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TMI Blog2021 (4) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... - 06 262/CTK/2019 2011-12 -do-, dated 25/09/2012 -do- 07 263/CTK/2019 2012-13 -do-, dated 06/09/2013 -do- 08 264/CTK/2019 2005-06 -do-, dated 24/03/2010 -do- 09 265/CTK/2019 2007-08 -do-, dated 06/09/2013 -do- 10 266/CTK/2019 2008-09 -do-, dated 27/03/2009 -do- 11 267/CTK/2019 2009-10 -do-, dated 29/05/2009 -do- 12 268/CTK/2019 2010-11 -do-, dated 26/09/2011 -do- 13 269/CTK/2019 2011-12 -do-, dated 25/09/2012 -do- 14 270/CTK/2019 2012-13 -do-, dated 06/09/2013 -do- 15 469/CTK/2019 2005-06 CIT(A) - 1, Bhubaneswar, dated 23/10/2019, IT Appeal No. 0424/13-14. u/s 143(3)/147 16 470/CTK/2019 2006-07 CIT(A) - 1, Bhubaneswar, dated 18/10/2019, IT Appeal No. 0425/13-14. -do- 17 471/CTK/2019 2007-08 CIT(A) - 1, Bhubaneswar, dated 26/11/2019, IT Appeal No. 0426/13-14. -do- 2. On perusal of case(s) record(s), we find that there is delay in filing of the following appeals: 1. ITA Nos. 261 & 262/CTK/2019 - 13 days 2. ITA No. 260 & 270/CTK/2019 - 19 days 3. ITA Nos. 267, 266, 265, 259, 263/CTK/2019 - 29 days 4. ITA Nos. 268 & 269/CTK/2019 - 12 days 3. The assessee(s) has filed condonation petitions explaining delay in filing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended Trust Deed dated 26.03.2012 was not valid, the Ld. Principal Chief Commissioner of Income-tax was not justified in denying exemption as the alleged non-educational objects were not implemented or acted upon. 5. That the Ld. Principal Chief Commissioner of Income-tax was not justified in ignoring the clarification issued by the CBDT in Circular No.14/2015 dated 17.08.2015 and in denying the exemption to the appellant trust u/s 10(23C)(vi) of the Act. 6. That the Ld. Principal Chief Commissioner of Income-tax has further erred in not following the principles laid down by the Hon'ble Supreme Court in American Hotel & Lodging Association Educational Institute CBDT (2008) 301 ITR 86(SC) and ignoring that appellant trust was an institution existing solely for education eligible for exemption u/s 10(23C)(vi) of the Act and not for profit. 7. The appellant craves leave to add, amend or modify any ground before or at the time of hearing of the appeal." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee trust came into existence vide registered Trust Deed dated 19-11-1997 and has been running various educational institutions u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present appeal. 6. We have heard the Ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 7. Undisputedly, earlier application moved by the assessee Trust for grant of approval u/s 10(23C)(vi) of the Act for FY 2009-10 was rejected on the ground that the assessee is not engaged in exclusive educational activities. It is also not in dispute that non-educational objects, namely, to contribute towards human resource development in the country; to establish, maintain or grant aid to homes for the aged, orphanages or other establishments for the relief and help to the poor, needy and destitute people, orphans, widows and aged persons; and to charge tuition fees and other fees to coup expenditure incurred in the upkeep and maintenance of the institution established and to be established under the deed, has been deleted from the Memorandum of Association through a registered amended Trust Deed on 26-03-2012. 8. In the backdrop of the aforesaid undisputed facts, grounds raised by the assessee Trust and impugned order passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llment of which only the exemption can be availed. These monitoring conditions include mode and manner of application of funds, maintenance and audit of books of accounts in certain situations etc. Some other Provisos prescribe the manner of making application u/s 10(23C)(vi) and the circumstances when an approval granted earlier can be withdrawn. Representations have been received seeking clarification on certain issues related to operation of section 10(23C)(vi). These have been examined by the Board and following clarifications are made- 1. Scope of enquiry while granting approval 1.1 Clarification has been sought on (he score of enquiry that can be made by the prescribed authority while grunting approval u/s 10(23C)(vi), i.e., whether it would be sufficient for the prescribed authority to consider the nature, existence for non-profit purposes and genuineness of the applicant institution or the conditions prescribed under various Provisos are also required to be considered at the stage of granting approval. 