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TMI Blog2020 (10) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the case. 3. For that the order of learned CIT (A)-1, Bhubaneswar confirming the A.O's addition of the income of Rs. 26,06,930 /- (being excess of income over expenditure claimed as exemption by the appellant) after rejecting the exemption status of the appellant Trust & treating the appellant as AOP on the ground that the appellant Trust had collected fees in excess of the fees prescribed by the authority which is not a fact & against the materials available on record. 4. For that the order of learned C1T (A)-1, Bhubaneswar confirming the A.O's addition of Rs. 5,61,504/- (being the salary paid to Smt.Ragoor Sujatha, Managing Trustee of the Trust) after observing that the salary paid to the Managing Trustee is liable to be disallowed since the status is taken as AOP after rejecting the benefit of exemption U/S-11 of the l.T Act 1961 is not just and correct on the facts and in the circumstances of the case. 5. For that without prejudice to the grounds mentioned above the learned A.O is wrong in not allowing the exemption U/s.11 of l.T.Act,1961 on the wrong grounds without giving adequate opportunity to the appellant which is nothing but gross vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O dated 6.8.2019 is as under: ""Facts of the case :-01. Fee Structure:- The assessee is a trust created by virtue of trust deed on 08.12.2006. It runs a degree engineering college in the name and style of "Indus College of Engineering" and imparting technical education. During the academic year 2009-10 approval has been accorded to the trust for imparting diploma engineering courses under the name and style of "Indus School of Engineering". The assessee has been registered u/s 12AA of the IT Act, 1961 w.e.f 09.04.2007 vide order dtd.27.06.2008 by the then Commissioner of Income-Tax, Bhubaneswar. .,Return of income for the A/Y 2010-11 relevant to the F/Y 2009-1Q was filed on 30.09.2010, showing 'nil' income. Case has been picked up for scrutiny' through CASS. Assessment was completed on 01.03.2013 determining the total income at Rs. 31,68,430/-(r.f.). While determining the total income the AO denied exemption u/s 11 of IT Act 1961, to the tune of Rs. 26,06,930/- due to violation of collection of fee structure from the students over and above the fees prescribed by the State Government (c) fixed for students. Besides, the above addition, the AO denied expenditure c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64,500 2,500 4,900 10,000 - 3,750 4,800 33,000 123450 Diploma 2009 23,700 10,000 - 3,750 31,000 68,450 All Govt. Engineering colleges/Polytechnics/Engineering Schools are. under the administrative control of the Director of Technical Education &-- Training, Industries Department of Govt, of Odisha, whereas the private Engineering colleges/poly techniques are unaided institutions affiliated to BPUT/state council for Technical Education & Vocational Trainings Odisha and approved by AICTE/State Government A reference to Government notification dated 17.12.2007 ( No.I-IT-141/2007 (pt.) 18488 which speaks about fee structure for the academic session 2007-08 which also hold good its validity for the academic year 2009-10. Extract of the notification is as under: "In pursuance of the provision of the Orissa Professional Educational Institutions(Regulation of Admission and Fixation of Fees)) Act 2007 and consequent upon the interim order of the Hon'ble Supreme Court dated 01.06.2007 in petitions for special Leave to Appeal(Civil No(s) 10318/2007 and in three others and interim order of the Hon'ble Apex court dated 18.06.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987. b) The assessee trust though is running educational activities, the actual generation of surplus year after year spent in expansion of infrastructure I facilities proved that the activities are in realistic sense meant to earn profit and no charity is genuinely involved. 6.1 That to understand the issue in greater clarity the provision of Sec- 2(15) of the Act is worth mentioning. a) That according toSec-2(15) of the act, expression "Charitable purpose" has been defined by way of inclusive definition so as to include relief to the poor, education, medical and advancement of any other object of genera! public utility. 6.2 That Imparting education is coming under the definition of charitable purpose under the provision of Sec-2(15) of the Act. The appellant trust is imparting education courses like B-Tech in conformity with the object clause of the trust deed, the copy of which was furnished earlier before your honour. 