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TMI Blog2018 (7) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... va, Judicial Member This appeal is filed by the department against order dated 15.04.2010 passed by the Ld. CIT (Appeals), Faridabad for assessment year 2007-08. 2. The brief facts of the case are that the assessee is a society registered u/s 12AA of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide order dated 30.09.2004. The society, during the year under consideration, was running an educational institute by the name of Manav Rachna College of Engineering . For the year under consideration, the return of income was filed at Nil. The case was selected for scrutiny and during the course of assessment proceedings the AO proceeded to examine the assessee s claim of exemption u/s 11 of the Act. The AO examined the aims and objects of the society and made inquiries with respect to two different sets of Memorandum of Association/Rules. The AO also carried out verification of income and expenditure account and investment in fixed assets for the immediately preceding four assessment years and came to the conclusion that the activities of the society were not in accordance with the provisions of sections 2(15), 11, 12 and 13 of the Act. The AO opined that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society. The Ld. Sr. Departmental Representative submitted that the assessee had violated provisions of section 2(15), 11, 12 and 13 of the Act as it was charging fees from the students. The Ld. Sr. Departmental Representative read out extensively from the assessment order and submitted that in view of findings of the AO, the order of the Ld. CIT (Appeals) should be set aside and that of the AO restored. The Ld. Sr. Departmental Representative also submitted that the department has filed additional ground of appeal which reads as under:- On the facts and in the circumstances of the case, the Ld. CIT (A) has erred on facts and in law in holding that the Society is legitimately eligible u/s 11 of the Income Tax Act, ignoring the fact that registration u/s 12AA was granted by the CIT, Faridabad on 30.09.2004 w.e.f. 09.06.2004, and thereafter, the assessee amended its memorandum of association on 24.03.2007, but no fresh application was made for 12AA registration . Under these circumstances, since the 12AA registration dated 30.09.2004 would not apply after 24.03.2007, and no fresh registration was obtained following the amendment, the claims under section 11-13 of the Act, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... APPEAL IN ITAT DATE OF ORDER 2005-06 143(3) ALLOWED 13.08.2007 2006-07 143(3) ALLOWED 28.11.2008 2007-08 143(3) NOT ALLOWED APPEAL DISMISSED PENDING 30.12.2009 2008-09 143(3) NOT ALLOWED APPEAL ALLOWED NO APPEAL 31.12.2010 2009-10 143(3) ALLOWED 21.12.2011 2010-11 143(3) ALLOWED 15.05.2012 2011-12 143(3) ALLOWED 04.06.2013 2012-13 143(3) ALLOWED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same also relate to education. The main objection of the AO against the assessee society is that the activities of the society are in the nature of business activity. The AO has referred to Clause 4(viii) of the objects clause which authorize the society to purchase, take on lease or exchange, or hire properties - movable and immovable for the purpose of the society and to improve, develop, manage, sell, lease, mortgage or dispose of any part of the property of the society. It is the opinion of the AO that leasing, hiring, selling and mortgaging etc. is not an allowable activity in terms of sections 11 to 13 of the Act as they were commercial activities. Similarly, the AO has referred to Clauses 4(iii), (ix), (x) which provide for providing all types of consultancy and accreditation services. The AO has also referred to object clause 4(xxv) regarding publishing of books, magazines, newspapers etc. which, as per the AO, is not a charitable activity and is a business activity. The AO has also referred to object clause 4(xl) which provides for donating or contributing corpus funds or giving loans in the form of cash/ movable property/immovable property to any other persons, individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further note that from assessment year 2005-06 to assessment year 2014-15, the department has not accepted the claim of exemption u/s 11 only on two occasions viz. A.Y. 2007-08 which is the subject matter of appeal before us and assessment year 2008-09 in which the Ld. CIT (A) had allowed the assessee s appeal and the department had not preferred any appeal before the ITAT. We note that in all other assessment years, the assessments have either been completed u/s 143(3) of the Act or u/s 153 of the Act and in all the years the department has allowed the claim of exemption u/s 11 to the assessee. Although the Ld. Sr. DR has argued vehemently against the action of Ld. CIT (A) in allowing exemption to the assessee, he could not point out any material difference in the facts pertaining to this year under appeal as compared to other assessment years falling within the period AY 2005-06 to assessment year 2014-15. Although the principle of res judicata is said to not apply in income tax proceedings, the Hon'ble Delhi High Court in the case of CIT vs. Dalmia Promoters Developers (P) Ltd reported in 281 ITR 346 (Del) has held that for rejecting the view taken in earlier assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier assessment years, there must be a material change in the fact situation. There is no gainsaying that the previous view will have no application even in cases where the law itself has undergone a change but before an earlier view can be upset or digressed from one of the two must be demonstrated namely a change in the fact situation or a material change in law whether enacted or declared by the Hon ble Supreme Court. Therefore, on the facts of the assessee s case, in the absence of a change in facts or any additional input there was no compelling reason for taking a different view and the view taken for the earlier assessment years continues to be applicable even for the year under consideration. Hence, it is our considered opinion that the Assessing Officer's action was not justified from this angle and we also hold that the Ld. CIT (A) was patently correct in rejecting the view taken by the AO. 5.6 We also find that the Assessing Officer, while disallowing the assessee s claim of exemption u/s 11, had placed reliance on the judgment of the Hon ble High Court of Uttarakhand in the case of Queens Education Society vs. CIT and had drawn support from this judgment for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases are disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into consideration the various provisions of law contained in Section 10(23C) read with Section 11 of the Income Tax Act. 5.7 Thus, considering the overall factual matrix of the case as well as the settled judicial precedent in this regard and duly noting the fact that the AO could not demonstrate by cogent evidence that the assessee society was carrying out activities which were commercial in nature and also after duly considering the fact that the assessee has been continuously enjoying the benefit of exemption u/s 11 of the Act from assessment year 2005-06 to assessment year 2014-15 barring the present year under appeal, we have no hesitation in holding that the Ld. CIT (A) has rightly adjudicated the issue in favour of the assessee. Accordingly, we dismiss the grounds raised by the department. 6. In the fina ..... 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