Income Tax Appellate Tribunal - Hyderabad
Chaitanya Bharati Education Society, ... vs Assessee on 31 March, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'B', HYDERABAD
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER
ITA No.707/Hyd/09 : Assessment year 2003-04
Chaitanya Bharati Educational V/s. Asst. Director of Income-
Society, Hyderabad. tax(Exemption) I, Hyderabad
( PAN - AAATC 1076 E)
(Appellant) (Respondent)
Appellant by : Shri P.Murali Mohan Rao
Respondent by : Shri D.Sudhakar Rao DR
Date of Hearing 10.1.2014
Date of Pronouncement
ORDER
Per Smt. Asha Vijayaraghavan, Judicial Member:
This appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals) IV, Hyderabad dated 31.3.2009, for the assessment year 2003-04.
2. Brief facts of the case leading to the filing of the present appeal are that the assessee, an educational society running engineering colleges and such other educational institutions, filed its return of income for the assessment year 2003-04 on 28.11.2003, admitting NIL income after claiming exemption under S.11 oaf the Act. Though the same has initially been processed under S.143(1) of the Act on 25.3.2004, in the course of regular assessment that followed, the Assessing Officer noted that in the computation of total income enclosed to the return, assessee had shown an amount of Rs.2,88,51,943 as deposit account, credited to the Capital Found Account of Chaitanya Bharati Institute of Technology (CBIT) for the assessment year 2002-03. Similarly, an amount of Rs.62,49,000 was shown as Development Fees credited to the Capital Fund in Mahatma Gandhi Institute of Technology.
2 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad Likewise, donations of Rs.17,000 were credited to the Capital Fund in Chaitanya Bharati Public School. It was explained by the assessee before the Assessing Officer that the said amounts represented donations received for infrastructure and other developmental activities. It was also claimed that though the said amounts were not shown on the Income-side of the Income and Expenditure side of the CBIT for the financial year 2002-03, the same was taken into consideration and added in the computation of total income filed with the return. The assessee also filed a list of donations received for the financial year 2002-03 with the names of various persons, against receipt Nos., totaling to Rs.2,88,51,943. It was submitted hat similar donations were received in MGIT also as development fees. A list of various members in respect of such donations was furnished, wherein the amounts ranged from Rs.30,000 to Rs.6,00,000. The Assessing Officer required the assessee to explain as to why the so called donations were reflected in the deposit Account in CBIT, donations in CB Public School and Development Fees in Mahatma Gandhi Institute of Technology, whereas it was apparent that the same were not contributed voluntarily but were paid by the parents, guardians of students seeking to gain admission in the Management Quota is of the Engineering Course of CBIT and MGIT and the school. It was found that on the receipts issued for the same, the names of the depositors and addresses were written alongwith various amounts paid by different Demand Drafts, which totaled to the amount reflected as donations in Annexure A enclosed to the assessment order. The Assessing Officer found that there were also certain obvious over writings of the term 'Corpus Fund' above the amount of deposit on the receipt. He further found that eh so called deposits appeared to be conditional as it was mentioned thereon that "I offer the above deposit and will take back the same if not accepted by the management subject to the rules and regulations of Chaitanya Bharati Educational Society. The Assessing Officer therefore, proceeded to make further enquiries into the real nature of these transactions. The Assessing Officer issued summons to some of the donors appearing in the Annexure A to the assessment orders. On the basis of letters and the sworn 3 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad statements of the parents recorded, the Assessing Officer concluded that the amounts shown by the assessee as Development Fees and Deposits were not in the nature of so called 'donations', but were amounts collected and extracted to grant admission to their wards/children in the Management Quota to various streams of engineering courses, which were in the nature of quid pro quo for allotment of seat and did not have the element of voluntariness. Considering that collection of such huge sums, over and above the stipulated official fee, was contrary to the rules and regulations and was in violation of the norms prescribed by the Hon'ble Supreme Court in the matter of collection of capitation fee/deposits, the Assessing Officer concluded that the institution does not exist solely for educational purpose, but it was existing for profit. He opined that such an institution was not eligible for exemption available under sub-clause (iiia)(d) of S.10 (23C)(vi) of the Act. The Assessing Officer also held the view that the assessee was not entitled to exemption under S.10(23C)(vi), as it has not obtained the mandatory approval from the prescribed authority, even though its gross receipts exceeded Rs.1 core., The Assessing Officer therefore, proceeded to tax the income of the engineering college, as per their income and expenditure statement, together with the amount of Rs.3,51,17,943 collected from or on behalf of the engineering students/other students as additional fee/donation.
