9911796707
TMI Blog2021 (4) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... rned 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) - 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 5,00,504/- is indeed less than the permissible 15% limit of gross receipts of 8,20,08,082/-; coming to 12,30,121/-. We thus observe that the assessee has applied and has utilizsed its gross receipts only for educational purposes as per the detailed evidence forming part of the case file. Whether the clinching statutory expression employed in section 10(23C)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granting the approval u/s 10(23C)(vi) - HELD THAT:- 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granted by the revenue department to the assessee u/s 12AA on 15/01/2003 BY CIT, Bhubneswar and it has not been withdrawn, then if the assessee is complying the other provisions of the Act, it cannot be held as there is any escapement of income .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 approval u/s 10(23C)(vi) is not justified. Another contention of the assessee is that there is no new material brought on record by the AO to reopen the assessment. He also contended that the objections were filed before the AO for the reasons recorded for reopening of the case which have not been disposed off, which is against the ratio laid down by the Hon ble Supreme Court in the case of GKN Driveshafts (Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. -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 the above appeals stating, inter-alia, therein that due to consultation of sr. lawyer when the CCIT rejected the approval u/s 10(23C) of the Act, who advised to file appeals before the Tribunal, caused the impugned delay resulting in filing of the instant appeals. Case law Collector Land Acquisition vs Mst. Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No. 9488 & 9489/2019 dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that assessee's impugned delay (supra) is neither intentional nor deliberate but due to circumstances beyond its control. Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 under the name and style of Roland Institute of Technology, Roland Junior College, Roland Institute of Computer & Management Studies and Supriya Junior College. Apart from the educational objects, other non-educational objects of the Trust are as under :- (i) to contribute towards human resource development in the country; (ii) 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; (iii) 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. 3. Earlier applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lp 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 the Ld.Pr.CCIT, the first question arises for determination in this case is:- "as to whether ld. Pr. CCIT has erred in denying the exemption u/s 10(23C)(vi) of the Act by declaring the amended registered Trust Deed dated 26.03.2012 deleting certain objects alleged to be noneducational as invalid?" 9. Pr.CCIT primarily declared the amended Trust Deed dated 26-03-2012, whereby all the non-educational objects have been deleted, as invalid by relying upon Clause No.27 of the registered Trust Deed dated 19-11-1997. Pr.CCIT further relied upon the decision rendered by Hon'ble Supreme Court in the case of CIT vs. Kamala Town Trust - (1996) 217 ITR 699 wherein it is held that the Trust Deed could be rectified through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. CBDT [301 ITR 86]( 20(8) in which it has been held that at the time of granting approval u/s 10(23C)(vi), the prescribed authority is to be satisfied that the institution existed during the relevant year solely for educational purposes and not for profit. Once the prescribed authority is satisfied about fulfillment of this criteria i.e. the threshold pre-condition of actual existence of an educational institution under section 10(23C)(vi), it would not be justifiable, in denying approval on other grounds, especially where [he compliance depends on events that have not taken place on the date on which the application for grant of approval has been made. 1.3 However, the prescribed authority is elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 all those connected with the institutions so as to make them good citizens. (4) To establish and run 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 objectives 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) To bring out, encourage and develop the inventive and research facilities to the students and teachers and to provide an opportunity for research ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal 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 Education, Orissa, Bhubaneswar. 16. Ld. Pr.CCIT declined the approval to the assessee Trust u/s.10(23C)(vi) of the Act primarily by declaring the amended Trust Deed as invalid on the ground that for granting approval u/s.10(23C)(vi), only original Trust Deed is to be looked into which contains non-educational objectives. However, we are of the considered view that in the original Trust Deed dated 19-11-1997, though the assessee Trust has undertaken both educational and non-educational objectives but predominant objectives were for promotion and imparting education as discussed in the succeeding paras. 