1.2 In this connection, attention is drawn to the decision of Hon'ble Supreme Court in case of American Hotel and Lodging Association Educational Institute vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), the prescribed authority is eligible to grant approval u/s.10(23C)(vi) of the Act subject to such terms and conditions as deemed necessary including those falling with the framework of various proviso to said clause of section 10, which can be gauged while monitoring the case and in case of any breach thereof, the approval can be withdrawn. It is clarified in unequivocal terms that application seeking approval for exemption u/s 10(23C)(vi) of the Act is to be disposed off in view of law laid down by Hon'ble Apex Court in American Hotel and Lodging Association Educational Institute (supra). 13. As per amended Trust Deed dated 26-03-2012, the assessee Trust is empowered to carry out following activities :- (1) To open, run, continue, educational and vocational institutions in healthy surroundings. (2) To engage, teachers, professors, instructors, experts of good moral character and conduct and able to impart efficiently up-to-date instruction to students in modem sciences, industrial avocations, research work, intellectual projects. (3) To develop a healthy as well as critical attitude towards the development of mental physical and moral uplift of the students and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in Computer Education-BCA Course (set up in 1998). (ii) Roland Supriya Junior College (set up in 1999). (iii) Roland Junior College (set up in 1999) (iv) Roland Institute of Technology (set up in 2001) started with providing MCA Course with 60 seats and in the year 2002, added an Engineering Course consisting of several engineering streams comprising of 4 years' and providing a 'B. Tech' degree. 15. Perusal of the amended Trust Deed dated 26-03-2012, available at pages 15 to 29 of the paper book, apparently goes to prove that post amendment, the assessee trust is engaged exclusively to carry out educational activities by amending the non-educational clauses existing in the original Trust Deed dated 19-11-1997. Furthermore, all the courses being imparted by the institution of the assessee Trust are affiliated to State Government bodies, Central Government bodies / Universities like AICTE, Regional Directorate of Education, Berhampur, universities like BPUT (Biju Patnaik University Of Technology), Orissa, Berhampur University,Orissa, Director of Higher Education, Govt. of Orissa, Recognition Director of Higher Education, Govt. of Orissa, Council of Higher E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or educational purpose and not for purposes of profit. 20. Moreover, vide order dated 15-01-2013, assessee Trust is registered as a charitable Trust u/s 12AA of the Societies Registration Act, copy of order available at page 43 of the paper book. This fact goes to prove that the assessee Trust is established not for profit motive. Furthermore, coordinate Bench of the Tribunal vide order dated 28-07-2015 passed in IT(SS)A.No.44/CTK/2004 in assessee's own case held the assessee Trust eligible for exemption u/s 11 of the Act for block assessment period 01-04-1989 to 22-12-1998, copy of order is available at pages 30 to 32 of the paper book. 21. Furthermore, details of fixed assets given by the assessee Trust for FYs 2011-12, 2012-13 and 2013-14, available at pages 71, 129 & 158 respectively, also go to prove that the assets include laboratory equipment, library, building, computer etc. which are necessary for imparting education and running educational activities of an educational institution. 22. This fact is also clear from the individual balance sheet of Roland Institute of Computer and Management Studies, Roland Supriya Junior College, Roland Junior College and Roland Instit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in American Hotel and Lodging Association Educational Institute (supra) has exceeded his jurisdiction to decline the approval for exemption u/s. 10(23C)(vi) of the Act which is not sustainable in the eyes of law. 27. Hon'ble Apex Court in judgment cited as Queen's Educational Society vs. CIT - (2015) 372 ITR 699 (SC) explained the provisions contained u/s 10(23C)(iiiad) & (vi) as under :- "11. Thus, the law common to Section 10(23C) (iiiad) and (vi) maybe summed up as follows: (1) Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit. (2) The predominant object test must be applied -the purpose of education should not be submerged by a profit making motive. (3) A distinction must be drawn between the making of a surplus and an institution being carried on "for profit". No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit. (4) If after meeting expenditure, a surplus arises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational institution did not exist solely for educational purpose. The emphasis of the word "solely" is in relation to the educational institution, which is running not for the purpose of making profit and is not in relation to the objects of the society." 