RAMA DEVI MEMORIAL EDUCATIONAL SOCIETY,NOIDA vs. JCIT, RANGE-2, NOIDA

The Assessee has filed this Appeal against the Order dated

31.03.2017 of the Ld. CIT(A)-I, Noida relating to assessment year

2010-11 on the following grounds:-

I. Whether on the facts of the case and in law

Ld. CIT(A) is correct in holding that the

charitable status of the Appellant Society was

not relevant for claim of exemption uls

11(1)(a) of the Income Tax Act,1961 but the

nature and source of income is material?

on the facts of case to ignore provisions of

Sections 11, 12, and 13 relating to charitable

institutions i.e. 'income derived from property

held under trust/legal obligation; application

of income of income for charitable purposes;

accumulation or setting apart of income for

charitable purposes; forms or modes of

investment of accumulated income etc.

necessary and relevant for exemption of

income.

import the concept of 'pure charity' in place

of words "Charitable purpose" when there is

no such requirement in Sections 11, 12, &13

of the Act.

issue enhancement notice based on arbitrary

and imaginary propositions of law ignoring

actual provisions of Income Tax Statute

relating to charitable institutions/trusts.

educational institutions can only claim exemption

u/s lO(23C)(iv) and IO(23C)(vi) and not under

section 11 of the Act.

that educational trusts or institutions cannot collect

fee etc from students and charging of such fee etc.

will render the objects of the trusts/institutions as

uncharitable.

ignore the principle of application Of income u/s 11

(1)(a) for claim of exemption and holding that

expenditure incurred on imparting of education is

not to be set off against fee and other income of

the Appellant.

that the income of appellant from fee and other

receipts is assessable under the head income from

'other sources' without any deduction on account of

expenditure incurred by the appellant.

and imaginary ideas will be within four corners of

law.

business undertaking held under trust should have

been received by way of contribution to its cause

and held as such only then charitable institution

can claim exemption of income derived from such

business.

facts of the case to ignore the school buildings and

other assets as property held under trust and

import his own imaginary and arbitrary ideas

relating' to term "property" to disallow benefit of

Section 11 when all relevant conditions of Section

11 are satisfied and there is no violation of any

legal provisions.

that when provisions Section 10(23C)(iv) & (v)

provide for exemption of income of educational

institutions, the Legislature would not have

legislated Section 11 again for exemption of such

income.

decide the ground of appeal relating to lease

charges of Rs 11,37,029/- paid to NOIDA Authority

ignoring written submissions filed by the appellant

on last day of hearing i.e. 31.03.2017 in respect of

this addition and on enhancement notice.

depreciation of Rs. 15,96,073/-, disallowed by AO

and not appealed against by the appellant, as

donation and again making addition as income

which amounts to double addition.

substitute, modify, delete or amend all or any

ground of appeal either before or at the time of

hearing.

completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter

referred as the Act) vide order dated 07.02.2013 by making addition

of Rs. 11,37,029/- on account of lease rent paid to Noida Authority

for not deducting TDS u/s 40(a)(ia). Against the assessment order,

the Assessee appealed before the Ld. CIT(A), who vide his impugned

order dated 30.3.2017 has enhanced the income at Rs.

2,61,15,153/-. Ld. CIT(A), discussed the concept and theory of

charitable purposes as defined in section 2(15) and conditions laid

down in section 11 to section 13 of the Act. He held that once the

income of educational institution is exempt, it was on account of the

fact that imparting education is matter of pure charity and

educational institutions are not permitted to receive or recover the

cost of charity by way of charging fee as according to him it would be

uncharitable activity. He relied upon the decision of the Hon’ble

Supreme Court decisions cited in his order in this regard. Ld. CIT(A)

further held that assessee is not entitled for the benefit of section 11

and 12 and its income has to be assessed as income from other

source u/s 56 against which no deduction u/s 57 will be allowed and

thus, Ld. CIT (A) held the entire receipts as taxable. Against the

order of Ld. CIT(A), assessee is in appeal before the Tribunal.

attention to a similar order passed by the same CIT(A), on

30.03.2017 in the case of M/s Aadarsh Public School, which was

made part of the paper book from page 23-51. It was shown by Ld.

Counsel for the assessee that para 4, 5, 8, 9, 11 to 100, 102 & 103

of the said decision given by same Ld. CIT(A) in the case of M/s

Aadarsh Public School are verbatim to para 19 to para 71, part of

para 72, para 73 to para 84, part of para 85, 87 to 91, 96 to 100,

part of para 101, para 102 to para 112, 113, 115 to 116, 118-119 of

appeal order passed in the case of the assessee and thus argued that

entire discussion and decision given by Ld. CIT(A) in the case of M/s

Adarsh Public School has been lifted by him in his order passed in the

case of the assessee & is identical. It was further brought to our

notice vide paper book page 52-74 that the said order of Ld. CIT(A),

in the case of M/s Aadarsh Public School went before Tribunal and

Tribunal in ITA No. 3782/Del/2017 vide order dated 31.01.2018

reversed all the findings recorded by CIT(A) vide its order dated

31.01.2018 and thus, Ld. Counsel for the assessee argued that this a

covered case by the aforesaid decision of Tribunal. Regarding

ground no. 13 and 14 it was pleaded that no opportunity was

provided to the assessee. In sum and substance Ld. Counsel argued

for the reversal of the order of Ld. CIT(A).

CIT(A) and the assessment order & agreed that the present appeal is

covered by the Tribunal decision in the case of Adarsh Public School,

(supra).

the orders passed in the present case and having gone through the

paper book, I am of the considered view that the decision of

Ld. CIT(A) on all fronts & issues are similar to the one which were

decided in the case of M/s Aadarsh Public School Supra. So much so

the language of the Ld. CIT(A)’s order in the case of Aadarsh public

School and the language in the appeal order in the present case and

the findings arrived at by Ld. CIT(A) in both the cases are identical.

We therefore, find that the issues involved in the present appeal

covering Grounds No. 1 to Ground No.12 are covered by the decision

of the Tribunal in the case of Aadarsh Public School (Supra) in which

Tribunal held as under:-

“11. We have heard the rival submissions and

perused the relevant finding given in the

impugned order as well as the material referred to

before us. We have already discussed in brief

various facets of the observations made by the ld.

CIT(A) while exercising his power of enhancement

u/s.251(2) and taxing the entire receipts of

Rs.1,04,85,689/- as income from other sources. It

is an admitted fact that assessee society has been

formed and registered under the ‘Registration of

Societies Act, 1860’, with the sole object of

providing education and in pursuance of such an

object it has set up an infrastructure in the form of

school which is named as ‘Adarsh Public School’,

from where it is providing education upto Senior

Secondary level. Looking to its object which is for

‘charitable purpose’ in terms of section 2(15) and

is solely for imparting education, it has been

granted registration u/s.12A by the competent

authority, i.e., Ld. CIT Ghaziabad. Once

registration u/s.12A is granted, then it is fait

accompli and accordingly, all its receipts / income

are subject to computation and benefit u/s.11 to

12 and restrictions provided u/s 13. Such a

registration u/s 12A has neither been withdrawn

nor has any action been taken by the competent

authority to withdraw such certificate of exemption

granted u/s.12A. That is the reason why the

assessments have completed u/s. 143(3) for the

subsequent assessment year, wherein the

assessee has been given the benefit of Section 11.

Here in the impugned assessment year the case of

the Assessing Officer was that the audit report in

Form 10B was not filed along with return of

income and the one which was filed during the

course of the assessment proceeding was back

dated. This allegation of the Assessing Officer has

been negated by the ld. CIT(A) who has found that

audit report in Form 10B was proper. Thus, the

ground and the finding of the Assessing Officer to

deny the claim of benefit of section 11 has been

overruled by the first appellate authority, which

finding has now attained finality as revenue is not

in appeal or in cross objection. The Assessing

Officer has only taxed the surplus over income and

expenditure account, however the ld. CIT(A) has

proceeded to tax the entire receipt albeit on

different grounds.

observations and findings of the ld. CIT(A) by

which he has denied exemption/benefit of Section

11 to the assessee. Coming to his first objection

that assessee is not entitled for benefit/exemption

u/s.11, because there is a separate provision

under the Act u/s. 10(23C)(iv), (v) and (vi) where

it could have or can claim the exemption and since

assessee has not availed the exemption

u/s.10(23C), therefore, it is debarred from

claiming exemption u/s.11. At the outset, such an

observation is against the principle laid down by

the Hon'ble Supreme Court in the case of CIT vs.

