) vs. Rajasthani Siksha Samithi (23 SOT 124) (Hyd) wherein held that institutions falling u/s. 10(23C)(vi) are eligible for exemption u/s. 11 also. Merely because sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Report that the assessee has not produced the same. In our opinion, if the assessee maintained separate books of account for letting out the function hall it has to be produced before the Assessing Officer. We, therefore, remit this issue to the file of the Assessing Officer for fresh adjudication after giving reasonable opportunity of hearing to the assessee. The Assessing Officer is directed to decide the issue in accordance with law. 5. The next objection of the Department is with regard to collection of fees from students in excess of prescribed limit by the State authorities. In our opinion, this issue is squarely covered by the order of the Tribunal co-ordinate Bench in the case of Vodithala Education Society (supra) wherein held that assessee had collected money over and above prescribed by concerned authority for admission of student, such an amount was to be classified as capitation fee and it could be said that assessee's case was a clear case of sale of education by assessee and, therefore, it could not be considered as charitable institution under section 2(15) of the Act because the purpose of the organisation as a whole was to make profit. 6. Similar view was ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts on record for deciding the issue effectively. Similar view was taken by us in the case of M/s. Jamia Nizamia in ITA No.763/Hyd/2007 dated 30.6.2008, in the case of International Educational Academy, 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 judgement 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 thereafter decide the issue afresh in accordance with law after giving reasonable opportunity of hearing to the assessee . We make it clear that the assessee is not entitled for exemption either u/s 11 or u/s 10(23C) in case it collected any money by wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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