3. It was also submitted before the Assessing Officer that in the project of development of education, lot of funds were required and the Government, being not in a position to establish engineering colleges with proper facilities, permitted the engineering colleges to collect fees for providing infrastructure facilities to students. It was claimed that the parents of the students were willing to pay Development Fee not only for their own children, but for other students also. It was submitted that the sums collected were not contrary to rules and regulations, and the huge capital incurred for providing good infrastructure was solely for educational purpose and not for profit. By virtue of the amounts being declared in the computation of income 4 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad statement, the conditions had been fulfilled and the reasonable opportunity regarding receipt of donations had not been provided to the assessee. It was also pleaded that the decision of the Apex court in Adinantar Educational Institution be applied to the assessee's case and since the primary purpose of the trust was philanthropic, the inclusion of some objects for earning profits would not alter the character of the primary object.
4. During the assessment proceedings, the Assessing Officer also recorded the statement of D.Kamlakar Reddy, Secretary and Governing Body Member of the assessee society. It was stated by him that the deposits represented amounts received from well wishers for development and infrastructure. Though it was submitted initially that the deposits were received from the donors, who walked into the office and that such donations were termed as 'deposits' as they were conditional and subject to the approval of the committee, he later pleaded that they were not aware of the provisions of law and that the noting "Corpus Fund", above the typed amount of "Deposit", was made by an advocate on the receipts book without their knowledge. He admitted that the deposits mentioned in the statements recorded on oath and mentioned in the letters received from the parents and were linked to admission. He however, claimed that the society was not insisting on donations and that parents had voluntarily came forward and donated the amounts, as that was the practice in all engineering colleges, wherein payments over and above the tuition fee and development fee is being collected in respect of management quota seats. He submitted that the society did not know how to formulate the receipt books and the deposits and that they will ensure that at the time of receipt of such amounts, intention of donors is clearly included.
5. Considering the matter in the light of the statement of Shri Kamalakar and the G.O.No.950 dated 6.12.2000 and G.O. No.33 dated 11.6.2000, the Assessing Officer noted that amounts have been prescribed under various heads and colleges found to be violating the norms are liable to 5 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad have their permission cancelled. He noted that in assessee's case, amounts over and above the tuition fee/development fee as prescribed by the government, had been collected in the form of deposits/donation /development fee and therefore, the assessee could not be considered as following the law. The Assessing Officer further noted that the said orders specifically prohibit collecting the amounts other than those fixed under the head 'tuition fee' and 'development fee' and therefore, the institutions charging fees, by whatever name called, higher than those fixed or institution falling to maintain accounts in the manner laid down or otherwise found to contravene the provisions, are liable to have their permission cancelled. Then referring to the decisions of the Apex Court in the case of TMA Pai Foundation and others V/s. State of Karnataka and others, the Assessing Officer felt that the activities of such trusts/institutions remain no more charitable but in fact support the beneficiaries, who represent an affluent section of the society, for profit and engage in such activities for profit. The Assessing Officer accordingly proceeded to deny exemption under S.11 to the assessee and brought the excess income over expenditure of all the institutions of the society amounting to Rs.4,58,040, besides the deposits/donations/development fee totalling to Rs.3,51,17,913, as appearing in the computation of income and expenditure statement, to tax.
