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TMI Blog2011 (2) TMI 1569X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 148 did not suffer from change of opinion and were fully valid and legal. 3. On the facts and in law, the ld. CIT(A) has erred in holding that res judicata is not applicable to I.T. proceedings and the Assessing Officer could ignore the orders for earlier years and could reopen assessment of subsequent assessment years on the basis of audit objection. 6. On facts and in law, the ld. CIT(A) has erred in failing to decide the ground concerning non-service of valid notice under section 148 in accordance with section 282 of the Income-tax Act, 1961. 3. Brief facts of the case are that returns of income for assessment years 2003-04 and 2004-05 were filed on 30-3-2005 [just after 1 and half months of order under section 143(3) for assessment year 2002-03] declaring nil income after claiming exemption under section 10(23C)(iiiab). These were accepted under section 143(1)(a) and no notice under section 143(2) was issued within the stipulated period. Notices under section 148 have been issued in December, 2006. During the course of re-assessment proceeding, the assessee challenged the reopening of the proceeding and reversal of the stand of the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he signature of the person regarding acknowledgement of this notice in both the years is not of any authorized person and therefore the service of notice is not proper. Regarding the allegation of change of opinion, same argumnts were reiterated, which were raised before ld. CIT(A). Reliance was placed on the following judgments :-- (a) Asstt. CIT v. Vision Inc. [2010] 130 TTJ (Delhi) 696. (b) CIT v. Mani Kakar [2009] 178 Taxman 315 (Dellhi). (c) CIT v. Rajesh Kumar Sharma [2009] 311 ITR 235/[2007] 165 Taxman 488 (Delhi). 5. As against this, ld. DR of the revenue supported the orders of the authorities below. 6. We have heard the rival submissions and have gone through the material available on record and the judgments cited by the ld. AR of the assessee. We find that the objection of the assessee regarding improper service of notice issued by the Assessing Officer under section 148 is on the basis that the signature of the recipient of the notice is not of any authorized person but the fact as noted by the Assessing Officer is that the notice was duly received by the authorized person of the assessee because such authorized person has w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the person available on this address and Shri Manoj Gupta was out of station and hence, it is apparent that the notice was not served on any partner of the assessee firm. In that case, the revenue could not establish that any authorized person of the assessee was in fact in receipt of the notice issued by the Assessing Officer under section 148 whereas in the present case, we have seen that an authorized person of the assessee was in fact in receipt of the notice issued by the Assessing Officer under section 148 of the Act in both the years in the present case and on the basis of such notice, he has requested the Assessing Officer in both the years to consider the return of income filed by the assessee on 30-3-2005 as return filed by the assessee in response to notice under section 148 of the Act. Because of this difference in fact, this Tribunal decision is of no help to the assessee in the present case. 8. The second decision cited by the ld. AR of the assessee is the decision of Hon'ble Delhi High Court rendered in the case of Mani Kakar ( supra). In that case, it has been noticed by the Hon'ble High Court of Delhi in para No. 3 of the judgment that factua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148 in both the years was actually received by an authorized person of the assessee who had taken action also on such notice in both the years and therefore, this objection of the assessee that the reopening is not valid because there is no proper service of notice is liable to be rejected and we reject the same. 11. The second objection of the assessee regarding validity of the reassessment proceeding is that it is not valid because it is due to change of opinion. Regarding this claim of change of opinion, it is submitted before us that status of assessee society is in all earlier years, it was accepted that the assessee's society and all educational institutions run by it are a single entity and exemption was allowed under section 10(23C)(iiiab ) and for one year i.e., assessment year 2002-03, the assessment was under section 143(3). Hence, in the present two years, the stand of the revenue to treat the assessee society separately and each educational institution separately is nothing but change of opinion and therefore, reopening is not valid. 12. Regarding this aspect, it is noted by the ld. CIT(A) on page No. 5 of the impugned combined order for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10(23C)(iiiab) and hence no deduction/exemption is allowable to the institutions under section 10(23C)(vi) as these have not been approved by CCIT. 14. Brief facts of the case are that it is noted by the Assessing Officer in the assessment order that no grant is being received by the assessee society i.e., Jat Education Society, Rohtak and the whole and substantial grant is received by the individual institution and not by the society itself. It is also noted that the grant received by the individual school or college is accounted for in the income and expenditure account of that particular school or college and not in the income and expenditure account of the society. It is further noted that the income of the society is from membership fees and donation only and no grant is received by it from the Govt. Thereafter, it is again noted by the Assessing Officer that Jat MHA Sr. Secondary School, Jat Education Society and CRM Public School, Rohtak are three institutions (Out of total seven institutions) which are not getting any grant from the Govt. It is held by the Assessing Officer that because of this reason, these three institutions are not covered by the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee. Being aggrieved, the assessee carried the matter in appeal before ld. CIT(A) for both the years but without success and now the assessee is in further appeal before us. 16. It is submitted by the ld. AR of the assessee that admittedly, if these three institutions are taken together, annual receipt is more than ₹ 1 crore and CCIT approval is not there. It is also submitted by him that admittedly, section 11 is not applicable in the present two years but the claim was that if each institution's gross receipt is considered separately, the same is below ₹ 1 crore and hence, the provisions of section 10(23C)(iiiad) are applicable. It is also submitted that capital expenditure cannot be disallowed and in support of this, reliance was placed on the judgment of Hon'ble Punjab Haryana High Court rendered in the case of Pinegrove Charitable Trust v. Union of India [2010] 188 Taxman 402 . 17. As against this, ld. DR of the revenue supported the orders of the authorities below. 18. We have heard the rival submissions and have gone through the material available on record and the judgments cited by the ld. AR of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1 crore in each year for each of these educational institutions. The same is as under :- Sl. No. Name Gross Receipt 2003-04 Gross receipt 2004-05 1. Jat Education Society, Rohtak 809399 1056800 2. Jat HMAS Sr.Secondary School, Rohtak 5925873 5404275 3. CRM Public School, Rohtak., 5080287 - 4. Jat HSAS High School, Rohtak. Grant from Govt. (3341210 (1627100 Total 11815559 94,29,385 21. Regarding Jat HSAS High School, Rohtak for assessment year 2004-05, the Assessing Officer has held that not wholly and substantially financed by the Govt. as the grant is just 1/3rd of the total expenditure approximately. Regarding the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed exemption under sub-clause (iiiab) of clause (23C) of section 10 and the assessee also did not claim exemption under sub-clause (iiiad) of clause (23C) of section 10. The Assessing Officer and ld. CIT(A) has considered the applicability of clause (vi) of clause (23C) of section 10 but they have also not discussed regarding applicability of sub-clause (iiiad) of clause (23C) of section 10 although the Assessing Officer has worked out the gross receipts of these three institutions taken together at above ₹ 1 crore and has held that therefore, the assessee was required to obtain the approval of CCIT under sub-clause (vi) of clause (23C) of section 10 which means that he is impliedly ruling out the applicability of sub-clause (iiiad) of clause (23C) of section 10 of the Act. We have seen that regarding this requirement of this sub-clause that the aggregate annual receipt below ₹ 1 crore has to be seen for each educational institution separately and for that purpose, the annual gross receipts of all the three educational institutions cannot be considered collectively to be eligible for exemption under sub-clause (iiiad) of clause (23C) of section 10. The Assessing Offic ..... 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