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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016
आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No. 923 /Ind/2016 Assessment Year 2004-05
Deputy Commissioner of Vs. M/s. Ayushmati Income Tax-2(1), Education and Social Bhopal Society, 202 Ganga Jamna Complex, Zone-1, Bhopal (Appellant) (Respondent ) PAN No. AAAAA3026D Revenue by Shri B.J Boricha, Sr. DR Assessee by S/Shri Sumit Neema, Sr.Adv & Ayush Gupta, Adv. Date of Hearing 25.10.2018 Date of Pronouncement 06.11.2018
O R D E R PER SHRI MANISH BORAD,AM
This appeal of Revenue pertaining to A.Y. 2004-05 is directed
against the order of Ld. Commissioner of Income Tax(Appeals)-31,
New Delhi, Camp Bhopal (in short ‘CIT(A)’), dated 29.06.2016 which
is arising out of the order u/s 143(3) of the Income Tax Act
1961(hereinafter called as the ‘Act’) framed on 29.12.2006 by ACIT,
1(1), Bhopal.
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 2. The revenue has raised following grounds of appeal;
“1. Whether on the facts and circumstances of the case Ld.CIT(A) was justified in deleting the addition of Rs.90,31,280/- made by A.O on account of disallowance of Excess of income over expenditure.. 2. Whether on the facts and circumstances of the case Ld.CIT(A) was justified in deleting the addition of Rs.90,31,280/- eve3n though approval 10(23C)(vi) was not granted to the society by the competent authority and thereby ignoring the decision of the I.T.A.T. Amritsar Bench in the case of (2014) 48 taxman.com 386 (Amritsar Trib.) in the I.T.A.T. Amritsar Bench Income Tax Officer v Vivekanand Society of Education and Research. 3. Whether on the facts and circumstances of the case Ld.CIT(A) was justified in deleting the addition of Rs.90,31,280/- even if no time limit for granting approval u/s 10(23C)(vi) is prescribed in the I.T.Act.”
Briefly stated facts as culled out from the records are that the
assessee is a society running educational institutes. The return of
income was filed on 23.12.2004 in which Income of Rs.Nil was
declared. The Society is registered under the Society’s Registration
Act vide order dated 15.10.1999. The assessee was also granted
registration u/s 12AA of the Income Tax Act by the Commissioner
of Income Tax, Bhopal vide order No.56/04-05 dated 24.05.2005
w.e.f. 01.04.2004. The society is engaged in the social services and
educational activities. The case picked up for scrutiny and
necessary notices u/s 143(2) and 142 Sub Section (1) of the Act
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 were duly served upon the assessee. The Ld.A.O while examining
the records observed that Bhabha Engineering Research Institute is
run by the assessee. In the return of income the assessee stated
that the entire receipt of Rs.1,08,73,530/- (after deducting 15% of
gross receipt) u/s 11(i) were exempt. Ld.A.O however was of the
view that the registration u/s 12AA of the Act has been granted
w.e.f. 1.4.2004 and the year under assessment is financial year
2003-04 and therefore assessee is not entitled for claiming the
exemption u/s 11 of the Act for the Assessment Year 2004-05.
Ld.A.O further noticed that the aggregate receipt for the year as
discernable from the Income and Expenditure Account of Bhabha
Engineering Research Institute worked out to Rs.1,22,14,312/- and
the same being more than Rs. 1 crore, approval by the prescribed
authority i.e. CCIT, Bhopal was required in order to claim
exemption u/s 10(23C)(vi) of the Act. It was stated by the assessee
that an application for grant of approval has been made on
23.12.2004 and the approval is still awaited. With this discussion
the Ld.A.O completed the assessment denying the benefit of
exemption u/s 11 as well as section 10(23C)(vi) of the Act and
assessed income at Rs.90,31,280/- which comprised of income 3
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 earned by Ayushmati Educational & Social Society at Rs.5,70,882/-
and income earned by Bhabha Engg. Research Institute at
Rs.84,60,398/-.