Bar Council of Maharashtra (supra), wherein the

their Lordships have observed and held as under:-

were not inclined to permit counsel for the

revenue to urge his first contention as in our

view the revenue must be deemed to have

given up the same. We may point out that

precisely this very contention was raised by

the revenue before the Tribunal and was

negative by it. The Tribunal on a detailed

analysis of the concerned provisions took the

view that the two provisions were not

mutually exclusive but operated under

different circumstances, that section 11 was

relatively wider in its scope and ambit, that

while section 10(23A) granted absolute

exemption in respect of particular types of

income, section 11 imposed certain

conditions for the exemption but such

exemption was available for all sources, and

that there was nothing inherently improbable

or inconceivable about the two provisions

operating simultaneously and as such the

claim for exemption under section 11 was

available to the assessee-Council provided it

satisfied 11 the requirements of that

provision. We may point out that there are

other allied provisions like for instance clause

(23C) in section 10 which clearly indicate that

the Legislature did not intend to rule out

section 11 when exemption was claimable

under such specific provisions of section 10.

It was after negativing the contention in this

manner that the Tribunal went on to consider

the claim for exemption made by the

assessee-Council under section 11 but on

merits found that there was no material or

evidence on record to show whether or not

the securities were held by the assessee-

Council for any of the charitable purposes

and, therefore, it remanded the case. The

remand order was never challenged by the

revenue by seeking a reference on the

ground that a remand was unnecessary

because section 11 was ruled out by reason

of exemption having been obtained by the

assessee- Council under section 10(23A) nor

was any such contention raised when

reference was sought by the assessee-

Council nor when the matter was being

argued in the High Court. In these

circumstances, it is clear to us that the

revenue acquiesced in the view taken by the

Tribunal that the claim for exemption under

section 11 could not be said to be ruled out

by reason of the provisions of section

10(23A). We, therefore, proceed to deal with

the second contention which was principally

argued before us in these appeals.

Hon'ble Apex Court, makes it very clear that there

is no bar or disharmony between Section 10(23C)

and Section 11; and exemption of Section 11

cannot be denied even when there is a specific

provision of Section 10(23C). This principle has

been reiterated by the Hon'ble Jurisdictional High

Court in the case of CIT vs. Indian Institute of

Engineering Society, reported in 218 Taxman 151

(All), wherein Their Lordships had observed as

under:-

submitted that as the assessee claimed

exemption, being an educational

institution as such it was required to

obtain exemption from the prescribed

authority under Section 10(23C) of the

Act, which is mandatory. Since no

exemption from the prescribed authority

under Section 10(23C) of the Act has

been obtained as such the assessee was

not entitled to claim benefits under

Section 11 of the Act. The submission is

wholly misconceived. Admittedly, the

assessee is an educational institution

and was established for charitable

purposes for running educational

institutions and imparting education.

Section 10 of the Act deals with the

income not liable to be included in total

income of the assessee while Section 11

deals with the income from property

held for charitable or religious purposes.

Both Section 10(23C) and Section 11 of

the Act are independent sections. The

assessee was registered under Section

12A of the Act. As such the assessee

was rightly granted benefits under

Section 11 of the Act.”

Court clearly negates the theory of ld. CIT (A).

Further Hon'ble Punjab and Haryana High Court in

the case of CIT vs. Mahasabha Gurukul

Vidhyapeeth (2010) 2 Taxmann.com 283 (P & H)

too have upheld the same proposition that once all

the requisite conditions for exemption u/s.11 have

been met and even if condition u/s. 10(23C) have

not been complied with, then there should be no

bar to seek exemption u/s.11. In view of the

aforesaid binding judicial precedents, we reject the

observation and finding of the ld. CIT (A) that

assessee cannot claim exemption/benefit of

Section 11 or is not entitled for benefit u/s 11 as

assessee was eligible for such an exemption u/s.

10(23C).

Section 11 to assessee society has held that, since

imparting of education is a matter of pure charity,

therefore, the educational institution is not

permitted to receive or recover the cost of charity

from its beneficiary by way of fees, i.e., charging

of fees itself would amount uncharitable activity.

We are unable to subscribe to this proposition at

all, because if fees is not charged from the

students then how the activity of imparting

education can be carried out. Fees collected from

the students itself feeds the charity, unless some

other considerations are received for profiteering

and personal gains of trustees or members of the

society. Strong reliance has been placed by the ld.