6. Reiterating the contentions urged before the Assessing Officer, the assessee submitted before the CIT(A) that the conditions prescribed under S.10(23C)(iiiad) had been fulfilled and the conditions under clause (vi) is also fulfilled as an application made by the assessee was pending before the prescribed authority. It was also pleaded that since the assessee society also holds registration under S.12A and consequently any income, if at all taxable, is to be exempted under S.11 of the Act. It was further contended that list of donors towards capital fund and development fee had been furnished by the assessee itself, however no opportunity was given to the assessee in the matter of obtaining statements and letters from donors, and the Assessing 6 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad Officer has worked behind the back of the assessee without its knowledge. It was further contended that reasonable opportunity for establishing/proving the claim regarding donations was not given and as such, the findings of the Assessing Officer cannot be made binding and cannot be considered as a basis for deciding eligibility for exemption. In view of the decisions of the Apex Court in the case of Adinatar Educational Institution(224 ITR 310); which was followed by the Madras High Court also in CIT V/s. Ann Arunachalam Educational Society(243 ITR 229), it was pleaded that the assessee was eligible for exemption as its object was running educational institutions solely for educational purposes and not for the purposes of profit. It was also submitted that the source from which money was received was not of any consequence and what is relevant is its application, and so long as the institution is an educational institution which is not engaged in earning profit, income of such institution would be exempt under S.10(22). It was also submitted that the real test to be applied was what is the dominant or primary purpose of the institution and if the same is philanthropic, the inclusion of some objects for earning profits for the implementation of the primary object, would not alter the character of the primary object.
7. The CIT(A) forwarded the submissions of the assessee to the Assessing Officer vide letter dated 29.8.2006, for his comments. In response, Assessing Officer submitted remand report dated 20.9.2006, which, in turn, was forwarded to the assessee. Assessee thereupon vide submissions dated 6.12.2006 submitted that the persons concerned had mentioned that the amounts had been paid by them as donations to the society and no one has compelled for the payment of the amount and therefore the amounts were paid voluntarily.
8. The CIT(A) further wrote a letter dated 22.4.2007 directed the Addl. Director of Income-tax(Exemption), Hyderabad to enquiry from the Secretary to Government of A.P., Higher Education(EC-II) Dept., to ascertain 7 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad whether the collection of fee against the prescribed norms fixed by the Government of AP had been taken into cognizance in view of the GO Nos.950 and GOMS No.33 and whether any action had been taken against the assessee-society for any year. In response, a report was submitted by the Assessing Officer on 18.2.2008, wherein after discussion of the earlier reports, it was submitted that the donations made to the society were voluntary, and therefore, there is merit in the contention.
9. On due consideration of the elaborate submissions of the assessee, in the light of the remand reports of the Assessing Officer, the CIT(A) found that the assessee has been changing its stand regarding the donations received as Capital Fund, development Fee, etc. by the various institutions of the society. He found that the assertions of the assessee are not in consonance with the evidence gathered during the course of assessment proceedings. Considering the proceedings before the Assessing Officer and the statements recorded from various persons and other material on record, the CIT(A) observed in para 7.5 and 7.6 of the impugned order as follows-
"7.5 The facts emerging from the confirmations/statements establish that the donations cannot be considered voluntary. It is beyond the human probabilities that any persons would give donations by borrowing funds from friends and relatives and even from bank, at interest. Even Shri C.V.Subramanyam in his subsequent statement also admitted that he found it reasonable to give a donation of Rs.6 lakhs to the society after "verifying the amount by others at that point of time".
His statement therefore establishes that this was a normal practice for the appellant society to take donation/capitation fee for granting admissions. Though he contended that he found it reasonable to give such donation as the appellant had good infrastructure, such assertion does not bring out the philanthropic intention behind such payment. In fact had the intention been really philanthropic, the donation would have been given to any good college which does not have good infrastructure. It may also be noted that the Assessing Officer found that the so called 'Deposits' were conditional as it was mentioned thereon that the donor would take it back if the same is not accepted by the Management. Obviously, a voluntary donation cannot be conditional.