Aggrieved assessee preferred appeal before Ld.CIT(A) who
allowed the assessee’s appeal observing that as the application of
the assessee for approval u/s 10(23C)(vi) of the Act has neither
been approved nor declined after lapse of so much time therefore
the assessee shall be deemed to have received the approval u/s
10(23C)(vi) of the Act, therefore eligible for exemption. Thereafter
the Revenue filed an appeal before I.T.A.T, Indore. The Tribunal vide
order dated 21.4.11 (I.T.A. No. 449/Ind/2007) set aside/restore the
matter back to the file of Ld.CIT(A) to verify the factual position with
regard to the application of the assessee pending for approval u/s
10(23C)(vi) of the Act before CCIT, Bhopal.
In the set aside proceedings Ld.CIT(A) allowed assessee’s
ground observing as follows;
“4.3 In order to comply with the directions of Hon'ble ITAT as regards the status of the application dated 23.12.2004 filed by the appellant, the matter was taken up with the office of the Pro CCIT, Bhopal. It was conveyed vide letter dated 06.06.16, forwarding thereby a letter dated 02.06.16 of the CIT(Exemption), Bhopal that the said application dated
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 23.12.2004 in form no. 560 for approval u/s 10(23C) for AY 2004-05 has not been disposed off by way of any order/ record of proceeding thereon.
4.4 I have carefully considered the findings recorded by the Id. AO as per the assessment order, the order dated 21.05.2007 of the CIT(A)-1, Bhopal the facts of the case on record and the submissions made by the appellant. It is now confirmed that the application dated 23.12.04 filed by the appellant for approval u/s 10(23C) has not been disposed off. Therefore, the facts of the case are the same on which relief was allowed by the Id. CIT(A)-1, Bhopal after a detailed discussion in view of various judicial pronouncements. Respectfully following the above, I confirm the relief allowed by Id. CIT(A)-I, Bhopal as the facts and circumstances have remained the same. Accordingly, the ground no.1, is allowed to the appellant”.
Aggrieved Revenue is in appeal before the Tribunal in the
second round.
Ld. Departmental Representative referring to the decision of
the Co-ordinate Amritsar Bench in the case of Income Tax Officer v.
Vivekanand Society of Education and Research (2014) 48
taxmann.com 386 submitted that Ld. CIT erred in deleting the
addition of Rs.90,31,280/-even when no approval was granted u/s
10(23C)(vi) of the Act by the competent authority.
Per contra Ld. Senior Counsel for the assessee without
supporting the finding of Ld.CIT(A) in favour of the assessee made
following submissions. 5
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016
“It is humbly submitted that the A0 as well as CIT(A) have directly considered sec ion 10(23C)(vi) on the ground that the receipts of the society exceed Rs. 1 crore.
However in the present case first the applicability of section 10(23C)(iii)(ad) have to be seen before considering the applicability of section 10{23(c)(iv).
The Society is running the following colleges which have the following gross receipts: Name of College Gross receipts Bhabha Engineering Institute 74,32,264
Reg.No.01/01/MP/DEG/2003/005 Bhabha Pharmacy Research Institute 36,43,120
Reg. No.01/01/MP/PHAR/2004/007 Bhabha Engineering Research Institute 1,47,720
(MCA)
Reg. No.PG/MCA/MP/2003/08 Bhabha Management Research 9,20,630 Institute
Reg. No.PG/MBA/MP/2003/02
Total 1,21,43,734
Thus it is evident that the gross receipts of each college is less than the prescribed threshold limit of 1 crore and therefore there the income of each of the collage is exempt u/s 10(23)(C)(iii)(ad).
Consequentially the income of the society is also exempt.
Reliance is placed on the following decisions:
(2013) 358 ITR 373 (Karnataka) CIT vs. Children's Education Society (para 22)
Thus in view of the aforesaid submission the income of the assessee is exempt u/s 10(23)(C)(iii)(ad) as each colleges gross receipts less than 1 crore”.