30. Judgment rendered by Hon'ble Allahabad High Court in case cited as Young Men's Christian Association (supra) is applicable to the facts and circumstances of the case because, in the instant case, the assessee has also been granted exemption u/s.12AA of the Act vide order dated 15.01.2013 and the Trust is also found to be eligible for exemption u/s.11 of the Act for block assessment period 01-04-1989 to 22-12-1998 by the coordinate Bench of the Tribunal in assessee's own case in order dated 28-07-2015 (supra). Even perusal of the original Trust Deed shows that the predominant object was educational though noneducational objects were also there. So, merely because of the fact that there were other objects of the Trust, the educational institution did not exist solely for educational purpose. But, in the instant case, the assessee Trust has gone one step further by amending the original Trust Deed vide registered amended Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997. It is seen from the Trust Deed that the objects of the Trust contain both educational as well as non-educational clauses. A plain reading of the objects of the Trust shows the following non-educational and mixed purposes: "8. To train and equip the pupils so as to be self supporting in an honourable and decent way of life so as to develop into good citizens. 9. To develop disciplinary conduct and a habit to observe the rule of law and self restraint. 11. To contribute towards human resource development in the country. 12. To establish, maintain or grant aid to homes for the aged, orphanages or other establishments for the relief and help to tile poor, needy and destitute people, orphans, widows and aged persons." Section 10(23C)(vi) of the I.T.Act, 1961 stipulates that in order to qualify for approval........................the following basic conditions should be satisfied. (i) It has to be a University or other educational Institution. (ii) It has to exist solely for educational purposes. (iii) It should not be for purposes of profit. One of the basis pre-requisites for considering claim of exemption u/s.10(23C)(vi) is that the educational institution must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Trust very clearly show that the Trustees have the power and authority to undertake activities other than educational. Therefore, it cannot be said that the Trust exists "solely" for educational purpose. Further, there are various clauses in the Trust Deed which give unbridled power to the permanent trustees to have absolute control over the management of the Trust and utilize the property of the Trust at their own will. Some of such clauses are reproduced below: "18. The funds of the trust shall be kept in a scheduled Bank and shall be operated by either of the permanent Trustees. 20. The permanent Trustees may appoint THREE more Trustees of their choice function as con-trustees and their tenure of office shall be not more than two years from the date of appointment unless they are re-nominated for further period. 21. The temporary Co-Managing Trustee will exercise their duties as co-trustee subject to the control and supervision of the permanent Trustees and in case any mal-feasance or mis-feasance or negligence in discharging their duties in the management of the educational institution the said temporary managing co-trustees may be dismissed by tile Permanent Trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducational purposes as well. We therefore deem it fit and proper to extract as follows:- "The objects of the Trust are :- 1. To open, run, continue an educational and vocational institutions in healthy surroundings. 2. To encourage Teachers, Professors, Instructors, Exports of good moral character and conduct and able to impart efficiently up-to-date instruction to students in modern sciences, industrial avocations, research work, intellectual projects, health projects and other useful pursuits. 3. To develop a healthy as well as critical attitude towards the development of mental, physical and moral uplift of the students and all those connected with the institution so as to make them good citizens. 4. To establish and run a boarding house and a residential institution for the students and those connected with the institution. 