7.6. Therefore, the final assertion of the appellant that nothing beyond the prescribed fees was collected from the students for granting admission, is devoid of any merit. The 8 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad investigations made by the Assessing Officer have duly proved that the appellant was charging amounts in the form of Capital Fund/Development Fee etc., over and above such prescribed fee, which were established as being in the nature of donation/capitation fee paid as quid pro quo and was being collected in a circuitus manner."
The CIT(A) thereafter, referred to the decision of the Tribunal in the case of Vodithala Educational Society in ITA NO.1138/Hyd/2006 for assessment year 2003-04, on the point at issue and observed that any amounts collected over and above the prescribed feds ha to be classified as capitation fee and would prove that the institution exists for the purpose of profit and not solely for educational purpose. He accordingly concluded that the assessee by collection donations, as evidenced by confirmations form donors, has failed to comply with the basic condition of exemption under S.10(23C), as it has been found to exist for the purpose of profit. He also referred to that very decision of the Tribunal in the case of Vodithala Educational Society (supra), among others, wherein it was held that if an educational institution is used as a tool and an apparatus for collecting money over and above the fee prescribed, it would not be entitled for exemption under S.11 also. Since it has been established in the present case that the assessee has taken donations, which are found to be linked to the admission of students to the college, the CIT(A) held that the assessee is not entitled for exemption either under S.10(23C) or under S.11 of the Act, and accordingly confirmed the assessment made by the Assessing Officer, denying exemption claimed by the assessee.
10. Aggrieved, assessee is in second appeal before us.
11. Assessee originally raised elaborate/argumentative grounds of appeal. However, during the course of appellate proceedings before us, precise grounds/additional grounds of appeal have been raised. We proceed to dispose of this appeal on the basis of these precise grounds/additional grounds, which read as follows-
9 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad "1. The Ld. CIT(A)-IV has erred in confirming the order of the AO regarding the Deposits of Rs.2,88,51,943/-
2. The Ld. CIT(A)-IV has erred in confirming the order of the AO wherein the Donation of Rs.17,000/- has been added.
3. The Ld. CIT(A)-IV has erred in confirming the order of the AO wherein the addition to the income of Rs.62,49,000/- was made.
4. The Ld. CIT(A)-IV ought to have appreciated that the fees has been collected as per the G.O. and hence the same cannot be disallowed and added to income.
5. The Ld. CIT(A)-IV ought to have appreciated that the appellant is running/existing solely for Educational purposes and not for the purposes of profit. \
6. The Ld. CIT(A)-IV ought to have appreciated that there is no question of "Quid Pro Quo" as the amount has been received by the society voluntarily from the parents of the students.
7. The Ld. CIT(A)-IV ought to have appreciated that the society is not running for the purpose of profit and hat amounts received have been utilised for tits objects and not for the purpose of profit.
8. The Ld. CIT(A)-IV Hyderabad ought to have appreciated the fact that the amount received towards corpus funds are eligible for exemption u/s. 11(1)(d).
9. The Ld. CIT(A)-IV Hyderabad ought to have appreciated the fact that the contributions received other than corpus have been utilized for the objects of the society and hence exemption u/s. 11 cannot be denied.
10, The Ld. CIT(A)-IV ought to have appreciated that section 11(4A) is not applicable where the income has been accounted for in the books of accounts.
11. The Ld. CIT(A)-IV Hyderabad ought to have appreciated the fact that the society had not violated any provisions for losing the exemption.
12. The Ld. CIT(A)-IV erred in relying on the decision of "Vodithala Education Society " (20 SOT 353 Hyd 2008) which is distinguishable on facts of the case on hand.