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016
Ld. Senior Counsel for the assessee further added that before
considering the applicability of Section 10(23C)(iv) of the Act it is
first to be examined whether the provisions of Section 10(23C)(iiiad)
are applicable or not on the assessee. He mainly focused that
whether the words University or other educational institution
referred in the provision of Section 10(23C)(iiiad) are to be
considered as individual institution or the group of such
institutions run by a society. Referring to the judgment of Hon'ble
High Court of Karnataka in the case of CIT vs. Children’s Education
Society (supra), wherein the Hon'ble High Court has held that “if an
assessee is running several educational institutions, if any of them
is wholly or substantially financed by the Government then the
income from which educational institution received by the assessee
is not included while computing its total income. Similarly income
from each educational institution if they are not receiving any aid
from the government wholly or substantially in respect of which the
aggregate annual receipt is not exceeding Rs. 1 crore, is also not
included while computing annual total income of the assessee”.
Referring to the above judgment of the Hon'ble Karnataka High 7
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 Court the Senior Counsel for the assessee submitted that the gross
income from each of the four institutions run by the assessee are
below Rs.1 crores and therefore the assessee is eligible for the
exemption u/s 10(23C(iiiad) of the Act.
We have heard rival contentions and perused the records
placed before us and carefully gone through the judgments referred
and relied by both the parties.
The issue before us raised by the Revenue is against the
deletion/addition of Rs.90,31,280/- by the Ld.CIT(A) taking the
same view as taken by his predecessor in the first ground of the
appellate proceedings thereby confirming the decision that the
assessee shall be deemed to have received the approval u/s 10(23C)
of the Act, as the application made by the assessee on 23.12.2004
has neither been approved nor rejected. The Ld. Senior Counsel for
assessee without supporting the finding of Ld.CIT(A) giving deemed
approval u/s 10(23C) of the Act submitted that the assessee is
eligible for exemption u/s 10(23C)(iiiad) of the Act because the gross
receipt of each institution is less than Rs.1 crore and further
referred to the judgment of Hon'ble High Court of Karnataka in the
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 case of CIT vs. Children’s Education Society (supra) for its
contentions.
In order to adjudicate the issue we would like to go through
the relevant portion of the judgment of the Hon'ble High Court of
Karnataka in the case of CIT vs. Children’s Education Society
(supra) which is mentioned below;
“11. In order to appreciate the aforesaid contentions, it is necessary to have a look at the statutory provisions. Chapter III deals with incomes which do not form part of total income. Section 10 deals with income not included in total income, which reads as under:
"Section 1 0 - In computing the total income of a previous year of any person, any income falling within any of the following clause shall not be included."
Sub-section (22) before deletion read as under:
"Any income of a University or other educational institution, existing solely for educational purposes and not for purposes of profit."
By deleting the aforesaid provision, the provisions which are now substituted are sub-section 23-C of Section 10. Sub-section 23-C reads as under:
"Any income received by any person on behalf of
(iii)(a) the National Foundation for Communal Harmony; or
(iii)(ab) any University or other educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or
(iii)(ac) any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or
(iii)(ad) any University or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed; or
(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 (iii)(ab) or sub-clause (iii)(ad) and which may be approved by the prescribed authority"
Section 10 groups in one place various incomes which are exempted from tax, which includes certain types of income from the ambit of total income, as defined under the Act. The incomes enumerated in the Section are not only excluded from the taxable income of the assessee, but also from his total income. They are not to be taken into consideration for the purpose of determining either the taxable income or rate of tax. If any income falling within any of these clauses of the Section is in reality not the income of the assessee, but is deemed to be his income under any provision of this Act, the exemption would still be available. A receipt may not be income, at all, within the proper concept of the term and yet may come within the expressed exemption in this Section due to the over anxiety of the Taxmann to make the nontaxable clear from possibility of doubt. In other words from the fact that such a receipt is exempted under the Section which must not be assumed that, but for the exemption, it would necessarily be taxable. The onus of showing that a particular item of income falls within any clause of the Section, is on the assessee. The object with which Subsection (22) of Section 10 was deleted is found in the Budget Speech of the Minister of Finance for 1998-99, where it is stated as under:
"Moderate rates and large concessions do not go hand in hand. I have, therefore, carried out a review of the various concessions and exemptions under the Income- Tax Act. I find that many of them are no longer necessary and some of them are also being used for tax avoidance. L. therefore, propose to withdraw many of these provisions. These include; exemption to the Export Import Bank of India and exemption in respect of certain perquisites on foreigners employed in India. The blanket exemption in respect of educational and medical institutions which is being misused, is proposed to be withdrawn, compelling such institutions to come under a discipline. However, safeguards are being provided to ensure that the institutions genuinely serving the social cause in either field do not lose the existing benefits."