5. To invest, dispose of, transfer and otherwise deal with the subject-matter of the Trust in such manner as the Trustees should deem fit so as to enable the institution to carry on the objects of the Trust efficiently. 6. To accept donations, grants, presentations and other offerings and to deal with the same for the purpose of the Trust. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned coordinate bench's discussion that assessee had in fact set up educational institutions in the years 1998-99 imparting education in various recognized colleges, namely, Roland Institute of Computer and Management Studies, Roland Supriya Junior college, Roland Junior College and Roland Institute of Technology. Coming to assessment years before i.e. AYs 2005-06 and 2007-08 to 2012-12, the assessee has placed on record its corresponding income and expenditure accounts indicating figures; after application of income (assessment year wise, surplus application) of Rs. (-) 1,59,34,478/-, (-)1,84,63,954/-, (-)79,41,522, (-) 71,97,091, (-) 1,04,33,615/-, (-) 16,71,912/-, (+) 5,00,504/-, (-) 82,76,269/-; respectively. In other words, all these assessment years except AY 2011-12 have seen more application than receipts since there is nothing left after considering accumulation, revenue expenditure and development heads in assessee's case. Relevant records indicate that AY 2011-12's positive figure of Rs. 5,00,504/- is indeed less than the permissible 15% limit of gross receipts of Rs. 8,20,08,082/-; coming to Rs. 12,30,121/-. We thus observe that the assessee has applied and has utilizsed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason that the legislature has itself made it clear that the institution concerned has to exist only for educational and not for profit purposes. We wish to repeat that the department; in such a cases has to pin point the material against taxpayer before us which could suggest even an iota of material that it has ever existed for deriving profits or the object clauses reveal such an element therein. 7.5 Case law Additional CIT Vs. Surat Art Silk Cloth Manufacturers Association, [1980] 121 ITR 0001(SC) held long back in case of an assessee having multiple objects that the test that needs to be applied in such an instance is as to whether the object non-charitable is the main or the preliminary one of the trust or the institution or it is ancillary or incidental to the dominant object which is charitable. We observe at the cost of the repetition that this taxpayer objects; although are multiple in number, but, the predominant one amongst many and only activity carried out since 1997 (supra) is in education only running for a period of almost 25 years as on date and 15 years upto last AY before us i.e. 2012-13. 7.6 Their lordships other decision(s) in DIT Vs. Bharat Diamond Bourse, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Commissioner of Customs (Imports) Vs. M/s Dilip Kumar and Company, [2018] 9 SCC 1 (FB)(SC) has settled the law that only stricter interpretation needs to be applied both in taxing as well as a deduction provision. Coupled with this, Mr. Tulsiyan pointed out that it was only in the AY 2001-02 that both of its trustees (supra) had sold lands to the assessee a collector rate(s) only i.e. as per the fair valuation adopted by the SRO Ganjam District in Odisha. No benefit or advantage accrued therefore in favour of the said two trustees which could disentitle the impugned claim of section 10(23C)(vi) approval. The very factual position continues regarding interest paid to the said trustees as well in AY 2007-08, 2009-10, 2011-12 and 2012-13 @ 11%, 8%, 11% and 9.5% only as against that paid to State Bank of India for the period from 27/02/2007 to 22/07/2013 (page 875 of the paper book). 7.9 Mr. Goutham's concluding argument sought to highlight the fact that the assessee's have paid rent as well to its twin trustees in the impugned AYs which deserves to be taken as an undue benefit. The said rental payments are found @ Rs. 1.87 per sq.ft. and much less than that paid to unrelated party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner erred in not having considered that registration u/s. l2AA of the Act was granted to the appellant-trust vide order dated 15.01.2003 w.e.f. 0 1.04.2002 and the same is I continuing and in such circumstances adding back the Excess of income over Expenditure amounting Rs. 26,29,697, denying exemption and without treating the appellant as existing solely for the purpose of education and the Ld. CIT(A) 1, Bhubaneswar confirming the same is bad in law. 5. That, the action of the Dy Commissioner and the ld. CIT(A) 1, Bhubaneswar in having denied exemption u/s 10(23C)(vi) is against the settled law decided by the Hon 'ble Apex Court in the cases of American Hotel and Lodging Association Educational Institute vs. CBDT (2008) 301 ITR 86 (SC) and Queen's Educational Society (2015) 372 ITR 699 (SC) and the Hon'ble Tribunal by following the said decisions allowed exemption u/s 10(23C)(vi) to the assessee for AY 2014-15. 