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TMI Blog2021 (4) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... the preceding two years is admittedly inadmissible for the reason that it was in contravention of the provisions of section 10 (23C)(iiad) which grant exemption to similar entities without approval subject to receipt of income upto limit prescribed therein The claim being inadmissible in the preceding years on account of receipts exceeding a specified limit, surely does not impinge upon its character of an institution existing solely for the purpose of education. The findings of the Ld.CIT(E) that the same impinges on the extent and quality of surplus being generated by the applicant society is a very general and farfetched observation/finding with no factual basis at all and, therefore, is of no relevance, in our view. Applicant society is not eligible for approval u/s 10 (23C)(vi) on account of the decision of Pinegrove International Charitable Trust [ 2010 (1) TMI 49 - HIGH COURT OF PUNJAB AND HARYANA AT] which addressed the issue whether the societies registered as such qualified as institutions for the purpose of grant of exemption u/s 10 (23C)(vi) - We find that the Ld. CIT(E) has clearly misread and misapplied the said decision as rightly pointed out by the Ld. Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were in sync with the stated objects and accordingly sought certain clarifications/documents to be provided by the assessee, which find mention at para 3 of the order. Due reply of the same was filed by the applicant/assessee as noted at para 4 of the order. That after going through the same the Ld. CIT(E) noted that in the preceding two years the aggregate receipt of the applicant/assessee had exceeded ₹ 1 crore, while the assessee had claimed exemption of its income u/s 10 (23C) (iiiad) of the Act incorrectly. He further held that the applicant/assessee s educational institute is not registered as a society in the spirit of the ratio laid down by the Hon ble Jurisdictional High Court in the case of Pinegrove International Charitable Trust and, therefore, was not eligible for approval u/s 10 (23C)(vi) of the Act. He relied upon the decision of the ITAT Chandigarh Bench in the case of M/s Prakash Education Society Vs. CIT in ITA No.1083 /Chd/2016 in this regard. The Ld.CIT(E) noted that inadmissible claim of exemption in past by the assessee impinged on the extent and quality of surpluses being generated by the applicant society and whether they were being redeployed into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Prakash Education Society Vs, CIT (Exemptions) Chandigarh in ITA No.1083/Chd/2016. 7. Keeping in the view of decision of the Hon'ble Punjab Haryana High Court and also the Hon'ble ITAT Division bench B Chandigarh (refer para '6), it is safe to conclude that the applicant being society is not entitled for approval u/s 10(23C)(vi). Further inadmissible claims for exemption in past also impinge on the extent and quality of surpluses being generated by the applicant society and whether the same are getting redeployment into education. Taking all the aforesaid into consideration, it is difficult to verify the activities of the society and come to the conclusion that it exists 'solely for education'. Moreover, it can't be said that the school has been registered as society in the present case. The application u/s 10{23C)(vi) for grant of approval is accordingly rejected. 4. Aggrieved by the same the assessee has come up in appeal before us, raising the following grounds: 1. The Learned Commissioner of Income Tax (Exemptions) is not justified in rejecting the application of society for grant of approval u/s 10(23C}(vi) vide order dt. 19.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee needs to fulfill and satisfy for the purpose of grant of approval u/s 10 (23C)(vi) of the Act. As for the applicant society not qualifying as per the decision of the Hon ble Jurisdictional High Court in the case of Pinegrove International Charitable Trust(supra), the Ld. Counsel for the assessee contended that the same has been incorrectly applied by the Ld. CIT(E) as is evident from the reproduction of the order of the Hon ble Jurisdictional High Court itself wherein the Hon ble High Court has clearly stated that the institutions registered as society would be eligible for grant of exemption and Pinegrove International Charitable Trust being registered as a society was, therefore, squarely covered by the aforesaid decision. He pointed out that the assessee being registered as a society qualified for approval u/s 10 (23C)(vi) of the Act as per the said decision and the Ld.CIT(E) had incorrectly interpreted the same to be ruling against the assessee. He, therefore, pleaded that the order of the Ld. CIT(E) be set aside and the assessee be granted approval as applied for u/s 10 (23C)(vi) of the Act. 6. The Ld. DR heavily relied on the order of the Ld.CIT(E). 7. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al institution, as the case may be, and the prescribed authority may also make such inquiries as i t deems necessary in this behalf. 8. As is evident from a bare perusal of the above, For the purpose of granting approval the prescribed authority is to satisfy himself about the objects and activities of the applicant university/institution, whether its income qualifies for exemption as such under the said provision. 9. Now in the present case undoubtedly the Ld.CIT(E) has considered the aims and objects of the applicant society and has found no anomaly in the same vis a vis it existing solely for the purpose of education. The reason for the Ld.CIT(E) arriving at the conclusion that it was difficult to verify the activities of the society and come to the conclusion it existed solely for education, was the inadmissible claim of exemption by the applicant assessee in the preceding two years. We are unable to concur with the Ld. CIT(E) on this score. The claim of exemption in the preceding two years is admittedly inadmissible for the reason that it was in contravention of the provisions of section 10 (23C)(iiad) which grant exemption to similar entities without approval subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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