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TMI Blog2022 (8) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... be an institution to give technical training and necessary professional grounding in the field of highway engineers including bridges to ensure an efficient, safe, reliable and economic highway system as an integral part of nation s economy. Tax Authority has questioned the charitable objectives of the appellant. An important aspect that is over looked by the Ld. Tax Authority is that appellant is an autonomous institution of a Ministry of Road Transport and Highway, Government of India. The initial funding was from this administrative ministry and even the land for building has been purchased in name of President of India. The Bench is of view that there cannot be a more sacrosanct purpose of an institution like the present appellant which is giving formal training to professionals like highway engineers, who otherwise would not have any training or continued learning, from ordinary academic institutions or Universities. A self sustaining autonomous institution is rather expected to be generating receipts for its subsistence rather then being dependent on the Government for aid. So, merely collection of fee for training programs cannot make an autonomous institution to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iety is a collaborative body of the Central and State Governments, formed under the administrative control of Ministry of Road Transport Highway, Government of India with a Governing Body consisting of all ex officio senior nominees from the Government, and thus it is an extended arm of the Government, formed and running with an object to give the technical training and necessary professional grounding in the field of Highway engineering including bridges to ensure an efficient, safe, reliable and economic highway system as in integral part of nation's economy, and without considering these facts on record, the CIT (Exemption) has arbitrarily rejected the application by wrongly inferring that the Appellant Society is not doing any charity and is running on commercial lines only because it has surplus, and thus rejected the application which is grossly illegal, beyond jurisdiction and against the law and thus. It is further submitted in grounds of appeal that the Ld. CIT (Exemption), Lucknow erred in law and on facts, by rejecting the Application u/s 10(23C)(vi), without appreciating that all the conditions prescribed in sec, 10(23C)(vi) r/w Sec 2(15) of the Act were satisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Text Books vs. Director of Income Tax(E)] 5. Counsel for the Indian School Certificate Examinations vs. Director General of Income Tax, 20 taxmann.com 505 (Delhi HC) 6. Oxford Academy for Carrer Development vs. Chief Commissioner of Income Tax 7. Investor Financial Education Academy vs. ITO (E) -4, Chennai , 121 taxmann.com 281 (Madras. HC) 8. ITO vs. SRM Foundation of India, 21 ITD 598 (Delhi) 9. ITO, Ward 1, New Delhi vs. Science Olympaid Foundation, 48 taxmann.com 382 (ITAT) 10. Sole Trustee, Lok Shikshana Trust vs. CIT, 101 ITR 234 (SC) 11. Queen s Education Society vs. CIT, 55 taxmann.com 255 (SC) 12. American Hotel Lodging Association, Educational Institute vs. Central Board of Direct Taxes 13. Radhasoami Satsang vs. CIT, 60 Taxman. 248 (SC) 14. CIT vs. Excel Industries Ltd., 38 taxmann.com 100 (SC) 5. Ld. DR defended the orders of Ld. CIT(E), Lucknow submitting that the appellant was collecting fees on account of training programmes and was more into commercial education, therefore, there is no illegality in the impugned order. It was submitted that as principle of res judicata is not applicable and also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Road Transport and Highways by initial corpus contribution. The land was allotted to the society in the name of President of India. Then again, on 10.09.2020 detail account/ reply was submitted by the appellant to the Tax Authorities submitting specifically that as to how the activities of institution fall into the beneficial provision of Section 10(23C)(vii) of the Act. The copy of this letter dated 10.09.2020 is on record at page no. 89 of the paper book. 7. However, it appears that all these factual aspects with regard to approval for previous years, mere change in the name and formal nature of applicatin due change in the name, had no bearing in the mind of Ld. Tax Authority while passing the impugned order dated 31.03.2021. Not a word is discussed in the impugned order about former approval. It appears that instead of having objective assessment of the facts the Ld. Tax Authority preferred to merely rely upon the reports called from subordinates i.e. Assessing Officer and Joint Commissioner of Income Tax (E), Ghaziabad. It also appears that the Ld. Tax Authority was also influenced by the fact of rejection of application for registration of the appellant u/s 12A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike highway engineers, who otherwise would not have any training or continued learning, from ordinary academic institutions or Universities. 8.3.1 A self sustaining autonomous institution is rather expected to be generating receipts for its subsistence rather then being dependent on the Government for aid. So, merely collection of fee for training programs cannot make an autonomous institution to be commercial, as observed by the Ld. Tax Authority. 9. A reference needs to be made of the Hob'ble Apex Court judgment in Queens Educational Society vs. CIT, (Supra) wherein in paras 24 25 it has held as under: 24. The view of the Punjab and Haryana High Court has been followed by the Delhi High Court in St. Lawrence Educational Society (Regd.) v. CIT Anr. (2011) 53 DTR (Del) 130. Also in Tolani Education Society v. Dy. DIT (Exemptions) and Ors. [2013] 351 ITR 184, the Bombay High Court has expressed a view in line with the Punjab and Haryana High Court view, following the judgments of this Court in the Surat Art Silk Cloth Mfrs. Association Case (Supra) and Aditanar Educational Institution case (Supra) as follows: .....The fact that the Petitioner has a surplu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt's judgment dated 29.1.2010 and the Gandhi College of Pharmacy judgments following it are dismissed. We reiterate that the correct tests which have been culled out in the three Supreme Court judgments stated above, namely, Surat Art Silk Cloth, Aditanar, and American Hotel and Lodging, would all apply to determine whether an educational institution exists solely for educational purposes and not for purposes of profit. In addition, we hasten to add that the 13th proviso to Section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with the law laid down. Further, it is of great importance that the activities of such institutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases are disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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