6. That the appellant craves leave to amend, alter, modify, substitute, add to. abridge and/or rescind any or all of the above grounds." 10. The Assessing Officer thereafter has finalized the assessment(s) on 26.03.2013 u/s 143(3)/147 in which he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation will hold good in the context of provisions of section 10(23 C)( vi). 7.2 The above clauses as per the Trust Deed are clearly either non-educational or mixed in nature. As already held by the Hon'ble Supreme Court in the case of Loka Shiksha Trust (101 ITR, 234)(SC), the sense in which the word 'education' has been used in section 2(15) is systematic instruction, schooling or training given to the young for preparation for the work of life. The word 'education' has not been used in wide and extended sense according to which every acquisition of knowledge would constitute education. This decision makes it very clear that the term education means only formal education aimed at preparing the students and citizens of the work of life and it does not include non-formal type of education. 7.3 In this context, it will be relevant to point out that in its instruction dated 29.10.1977, the Central Board of Direct Taxes, had also clarified that if the Trust has the option to apply its surplus for non-educational purposes, it cannot be said to exist 'solely' for educational purposes and such institutions will not qualify for exemption u/s. 10(22) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Trustees may appoint other staff members required for the institution and remove them whenever it is considered necessary in the interest of the institution. Clause 27: The Permanent Trustees shall have the power to add, alter amend any of the clauses mentioned herein for the advantage/benefit of the society. " 8. Moreover, as per the Trust Deed dated 19.11.1997, Dr. J. Surya Rao and his wife Smt. 1. Jayalakshmi have appointed themselves as the "Permanent Trustees" of the Trust. From the details furnished by the assessee, it is seen that the permanent trustees and their relatives i.e. daughters have received the financial benefits from the Trust as under: i) Interest of Rs. 2,32,384/- received by Sri J. Surya Rao, permanent trustee, on loan advanced to the assessee-trust. ii) Interest of Rs. 6,83,8891- received by Smt. 1. Jayalakshmi, permanent trustee and W/o. Sri J. Surdya Rao on loan advanced to the assessee-trust. iii) Interest of Rs. 91,710/- received by Miss J. Sruti, D/o. Sri J. Surya Rao, permanent trustee on loan advanced to the assessee trust. iv) Interest of Rs. 91,710/- received by Miss. J. Soumya, D/o. Sri J. Surya Rao, permanent trustee on loan advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V State of Karnataka (2002) 8 SCC 481 & Islamic Academy of Education V State of Karnataka (2003) 6 SCC 697, the assessee is not eligible f07' exemption either u/s.11 or 10(23C)(vi) of the Income tax Act, 1961. Further, the Permanent Trustees as well as their daughters have also substantial interest so far as the advancement of loan to the Trust and receipt of interest therefrom are concerned, as discussed above. It is also seen from the records of earlier years that Smt. J. Jayalakshmi and Dr. J. Surya Rao, both Permanent Trustees, have received a sum of Rs. 53,03,400/- and Rs. 13,74,260/- on sale of lands to the Trust measuring 13.176 acres and 3.280 acres respectively in the year 2001~02. 11. In view of the findings discussed above, the assessee-trust is not eligible for exemption u/s. 11 of the Income tax Act, 1961. Therefore, the Status of the assessee-trust is treated as Association of Persons (AOP) and the excess of income over expenditure is taxed accordingly as per the provisions of the Income tax Act, 1961." 10.1 Accordingly, made disallowances u/s 40(a)(ia) of the Act of Rs. 10,99,693/-, 70,200/- and Rs. 22,54,379/-, totalling to Rs. 34,24,272/-. and also disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): ................ Relevant extract reproduced A bare reading of the foregoing provision suggests that reason to believe and escapement of income are the jurisdictional requirements for invoking section 147 of the I.T. Act, 1961. In light of the above the appellant would like to submit that it is registered uls 12AA of the I.T. Act, 1961 by the CIT, Bhubaneswar vide Order dated 15/01/2003 (copy at page 02 of the paper book) with effect from 01/04/2002. Thus the appellant is eligible for claiming exemption uls II of the l.T. Act, 1961 w.e.f. 01/04/2002 (A.Y. 2003-04 onwards). Also this Hon'ble Tribunal in the appellant's own case for the Block Assessment Year 01.04.89 to 22.12.98 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied in India for such purposes; and 2. where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of 15% of the income from such property. In other words for the appellant's income for being exempt u/s 11(I)(a) of the I.T. Act, 1961 the appellant is permitted to set aside/accumulate 15% of its gross receipts/income and it has to mandatorily apply 85% of its gross receipts/income to the charitable objects in India, for which it is established. In connection to the above the appellant would like to invite Your Honours' attention to the following chart made in reference to the appellant's Audited Annual Accounts for the A.Ys. 2005-06, 2006-07 and 2007-08: Sl.No. Particulars AY 2005-06 (in Rs.) AY 2006-07 (in Rs.) AY 2007-08 (in Rs.) A Gross Receipts 2,54,75,199 3,41,53,897 4,03,99,767 B Less: Application Revenue exp. Development exp. 2,25,54,602 1,8855,075 3,01,35,769 2,24,82,082 3,69,39,968 1,14,01,321 C Total application 4,14,09,677 5,26,17,851 4,83,41,522 D Surplus/Deficit (A-C) (1,59,34,478) (1,84,63,954) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that even if such violations had occurred as alleged by the Ld. AO and confirmed by the Ld. CTT(A), it would not lead to denial of exemption u/s 11 ofthe LT. Act, 1961. Only the non-exempt income, in view of the violations as per section 13( I )/13(2) of the LT. Act, 196\ would fall in the tax-net and the other income of the appellant trust would remain exempt as per the provisions of section 11 ofthe LT. Act, 1961. Having submitted the above the appellant would like to rebut the allegations of the Ld. AO for denying exemption u/s 11 of the Income Tax Act, 1961, in seriatim." 13.1 Further, the ld. counsel for the assessee submitted that the assessment order dated 26.03.2013 passed u/s 143(3)/147 of the Act is barred by limitation and hence, deserves to be annulled. The assessment order was to be passed on or before 31st May, 2010 as per the directions of the High Court's order dated 15.12.2009. Even under the provisions of section 153 of the Act, the assessment was required to be made within one year from the end of the financial year in which notice u/s 148 was served. In this case, notice u/s 148 was issued on 25.02.2009. Therefore, the assessment made on 30.03.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve that income over expenditure to the extent of Rs. 26,29,697/-, Rs. 53, 74,823/- and Rs. 35, 07,429/- for the assessment years 2005-06, 200607 and 2007-08 respectively, have not been applied or accumulated it for application, wholly and exclusively to the objects for which it is established. Consequently, the case has been reopened u/s 147 of the I. T. Act, 1961." 15.1 From the written synopsis as quoted supra and the case law relied upon by the ld. AR, the assessee demonstrated that there is no escapement of income, as the assessee followed the provision for accumulation of income u/s 11 of the Act. We also observe that once registration granted by the revenue department to the assessee u/s 12AA on 15/01/2003 BY CIT, Bhubneswar and it has not been withdrawn, then if the assessee is complying the other provisions of the Act, it cannot be held as there is any escapement of income . In this case, merely not granting the approval u/s 10(23C)(vi) does not amount to escapement of income as per the decision cited by the assessee as quoted supra. Respectfully following the above judgement we therefore, hold that the reopening merely on the basis of that the assessee has not got appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years." 15.3 Therefore, the reopening of assessments in AYs 2005-06 to 2007-08 are held as not sustainable in law and the same are hereby quashed. Since we have quashed the reopening of assessments u/s 147 of the Act, the additions made on such assessment cannot withstand and, therefore, the grounds raised on merit become academic. 16. This latter batch of 3 cases in ITA Nos. 469 to 471/CTK/2019 are allowed in above terms. 17. These twin assessees' seventeen appeals are allowed in above terms. A copy of this common order be placed in the respective files. Pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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