13. The Ld. CIT(A)-IV Hyderabad ought to have appreciated that 85% of the income has been applied to charitable purpose in India during the year of account.
14. The Ld. CIT(A)-IV Hyderabad ought to have appreciated that there is no violation of any provisions of the IT Act, 1961 and hence trust is entitled to exemption u/s. 11 of the IT Act, 1961.
10 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad
15. The Ld. CIT(A)-IV ought to have appreciated that source of income is not relevant but what is relevant is application of the income in the case of the appellant trust for the purpose of section 11 of the IT Act.
16. The Ld. CIT(A)-IV ought to have confined his decision to the provisions of IT Act, 1961 and ought not to have passed his order on breach of some other statute.
17. The Ld. CIT(A)-IV ought to have appreciated that the AO is not empowered under the statute to deny the exemption u/s. 11 in the absence of withdrawal of registration under S.12A by the DIT(Exemption) in the appellant's case.
18. The Ld. CIT(A)-IV ought to have held that the appellant is entitled to exemption u/s. 11 of the Act
19. The Ld. CIT(A)-IV erred in relying on the decisions of "TMA Pai Foundation and others vs. State of Karnataka and others (8 SCC 481 2002)and Islamic Academy of Education and Another Vs. State of Karnataka and Another (6 SSC 6907 2003) which are not applicable to the appellant's case for the year under consideration.
20. ....."
12. The learned counsel for the assessee, narrating the facts of the case, and reiterating the contentions urged before the Revenue authorities submitted that during the year under consideration, assessee society was in receipt of some voluntary donations towards corpus fund which were credited directly to the Balance Sheet. According to him, the Assessing Officer has opined that the donations are nothing but capitation fee charged form the students and their guardians and that the assessee has done profiteering activities which cannot be termed as charitable. He denied the assessee exemption of its income from tax on this count, and brought to tax. The learned counsel also drew our attention to the objects of the society as appearing in the Memorandum of Association and submitted that the society runs various educational institutions, including Chaitanya Bharathi Institute of Technology, which is one of the premier Engineering Colleges in the self-financing category in Andhra Pradesh. Learned counsel has brought to our notice that the assessee society received several voluntary contributions from different persons towards corpus fund of the society, and the assessee has credited the same in the 11 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad Balance Sheet. During the assessment proceedings, the assessee has filed a list of all the donations received for financial year 2002-03, with the names of various persons against receipt numbers and the amounts totaling to the amount credited in the Balance Sheet. It was also submitted that the in the remand report submitted by the Dy. Director of Income-tax(Exemption) it was observed that the donations made to the society are voluntary only. Further the said authority in his another remand report dated 22.11.2006 has also observed that there are some inherent omissions in the assessment order and there is merit in the submissions of the assessee society, and since the assessee was registered under S.12A, provisions of S.11(1) are to be applied. It is also submitted that the CIT(A) himself has, vide para 5.5. of the impugned order, has stated that his predecessor vide letter dated 2.4.2007 had directed the Addl. Director of Income-tax(Exemption) Hyderabad to enquire from the secretary to Government of Andhra Pradesh Higher Education(EC II) Dept. whether the collection of fee against the prescribed norms fixed by the Government of Andhra Pradesh has been taken cognisance of, in view of the GO Nos. RT 950 and GOs No.33, and whether any action has been taken against the assessee society for any year. In reply, the Secretary has stated no action has been taken. In support of his contentions, the learned counsel has relied on a number of decisions/circulars, numbering to as many as 31, duly furnishing copies thereof in the paper-books.
13. The Learned Departmental Representative on the other hand, relied on the impugned orders of the Revenue authorities and specifically relied on the judgment of the Apex Court in the case of TMA Pai Foundation and Others V/s. State of Karnataka and Others (8 SCC 481) and Islamic Academy of Education and Others V/s. State of Karnataka and Anr.(6 SCC 697). He also relied on the decision of the coordinate bench of 12 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad the Tribunal in the case of Voditala Educational Society (20 SOT 353)- Hyd.
