M/S GURUKUL VIDHYA PEETH,JAIPUR vs. INCOME TAX OFFICER (EXEMPTION), ALWAR

ITA 996/JPR/2017Status: DisposedITAT Jaipur31 December 2018AY 2012-135 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee raised an additional ground for exemption under Section 10(23C)(iiiad) before the CIT(A) and submitted some documents like registration certificates and income/expenditure accounts. However, the CIT(A) did not record any finding on merits. Given this, the Tribunal found it appropriate to remand the matter back to the CIT(A). The CIT(A) is directed to examine the assessee's claim for exemption on merits, in accordance with the law, after providing a reasonable opportunity to the assessee to present its contentions, which can be the same as those raised before the Tribunal. The Tribunal did not decide the merits of the exemption claim itself but rather the procedural aspect of how it was handled by the lower appellate authority.

What were the facts?

The assessee, M/s Gurukul Vidhya Peeth Shiksha Samiti, filed appeals for Assessment Years (AY) 2012-13 and 2013-14 against the orders of the CIT(A), Alwar. The primary issue pressed by the assessee was the denial of exemption under Section 10(23C)(iiiad) of the Income Tax Act, 1961. The assessee, a society running a school, had initially filed returns with a declared income. During appellate proceedings, it raised an additional ground for exemption. The CIT(A) dismissed this ground, stating that no details were filed in support of the claim during assessment or appeal. The assessee contended that details were provided and that the CIT(A) should have sought further information if required, adhering to natural justice.

What were the issues?

1. Whether the assessee is eligible for exemption under Section 10(23C)(iiiad) of the Income Tax Act, 1961, as an educational institution existing solely for educational purposes and not for profit, despite not making the claim in the original return of income or before the Assessing Officer? Assessee's contentions: The assessee argued that all conditions for exemption under Section 10(23C)(iiiad) were fulfilled. It is an educational institution approved by the Department of School Education, exists solely for educational purposes, and its receipts are below Rs. 1 crore. The failure to claim exemption in the return was a bona fide mistake. Reliance was placed on Queen’s Educational Society vs. CIT, CBDT Circular No. 14(XL-35), CIT vs. Lucknow Public Education Society, CIT vs. Muzaffarnagar District Co-operative Bank Ltd., CIT vs. St. Mary's Malankara Seminary, and CIT vs. Rajasthan Fasteners Pvt. Ltd. The assessee also argued that the CIT(A) incorrectly stated no details were filed and should have provided an opportunity to submit further information. Revenue's contentions: The Revenue relied on the orders of the lower authorities. The Revenue pointed out that for AY 2013-14, besides school receipts, the assessee also received grants for a training program, implying these might not be solely for education.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHE-B, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM

For Appellant: Shri Nikhilesh Kataria (CA)

For Respondent: Shri Ashok Khanna (JCIT)

Hearing: 18/12/2018Pronounced: 31/12/2018

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE-B, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 996 & 995/JP/2017 fu/kZkj.k o"kZ@Assessment Years : 2012-13 & 2013-14 cuke M/s Gurukul Vidhya Peeth Shiksha Samiti, ITO (Exemption) Vs. Village- Late Ka Bas, Ward-Alwar Shahpura, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAAG9400B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Nikhilesh Kataria (CA) jktLo dh vksj ls@ Revenue by: Shri Ashok Khanna (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 18/12/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 31/12/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. These are two appeals filed by the assessee against the orders of the ld. CIT(A), Alwar dated 16.07.2017 & 18.10.2017 for AY 2012-13 & 2013-14 respectively.

In its grounds of appeal, the assessee has taken various grounds of appeal, however, the only ground of appeal which was pressed during the course of hearing relates to denial of exemption

2 ITA No. 996 & 995/JP/2017 M/s Gurukul Vidhya Peeth, Jaipur vs. ITO(E), Alwar u/s 10 (23C)(iiiad) of the Income Tax Act, 1961. Hence, rest all grounds of appeal are dismissed as not pressed.

Briefly stated, the facts of the case are that the assessee is a society registered with Registrar of Society, Jaipur and is running a school at village Lat ka Bass, Shahpura (Distt.- Jaipur). It filed its return of income disclosing total income of Rs. 135,010 for AY 2012-13 which was assessed to tax at income of Rs. 278,990/- u/s 143(3) of the Act.