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 15. The Apex Court had an occasion to consider the Sub-section (22) of Section lO in the case of Aditanar Educational Institution v. Addl. CIT [1997J 224 ITR 310/90 Taxman 528 (SC), has held as under:
"Counsel for the Revenue mainly stressed the plea that the exemption under section 10(22) of the Act would apply only to educational institutions as such. According to him, in this case, the assessee might be financing for running an educational institution, but it is not itself an educational institution. As noted earlier, the Tribunal held that the assessee was an institution existing for educational purposes and not for the purposes of earning any profit and the assessee itself could be termed as an "educational institution" coming within section 10(22) of the Act. The High Court has concurred with this view. The High Court has further held that the medium through which the assessee could effectuate its objects is the college and by employing this medium, the assessee imparts education and it cannot be stated that the assessee is only a financing body and does not, on the facts, come within the scope of "other educational institution" occurring in section 10(22) of the Act. Reliance was placed on the decision of the Allahabad High Court in Katra Education Society v. ITO [1978J III ITR 420, to hold that an educational society could be regarded as an educational institution if the society was running an educational institution. We are of the view that an educational society or a trust or other similar body running an educational institution solely for educational purposes and not for the purpose of profit could be regarded as "other educational institution" coming within section 10(22) of the Act. (See CIT v. Doon Foundation [1985] 154 ITR 208 (Cal) and Agarwal Shiksha Samiti Trust v. CIT [1987] 168 ITR 751 (Raj). It will be rather unreal and hypertechniced to hold that the assessee-society is only a financing body and will not come within the scope of "other educational institution" as specified in section I 0(22) of the Act. The object of the society is to establish, run, manage or assist colleges or schools or other educational institutions solely for educational purposes and in that regard to raise or collect funds, donations, gifts, etc. Colleges and schools are the media through which the assessee imparts education and effectuates its objects. In substance and reality, the sole purpose for which the assessee has come into existence is to impart education at the levels of colleges and schools and so, such an educational society should be regarded as an "educational institution" coming within section 10(22) of the Act. We hold accordingly. In our view, the judgment of the High Court does not merit interference. The plea of the Revenue to the contrary is untenable and we repel the same. All the appeals filed by the Revenue shall stand dismissed, but there shall be no order as to costs."
The aforesaid provision as "it stood then and the interpretation placed on it by the various High Courts as well as the Apex Court gave 11
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 total exemption in respect of the income derived from running such educational institutions. As the said provision was abused by some persons, the said provision was deleted and thus new provisions have been inserted. However, it is made clear, the intention of such amendments was not to deny the benefit to the institutions genuinely serving the social cause and to deny the existing benefits. Therefore, the real test is whether the assessee who claiming these exemptions is running educational institutions solely for education purposes and not for purpose of profit. If the said fact is established, he is entitled to exclude the income from such institution under Section 10. However, as intention of the deletion of Section 10(22) and introduction of these provisions was to compel such institutions to come under a discipline, the stress now is on the aggregate of the annual receipts received by such institutions. By the amended provisions what is intended to be done is, any University or other educational institution existing solely for educational purpose and not for purposes of profit, if it is wholly or substantially financed by the Government, then the income of such educational institutions in the hands of the assessee, is not included in the total income of the assessee. The reason appears to be that if the Government is financing, thev would take all precautions before parting _ funds and make sure that such educational institution is existing for the educational purpose and not for the purpose of profit. Therefore, the income derived on such institutions is excluded from the total income of the assessee. The next exemption is contained in Sub-clause (iii)(ad). If any University or other educational institution existing solely for educational purpose and not for the purposes of profit, if the aggregate annual receipts of such University or educational institution do not exceed the amount of annual receipts as may be prescribed.
