Assessing Officer/Appellant/S v. M/S Takshila Education Society Branch Office Kashi Place, Patna, B

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.530 of 2008 ====================================================== 1. The Commissioner of Income Tax Central, Patna. 2.Deputy Commissioner of Income Tax, Central Circle-4, Patna. ... Assessing Officer/Appellant/s Versus M/s Takshila Education Society Branch Office Kashi Place, Patna, B-549,New Friends Colony, New Delhi. ...Assessee/Respondent/s ====================================================== withMiscellaneous Appeal No. 532 of 2008 ====================================================== 1. The Commissioner of Income Tax Central, Patna.2.Deputy Commissioner of Income Tax, Central Circle-4, Patna. 2.Deputy Commissioner of Income Tax, Central Circle-4, Patna. ... Assessing Officer ... Appellant/s Versus M/s Takshila Education Society Branch Office Kashi Place, Patna, B-549,New Friends Colony, New Delhi. ... Assessee... Respondent/s ======================================================Appearance :(In Miscellaneous Appeal No. 530 of 2008)For the Appellant/s: Ms. Archana Sinha, Sr. Standing Counsel Mr. Sanjeev Kumar, Adv.For the Respondent/s: Mr. Ajay Kumar Rastogi, Adv. Mr. Smriti Singh, Adv. Mr. Parijat Saurav, Adv. (In Miscellaneous Appeal No. 532 of 2008)For the Appellant/s: Ms. Archana Sinha, Sr. Standing Counsel Mr. Sanjeev Kumar, Adv.For the Respondent/s: Mr. Ajay Kumar Rastogi, Adv. Mr. Smriti Singh, Adv. Mr. Parijat Saurav, Adv. ====================================================== CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN and HONOURABLE MR. JUSTICE ARVIND SRIVASTAVAORAL JUDGMENT(Per: HONOURABLE MR. JUSTICE JYOTI SARAN) Date : 14-02-2019 These appeals under Section 260A of the Income TaxAct, 1961 (hereinafter referred to as ‘the Act’) are directed againstthe order dated 18.03.2008 passed by the Income Tax AppellateTribunal, Patna Bench, Patna (hereinafter referred to as ‘the Tribunal’) in ITA No.572/Pat/06 and ITA No.571/Pat/06 filed bythe appellant Department for the assessment years 2003-04 and2002-03 respectively, whereby the appeals have been dismissed,thus confirming the order passed by the Commissioner of IncomeTax (Appeals), Patna dated 27.10.2006. We have heard Ms. Archana Sinha, learned counselappearing for the Income Tax Department and Mr. Ajay KumarRastogi, learned counsel appearing for the respondent- assesseeand we have perused the records. Since the issues raised in these appeals are identicalhence with the consent of the parties they have been taken uptogether with a view to their final disposal at the present stageitself. The assessee is an educational society and apparently enjoying the exemption granted by the statutory authority undersection 10(23C)(vi) as well as the exemption under section 11 of‘the Act’ for which it is duly registered under section 12AA of ‘theAct’. In so far as the present appeals are concerned, it is theexemption granted to the society under section 11 of ‘the Act’which is the subject matter of dispute and to cut short the matter itis because the Commissioner, Income Tax (Appeals) has acceptedthe position to differ with the opinion of the Assessing Authority and which opinion of the Commissioner, Income Tax (Appeals)has been endorsed by ‘the Tribunal’ by the order impugned thatfeeling aggrieved Department is before us. The assessee is an educational society and apparently enjoying the exemption granted by the statutory authority undersection 10(23C)(vi) as well as the exemption under section 11 of‘the Act’ for which it is duly registered under section 12AA of ‘theAct’. In so far as the present appeals are concerned, it is theexemption granted to the society under section 11 of ‘the Act’which is the subject matter of dispute and to cut short the matter itis because the Commissioner, Income Tax (Appeals) has acceptedthe position to differ with the opinion of the Assessing Authority and which opinion of the Commissioner, Income Tax (Appeals)has been endorsed by ‘the Tribunal’ by the order impugned thatfeeling aggrieved Department is before us. While Ms. Sinha, learned counsel appearing for theappellant-department has invited our attention to the substantialquestion of law framed at paragraph (v) to submit that the IncomeTax Appellate Tribunal has erred in allowing exemption to theassessee under section 11 of ‘the Act’ even when the activities ofthe society is neither charitable nor the society is existing solelyfor the education purposes but for profit, Mr. Rastogi, learnedcounsel appearing for the assessee has invited our attention to theorder of the Commissioner enclosed at Annexure R/5 to thecounter affidavit filed in the present appeal to submit that a similarissue raised by the Assessing Authority i.e. AssistantCommissioner