During the course of appellate proceedings before the ld. CIT(A), the assessee took the additional ground of appeal relating to claim of exemption u/s 10(23C)(iiiad) of the Act. However, the ld. CIT(A) dismissed the said ground stating that the assessee has neither filed any details in support of its claim u/s 10(23C)(iiiad) during the assessment proceedings or during the appellate proceedings.

During the course of hearing, the ld. AR submitted that the complete details were filed before the ld. CIT(A) and no further details were required by the ld. CIT(A). It was accordingly submitted that it is incorrect on the part of the ld. CIT(A) to state that no details were filed before him. It was further submitted that where the ld. CIT(A) require any further details, he could have asked the assessee and given an appropriate opportunity to file such details to meet the principle of natural justice.

On merits, the ld AR submitted that all the conditions laid down u/s 10(23C)(iiiad) have been fulfilled by the assessee society. It was submitted that it is an educational institution duly approved by the

3 ITA No. 996 & 995/JP/2017 M/s Gurukul Vidhya Peeth, Jaipur vs. ITO(E), Alwar Department of School Education and it exists solely for educational purposes and not for the purposes of profit. In support reliance was placed Hon’ble Supreme Court decision in case of Queen’s Educational Society vs. CIT 275 CTR 449 (SC). It was further submitted that its receipts for the year is below Rs. 1 crore which is not disputed by the Revenue authorities. It was further submitted that though the assessee has not made the claim for exemption in the return of income. However, such mistake was bona fide and their remain no advantage with the assessee in not making claim in the return of income or before the Assessing Officer. It was further submitted that all the relevant information was before the Assessing Officer and the Assessing Officer was duty bound to allow all the deduction and exemption to the assessee and the Department cannot take advantage of any ignorance or omission on the part of assessee and in support, reliance was placed on CBDT’s Circular No. 14(XL-35) dt. 11.04.1955. Further reliance was placed on the Hon’ble Allahabad High Court in case of CIT vs. Lucknow Public Education Society 318 ITR 223 (All) and in case of CIT vs. Muzaffarnagar District Co-operative Bank Ltd. 100 CCH 91 (All) (HC). It was further submitted that even where the claim was not made before the Assessing Officer, the claim of exemption u/s 10(23C)(iiiad) is purely a question of law and the term “education” has been held to be worded widely as held by the Kerala High Court in case of CIT vs. St. Mary’s Malankara Seminary 348 ITR 69 (Ker) (HC) and the claim of exemption should have been entertained by the ld. CIT(A). Further reliance was placed on the decision of Hon’ble Rajasthan High Court in case of CIT vs. Rajasthan Fasteners Pvt. Ltd. 363 ITR 271 (Raj.).

4 ITA No. 996 & 995/JP/2017 M/s Gurukul Vidhya Peeth, Jaipur vs. ITO(E), Alwar 7. The ld. DR is heard who has relied on the order of the lower authorities. The ld DR drawn our reference to the assessment order for AY 2013-14 wherein besides receipts from school, the assessee has also shown receipts in form of grants from M/s ILFS Cluster Development limited sanctioned by the Ministry of Rural Development, Government of India for running a training programme. Per contra, the ld AR submitted that such training programme falls within the broad definition of “education” and so long as the assessee society is running the school and also such educational programmes, running of such training programmes cannot be held against the assessee society as not falling within the definition of education.

We have heard the rival contentions and perused the material available on record. We find that in respect of claim of exemption under section 10(23C)(iiiad), the assessee has raised an additional ground before the ld CIT(A) and certain information has been filed during the course of appellate proceedings in form of copy of registration certificates issued by the Registrar of Society and by the Department of School Education, Jaipur, copy of income and expenditure account, etc. It would have been appropriate where the ld CIT(A) have examined such a claim of the assessee society U/s 10(23C)(iiad) and sought further information/clarification as may be desired. However, given that there is no finding recorded by the ld CIT(A) on merits, we are constrained to remand the matter back to the file of the ld CIT(A) who shall examine the said claim of the assessee society on merits as per law after providing reasonable opportunity to the assessee and the latter shall be free to raise the contentions before him as so raised before us.

5 ITA No. 996 & 995/JP/2017 M/s Gurukul Vidhya Peeth, Jaipur vs. ITO(E), Alwar

In the result, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on 31/12/2018.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 31/12/2018 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Gurukul Vidhya Peeth, Jaipur 2. izR;FkhZ@ The Respondent- ITO (Exemption), Alwar 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 996 & 995/JP/2017} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत

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