C I T vs. M/S ARVIND BHARTI VIDHYALAYA S

Briefly stated the facts of the case are that respondent assessee is a registered society

Initially, learned counsel for the appellant argued that the orders passed by Commissioner of Income Tax (Appeals) as well as Income Tax Appellate Tribunal are bad in law, the Assessing Officer was right in declining the exemption to assessee under Section 10(23C)(vi) of the Act of 1961. However, when the learned counsel for the respondent pointed out that exemption under Section 10(23C)(vi) of the Act has been 3 granted to the assessee/respondent by the Central Board of Direct Taxes vide order dated 16th March, 2007, which is applicable for Assessment Year 1999-2000 and onwards, nothing remains to be decided in the present appeals, learned counsel for the appellant also agreed that order of Central Board of Direct Taxes is binding on the department and in view of order passed by Central Board of Direct Taxes, the assessee is entitled for exemption under the provisions of the Act. The order of Central Board of Direct Taxes dated 16th March, 2007 is reproduced as under:- “P.No.197/115/2006-ITA, I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, 16th March, 2007 ORDER In exercise of powers conferred by the sub clause (vi) of the clause(23C) of Section 10 of the income tax Act, 1961(43 of 1961), the Central Board of Direct Taxes hereby approves that any income received by any person on behalf of “Arvind Bhatri Vidyalala Samiti, Ambabari, Jaipur-302023” (hereinafter the “Institution”) shall not be included in the total income of such person as assesseable, subject to the following conditions: a) the institution will apply its income, or accumulate for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its Income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; b) the institution will not invest or deposit its fund (other than voluntary contribution received and maintained in the 4 form of jewellery, furniture, etc.) for any period during the previous years relevant to the assessment years mentioned above otherwise than in any one or more of the forms or modes specified in sub-section (5) of the section 11; c) this approval will not apply in relation to any income being profits and gains of business, unless the business is incidental to the attainment of the objectives of the institution and spaate books of account are maintained in respect of such business; d) the institution will regularly file its return of income before the income tax authority in accordance witH the provisions of the income tax Act, 1961; e) that in the event of dissolution of the institution, its surplus and the assets will be given to an organization with similar objectives. (f) the institution will continue to be exist solely for educational purpose. g) The institute will get its accounts audited by an accountant as defined in Explanation below sub section (2) of section 288 and furnish along with the return of income. The report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

This order is applicable only to the recipients of income on behalf of the institution and not to any other receipt or income of such recipients. Taxability or, otherwise of the Income of the Institution would be separately considered as per the provisions of the Income tax Act, 1961;

This order is applicable for Assessment Year 1999-2000 and onwards.

The above order is liable to be rescinded by the Central Government, if it is subsequently found that the activities of the institution are not genuine or if they are not carried out in accordance with all or any of the conditions subject to which it was notified.

This order is in super-cession of the earlier order no.197/115/2006-ITA-I dated 07.02.2007. (DEEPAK GARG) Under Secretary to the Govt. of India Copy to:- i) “Arvind Bharti Vidyalaya Samiti, Ambabari, Jaipur-302023”

In view of above order passed by the Central Board of Direct Taxes, the assessee/respondent is held entitled for exemption under Section 10(23C)(vi) of the Income Tax Act, 1961. Learned Tribunal has already affirmed the order of Commissioner of Income Tax (Appeals), who had allowed the exemption to the assessee/respondent, while allowing the appeals of the assessee.

In these circumstances, we find no force in these appeals and the same are, accordingly, dismissed with no order as to cost.

Registry is directed to place on record a copy of this order in the connected appeal.