of Income Tax vide Annexure R/4 praying forwithdrawal of the exemption under section 11 and consequentcancellation of registration under section 12AA of ‘the Act’ hasnot found favour with the Commissioner who after examining thematter threadbare vide order passed on 27.10.2010 has dropped theproceeding. He thus submits that even if any issue persuaded theappellant herein to raise such question of law through the appealsin question, it stands answered by the order of Commissioner,Income Tax himself enclosed at Annexure R/5, whereby the recommendation made by the Assessing Authority i.e. AssistantCommissioner of Income Tax at Annexure R/4 for withdrawal ofexemption has been rejected and the proceedings dropped. We have heard learned counsel for the parties and wehave perused the records. The status of the educational society already standsdiscussed above and requires no further discussion, save andexcept, that it is running an Educational Institution in the name of‘Delhi Public School’ at Patna and at Pune and is registered undersection 12AA of ‘the Act’ as at present and was also grantedexemption under section 10(23C)(vi) of ‘the Act’ for theassessment years 1999-2000, 2000-2001 and 2001-2002 under theorders of the Central Board of Direct Taxes dated 21.03.2002which fact is not in dispute. The present appeals relate to the Assessment Year 2003-2004 and Assessment Year 2002-03 respectively and thus we arenot concerned with the exemption discussed above rather it is theexemption sought by the assessee under section 11 of the Actwhich is the subject matter of the present appeals and it is for thispurpose that the substantial question of law raised by Ms. Sinha atparagraph (v) of the appeal is reproduced which runs under: “(v) Whether on facts and in law the ITATwas justified in directing the Assessing Officer toallow the exemption to the assessee u/s 11 whenthe assessee society has been found indulging in the activity which is primarily neither charitablenor existing solely for education purposes but forthe profit.” The present appeals relate to the Assessment Year 2003-2004 and Assessment Year 2002-03 respectively and thus we arenot concerned with the exemption discussed above rather it is theexemption sought by the assessee under section 11 of the Actwhich is the subject matter of the present appeals and it is for thispurpose that the substantial question of law raised by Ms. Sinha atparagraph (v) of the appeal is reproduced which runs under: “(v) Whether on facts and in law the ITATwas justified in directing the Assessing Officer toallow the exemption to the assessee u/s 11 whenthe assessee society has been found indulging in the activity which is primarily neither charitablenor existing solely for education purposes but forthe profit.” Substantially, it is argued by Ms. Sinha that the activityof the society is neither charitable nor it is running exclusively foreducational purposes rather it is a business to gain profit thatraising such very issue that the Assessing Authority made hisrecommendation through letter dated 26.07.2007 addressed to theAdditional Commissioner of the Income Tax, Central Range 1,Patna, whereby he prayed for withdrawal of exemption granted tothe assessee under section 10(23C)(vi) as well as the exemptiongranted under section 11 of ‘the Act’. The assessing Authorityraised five grounds to make such recommendation for withdrawalof the exemption as well as for cancellation of the registrationunder section 12AA of ‘the Act’ which in turn allowed the benefitof section 11 to the assessee. The records transpire that the matter was examined bythe Commissioner, Income Tax and who did not find any merit inthe recommendation for inviting a cancellation of registration ofthe respondent-assessee under section 12AA of ‘the Act’ foraccording to the Commissioner of Income Tax, the activities of thesociety was not found true to invite such cancellation. Theproceeding was accordingly dropped vide order dated 27.10.2010enclosed at Annexure R/5 to the counter affidavit, filed in the appeals. In our opinion, considering the fact that theCommissioner, Income Tax (Central) himself having examined theissues has chosen to drop the proceeding for cancellation ofregistration under section 12AA of ‘the Act’ which permits theassessee to enjoy the exemption under section 11 of ‘the Act’, hecannot be permitted to pursue the appeals before this Court whichin our opinion actually should have been withdrawn evenotherwise. Having considered the matter on the contentionsadvanced, we do not find any question of law arising in theseappeals much less a substantial question of law inviting ouropinion. These appeals are accordingly dismissed. (Jyoti Saran, J) ( Arvind Srivastava, J) Anjula/Skpathak AFR/NAFRAFRCAV DATENAUploading Date05.03.2019Transmission DateNA