14. We heard both the parties and perused the material available on record. It is an undisputed fact that the assessee is an educational society registered under S.12A of the Act, and its objects as appearing in the memorandum of association are for carrying on activities of general public utility in the field of education and charitable purposes. During the year under consideration, assessee has received donations from the parents of the prospective students seeking admissions into the assessee's educational institutions. A list of such donations together with the particulars of the donors has also been furnished before the Revenue authorities. Affidavits of some of the donors were also furnished before the Assessing Officer. It is the case of the Revenue that such donations are not voluntary and they are linked to the admission of the students to the educational institutions of the assessee, and thus, the assessee has collected higher fee over and above the prescribed fee limit and also camouflaged these amounts under other heads, which established the intent of defraud the Revenue. Such a society, according to the Revenue cannot be said to be genuinely charitable, and as such, it is not entitled to exemption under S.11 of the Act. It is the case of the assessee that the donations are purely voluntary and have nothing to do with the admission of the students.
15. On careful consideration of the material on record, we find merit in the submissions of the assessee that the donations are voluntary and there was no violation whatsoever by the assessee, so as to warrant denial of exemption under S.11 of the Act . In the remand report submitted by the Dy. Director of Income-tax(Exemption) dated 18.2.2008, it was observed as follows-
13 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad "6. As seen from the above material, it appears that the donations made to the society have been made voluntarily only and there is merit in the contention of the assessee. I am enclosing the two remand reports submitted by my predecessor A.O. and the enclosures also."
In the other remand report dated 20.9.2006 submitted earlier, Asst. Director of Income-tax(Exemption) has observed that there are inherent omissions in the assessment order and there is merit in the submissions of the assessee-society. Relevant extract of the said remand report is as under-
"9. In the instant case, the Assessing Officer did not find any situation of application of funds for the purposes other than the one for which the assessee was constituted. The only reason found by the Assessing Officer was that the assessee had collected on "quid pro quid" basis and it amounts to profiteering. The Assessing Officer had denied exemption u/s. 11 and taxed the excess of income over expenditure and also the capitalized amounts. He opted to deny the exemption u/s. 11 and also u/s. 10(23C) mainly on the reason of profit making. A doubt may arise as to whether the profit accrues to the assessee or any persons connected to the assessee. As claimed by the assessee in the submissions enclosed to the above reference, if profit accrues to the assessee and without establishing the accrual to any particular person as specified in sec.13, the exemption might not be denies. He made out a case for denial exemption us. 10(23C) as there was no exemption certificate for that purpose. But for denial of exemption u/s. 11 he did not make out any lapse on the part of the assessee. Section 11 speaks of gross receipts from property held under trust and exemption to the extent of its application for the purpose of trust including capital expenditure and amounts notified u/s. 11(2). Since the assessee was registered u/s. 12A, and the provisions of S.11(1a) are to be applied.
10. A over all study of the assessment order with reference to the provisions and case laws under citation reveals that there are some inherent omission in the assessment order and I feel that these might not stand the test of appeal. I also feel that there are merits in the submissions to some extent in favour of the assessee. Hence, I request your honour to decide the matter as per law."
16. The CIT(A) has also taken note that in the remand report submitted by the Assessing Officer on 18.2.2008, after discussion of the earlier reports, it was submitted that the donations made to the society were voluntary and therefore, there is merit in the contention of the 14 ITA No.707/Hyd/2009 Chaitanya Bharati Educational Society, Hyderabad assessee, but still proceeded to uphold the view taken by the Assessing Officer without proper reasoning. We find that the Assessing Officer has proceeded to decide the issue of assessee's claim for exemption, merely on the basis of suspicions and surmises, and the CIT(A) simply confirmed the action of the Assessing Officer, ignoring the findings and observations of the Assessing Officer in the remand reports and other material available on record.
