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TMI Blog2015 (7) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... the 13th Proviso, after giving reasonable opportunity, the earlier approval could be withdrawn if the activities are found not to be genuine and not according to the conditions and the approval could be subject to monitoring. - Decided in favour of assessee. - CWP No. 16248 of 2012(O&M) - - - Dated:- 30-6-2015 - S. J. Vazifdar, ACJ And G. S. Sandhawalia,JJ. For the Appellant : Mr Kulvir Narwal, Adv. For the Respondents : Ms Urvashi Dhugga, Adv. JUDGMENT G. S. Sandhawalia,J. 1. Challenge in the present writ petition is to the order dated 25.03.2011 (Annexure P5), passed by the Chief Commissioner of Income Tax, Haryana-respondent No.2, whereby the application of the petitioner for the assessment year 2010-11, for grant of exemption under Section 10(23C) of the Income Tax Act, 1961 (for short, the 'Act') has been rejected. The application for rectification claiming depreciation was also rejected vide order dated 01.06.2011 (Annexure P7). 2. The pleaded case of the petitioner is that it is duly registered with the Registrar of Firms Societies, Haryana and running a educational institution, solely for the purpose of imparting education and not for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the matter is squarely covered against the Revenue. There is no denying the fact that exemption had already been granted to the petitioner earlier, vide order dated 26.03.2008, for a period of 3 years till the year 2009-10. The application was made on 29.03.2010, for continuation and in pursuance of the same, a show cause notice was issued to the applicant on 13.01.2011 to substantiate its claim. In view of the circular No.7 dated 27.10.2010 (Annexure P8), the petitioner was not required to file an application for extension, as has been held in the case of Sunbeam Academy Educational Society (supra). Relevant observations read as under: 9. The aforesaid proviso was in relation to clause (iv) and (v) of Section 10 (23C) of the Act. The CBDT by its circular No.7 of 2010 has clearly held that it would also be applicable for approval granted under clause (vi) and (via) of the Act, namely, that the approval can be withdrawn by the competent authority on certain conditions being satisfied and after giving a reasonable opportunity of show cause to the assessee. 10. In the light of the aforesaid, the application dated 25.3.2008 filed by the petitioner for extension of the appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Bombay High Courts. Since we have set aside the judgment of the Uttarakhand High Court and since the Chief CIT's orders cancelling exemption which were set aside by the Punjab and Haryana High Court were passed almost solely upon the law declared by the Uttarakhand High Court, it is clear that these orders cannot stand. Consequently, Revenue's appeals from the Punjab and Haryana High Court's judgment dated 29.1.2010 and the judgments following it are dismissed. We reiterate that the correct tests which have been culled out in the three Supreme Court judgments stated above, namely, Surat Art Silk Cloth, Aditanar, and American Hotel and Lodging, would all apply to determine whether an educational institution exists solely for educational purposes and not for purposes of profit. In addition, we hasten to add that the 13th proviso to Section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with the law laid down. Further, it is of great importance that the activities of such institutions be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities in India which the applicant has undertaken in its Constitution, MoUs. and Agreement with Government of India/National Council. In this case, broadly the activities undertaken by the appellant are - conducting classical education by providing course materials, designing courses, conducting exams, granting diplomas, supervising exams, all under the terms of an Agreement entered into with Institutions of the Government of India. Similarly, the PA may grant approvals on such terms and conditions as it deems fit in case where the Institute applies for initial approval for the first time. The PA must give an opportunity to the applicant-institute to comply with the monitoring conditions which have been stipulated for the first time by the third proviso. Therefore, cases where earlier the applicant has obtained exemption(s), as in this case, need not be re-opened on the ground that the third proviso has not been complied with. However, after grant of approval, if it is brought to the notice of the PA that conditions on which approval was given are breached or that circumstances mentioned in the thirteenth proviso exists then the PA can withdraw the approval earlier given by fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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