9911796707
TMI Blog2015 (9) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... not considering the decision of Hon'ble High Court in the case of Maharaja Singh Museum Trust 169 ITR 379 (Raj) and Supreme Court of India in the case of Sole Trustee Lok Sikshan Trust Vs. CIT 101 ITR 234 (SC) wherein the word solely has been defined." 2. All the grounds of the revenue's appeal are revolving around annual credit receipt is more than one crore is not eligible for exemption U/s 10(23C)(iiiad) Hon'ble Rajasthan High Court decision in the case of Maharaja Singh Museum Trust 169 ITR 379 (Raj) and the decision of Hon'ble Supreme Court of India in the case of Sole Trustee Lok Sikshan Trust Vs. CIT 101 ITR 234 (SC). The ld Assessing Officer observed that the assessee is an educational institution, filed its return as the status of AOP on 22/09/2009 at NIL after claiming exemption U/s 10(23C)(iiiad) of the Income Tax Act, 1961 (hereinafter referred as the Act). The assessee had also claimed loss of Rs. 29,756/- under the head "profit and gains of business". In the computation filed alongwith the return of income, the assessee had claimed to carry forward business loss of Rs. 29,756/-. The case was scrutinized U/s 143(3) of the Act. The case of the samiti for earlier year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of the income must have the character of an educational institution to be ascertained from its objects. In this Section word "solely" means exclusively and not primarily. In using the expression "solely" the legislature has made it clear that it intends to exempt the income of the institutions established solely for educational purposes and not for commercial activities. This requirement would militate against an institution pursuing objects other that education. Even if one of the objects enables the institution to undertake commercial activities, it would not be entitled for approval U/s 10(23C)(vi) of the Act. The ld Assessing Officer further observed that if there are several objects of a society, some of which relate to education and others which do not, and the trustees or the managers in their discretion are entitled to apply the income or property to any of those objects, the institution would not be liable to be regarded as one existing solely for educational purposes, and no part of its income would be exempt from tax. In other words, where the main or primary objects are distributive, each and everyone of the objects must relate to "education" in order that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Hostel Sai Dham Colony Rs. 1,00,000/-: Made to Smt. Sunita Singh. 3. Nirwan Charitable Trust Rs. 46,35,000/- & Rajasthan Dental College Rs. 45,63,807/-. From the above details of advances etc., it can be clearly noticed that a major part of Samiti's funds are in still in utilization for purposes other than purpose of education as well as the for purposes other than objects of the Samiti which authenticates disqualification for being institution existing solely for education purposes. Keeping in view the facts and circumstances as above, I disallow the claim of assessee for exemption U/s 10(23C)(iiiad) as the total receipts of the assessee are more than Rs. 1,00crore and simultaneously for not being an institution existing solely for education purposes as discussed in preceding para." 3. Being aggrieved by the order of the learned Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal by observing as under:- "I have considered the assessment order, assessment record as well as submissions made by the appellant and the cases relied upon. The A.O. has aggregated the receipts of the Samiti as per receipt and payment account, inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 192, I am inclined to agree with the appellant that the aggregate annual receipts should included receipts which are being received on annual basis and not occasionally or on some other counts. The receipts must be related to the activity of the institution like fee receipts received from students. But it should not include (i) other receipts received from Govt. or any such department to repay or distribute to students under any scheme like scholarship etc. (ii) any loan or debt, (iii) any advances received for sale of any land, sale consideration of any assets (iv) interest earned on any investment like FDR which has no nexus with activity of education. Accordingly, it is held that the annual receipts for the appellant would be Rs. 9036200/-, being the admission fee as per income and expenditure account. The A.O. was not correct in holding that the aggregate annual receipts would be more than Rs. 1 crore at Rs. 14681760/- and in denying the exemption U/s 10(23C)(iiiad) to the appellant on this ground. Ground No. 1,2,3,4 & 5 are allowed." 3.1 The ld CIT(A) also decided the issue that the appellant did not exist solely for the purpose of education & mis-utilization of funds by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported the order of the ld. Assessing Officer. At the outset, the ld AR of the assessee has supported the order of the ld CIT(A) and further submitted as under:- 1. The AO from the perusal of receipt & payment a/c of the assessee observed that it has shown receipts aggregating Rs. 1,46,81,760/- (as mentioned at Page 3 of the assessment order) but declared gross income of Rs. 90,87,043/- in the income & expenditure a/c. Accordingly, he held that the aggregate annual receipts of the assessee are more than Rs. 1 crores and therefore its claim of exemption u/s 10(23C)(iiiad) is not allowable 2. Before Ld. CIT(A), assessee gave a detailed submission explaining the meaning of the words 'annual receipt' and the nature of each and every receipt which has been allegedly added by the AO in arriving at 'annual receipt' of Rs. 1,46,81,760/-. The assessee also placed reliance in case of Param Hans Swami Uma Bharti Mission Vs. ACIT (2013) 140 ITD 429 (Del.) (Trib.) wherein it was held that income from interest on FDRs is an additional income of society and it cannot be considered to be part of annual receipts of the school and thus assessee is eligible for exemption u/s 10(23C)(iiiad) as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n education but those other objects were never carried out by it would not mean that assessee was not existing 'solely' for educational purposes and thus, not entitled to exemption u/s 10(23C)(iiiad). Apart from the cases relied before the Ld. CIT(A), reliance is further placed on following cases:- - Saraswati Educational & Welfare Society (Regd.) (2015) 152 ITD 527 (Chand.) (Trib) - Geetanjali Education Society Vs. ADIT (2014) 101 DTR 337 (Kar.) (HC) - Neeraj Janhitkari Gramin Sewa Sansthan Vs. CCIT & Ors. (2014) 360 ITR 168 (All.) (HC) - Digember Jain Society For Child Welfare Vs. DGIT (2010) 329 ITR 0459 (Del.) (HC) The department in Ground No. 3 has challenged that the Ld. CIT(A) erred in not considering the decision in case of Maharaja Singh Museum Trust 169 ITR 379 (Raj.) and in case of Sole Trustee Sikshan Trust Vs. CIT 101 ITR 234 (SC) wherein the word solely has been defined. In this connection, it is to be noted that the Rajasthan High Court decision in case of Maharaja Singh Museum Trust 169 ITR 379 has been distinguished by Gujarat High Court in case of Gujarat State Co-operative Union Vs. CIT 195 ITR 279 in Para 7 as under:- "It is seen from decision in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the total receipt mentioned by the Assessing Officer on pae 3 of the assessment order, there was a transaction of sale of land for Rs. 47,90,000/-. The Hon'ble Madras High Court has considered the issue of annual receipts as envisaged in Section 10(23C)(iiiad) of the Act in the case CIT Vs. Madrasa EBakhiyath- Us-Salihath Arabic College (2015) 120 DTR 238/226 Taxman 372 (Mad.) (HC)wherein the annual receipt, the sale proceed of land and Bond held not to be equated to annual receipts as stated U/s 10(23C)(iiiad) of the Act. If the sale of land to the tune of Rs. 47,90,000/- reduced from the total receipt, it comes within the limit prescribed U/s 10(23C)(iiiad) of the Act. Further the Hon'ble Jurisdictional High Court and Hon'ble Supreme Court's decision referred by the Assessing Officer has been considered by the Hon'ble Gujarat High Court in the case of Gujarat State Co-operative Union Vs. CIT 195 ITR 279 wherein it has been held that word education was not used in a wide or extended sense so as to include addition to the knowledge of a visitor to a zoo or museum, the High Court held that the museum cannot be taken to be an educational institution existing solely for educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
