M/S. NAV STHALI EDUCATION SOCIETY,NEW DELHI vs. CCIT, GHAZIABAD

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ITA 6266/DEL/2015Status: DisposedITAT Delhi27 February 2019AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal rejected the Revenue's preliminary objection regarding the maintainability of the appeal. However, it found that the CIT had not properly verified the society's objectives or sought explanations regarding surplus funds and diversion of money.

What were the facts?

The assessee, Nav Sthali Education Society, running a school, applied for exemption under Section 10(23C)(vi) of the Income Tax Act. The CIT rejected the application, stating the society was profit-making and diverted funds for personal use.

What were the issues?

Whether the appeal against the CIT's order under Section 10(23C)(vi) is maintainable before the ITAT, and whether the CIT properly examined the society's claim for exemption and its financial dealings.

Which sections of the Income-tax Act were involved?

Section 10(23C)(vi),Section 253

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Income Tax Appellate Tribunal, DELHI BENCHES: ‘D’, NEW DELHI

Before: SMT. BEENA A PILLAI & SHRI PRASHANT MAHARISHI

Hearing: 26/02/2019Pronounced: 27/02/2019

ORDER PER BEENA A PILLAI, JUDICIAL MEMBER

Present appeal has been filed by assessee against order dated 28/09/2015 passed by Ld.CCIT, Ghaziabad pertaining to A.Y. 2014-15 on following grounds of appeal: “

1. That on the facts and in the circumstances of the case and in law, the order passed u/s 10(23C) (vi) is bad in law.

2. That on the facts and in the circumstances of the case and in law, the CCIT erred in not appreciating that the society exists ‘solely for the purpose of education’ as contemplated u/s 10(23C)(vi) of the Income Tax Act.

A.Y.2014-15 Nav Sthali Education Society, N.Del.

3. That on the facts and in the circumstances of the case and in law, the CCIT has erred on facts that the society is a profit making entity.

4. That on the facts and in the circumstances of the case and in law, the CCIT has erred on facts that the society has diverted its surplus for the personal use of its members.

5.

That the impugned order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.

6.

That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”

At the outset assessee filed adjournment application stating that Ld.Counsel was out of town. But keeping in view the smallness of the matter, the same is rejected.

2.

Brief facts of case are as under: 2.1. Assessee is a Society which is running a school by name N.S.Public School at Noida. It claimed that it is existing solely for educational purposes and not for profit. Assessee filed application on 22.09.2014 for obtaining exemption u/s 10(23c)(vi) of the Income Tax Act, 1961 (the Act). Ld.CIT rejected application vide order dated 28.09.2015.

2.2. Against the rejection order by Ld.CIT, assessee preferred appeal before this Tribunal.

2.3. At the outset, Ld.CIT,DR submitted that present appeal cannot be filed before this Tribunal as impugned order has been passed by Ld.CIT u/s 10(23c)(vi). Sec.253 does not include an order passed u/s 10(23c)(vi). A.Y.2014-15 Nav Sthali Education Society, N.Del.

3.

We have perused Sec.253 of the Act and are not in agreement with Ld.CIT, D.R. Sec.253(1)(f) has been amended vide Finance Act, 2015 w.e.f. 01/06/2015. It is observed that impugned order was dated 28/09/2015 and present appeal has been filed on 26/11/2015. We therefore reject this argument of ld.CIT,D.R.

3.1. However, it is observed that Ld.CIT(A) has not verified the objectives of assessee and no explanation has been called for in regard to excess surplus, and diversion of funds found in the accounts. We therefore remit this issue to ld.CIT and direct him to call for explanation/submissions/evidences by granting proper opportunity to assessee. Assessee shall establish its claim to the satisfaction of Ld.CIT within principles of law which would govern the issues observed by Hon’ble Supreme Court in case of Visveswaraiah Technological University vs. ACIT reported in(2016) 68 taxmann.com 287.

4.

In the result appeal filed by Assessee stands allowed for statistical purposes.

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