17. In order to decide the issue in controversy, the provisions contained u/s.10(23C)(vi) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 Institute of Technology for the FY 2013-14, available at pages 159, 155, 148 & 140 of the paper book respectively showing assets as Xerox machine, DVD Writer, Scanner, EEE Purchases (Electrical & Electronics Engineering Purchases), Mechanical Purchases, Civil Department Purchases, Licensed Software, library books & magazines, projectors & printers, computers, white boards, notice boards, fax machine, library, lab equipments, which can be used for carrying out educational activities only. 23. So, merely declining the approval u/s 10(23C)(vi) of the Act by Ld. Pr.CCIT on the premise that amended Trust Deed dated 26-03-2012, to prove the assessee's existence, is invalid document being not in conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes. (5) The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to educating persons." 28. Hon'ble Apex Court in Queen's Educational Society (supra) held that to determine whether an educational institution exists solely for educational purposes and not for purposes of profit, three Supreme Court judgments, namely, Addl.CIT vs. Surat Art Silk Cloth Manufactures Association - (1980) 121 ITR 1, Aditanar Educational Institution vs. Addl. CIT - (1997) 224 ITR 310 (SC) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Trust Deed dated 26-03-2012 deleting all the non-educational objectives. So, the impugned order passed by Ld.Pr.CCIT is not sustainable. 31. In view of what has been discussed above, when it is proved on record that the assessee Trust is running an educational institution, the application to grant approval u/s 10(23C)(vi) of the Act cannot be denied merely because there are other objects in the original Trust Deed also. But, in the instant case, assessee has gone one step further even by amending the original Trust Deed which has been declared invalid by the ld. Pr.CCIT and rejected the application by ignoring the settled principle of law laid down by Hon'ble Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 exist 'solely' for educational purposes. The expression 'solely' came up for consideration before the Rajasthan High Court in the case of Maharaja Sawai Mansinghji Museum Trust (169 ITR 379). The Hon'ble Court had held that the expression 'solely' means exclusively and not primarily. This case was decided in the context of erstwhile provisions of section 10(22) of the Income Tax Act, 1961. Since the provisions of section 10(23C)(vi) are similar, the same interpretation will hold good in the context of provisions of section 10(23C)(vi). The above clauses as per the Trust deed are clearly either non-educational or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Trustees prior to the expiry of the stipulated period of two years. 22. That either of the Two Permanent Trustees shall represent the institution for all purposes including to sue or to be sued. 23. That the Permanent Trustees shall have the power to nominate their successors to be Permanent Trustees, failing which two of their heirs shall become Permanent Trustees. The said procedure of filling of succession shall be adopted in future also." From the above, it is clear that the Trust is in the nature of a family concern of Dr. J.Surya Rao and his Wife Smt. J. Jayalakshmi. The Permanent Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hysical 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. To charge tuition fees and other fees to recoup expenditure incurred in the upkeep and maintenance of the institution established and to be established under this Deed. 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. 10. To bring out, encourage and develop the inventive and research facilities to the students and teachers and to provide an opportunity for research work in Arts, Science, Industry and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,63,954/-, (-)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 ₹ 5,00,504/- is indeed less than the permissible 15% limit of gross receipts of ₹ 8,20,08,082/-; coming to ₹ 12,30,121/-. We thus observe that the assessee has applied and has utilizsed its gross receipts only for educational purposes as per the detailed evidence forming part of the case file. 7.3 Learned CIT-DR at this stage sought to reiterate that the CCIT's order has already gone by assessee's objects in the trust deed that same contains some alleged non-educational purposes as well. The assessee in turn submitted that it has not undertaken any other activity than educational purpose since 1997 onwards. It is, inter-alia stated that the assessee had been granted section 12A registration with effect from 01/04/2002 as well. This tribunal yet another coordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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, [2003] 179 CTR 225 (SC), American Hotel case (supra), Queens Educational Society Vs. CIT, 2015 372 ITR 699 (SC) also applied "purpose" test i.e. as to whether educational institutions existed only for educational purpose and not for earning profits. Yet another decision law HARF Charitable Trust Vs. CCIT [2015], 376 ITR 1100 (P&H) also dealt with an identical issue wherein the said assessee already enjoys section 12A registration and its trust deed also comprises of multiple clauses of carrying other than educational activity, their lordships hold that merely because one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 @ ₹ 1.87 per sq.ft. and