6.3 That admittedly the assessee trust is registered under Sec-12AA of the Act. The genuineness of the registration and the operation of the appellant trust has nowhere been disputed by A.O. in fact learned A.O. has admitted the fact of carrying on edu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice of Hon'ble Odisha High Court vide Writ Petition No.3824 of 2009 by Orissa Private Engineering College Association (OPECA). Hon'ble Odisha High Court vide its order dated 15.04.2009 directed as under: "The representation shall be disposed of by the Fee Structure Committee before expiry of its life. The aforesaid order is subject to the condition that the representation under Annexure-4 and the representations of the other member institutions pursuant to the resolution of the Fee Structure Committee are pending disposal." The copy of the order of the Hon'ble Odisha High Court is enclosed herewith & marked as Annexure-F. 6.11 That due to the unjust fixation of Fees, the appellant had filed the following Writ Petitions before the Hon'ble Odisha High Court challenging the arbitrary & unilateral action of the Fees Structure Committee: 6.11 That due to the unjust fixation of Fees, the appellant had filed the following Writ Petitions before the Hon'ble Odisha High Court challenging the arbitrary & unilateral action of the Fees Structure Committee: SI. No. Particulars Case No. Status 1 Fees collected for B.Tech Courses W.P.(C) No.22332 of 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, BBSR 67,000/- Academy of Business, Balasore 76,000/- 2 Gandhi engineering college, BBSR 70,000/- Ajay Binoy Inst,Cuttack 65,000/- 3 Krupajal Engg college, BBSR 64,000/- Bijupatnaik Inst, of U & MGT, BBSR 95,000/- 4 Silicon Inst Of Techno, BBSR 68,000/- NIST, Berhampur 78,000/- 5 NIST, Berhampur 68,000/- Gandhi Inst, Gunupur 73,000/- 6 Gandhi Inst, BBSR 67,000/- - DRIEMS , CUTTACK/ 76,000/- 7 Jagannath Inst, Gajapati 67,000/- NM Inst, BBSR 76,000- 8 Gandhi Inst, Gunupur 70,000/- Srusti Academy, BBSR 84,000/-- Analysis of the above facts reveals that the fees charged by the appellant trust are in no stretch of imagination in excess as compared to the above cotemporary Institutions. Thus learned A.O'S observation that the activities of the appellant trust are in realistic sense meant to earn profit and no charity is genuinely involved is a concoction & has no leg to stand. 6.15 That your honour's attention is drawn to the fact that in the case of T.M.A pai foundation vs. state of Karnataka (2002) 8 SCC 481 , Hon'ble supreme Court has stated that the decision on the fees to be charged must necessarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit available to a charitable organization U/s. 11 of the Act except for violation as provided in Sec 11 to 13 of the Act. No such violation has been established. The Hon'ble ITAT, Cuttack Bench, Cuttack has observed that even the administrative CIT does not have unbridle powers to withdraw the registration of a charitable organization U/s-12AA(3) of the Act as is decided in the case of Kalinga Institute of Information Technology (KIIT) vs. CIT (2008)23 SOT 74. Obviously, the AO does not enjoy any such power under the Act and the AO cannot deny the exemption U/s 11 without establishing any violation. No such violation has been established. Therefore, imposing Tax ignoring the exemption status is totally unfounded. 9. Ld AR also submitted that in view of decision of Hon'ble Supreme Court in the case of TMA Pai Foundation vs State of Karnataka (supra), the conclusion drawn by the AO regarding collection of excess fees of the prescribed limit has no legs to stand, thus, not sustainable. He also submitted that the Hon'ble High Court of Orissa in the W.P. (C) No.22332 of 2010, 22333 of 2010 and 22493 of 2010, which are pending before the Hon'ble High Court has passed orders dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructure by the assessee trust but denied exemption u/s.11 of the Act that carrying of educational activities cannot be considered as solely for charitable purposes. In my considered and respectful opinion, in view of interim orders passed by Hon'ble High Court of Orissa, copies placed at pages 79 to 88 of assessee's paper book, I have no hesitation to hold that the Hon'ble High Court has allowed the assessee to retain extra amount of fees from prescribed limit till disposal of writ petitions. Even if assessee does not succeed in the said writes, then also, excess or extra charged fees has to be adjusted towards the fees of the respective students from whom it has been collected during completion of their courses. Order of Hon'ble High Court dated 22.12.2010 in W.P. (C) 22332 of 2010/Misc. case No.20452 of 2010 is being respectfully reproduced below for the sake of clarity: " Heard. In the interim, it is directed that no coercive action shall be taken pursuant to the public notice issued in the daily "The Samaj" annexed as Annexure-4 as well as the communication under Annexure-3 against the petitioner-institution till the next date. However, it is clarified that in the event ..... X X X X Extracts X X X X X X X X Extracts X X X X
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