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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: V. DURGA RAO & SHRI S. RIFAUR RAHMAN
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 790/Hyd/2017 Assessment Year: 2016-17 Pragnya Educational Vs. Commissioner of Income Society, Tax, Exemptions, Hyderabad. Hyderabad. PAN: AABAP 1602 P (Appellant) (Respondent) Assessee by: Sri K.A. Sai Prasad Revenue by: Sri Y.V.S.T. Sai, CIT-DR Date of hearing: 07/03/2019 Date of pronouncement: 13/03/2019 ORDER PER V. DURGA RAO, J.M.:
This appal filed by the assessee is directed against the order of the CIT (Exemptions), Hyderabad dated 22/02/2017. In this appeal, assessee has raised the following grounds of appeal:-
“1. The Ld. CIT(Exemptions) is not justified in not entertaining and rejecting the application of the appellant for recognitions u/s 10(23C)(vi). 2. The Ld. CIT(Exemptions) failed to appreciate the fact that (i) The appellant-society is running an educational institution only and no other activity is being conducted by the society and (ii) The objects (3) and (5) are only incidental to the school education.”
Brief facts of the case are that the assessee-society, M/s. Pragnya Educational Society, filed an application seeking exemption u/s 10(23C)(vi) of the Act. On verification of the objects of the assessee- society, CIT (E) observed that one of the objects ie., Object No.3 relates to ‘promote cultural and social activities by organizing cultural programmes, artistic events and supports’ and came to the conclusion that the assessee-society is not “solely” existed for the purpose of educational purposes and therefore, rejected the approval u/s 10(23C)(vi) of the Act.
On appeal before us, Learned Counsel for the Assessee submitted that the main activity of the assessee-society is only education the object no.3, to promote cultural and social activities’ is only incidental and therefore, the assessee’s case may be considered and the order of the CIT (E) be reversed.
On the other hand, Learned Departmental Representative, supported the order of the CIT (E).
We have heard both the parties and perused the material available on record. The only issue involved in this appeal is whether the assessee-society is entitled for exemption u/s 10(23C)(vi) or not. On verification of the assessee-society’s objects, the CIT (E) came to the conclusion that the intention of the assessee-society is not ‘solely’ and exclusively for the purpose of education and therefore, the assessee-
society is not entitled for seeking exemption u/s 10(23C)(vi) of the Act. The provisions of section 10(23C)(vi) read as under:-
Sec. 10(23C)[(vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority;
From the above, it is very clear that to seek exemption u/s 10(23C)(vi) of the IT Act, 1961, the assessee should be existed “solely” for educational purposes and not otherwise. In the present case, the as per the objects of the assessee-society it is clear that the assessee is not solely for the educational activities and one of the objects of the assessee-society (Object No.3) provides ‘to promote cultural and social activities by organizing cultural programmes, artistic events and sports’ and therefore, the assessee-society is not eligible to claim exemption u/s 10(23C)(vi) of the Act. Therefore, in our considered view, there is no infirmity in the order of the CIT (E) and it does not call for any interference. Accordingly, grounds raised by the assessee are dismissed.
In the result, appeal filed by the assessee is dismissed.
Pronounced in the open Court on 13th March, 2019
Sd/- Sd/- (S. RIFAUR RAHMAN) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 13th March, 2019
OKK Copy to:- 1) C/o. Ch. Parthasarathy & Co., 1-1-298/2/B/3, 1st Floor, Sowbhagya Avenue, Street No.1, Ashoknagar, Hyderabad – 500 020. 2) CIT (Exemptions), Hyderabad. 3) The Addl. CIT (E), Hyderabad 4) The Pr. CIT (Exemptions), Hyderabad 5) The DR, ITAT, Hyderabad 6) Guard File