Ramshree Education Of Technology Samiti Thr. vs. Principal Commissioner Of Income Tax Thr.

1 THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of Income Tax, Gwalior and others Gwalior, 20/08/2018 Shri Pankaj Bhatia & Shri Kunal Suryavanshi, learned counsel for the petitioner. Shri D.P.S. Bhadauriya, learned counsel for the respondents. With the consent of learned counsel for the parties, the matter is finally heard. Challenge is to an order dated 19/03/2018 passed by Principal Commissioner of Income Tax, whereby Revision under Section 264 of the Income Tax Act, 1961, filed by the petitioner has been dismissed. The Revision was directed against the assessment order passed by ACIT, Circle 1, Gwalior on 22/12/2016 in respect of the accounting year 2009-10; and the demand order dated 26/12/2016 whereby an amount of Rs. 40,77,690/- was directed to be deposited by the petitioner – assessee bearing PAN No. AAFFR4110D and demand notice dated 20/02/2017 under Section 221(1) of the Income Tax Act, 1961. It is the contention of the petitioner that in the Revision, the petitioner had raised many grounds including that the notice issued under Sections 148, 2 THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of Income Tax, Gwalior and others 142(1) and 144 of 1961 Act was never served on the petitioner and that it was beyond the jurisdiction of Assistant commissioner of Income Tax, Circle-1, Gwalior to have initiated the proceeding of assessment / re-assessment of the income relating to accounting year 2009-10. It is urged that though the Revisional Authority took note of the grounds and contentions raised in the Revision, however, glossing over the same passed the order on merit dismissing the revision and upholding the demand raised, on the findings that the petitioner is not entitled for exemption under Section 10(23C)(iiiad) of 1961 Act. The order which is under challenge is in the following terms:- “In order to examine the cash fees deposited in saving bank account and claim of exemption u/s 10(23C)(iiiad) of the I.T. Act, 1961, a letter dated 05.02.2018 has been issued to the assessee. The assessee was also required to produce books of account, fees receipts etc. In compliance, the assessee filed reply on 12.02.2018 and produced books of account, fees receipts etc on 22.02.2018 which has been examined. 3 THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of Income Tax, Gwalior and others As per AIR information during the year assessee had made cash deposits of Rs. 65,32,563/- in saving bank account maintained with PNB on PAN- AAFFR4110D whereas as per copy of acknowledgment of return for A.Y. 2009- 10, it has been found that assessee has filed return for A.Y. 2009-10 on 31.08.2009 vide receipt no.459 with ACIT/DCIT Circle-II, Gwalior on PAN- AABTR3494C. However, jurisdiction over the case lies with ACIT, Circle-I, Gwalior. The fees receipts issued by the institution has been examined and it has been found that assessee is receiving fees on commercial basis as such, it cannot be said that institution is running solely for educational purpose and not for the purpose of profit which is also evident from income and expenditure account which shows profit of Rs.4,86,165/-. Thus in my opinion assessee is not liable for exemption u/s 10(23C)(iiiad) of the I.T. Act as claimed by the assessee. Further, on going through income and expenditure account, it has been found that during the year total receipts of the assessee from all sources is Rs. 76,88,448/- which includes donation of Rs. 2,81,000/-. It has been found that before depreciation, the assessee has total surplus of Rs. 4 THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of Income Tax, Gwalior and others 12,37,041/- which is 16.09% of total receipts. Thus, the assessee has also not incurred 85% of total receipts as expenditure which is necessary for claiming exemption u/s 10(23C)(iiiad) of the I.T. Act.” Respondents have entered appearance and also filed their reply along with affidavit of the Revisional Authority. Though an exception is taken by the petitioner against the affidavit filed by the Revisional Authority justifying the order, which as per the petitioner is impermissible, as the order under challenge has been passed by the Authority concerned in her capacity of quasi-judicial Authority. Be that as it may. Learned counsel appearing for respondents

fairly

submits

that

the petitioner/assessee had raised a ground regarding non-service of notice under Sections 148, 142(1) and 144 of 1961 Act, which is not being considered, the Revision has been dismissed on merit. In view of the submissions made on behalf of the respondents, we are of the considered opinion that the matter deserves to be remitted to the Revisional Authority for fresh consideration of the 5 THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of Income Tax, Gwalior and others Revision filed by the petitioner dwelling on all the issues raised therein. In view whereof, the impugned order is set aside. The matter is relegated to Principal Commissioner of Income Tax, Gwalior, for reconsideration of Revision preferred by the petitioner. The Principal Commissioner of Income Tax, Gwalior, shall, after affording opportunity of hearing, decide the Revision in accordance with law meeting out the contentions raised in the Revision. The Revision be decided expeditiously, however, not later than 30 days from the date of communication of this order. Petition is finally disposed of in above terms. No costs.

(Sanjay Yadav) (Ashok Kumar Joshi) Judge Judge shubh* Digitally signed by SHUBHANKAR MISHRA Date: 2018.08.23 17:51:00 +05'30'