ADIT, Hyderabad v. Niraj Educational Society, Hyderabad

ITA 1641/HYD/2008 | 2004-2005
Pronouncement Date: 29-01-2010 | Result: Allowed

Appeal Details

RSA Number 164122514 RSA 2008
Assessee PAN AAATN2652H
Bench Hyderabad
Appeal Number ITA 1641/HYD/2008
Duration Of Justice 1 year(s) 2 month(s) 21 day(s)
Appellant ADIT, Hyderabad
Respondent Niraj Educational Society, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-01-2010
Date Of Final Hearing 19-01-2010
Next Hearing Date 19-01-2010
Assessment Year 2004-2005
Appeal Filed On 07-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.: 1641/HYD/2008 ASSTT. YEAR : 2004-05 THE ADIT(EXEMPTIONS)-III HYDERABAD VS M/S NIRAJ EDUCATIONAL SOCIETY HYDERABAD (PAN: AAATN 2652 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H. PANI RAJU DR RESPONDENT BY : SHRI B. SATYANARAYANA MURTHY O R D E R PER : CHANDRA POOJARI ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT (A)-IV HYDERABAD AND PERTAIN S TO THE ASSESSMENT YEARS 2004-05. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS FAILED TO APPRECIATE THAT OBTAINI NG APPROVAL OF THE PRESCRIBED AUTHORITY IS MANDATORY AS PER THE PLAIN MEANING OF THE PROVISIONS. 2. THE CIT(A) HAS FAILED TO APPRECIATE THAT SEC.10 (23C) AS SUCH IS NOT REPLACEMENT OF SECTION 10(22) AND (22A) AS STATED I N THE ASSESSEE APPELLATE ORDER BUT ONLY SUB CLAUSES (IIIAD) AND (I IIAE) ARE REPLACEMENTS OF THE ERSTWHILE SEC.10(22) AND SEC. (22A) RESPECTI VELY. 3. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THA T SUB CLAUSES (VI) AND (VIA) ARE ENTIRELY NEW PROVISIONS MEANT TO PROVIDE THE MUCH NEEDED MONITORING MECHANISM THAT WAS LACKING IN THE EARLIE R PROVISIONS (AS STATED IN CIRCULAR NO.772) 2 2 4. THE CIT(A) HAS WRONGLY HELD THAT PROVISIONS OF S EC.10(23C) (VI) DO NOT OVERRIDE SEC. 11 IN SPITE OF OVERWHELMING JUDIC IAL OPINION THAT SPECIFIC PROVISIONS OVERRIDE GENERAL PROVISIONS. 4. WE HAVE HEARD BOTH SIDES. THE LEARNED AUTHORIZE D REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE CO VERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HYDERABAD BE NCH B OF THE TRIBUNAL DATED 16.1.2009 IN ASSESSEES OWN CASES IN ITA NO. 234 & 498/HYD/2007 FOR THE ASSESSMENT YEARS 2003-04 AND 2000-01 . HOWEVER WE FIND THAT THE CONSTITUTIONAL BENCH OF APEX COURT IN THE CASE OF T.M.A. PAI FOUNDATIONS AND OTHERS VS. STATE OF KARNATAKA & OTHERS (2002) 8 SCC 481 EXAMINED THE ISSUE OF COLLECTI ON OF CAPITATION FEES FOR THE ADMISSION OF STUDENTS OVER AND ABOVE FEES PRESCRIBED BY THE PRIVATE INSTITUTION AND HELD THAT THE INSTITUTION WHICH ARE COLLECTING CAPITATION FEES FOR ADMISSION OF STUDENTS OVER AND ABOVE THE FEES PRESCRIBED CANNOT BE CONSTRUED AS CHARITABLE/EDUCATION INS TITUTION. APEX COURT FURTHER OBSERVED THAT THE FEES COLLECTED OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSION OF THE STUDENT HAS TO BE CONSTRUCTED AS CAPITATION FEE. THE APEX COURT FURTHER OBSERVED THA T THE CONCERNED UNIVERSITY AND REGULATED BODY HAS TO TAKE ACTION FOR W ITHDRAWAL OF THE RECOGNITION IN CASE IT IS FOUND THAT THE EDUCATIONAL IN STITUTION RECEIVED ANY MONEY OVER AND ABOVE THE FEES PRESCRIBED FOR THE C OURSES. SAME VIEW WAS TAKEN BY APEX COURT IN THE CASE OF ISLAMIC ACA DEMY OF EDUCATION AND ANOTHER VS. STATE OF KARNATAKA & ANOTHE R (2003) 6 SCC 697. IF THE DONATIONS WERE RECEIVED COMPULSORILY FOR A DMISSION OF STUDENTS THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION EITH ER U/S 10(23C) OR U/S 11 OF THE IT ACT. SINCE THE LOWER AUTHORITI ES WERE NOT EXAMINED THE COLLECTION OF CAPITATION FEES IN THIS CASE IN OUR OP INION THE MATTER REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER WHETHER THE ASSESSEE IS COLLECTING THE CAPITATION FEES FROM STUDENTS OR NOT AND I T IS NECESSARY FOR BRINGING THE ACTUAL FACTS ON RECORD FOR DECIDING THE ISSUE EFFECTIVELY. 3 3 SIMILAR VIEW WAS TAKEN BY US IN THE CASE OF M/S. JAMIA N IZAMIA IN ITA NO.763/HYD/2007 DATED 30.6.2008 IN THE CASE OF INTERN ATIONAL EDUCATIONAL ACADEMY HYDERABAD IN ITA NO.494/HYD/2007 AND 518/HYD/2008 FOR THE ASSESSMENT YEARS 2002- 2003 AND 200 4-05 AND SRI SAI SUDHIR EDUCATIONAL SOCIETY HYDERABAD IN ITA NO.999/HYD/20-06 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE WE SET ASI DE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT BACK THE MATTER TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO ASSESSING OFFICER THAT H E SHALL RECONSIDER THE ENTIRE ISSUE IN THE LIGHT OF JUDGEMENT O F SUPREME COURT IN THE CASE OF M/S ISLAMIC ACADEMY OF EDUCATION & ANOTHER VS. STATE OF KARNATAKA AND ANOTHER (SUPRA) AND IN THE CASED OF T.M .A. PAI FOUNDATION AND OTHERS VS. STATE OF KARNATAKA AND OTHE RS (SUPRA) AND FIND OUT WHETHER THE ASSESSEE HAS RECEIVED ANY MONEY OVE R AND ABOVE THE FEES PRESCRIBED AND THEREAFTER DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE . WE MAKE IT CLEAR THAT THE ASSESSEE IS NOT ENTITLED FOR EX EMPTION EITHER U/S 11 OR U/S 10(23C) IN CASE IT COLLECTED ANY MONEY BY W HATEVER NAME IT IS CALLED I.E. DONATION BUILDING FUND AUDITORIU M FUND ETC. ETC. OVER AND ABOVE THE PRESCRIBED FEE FOR ADMISSION OF STUDENTS. 5. IN THE RESULT REVENUES APPEAL IS ALLOWED FOR ST ATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON:29.1.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 29 TH JANUARY 2010. 4 4 COPY FORWARDED TO: 1. THE ASSESSMENT. DIRECTOR OF INCOME TAX (E)-III AP OLY MPIC BHAVAN L.B. STADIUM BASHEERBAGH HYDERABAD-4. 2. M/S NIRAJ EDUCATIONAL SOCIETY 6-3-864 AMEERPET HYDERABAD 3. CIT(A)-IV HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP