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TMI Blog2019 (12) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue will deprive the beneficiaries of the assessees societies in obtaining the benefits which is detrimental to the larger interest of the public. As it appears from the orders of the Ld. CIT dated 29/09/2017, during the period 1/4/2016 till 29/09/2017, no violation is pointed out. Further, from the assessment order of the assessees for the AY 2015-16 dated 27/12/2017 and 22/12/2017 (cited supra) it is evident that there was no violation. In such circumstances, we fail to understand as to why the assessee societies have to be penalised which will ultimately result in hardships to the public at large Since during the relevant period the assessee societies has neither violated any of the provisions of section 10(23C)(vi) of the Act nor conducted itself detrimental to the conditions stipulated by the Ld. CIT while granting approval U/s. 10(23C)(vi) of the Act on the earlier instance, and further placing reliance on the Circular of the CBDT No.14/2015 dated 17/08/2015 and the decision o COUNCIL FOR THE INDIAN SCHOOL, CERTIFICATE EXAMINATIONS VERSUS DIRECTOR GENERAL OF INCOME TAX [ 2014 (5) TMI 898 - DELHI HIGH COURT] we are of the considered view that the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to the assessments are allowed then the fresh registration may be considered by the Authority concerned in accordance with law. (ii) On the above observation of the Hon ble High Court, the Ld. CIT (E) was of the view that (a) Considering the fact, in rejecting / revoking of approval U/s. 10(23C)(vi) is so compact and based on information and particulars that there is no material to come to another contrary decision. In other words, no view other than rejection is possible. (b) In the event of the assessees appeals being allowed by the Tribunal, then the question of fresh registration may be considered by the Departmental Authorities in accordance with law. (iii) Accordingly, the Ld. CIT (E) was of the view that the issue of considering the fresh registration arises in the event the appeals are allowed by the Tribunal. (iv) Thereafter the Ld. CIT (E) observed that in the two critical assessment years 2009-10 and 2010-11 the Tribunal had upheld the addition to substantial extent and therefore, to that extent the violation with respect to section 10(23C)(vi) was confirmed. Moreover, the Revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions and carefully perused the materials on record. At the outset, considering the facts and circumstances of the case, we find that the decision relied by the Ld. CIT is not applicable in the relevant case before us. Moreover, it is pertinent to mention that the approval U/s. 10(23C)(vi) is granted to any charitable institution based on the charitable activity the institution is suppose to conduct, ie., the activity mentioned in the deed which governs the institution. In the case of the assessees, the Revenue had earlier granted approval U/s. 10(23C)(vi) of the Act by examining the activities mentioned in the deed of the assessees societies. Thereafter, when the assessees societies had violated the conditions stipulated by the Ld. CIT while granting the approval U/s. 10(23C)(vi) of the Act, additions were made and the approval withdrawn for those assessment years. However, it cannot be presumed that the assessees societies is bound to err year after year by violating the provisions of section 10(23C)(vi) of the Act. It will not be appropriate to withdraw the approval or resist from granting approval U/s. 10(23C)(vi) of the Act when the assessees societies are conducting its char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarified that the principle laid down by the Apex Court in American Hotels case (supra) must be followed while considering the applications filed seeking approval for exemption u/s 10(23C)(vi). 6. From the above it is clear that at the time of granting approval U/s. 10(23C)(vi) of the Act the relevant Revenue Authority is to be satisfied that the institution existed during the relevant year solely for educational purpose and not for profit. Therefore, when the assessee has come out with the fresh application the revenue has to only examine that during the relevant AY the institution existed / existing only for the purpose of education. A violation made during the earlier assessment year need not be imported to the relevant assessment year while deciding the issue for the relevant assessment year. As it appears from the orders of the Ld. CIT dated 29/09/2017, during the period 1/4/2016 till 29/09/2017, no violation is pointed out. Further, from the assessment order of the assessees for the AY 2015-16 dated 27/12/2017 and 22/12/2017 (cited supra) it is evident that there was no violation. In such circumstances, we fail to understand as to why the assessee societi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from claiming exemption under section 10(23C)(vi). Thus, the conclusion of the prescribed authority that the assessee was not entitled to exemption U/s. 10(23C)(vi) since it had generated a surplus was not available. Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC), Aditanar Educational Institution vs. Add. CIT [1997] 224 ITR 310 (SC) and American Hotel and Lodging Association vs. CBDT [2008] 301 ITR 86 (SC) applied. CIT vs. Queen s Educational Society [2009] 319 ITR 160 (Uttarakhand) distinguished. (ii) That the fact that the assessee conducted theexamination for classes 10th and 12th students with respect to schools that are affiliated with the assessee and indisputable. The nature of the predominant activity, therefore, could not be questioned. There was no doubt about the genuineness of this activity of the assessee, thus the conclusion drawn by the prescribed authority that the activities of the assessee were not genuine merely because a contract entered into by the assessee had been brought into question, was not warranted. It was also not the prescribed authority s case that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting in the authorities carried on by the assessee. The results of ISCE and ISC for the year 2009 was collated and disseminated by use of the e-enabled services developed and implemented by R. The Registration of schools / students was carried out, during the relevant period, through the system developed and implemented by R. However, in view of the complaints received, the contract with R was terminated and the amount payable to it for the work already done was determined and agreed between the assessee and R and the balance was refunded by R. The amount incurred by the assessee for modernization and computerization could not be stated to be for the purposes other than the objects as specified in the assessee s charter. The same cannot be mistaken to be deployed for any other purpose. Thus, any irregularity in the manner in which the contract had been entered into with R would not be sufficient for a conclusion arrived at by the prescribed authority. (iv) That the reasonableness of the amount spent and the quality of the decisions of the management are not the subject matter in respect of which the satisfaction of the prescribed authority is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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