Rule 2BC of the Income-Tax rules prescribes the amount of annual receipts for the purposes of sub-clauses (iii)(ad) and (iii)(ae) of clause (23C) of section 10, which reads as under:
"2BC (1) For the purposes of sub-clause (iii)(ad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any university or other educational institution, existing solely for educational purposes and not for purposes of profit, shall be one crore rupees.
(2) For the purposes of sub-clause (iii)(ae) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be one crore rupees.]" 12
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 18. Therefore, one crore of rupees is the aggregate annual receipts which is prescribed under the Rules. In other words, if the aggregate annual receipts of an educational institution is less than one crore, the income from such educational institution in the hands of the assessee, is not taken into consideration in computing the total income of the assessee.
Sub-clause (vi) provides that any University or other educational institution existing for educational purposes and not for the purpose of profit other than those mentioned in sub-clause (iii)(ab) and sub-clause (iii)(ad) and which may be approved the prescribed Authority, they are also entitled to the said benefit. In other words, sub-clause (iii)(ab), sub- clause (iii)(ad) and clause (vi) applies to three categories of institutions.
Now, we are concerned with the meaning to be attached to the word "aggregate annual receipt". The argument is, other educational institution referred to in the said sub-clause refers to all educational institutions run by the assessee and aggregate annual receipts of such other educational institutions means the aggregate of annual receipts of all such educational institutions put together. Otherwise, the use of the word "aggregate" loses its meaning. We find it difficult to accept the said argument.
Firstly, if the word "aggregate annual receipts" of other educational institution is to be understood as clubbing of annual receipts of all educational institutions run by an assessee society, then it will also include the annual receipts of an educational institution which is wholly or substantially financed by the Government. If that was intention of the Legislature, they would not have introduced separate sub-clauses as (iii)(ab) and (iii)(ad). If such interpretation is placed, sub-clause (iii)(ab) becomes otiose. Therefore, it is not possible to place such an interpretation. If an assessee society is running several educational institutions, if some of them are wholly or substantially financed by the Government in terms of sub-clause (iii)(ab), the income on behalf of such educational institution received by the assessee is exempted from being computed the total income of the assessee. If the assessee is running other educational institutions which are not wholly or substantially financed by the Government, then the benefit of that exemption is also extended to the income derived from such educational institutions and received by the assessee under sub-clause (iii)(ad) reading with sub- clause (iii)(ad) along with Rule 2BC. It was contended, the Legislature used the word "aggregate annual receipt" and "amount of annual receipts" and therefore, the provisions are not one and the same. The word "aggregate" has been defined in Chambers 21st Century Dictionary as under:
"aggregate - noun = a collection of separate units brought together, a 13
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 total taken altogether, bring together."
In Wharton's Law Lexicon, it is defined as thus:
“a collocation of individuals, units or things in order to form a whole"
Similarly relying on the judgment of the Apex Court in the case of Aditanar Educational Institution (supra) it was contended the word "other educational institution" refers to the assessee society and not to the individual educational institution. If the intention of the Legislature was to club the annual receipts of all educational institutions run by the assessee society, they could have said so in clear terms. On contrary what is stated in the said Section is the aggregate annual receipts of such University or such educational institution referring to other educational institution. Other educational institution is to be understood with the context of the first word i.e., the University. Both in the University and any educational institutions, education is imparted. The University is a statutory body. But there are a number of educational institutions which are not run by a statutory authority which are imparting education, the word "other educational institution" has to be understood in the context of other than any University. If so understood, all that it means is every educational institution existing solely for educational purpose and not for the purpose of profit, if the aggregate annual receipts of such educational institution exceeds Rs.1 crore, then the income from such educational institution received by the assessee is excluded from his total income. In an educational institution the amount are calculated periodically. It may be calculated under different heads. All such amount received constituted receipts and those receipts may be received throughout the year. Therefore, the word "annual" has been inserted. But to be eligible for exemption, aggregate of annual receipts should not exceed Rs.1 crore i.e. the total annual receipts of a year if it does not exceed Rs.I crore, then the income derived from such educational institution in the hands of the assessee cannot be taken into consideration to compute the income of the assessee.