17. The decision of the coordinate bench of the Tribunal in the case of Voditala Educational Society (supra) is distinguishable on facts. In that case, there was a survey action in the premises of one of the colleges run by it, whereas in the case of the assessee, no such thing has happened. Further, in that case, the contributions/receipts were not recorded in the books of account, and it was a case of concealment of income, which was also not the matter in the present case. In that view of the matter, ratio of the said decision of the Tribunal in the case of Voditala Educational Society (supra), is not applicable to the facts of the present case.
18. Even the decision of Apex Court in the case of TMA Pai Foundation (supra) relied upon by the CIT(A) in the impugned order, is distinguishable, in as much as the formation of frame work in respect of fixation of fee for the students admitted into private professional institutions, in accordance with the said decision was done only after 2002-03. We are supported in this behalf by the decision of the Madhya Pradesh High Court in the case of Ku.Priyanaka and Ors. V/s. State of MP and ors. (AIR 2007 MP 182), wherein, considering similar circumstances, it was held judgment of Apex Court in the case of TMA Pai Foundation (supra), could not be given effect, as the said judgment was given on 31.10.2002 whereas the academic year in the case of the assessee was 2002-03. The Court observed in that case as follows-
15 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad "The committee had no jurisdiction under the order of honourable Supreme Court for fixing the differential fees for the academic year 20o03-04. In fact, the committee had come into existence only when those academic years were nearing completion."
For almost similar reasons, the other decision of the Apex Court in the case of Islamic Academy of Education and Anr. V/s. State of Karnataka (supra), also relied upon by the Revenue authorities, is not applicable, as that decision was pronounced on 14.8.2003, which is after the closure of academic year under consideration, i.e. 2002-03 in the present case.
19. Further, the GOMs No.90 by the Government of Andhra Pradesh in respect of constitution of committee as per the judgment of Apex Court in TMA Pai foundation (supra) was issued on 22.12.2003, which is after the closure of the academic year under consideration i.e. 2002-03. Similarly, the GO Ms. No.33 by the Government of Andhra Pradesh in respect of formulation of rules for admission into the Under Graduate Professional Courses in Engineering in Unaided Non-Minority Professional Institutions was issued on 20.6.2003, which is after the closure of the academic year under consideration, viz. 2002-03. Consequently, those Government orders noted above, also are of no application to the year under appeal, viz. assessment year 2003-04, in the case of the present assessee. In any event, we agree with the assessee that there were no violation of the above rules. Further, in the absence of any clinching material brought on record by the Revenue, to indicate that there were, in fact, violations warranting denial of exemption under S.11 of the Act, the ratio of the decision of coordinate bench of the Tribunal in the case of Pratima Educational Society (supra), relied upon by the learned counsel for the assessee, also squarely applies to the facts of the present case.
16 ITA No.707/Hyd/2009Chaitanya Bharati Educational Society, Hyderabad
20. In the light of the foregoing discussion, we hold that the assessee is entitled to exemption under S.11 of the Act, and consequently, the additions made by the Assessing Officer in the impugned assessment order, have no legs to stand. We accordingly set aside the impugned orders of the Revenue authorities, allowing the grounds of the assessee in this appeal.
21. In the result, assessee's appeal is allowed.
Order pronounced in the court on 7th March, 2014
Sd/- Sd/-
(Chandra Poojari ) (Asha Vijayaraghavan)
Accountant Member Judicial Member
Dt/- 7th March, 2014
Copy forwarded to:
1. Chaitanya Bharati Educational Society, C/o. M/s.P.Murali & Co., Chartered Accountants, 6-3-6755/2/3, 1st Floor, Somajiguda, Hyderabad-82
2. Asst. Director of Income-tax(Exemption) I, Hyderabad
3. Commissioner of Income-tax(Appeals) IV Hyderabad
4. Commissioner of Income-tax III, Hyderabad 5 Departmental Representative, ITAT, Hyderabad.
B.V.S