MOHAN EDUCATIONAL SOCIETY,KAKINADA vs. THE CIT, (EXAMPTIONS), HYDERABAD

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ITA 502/VIZ/2016Status: DisposedITAT Visakhapatnam31 July 2018AY 2015-20164 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found no infirmity in the Commissioner's order regarding the initial rejection. However, it directed the Commissioner to consider the amended objects, which were pending, for examination under Section 10(23C)(vi).

What were the facts?

The assessee, an educational society, applied for exemption under Section 10(23C)(vi) of the Income Tax Act. The Commissioner denied exemption, finding that the society's objects were not solely for educational purposes.

What were the issues?

Whether the assessee's objects were solely for educational purposes to qualify for exemption under Section 10(23C)(vi), and the impact of amended objects.

Which sections of the Income-tax Act were involved?

Section 10(23C)(vi)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLE

For Appellant: Shri P. Prabhakara Murthy – Adv
For Respondent: Shri V. Appala Raju – Sr.DR
Hearing: 25/07/2018

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 502/VIZ/2016 (Asst. Year : 2015-16) Mohan Educational Society, vs. CIT (Exemptions), D.No. 10-475, Eqaswar Nagar, Kakinada. Near APSP Quarters, Kakinada. PAN No. AAAAM 4370 L (Appellant) (Respondent)

Assessee by : Shri P. Prabhakara Murthy – Adv. Department By : Shri V. Appala Raju – Sr.DR Date of hearing : 25/07/2018. Date of pronouncement : 31/07/2018. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Visakhapatnam, dated 18/08/2013 for the Assessment Years 2006-07 to 2009-10. 2. Facts of the case in brief are that assessee is an educational society registered under the Societies Registration Act, 1980 and is carrying educational activities. The assessee has filed an application for seeking grant of exemption under section

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10(23C)(vi) of the Income Tax Act, 1961(for short, the “Act”) with the following objects:- “(i) To develop social contents and spirit of fellow feeling amount its members and to maintain a library with good books periodicals and newspapers. (ii) To strive for eradication of illiterature. (iii) To develop the social and cultural activities for the running of the society.”

3.

The Commissioner by considering the above objects has observed that the assessee-society not existed solely for educational purposes and therefore, not entitled for grant of exemption under section 10(23C)(vi) of the Act and denied registration. 4. The assessee carried the matter in appeal before the Tribunal 5. Ld. counsel for the assessee has submitted that the assessee society solely existed for the purpose of imparting education to the rural people and without profit motive. Therefore, the assessee is eligible for grant of registration under section 10(23C)(vi) of the Act. So far as objects raised are concerned, ld.counsel for the assessee by pointing out at page No. 78 of the paper book has submitted that the assessee has filed an

3 ITA No.502 /VIZ/2016 (Mohan Educational Society)

application dated 30/08/2016 wherein he stated that the society is ready to amend and the redraft the said objects with sole clause of running educational institutions only and subsequently, amended the objects which are before the ld. Commissioner under consideration and requested that Tribunal may be directed the Commissioner to grant registration under section 10(23C)(vi) of the Act. 6. On the other hand, ld. Departmental Representative strongly supported the order passed by the ld. Commissioner. 7. The assessee is an educational institution registered under the Registration of Societies Act. The assessee has filed an application before the Commissioner to grant exemption under section 10(23C)(vi) of the Act. To grant registration under section 10(23C)(vi) of the Act, the assessee has to carry solely educational activities and nothing else. Therefore, the Commissioner by considering the objects which are not solely for educational purposes, rejected for grant of exemption. We find no infirmity in the order passed by the ld.Commissioner. However, the assessee has filed an application before the Commissioner and also submitted that he is ready to amend the objects and accordingly he submitted that an application for amendment to the objects is pending before the Commissioner. If

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the assessee has already amended the objects which is pending before the Commissioner, the same may be considered for examination under section 10(23C)(vi) of the Act in accordance with law. Ordered accordingly. 8. In the result, appeal filed by the assessee is partly allowed for statistical purpose. Order Pronounced in open Court on this 31st day of July, 2018.

Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated : 31st July, 2018. vr/- Copy to: 1. The Assessee – Mohan Educational Society, D.No. 10- 475, Eqaswar Nagar, Near APSP Quarters, Kakinada. 2. The Revenue – CIT (Exemptions), Kakinada. 3. The D.R., Visakhapatnam. 4. Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.

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