No doubt, education has become a business, a very profitable business also. But it requires huge investment. It is the duty of the Government to provide education to all its citizens, JS the Government is not able to shoulder the responsibility completely. Therefore, the field of education is now thrown open to private organizations. But for throwing open the field. to the private operators, probably, the country would not have achieved in the field of education what it has achieved. Therefore, lot of funds are invested in running these educational institutions, either by creating a Society or a Trust. In course of time, they have expanded their activity providing course in various subjects at various levels and for that purpose they have established more than one educational 14
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 institution. Each educational institution is a separate entity controlled under various statutes for various purposes. May be the Management of these educational institutions would be in the hands of the Societies or the Trust, but for all other purposes they are different, independent entities. That is the reason why Section 10 (23)(c) is worded as under:
"Any income received by any person on behalf of. .. "
Here "any person" refers to the assessee and "on behalf of' refers to such institutions. It may be an University, it may be an educational institution, it may be a hospital or other institutions of similar nature. As all such institutions are independent entity and they generate income and when that income is received by the assessee, it becomes the income in the hand of the assessee and it is such income which is sought to be excluded while computing the total income of the assessee under Section 10. The test prescribed under the aforesaid provision is not the income of the educational education. It is the aggregate annual receipts of such educational institution that is prescribed at Rs.1 crore. Therefore, irrespective of the expenditure incurred by those institutions, the exemption is based on the total receipts. Even if the word "aggregate" has to be understood as suggested by the Revenue as the annual receipts of such educational institutions put together, probably, the said provision regarding exemption would be of no use at all. Especially, if the society is running a medial college or any engineering college or other professional courses, then the annual receipt of each institution would run to few crores and therefore, the very object of granting exemption to such genuine institution would be lost. Therefore, the word "aggregate annual receipt" has to be understood with the context in which it is used and the purpose for which the said provision was inserted, keeping in mind, the Scheme of the Act. Therefore, if an assessee is running several educational institutions, if any of them is wholly 01 substantially financed by the Government, then the income from such educational institution received by the assessee is not included while computing his total income. Similarly, income from each educational institution if they are not receiving any aid from the Government wholly or substantially in respect of which the aggregate annual receipt do not exceed Rs.l crore received by the assessee, is also not included while computing annual total income of the assessee.
Clause (vi) makes it clear that if educational institution do not fall under either of those two categories and still such educational institutions are also entitled to the exemption, provided such institutions are approved by the prescribed authority. Therefore all these three provisions apply under three differed spheres. Otherwise, there was no necessity for the Legislature to introduce these three provisions. In that view of the matter, the finding recorded by the Tribunal that aggregate 15
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 annual receipt of other educational institution means, total annual receipt of each educational institution, is correct and it does not call for any interference. Therefore the substantial questions of law Nos. 2 and 3 is answered in favour of the assessee and against the revenue”.
The above judgment of Hon'ble High Court of Karnataka in
the case of CIT vs. Children’s Education Society (supra) clearly
holds that the gross receipt of each of the Institute/University/
Educational Institution which solely existing for educational
purpose if less than the prescribed limit )which in this case is Rs.1
crore) there is no need for getting the approval from the competent
authority and the Income of such institution is exempt u/s
10(23C)(iiiad) of the Act. We therefore respectfully following the
above judgment and in the given facts and circumstances of the
case are of the considered view that the issue of verification of gross
receipts of various institutions run by the assessee society needs
to be verified at the end of the Ld.A.O in the light of the judgment of
Hon'ble High Court of Karnataka in the case of CIT vs. Children’s
Education Society (supra) and if the contentions of the assessee are
found to be correct as submitted before us and the Ld.A.O is also
satisfied that all the institutions run by the assessee are existing
solely for educational purposes and not for the purpose of profit 16
Ayushmati Education and Social Society I.T.A.No.923/Ind/2016 coupled with the fact that the aggregate receipt of such institution
is less than Rs.1 crore then the Learned Assessing Officer may
consider to grant the benefit of exemption u/s 10(23C)(iiiad) of the
Act. Needless to mention that reasonable opportunity of being
heard should be provided to the assessee.
In the result the appeal of the Revenue is allowed for statistical
purposes.
The order pronounced in the open Court on 06.11.2018.
Sd/- Sd/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 06.11.2018 /Dev Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Asstt. Registrar