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TMI Blog2019 (5) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... Center [ 2016 (5) TMI 1366 - SUPREME COURT]. Why should a management, in no dearth of funds, risk its reputation and, rather, even the future of its institution, by asking for such ill gotten money? Clearly, we are unable to regard the present case as one of distinct possibility i.e., the test or the threshold which, in our view, must characterize the impugned transactions of donations which the applicant-appellant targets while seeking benefit u/s. 80G(5), so as to oust its case for being a eligible for approval thereunder. In our view, therefore, the assessee cannot be denied approval u/s. 80G. We, accordingly, setting aside the impugned order, direct the competent authority to grant the said approval. The assessee shall, however, give a legal undertaking to the Revenue that it shall not seek contributions, directly or indirectly, from persons who (or whose wards seek admission) to various educational or training institutions run, or may be run, by the assessee-society. - Decided in favour of assessee. - I.T.A. No. 665/Asr/2017 - - - Dated:- 18-3-2019 - SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER For The Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to it by the competent authority (in ITA No. 102/Asr/2017, dated 26.9.2017/PB pgs. 264-271). 2.2 The Revenue s case, on the other hand, toward which passionate submissions were made by the ld. CIT-DR, Sh. Alok Kumar, is that the tribunal cannot be oblivious to the ground realities. The acceptance of capitation fee for acquiring admissions, camouflaged as donations, deemed illegal by the Hon ble Apex Court in Modern Dental College and Research Center Others v. State of Madhya Pradesh (in civil appeal no. 4060 of 2009), per a five judge bench constitution, is a bane to the society. The donations having been since held impermissible, are routed through un-related (to the students seeking admission) persons, desirous of claiming tax rebate on donations by providing an accommodation entry. Where, one may ask, in view of continuing surpluses, being at nearly ₹ 90 crore for AY 2015-16 (PB pg. 135), is the need for donations, which has not been demonstrated in spite of being called upon to do so by the competent authority? Even the list of the prospective donors, called for, could not be supplied. Donation to any charitable institution would in the normal cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) of s. 80G(5) are the conditions which the institution or the fund must additionally fulfill so as to be entitled to the approval of the CIT. It is well-settled that for the purpose of construing the purpose of a trust, it is not necessary that one remains confined to the objects of the society or the trust, as set out in the memorandum of association or the trust deed, as the case may be. What is required to be found is the real purpose of establishment of the trust. There can be no quarrel with the proposition that the Commissioner, conferred with the power to grant exemption, is fully competent to find out the real purpose, as distinguished from the ostensible purpose of establishment of the society or the trust. If the Commissioner is convinced that the purpose of the society or the trust is not charitable, nothing debars him from denying the approval but, at the same time, if he is satisfied that the objects of the trust, as set out in the deed of declaration, were charitable, then having regard to the object of the provision, the approval should not be denied on mere technicalities. As a matter of fact, the power to grant or negative the claim for approval is coupled wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re falling within the objects and projected to be undertaken. However, whether the same could include those vehemently denied to the pursued, but could possibly be, is the question. We are not suggesting that the competent authority is not empowered to enquire about the need for donations by the assessee-society, considering the deluge of funds it finds itself in, and which aspect it has miserably failed to explain, including the list of the prospective donors, who it considers as espousing its cause or otherwise willing to donate, i.e., but for the section 80G benefit, or would be more likely to in case the same enures. However, firstly, donations would mean just that, i.e., without any quid pro quo, or any value parted with in exchange, while what the competent authority apprehends is not donation per se , but payments in the guise of donations, being consideration for grant of admission to various professional courses being provided by the schools/colleges being run and managed by the assessee-society. Two, the enquiry has its limitations. What, if the stated donations do not follow? What, if the stated project, i.e., where so, does not materialize? In either situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surmise, but the surrounding facts and circumstances, of which the assessee s conduct is an integral part, in our view, liable to be upheld. 4 . Conclusion The Revenue s real objection, as we discern, is essentially the commercialization, which has over time engulfed the educational system in our country, eating into its very vitals. The right to education is a integral part of the right to life, a fundamental right guaranteed by our Constitution. Yet, access to quality education is a distant reality for want of purchasing power, with the reach and quality of public schools also being wanting by far. The position is more acute for higher education. It is this supply demand gap that is sought to be capitalized by the mushrooming educational institutes, particularly in the field of professional education, i.e., qua which there is an actual or perceived demand in the job market. Charged for in full, cost or the ability to pay, becomes a criterion on which, then, admission to such institutes becomes available, making a travesty of the educational ideals, symbolized by Gurukuls of our ancient land where students were taught in their natural set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is in practice obtained from others , while in effect are for and on behalf of the person seeking admission. Why, unaccounted money received in lieu of admissions could be routed in books in the guise of donations. All this is not imagination, but a part of reality of our public life in this sphere, which one cannot be oblivious of. This would, however, not however detract from the assessee s case. This is as it is only in the realm of possibility, which cannot oust an otherwise meritorious case. It is these opposing considerations that have led us to opine of it being a distinct possibility to be taken notice of or given cognizance to. This shall also balance the play in the joints referred to earlier, and the need for an effective regulatory measure, with the judicial requirement of it falling within the parameters laid down by law, and the need to maintain objectivity, lest it be regarded as arbitrary. In the facts of the case, the ld. CIT(E) has based his decision of the donations being liable to be misused wholly on the basis of the assessee-society being prosperous and, consequently, in no apparent, or shown, need for donations to support its activiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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