CIT (A) upon the judgment of Hon'ble Apex Court

in the case of ACIT vs. Surat Art Silk Cloth

Manufactures Association (supra). In our humble

understanding of the said judgment and the

principle laid down by the Constitutional Bench of

Hon'ble Apex Court, nowhere the Hon'ble Apex

court has held that the charging of fees or some

profit for carrying out charitable activity would be

reckoned as not charitable. The Hon'ble Apex

Court held that if primary or dominant purpose of

a trust or institution is charitable, then any other

object which by itself is not charitable and is mere

ancillary to the dominant purpose then also it is

held to be valid charity. The primary test which is

to be applied is, whether the main or primary

object of the trust is charitable or not. It is an

undeniable that under the Income Tax Act,

educational activity has been specifically treated

as charitable purpose and if the entire activities of

the assessee is purely for carrying out education

then the test of dominant and main purpose

stands fulfilled as laid down by the Hon'ble Apex

court. Hon'ble Apex Court has further held that if

any activity for profit is carried out in the course of

actual carrying out its purpose, then the activity

for profit must be intertwined or wrapped up with

or implied in the purpose of the institution or trust,

in other words it must be an integral part of such

purpose. What is to be looked into whether the

activity is propelled by a dominant profit motive

and whether the dominant object of the activity is

profit making or carrying out a charitable purpose,

if it is former then the purpose would not be

charitable, but, if it is latter the charitable

character of the purpose would not be lost. Thus,

in no way the principle laid down by the Hon'ble

Apex Court can be interpreted or understood in

the manner that if certain receipt or income is

generated out of an activity which is charitable

and such a receipt or income is wholly applied for

carrying out charitable purpose, then it cannot be

reckoned for non charitable purpose. Here in this

case, the charging of fees is a part of receipt

during the course of carrying out educational

activity which has been completely applied for that

activity alone, therefore such a receipt by way of

fees has to be seen as an application of income for

charitable purpose. As regards another

constitutional bench judgment of Hon'ble Apex

Court in the case of TMA Pai Foundation and

others (supra), it is seen that the Hon'ble Apex

Court in the context of ‘capitation fee’ and

profiteering, itself culled out the exception in the

following manner:-

institutions, the Management will have

the right to select teachers as per the

qualifications and eligibility conditions

laid down by the State/University

subject to adoption of a rational

procedure of selection. A rational fee

structure should be adopted by the

Management, which would not be

entitled to charge a capitation fee.

Appropriate machinery can be devised

by the state or university to ensure that

no capitation fee is charged and that

there is no profiteering, though a

reasonable surplus for the furtherance

of education is permissible. Conditions

granting recognition or affiliation can

broadly cover academic and educational

matters including the welfare of

students and teachers.”

[Emphasis added is ours]

principle there should be no ‘capitation fee’ or

profiteering, but reasonable surplus to meet the

cause of education and augmentation of facility

does not amount to profiteering. Nowhere the

Hon'ble Apex Court has held that educational

institution is debarred from taking any kind of fees

from the students albeit they have expressed

caution in a limited way on a capitation fee for the

purpose of profiteering. Similarly in the other

judgment relied upon by the ld. CIT (A), that is, in

the case of Islamic Academy of Education & Ors

vs. State of Karnataka (supra), the Hon'ble Apex

Court again following the principle of the

constitutional Bench in the case of TMA Pai

Foundation & Others (supra) and observed as

under:-

concerned, in our view the majority

judgment is very clear. There can be no

fixing of a rigid fee structure by the

government. Each institute must have

the freedom to fix its own fee structure

taking into consideration the need to

generate funds to run the institution and

to provide facilities necessary for the

benefit of the students. They must also

be able to generate surplus which must

be used for the betterment and growth

of that educational institution. In

paragraph 56 of the judgment it has

been categorically laid down that the

decision on the fees to be charged must

necessarily be left to the private

educational institutions that do not seek

and which are not dependent upon any

funds from the Government. Each

institute will be entitled to have its own

fee structure. The fee structure for each

institute must be fixed keeping in mind

the infrastructure and facilities

available, the investments made,

salaries paid to the teachers and staff,

future plans for expansion and/or

betterment of the institution etc. Of

course there can be no profiteering and

capitation fees cannot be charged. It

thus needs to be emphasized that as

per the majority judgment imparting of

education is essentially charitable in

nature. Thus the surplus/profit that can

be generated must be only for the

benefit/use of that educational

institution. Profits/surplus” cannot be

diverted for any other use or purpose

and cannot be used for personal gain or

for any other business or enterprisers.”

[Emphasis added is ours]

issue and completely negates the view of the Ld.