much less than that paid to unrelated party i.e. Shri Sushil Kumar @ ₹ 2.20 in AY 2005-06 and ₹ 2 per sq.ft in AY 2006-07. We thus decline all these Revenue's arguments alleging that assessee's twin trustees have derived undue benefit from the educational activities carried out in all these AYs. The CCIT's all impugned orders under challenge in first set of 14 appeals (except ITAs No 469-471/CTK/2019) are held as not sustainable in the eyes of law. The same stand reversed therefore. These two assessees' corresponding appeals seeking section 10(23C)(vi) approval are allowed as necessary corollary ordered acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 has denied the exemption u/s 11 of the Act and has determined the total income of the trust at ₹ 64,50,460/- and tax payable thereon including interest at ₹ 41,98,424/-. He has denied the exemption on the same grounds on which the Ld. CCIT has rejected the same u/s 10(23C)(vi) in proceedings of the Income-tax Act, 1961 (forming subject matter of adjudication in preceding paras). While doing so, the Assessing Officer observed in his order passed u/s 143(3)/147 dated 26/03/2013, as under: "6. Roland Educational & Charitable Trust is a Trust, registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 Income tax Act, 1961. Since the provisions of Section 10(23C)(vi) are similar, the same view will hold good in the context of the aforesaid provisions. The interpretations contained in the Board's instruction find support from the decision of Reliance Motor Co. Pvt. Ltd. reported in (213 ITR 733)(Madras). In the aforesaid case, the Hon'ble Court had categorically held that it is not the actual user but the likelihood of the user and the capacity of the Trust to undertake a particular activity, which relevant. Though this case law was decided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 2,32,384/- received by Sri J. Surya Rao, permanent trustee, on loan advanced to the assessee-trust. ii) Interest of ₹ 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 ₹ 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 ₹ 91,710/- received by Miss. J. Soumya, D/o. Sri J. Surya Rao, permanent trustee on loan advanced to the assessee trust. Further, the assessee-trust has also paid a sum of ₹ 1,50,OOO/- and ₹ 5,OO,OOO/-to Sri J. Surya Rao and Smt. J. Jayalakshrni, Permanent Trustees and the Founders respectively towards repayment of loan during the year. 9. From the above, it is apparent that the Trust has been created by the Permanent "trustees" for reaping various personal financial benefits rather than making it a public Trust for educational purposes only. The income of the Trust is apparently being syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hmi and Dr. J. Surya Rao, both Permanent Trustees, have received a sum of ₹ 53,03,400/- and ₹ 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 ₹ 10,99,693/-, 70,200/- and ₹ 22,54,379/-, totalling to ₹ 34,24,272/-. and also disallowed excess claim of depreciation on laboratory equipments of ₹ 2,58,180/-, furniture of ₹ 23,734/- and computers of ₹ 1,34,580/- totalling to ₹ 3,94,494/- 11. Aggrieved, the assessee preferred appeal(s) before the CIT(A) and the CIT(A) partly allowed the appeal of the assessee by restricting the disallowance made u/s 40(a)(ia) to ₹ 1,83,420/- against ₹ 10,99,693/-. 12. Aggrieved by the order of CIT(A), the assessee is in appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 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 I.T. (SS) A. No. 44 (CTK) of 2004 and CO. No, 69 (CTK) of 2004 (supra) held that the appellant's income is exempt u/s 11 of the I. T. Act, 1961. The above decision of this Hon'ble Bench has again been referred to and acknowledged by this Hon'ble Bench in the appellant's own case for the A.Y. 2014-15 in Roland Educational and Charitable Trust vs. PClT, [2017]157 ITR (Trib) 655 (lTAT [Ctk]). From the above it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umulate 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) (79,41,522) E Accumulation of 15% (A*15%) - - - F Taxable income (D-E) (1,59,34,478) (1,84,63,954) (79,41,522) From the above details it can be clearly seen that during the captioned AY.s the appellant has applied its gross receipts entirely for its charitable objects in India. In fact the appellant has made excess expenditure over income. Thus the appellant has made application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is clearly barred by limitation and hence, deserves to be annulled. As per the direction of Hon'ble High Court, the order should be passed within two months preferably, which the AO has not done. 13.2 On the issue of illegality at notice u/s 148, the ld. counsel submitted that the Ld. AO has stated that there is nothing found on the face of the record as well as order sheet regarding passing of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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 approval u/s 10(23C)(vi) is not justified. Another contention of the assessee is that there is no new material brought on record by the AO to reopen the assessment. He also contended that the objections were filed before the AO for the reasons recorded for reopening of the case which have not been disposed off, which is against the ratio laid down by the Hon'ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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