Income Tax Appellate Tribunal - Hyderabad
Dr. Ambedkhar People'S Educational ... vs Dit (Exemptions), Hyderabad on 28 February, 2017
ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' B ' Bench, Hyderabad
Before Smt. P. Madhavi Devi, Judicial Member
AND
Shri S.Rifaur Rahman, Accountant Member
ITA No.1794/Hyd/2014
(Assessment Year: NA )
Dr. Ambedkar People's Vs Director of Income Tax
Educational Trust, (Exemptions)
Ambedkar Bhavan, Hyderabad
Hyderabad
PAN: AAATD 6201 G
For Assessee : Shri V. Siva Kumar
For Revenue : Smt. G. Aparna Rao, CIT(DR)
Date of Hearing: 20.02.2017
Date of Pronouncement: 28.02.2017
ORDER
Per Smt. P. Madhavi Devi, J.M.
This is assessee's appeal against the withdrawal of the registration granted to the assessee u/s 12A of the Act by dated 25.09.2014 u/s 12AA(3) of the I.T. Act.
2. The assessee is a Trust which is carrying on educational activities and is thus running an educational institution for P.G. students in Management at Visakhapatnam and awarding management degrees to the students. The assessee trust was granted registration u/s 12A of the Act by the Director of Income Tax (Exemptions) vide orders dated 4.12.1990. While granting approval to the Institution, the All India Council for Page 1 of 6 ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad Technical Education (AICTE), vide its order dated 12.05.2008, has laid down a specific condition that the Institution will charge the fee as prescribed by the competent authority from time to time and in no situation, capitation fee shall be charged from the students or guardians of students in any form.
3. The assessee has applied for registration u/s 80G of the Act and the DIT vide orders dated 19.11.2009, rejected the same by holding that the assessee trust is running the institution on commercial lines. The assessee did not challenge that order before the higher courts. Thereafter, the DIT taking into consideration the said order u/s 80G(5), observed that it shows that the assessee is not functioning as a charitable institution and is also not carrying out charitable activities. Therefore, he sought to withdraw the registration granted to the assessee u/s 12A of the Act. Therefore, a show cause notice dated 13.3.2014 was issued u/s 12AA(3) of the Act to the assessee trust.
4. The assessee, vide letter dated 14.4.2014, submitted that the assessee was carrying on activities on 'no profit, no loss' basis and is strictly complying with the guidelines of the AICTE. However, the DIT (E) was not convinced and observed that the assessee has not furnished the fee structure which it has fixed for the students for the academic years 2007-09 to 2008-10 relevant in this case. He also observed that (i) the assessee has not furnished the copies of the letters etc., written to AICTE during the financial years 2006-07 to 2008-09, and (ii) the copies of the approval, if any, received from AICTE pertaining to the fee Page 2 of 6 ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad structure during such period has not been furnished. Under these circumstances, the DIT (E) held that the fee structure of the students as fixed by the assessee trust and is approved by the AICTE is not known. He also observed that the assessee has not furnished the books of account and also that the assessee has been having excess of income over expenditure for each of the A.Ys and therefore, the assessee's contention that it was running the institution on 'no profit no loss' basis is not correct. In view of the same, the DIT (E) passed an order u/s 12AA(3) of the Act withdrawing the registration granted to the assessee u/s 12A of the Act, w.e.f. 1.4.2008. Aggrieved, the assessee is in appeal before us.
5. The learned Counsel for the assessee submitted that before the Finance Act being amended by the Finance Act of 2014, the registration granted under section 12A could be withdrawn only under two circumstances i.e. (a) the activities of the trust or institution are not genuine or; (b) the activities are not bring carried in accordance with the objects of the trust or institution. He submitted that the DIT (E) did not have any material before him to come to the conclusion that the assessee trust was charging capitation fee or that it was charging excess of fee than the fee approved by AICTE. Therefore, he submitted that in the absence of any material, the DIT (E) could not have come to the conclusion that the assessee is not carrying on activities in accordance with the objects of the Trust or that the activities are not genuine. Further, the learned Counsel for the assessee also drew our attention to various documents filed as additional Page 3 of 6 ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad evidence before us to contend that the assessee has complied with the instructions of the AICTE and there was no violation in any way. He submitted that this evidence is being filed at this stage only to substantiate the assessee's claim that it was following the norms laid down by the AICTE and there was no violation of any norms whatsoever. He therefore, prayed for admission of the documents as additional evidence and consideration of the same in accordance with the law.
6. The learned DR, on the other hand, supported the orders of the DIT (E) and submitted the fact that the assessee is not carrying on activities as a charitable institution is confirmed by the fact that the registration u/s 80G has been denied to the assessee and the assessee has accepted the said decision and therefore, the withdrawal of the registration u/s 12A of the Act is justified.
7. Having regard to the rival contentions and the material on record, we find that the basis for the withdrawal of the registration u/s 12A of the Act is the order of the DIT (E) dated 19.11.2009 rejecting the application for approval u/s 80G of the Act. A copy of the order u/s 80G is placed at pages 1 to 3 of the paper book filed by the assessee. On a close reading of the said order, we find that the registration u/s 80G was rejected on the ground that the assessee is not able to establish that the fees charged by it is in accordance with the rules and regulations of the Govt. of Andhra Pradesh and also the rules and regulations framed by the All India Council for Technical Education (AICTE).
Page 4 of 6ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad It was observed by the DIT (E) that the assessee was given adequate time to establish that the fee charged by the assessee is in accordance with the rules and regulations framed by the competent authority and in the absence of the evidence that the fee paid by the students is in accordance with the rules and regulations, the registration was denied to the assessee. We find that the DIT (E) had, issued a show cause notice u/s 12A(3) of the Act for withdrawal of the registration u/s 12A of the Act. In such circumstances, the duty was cast upon the assessee to furnish all the relevant material before the DIT (E) both during the proceedings u/s 80G and section 12AA(3) of the Act.
8. The assessee has now filed the details before us and on perusal of the said details, we find that they consists of the copy of the letter issued by the AICTE granting registration to the assessee, financial statements for the assessee as on 31.3.2009 and such other documents. We find that these documents are very essential for adjudicating the issue as to whether the assessee has violated any of the conditions laid down by the AICTE. In view of the same, we deem it fit and proper to admit the additional evidence and remand the issue to the file of the DIT (E) for reconsideration in accordance with the law in the light of the above material. The assessee is directed to cooperate with the DIT (E) by filing all the relevant material called for by the DIT (E) and for disposal of the assessee's application at the earliest.
Page 5 of 6ITA No 1794 of 2014 Dr Ambedkar Peoples Educational Trust Hyderabad
9. In the result, assessee's appeal is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 28th February, 2017.
Sd/- Sd/-
(S.Rifaur Rahman) (P. Madhavi Devi)
Accountant Member Judicial Member
Hyderabad, dated 28th February, 2017.
Vinodan/sps
Copy to:
1 Shri S. Babu, Advocate, MIG-I Block-3 Flat No.7 Bagh Lingampally, Hyderabad 500044 2 Director of Income Tax (Exemptions), Aayakar Bhavan, Basheerbagh Hyderabad 3 ADIT (E) Hyderabad 4 The DR, ITAT Hyderabad 5 Guard File By Order Page 6 of 6