CIT (A). Thus, none of the judgments as referred

to by the ld. CIT(A) have been analysed in proper

prospective rather his interpretation of the

principles laid down by the Apex Court are

incorrect and out of context. Before us the learned

counsel had submitted the total fees charged from

various students during the year the details and

bifurcation of which is as under:-

Class STUDE NTS NO. TRAVE ADMISS BUS OF LLING TUTION REST ION MON STUD (300*1 BY FEES THS ENTS 2) BUS ANNUAL FEES Total 60,000 NUR 500 12 60 3,60,000 1,000 3,600 5 18,000 78,000 LKG 500 12 78 4,68,000 1,000 3,600 7 25,200 70,000 UKG 500 12 70 4,20,000 1,000 3,600 8 28,800 69,000 69 4,96,800 1,000 3,600 43,200 1 600 12 12 83,000 2 600 12 83 5,97,600 1,000 3,600 15 54,000 80,000 3 5,76,000 1,000 3,600 36,000 600 12 80 10 78,000 4 600 12 78 5,61,600 1,000 3,600 17 61,200 70,000 5 600 12 70 5,04,000 1,000 3,600 15 54,000 76,000 6 700 12 76 6,38,400 1,000 3,600 17 61,200 700 77,000 12 77 6,46,800 1,000 3,600 15 54,000 79,000 8 700 12 79 6,63,600 1,000 3,600 19 68,400 60,000 9 900 12 60 6,48,000 1,000 3,600 17 61,200 57,000 10 900 12 57 6,15,600 1,000 3,600 18 64,800 33,000 11 1,100 12 33 4,35,600 1,000 3,600 7 25,200 29,000 12 1,100 12 29 3,82,800 1,000 3,600 5 18,000 TOTAL 80,14,800 9,99,000 6,73,200 LATE FINE 2,65,095 FEES 27,750 30,500 B/S 82,79,895 B/S 7,00,950 10,29,500 4,70,900 1,04,81,245

that the assessee school has been charging fees

only from its students and there is no capitation

fee at all. Such fees have been charged from the

students for the running of the school and has

been applied for its dominant purpose/object of

carrying out educational activity. If we apply the

principle and ratio laid down by the Hon'ble Apex

Court in the aforesaid cases, then the fees charged

by the assessee is neither for profiteering nor for

carrying any activity beyond its dominant object.

Thus, allegation of the ld. CIT (A) on this score

also is hereby rejected.

assessee’s income by way of fees cannot be held

to be derived from property held under the trust,

because students cannot be treated as property. If

such a proposition or view of ld. CIT (A) is upheld,

then probably no education institution in the

country would ever be eligible/entitled for

exemption u/s.11 and perhaps will defeat the

entire purpose of legislature and the definition of

‘charitable purpose’ of education as defined in

Section 2(15). Section 12 of the Act clearly

provides that any voluntary contribution received

by a trust wholly for charitable or religious

purpose, then for the purpose of Section 11 it is

deemed to be income derived from the property

held under the trust. Such a deeming provision of

revenue contribution is held as income derived

from the trust which is subject to computation and

conditions laid down in Section 11 to 13. If the

assessee is carrying out any obligation for

educational activity, then it has to be treated as

the ‘trust’ under the provision of Section 11; and

this proposition has been clearly held by the

Hon'ble Supreme Court in the case of CIT vs.

Gujarat Maritime Board (Supra), that if the

assessee is under legal obligation to apply the

income then it is entitled to be registered as

charitable trust. In the case before the Hon’ble

Supreme Court, the authority Gujarat Maritime

Board was carrying out the development of minor

port which was in the realm of ‘carrying out

objects of general public utility’. The Hon'ble Apex

Court held that such an authority is to be reckoned

as charitable trust for the purpose of Section 11.

In this case one of the main objection raised on

behalf of the department was that said Board was

not entitled for the benefit of Section 11 as it was

not a trust under the ‘Public Trust Act’ and

therefore, it was not entitled to claim registration

u/s. 12A. Since it was not held under the trust

therefore, it is not entitled for exemption u/s.

11(1)(a). The relevant contention of the Revenue

as well as the finding of the Hon'ble Apex Court

reads as under:-

behalf of the Department was that

Gujarat Maritime Board is not entitled to

the benefit of section 11 of the 1961 Act

as the said Board was not a trust under

Public Trust Act and, therefore, it was

not entitled to claim registration under

section 12A of the 1961 Act. The

Department's case was that the

Maritime Board was a statutory

authority. It was not a trust. Its

business was not held under a trust. Its

property was not held under trust.

Therefore, the Board was not entitled to

be registered as a Charitable Institution.

