Commissioner Of Income Tax v. M/S Arvind Bhartiya Vidhyala Samiti (2) D.b. Income Tax Appeal

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANJAIPUR BENCH, JAIPUR O R D E R (1) D.B. INCOME TAX APPEAL NO.404/2011 Commissioner of Income TaxVs. M/s Arvind Bhartiya Vidhyala Samiti(2) D.B. INCOME TAX APPEAL NO.236/2009 Commissioner of Income TaxVs. M/s Arvind Bhartiya Vidhyala Samiti Date of Order: August 21, 2012 PRESENT HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA'-HONBLE MR. JUSTICE NARENDRA KUMAR JAINI Mr. R.B. Mathur, for the appellantMr. L.L. Gupta, for the respondent BY THE COURT(Per Jain J.) I.A. No. 17683/2012 in D.B. IncomeTaxAppealNo.236/2009andI.A.No.17670/2012 in D.B. Income Tax Appeal No.404/2011 are allowed.2.At the request of the parties, theappeals were heard finally.3.Both the appeals are directed against the common order dated 19[th] September, 2008 passed by Income Tax Appellate Tribunal,Jaipur Bench 'A', Jaipur, whereby ITA No. 694& 695/JP/2007 relating to Assessment Year 2004-2005 and 2000-2001 filed by revenue,have been dismissed, therefore, these appealsare being disposed off by a common order. 4.Briefly stated the facts of the caseare that respondent assessee is a registeredsocietyrunningvariouseducationalinstitutions. The Assessing Officer hasdenied the exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 to theassessee. The learned Commissioner of IncomeTax (Appeals), allowed the same, whileallowing the appeals of the assessee. Beingaggrieved with the order of Commissioner ofIncome Tax (Appeals), the revenue preferredtwo separate appeals before the Income TaxAppellateTribunal,which have beendismissed, vide common order dated 19[th]September, 2008, which is under challenge inthese appeals. 5.Initially, learned counsel for theappellant argued that the orders passed byCommissioner of Income Tax (Appeals) as wellas Income Tax Appellate Tribunal are bad inlaw, the Assessing Officer was right indeclining the exemption to assessee underSection 10(23C)(vi) of the Act of 1961.However, when the learned counsel for therespondent pointed out that exemption underSection 10(23C)(vi) of the Act has been granted to the assessee/respondent by theCentral Board of Direct Taxes vide orderdated 16[th] March, 2007, which is applicablefor Assessment Year 1999-2000 and onwards,nothing remains to be decided in the presentappeals, learned counsel for the appellantalso agreed that order of Central Board ofDirect Taxes is binding on the department andin view of order passed by Central Board ofDirect Taxes, the assessee is entitled forexemption under the provisions of the Act.The order of Central Board of Direct Taxesdated 16[th] March, 2007 is reproduced asunder:- “P.No.197/115/2006-ITA, IGovernment of IndiaMinistry of FinanceDepartment of RevenueCentral Board of Direct Taxes New Delhi, 16[th] March, 2007 ORDER In exercise of powers conferred by the subclause (vi) of the clause(23C) of Section 10 ofthe income tax Act, 1961(43 of 1961), theCentral Board of Direct Taxes hereby approvesthat any income received by any person onbehalf of “Arvind Bhatri Vidyalala Samiti,Ambabari, Jaipur-302023” (hereinafter the“Institution”) shall not be included in thetotal income of such person as assesseable,subject to the following conditions:a) the institution will apply its income,or accumulate for application, wholly andexclusively to the objects for which it isestablished and in a case where more thanfifteen per cent of its Income is accumulatedon or after the 1[st] day of April, 2002, theperiod of the accumulation of the amountexceeding fifteen per cent of its income shallin no case exceed five years; b) the institution will not invest ordeposit its fund (other than voluntarycontribution received and maintained in the b) the institution will not invest ordeposit its fund (other than voluntarycontribution received and maintained in the form of jewellery, furniture, etc.) for anyperiod during the previous years relevant tothe assessment years mentioned above otherwisethan in any one or more of the forms or modesspecified in sub-section (5) of the section 11; c) this approval will not apply in relationto any income being profits and gains ofbusiness, unless the business is incidental tothe attainment of the objectives of theinstitution and spaate books of account aremaintained in respect of such business; d) the institution will regularly file itsreturn of income before the income taxauthority in accordance witH the provisions ofthe income tax Act, 1961; e) that in the event of dissolution of theinstitution, its surplus and the assets will begiven to an organization with similarobjectives. (f) the institution will continue to beexist solely for educational purpose. g) The institute will get its accountsaudited by an accountant as defined inExplanation below sub section (2) of section288 and furnish along with the return ofincome. The report of such audit in theprescribed form duly signed and verified bysuch accountant and setting forth suchparticulars as may be prescribed. 2.This order is applicable only to therecipients of income on behalf of theinstitution and not to any other receipt orincome of such recipients. Taxability or,otherwise of the Income of the Institutionwould be separately considered as per theprovisions of the Income tax Act, 1961; 3.This order is applicable for AssessmentYear 1999-2000 and onwards. 4.The above order is liable to be rescindedby the Central Government, if it issubsequently found that the activities of theinstitution are not genuine or if they are notcarried out in accordance with all or any ofthe conditions subject to which it wasnotified. 5.This order is in super-cession of theearlier order no.197/115/2006-ITA-I dated07.02.2007. Sd/- (DEEPAK GARG) Under Secretary to the Govt. of India ii) The CCIT, Jaipuriii) The CIT-II Jaipur iv) The Director of income Tax, (RSP&PR), New Delhi.v) Guard File. Sd/- (DEEPAK GARG) Under Secretary to the Govt. of India” 6.In view of above order passed by the Central Board of Direct Taxes, the assessee/respondent is held entitled forexemption under Section 10(23C)(vi) of theIncome Tax Act, 1961. Learned Tribunal hasalready affirmed the order of Commissioner ofIncome Tax (Appeals), who had allowed theexemption to the assessee/respondent, whileallowing the appeals of the assessee. 7.In these circumstances, we find noforce in these appeals and the same are,accordingly, dismissed with no order as tocost. 8.Registry is directed to place onrecord a copy of this order in the connectedappeal. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. BKS/- “All corrections made in the judgment/order have beenincorporated in the judgment/order being emailed.” B.K. SHRIVASTAVAPRIVATE SECRETARY