It was the case of the Department that

the Board was performing statutory

functions. Development of minor ports

in the State of Gujarat cannot be

termed as the work undertaking for

charitable purposes and in the

circumstances the Commissioner

rejected the Board's application under

section 12A of the 1961 Act in the light

of the above case of the Department,

we are required to consider the

expression 'any other object of general

public utility' in section 2(15) of the

1961 Act.

or protect the interest of a particular trade or industry that object becomes an object of public utility, but not so, if it seeks to promote the interest of those who conduct the said trade or industry— CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC). If the primary or predominant object of an institution is charitable, any other object which might not be charitable but which is ancillary or incidental to the dominant purpose, would not prevent the institution from being a valid charity— Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 121 ITR 1 (SC). 15. The present case in our view is squarely covered by the judgment of this Court in the case of CIT v. Andhra Pradesh State Road Transport Corpn. [1986] 159 ITR 1 in which it has been held that since the Corporation was established for the purpose of providing efficient transport system, having no profit motive, though it earns income in the process, it is not liable to income- tax. 16. Applying the ratio of the said judgment in the case of Andhra Pradesh State Road Transport Corpn. (supra), we find that, in the present case, Gujarat Maritime Board is established for the predominant purpose of

development of minor ports within the State of Gujarat, the management and control of the Board is essentially with the State Government and there is no profit motive, as indicated by the provisions of sections 73, 74 and 75 of the 1981 Act. The income earned by the Board is deployed for the development of minor ports in India. In the circumstances, in our view the judgment of this Court in Andhra Pradesh State Road Transport Corpn.'s case (supra) squarely applies to the facts of the present case. 17. Before concluding we may mention that under the scheme of section 11(1) of the 1961 Act, the source of income must be held under trust or under other legal obligation. Applying the said test it is clear, that Gujarat Maritime Board is under legal obligation to apply the income which arises directly and substantially from the business held under trust for the development of minor port in the State of Gujarat. Therefore, they are entitled to be registered as 'Charitable Trust' under section 12A of the 1961 Act.” 20. This principle has been reiterated by the

Hon'ble Delhi High Court in the case of Institute of

Chartered Accountants of India-v-DGIT, 358 ITR

91 (Del). Thus, the assessee society which has

been registered under ‘Registration of Societies

Act, 1860’ with the sole object of providing

education and has a legal obligation for applying

its income for such charitable purpose, then for

the purpose of Section 11 it has to be treated as

trust and income derived from carrying out such

obligation has to be reckoned as income derived

from property under the trust and therefore, on

the ground also as raked by the ld. CIT (A),

exemption u/s.11 cannot be denied. Accordingly,

in view of the finding given above and various

legal principle as discussed above, we hold that

none of the observations and the finding of the ld.

CIT(A) are sustainable and the grounds taken and

the reasoning given by him to deny the

benefit/exemption u/s.11 to the assessee cannot

be upheld either in law or on facts.

above, the entire receipts which has been taxed

under the head ‘income from other sources’ is set

aside and we direct the Assessing Officer to grant

exemption u/s.11 as per the income and

expenditure account submitted by the assessee.”

Bench of the Tribunal in the case of Aadarsh Public School (Supra), it

is held that the findings of Ld. CIT(A) are not in accordance with law

and his action of denial of benefit of section 11 and 12 is reversed

and it is further held that educational activity has been specifically

treated as charitable purpose u/s 2(15) and I do not uphold the

finding of Ld. CIT(A) that charging of fee would amount to

uncharitable activity. It is further held that judgments referred by Ld.

CIT(A) have not been interpreted correctly and have been

interpreted out of context. Fee charged from the students has been

applied for the purpose of carrying out charitable activity. I also

reverse the finding of Ld. CIT(A) that income by way of fee cannot be

held to be derived from property held under trust. I also do not

approve the order of Ld. CIT(A) that the entire receipts are liable to

be taxed under the head income from other source in this case and

this finding given by CIT(A) is set aside and it is directed that the Ld.

A.O. should grant exemption u/s 11 and section 12 to the appellant

as per the income & expenditure account submitted by the assessee.

In other words the order of CIT(A) passed in this case for the above

stated reasons is reversed and thus, enhancement of income made

by him at Rs. 2,61,15,153/- is hereby set aside and addition made

by him is hereby deleted. Accordingly, all these grounds stand

allowed.

of hearing has not been given to the assessee, both these grounds

are set aside to the file of A.O. for deciding denovo in accordance

with law after giving opportunity of hearing to the assessee.

statistical purposes.

Order pronounced on 05-07-2018.

Sd/-

(H.S. SIDHU) JUDICIAL MEMBER

Dated : 05-07-2018

SR BHATANGAR