Ii) Whether As Per The Scheme Of The Act And The Ratio Ofthe Decision Of The Hon'ble Supreme Court In The Case Ofthe Dental Council Of India v. We Have Heard The Learned Counsel For The Parties

IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLAON THE 6[th] DAY OF APRIL, 2022BEFOREHON'BLE MS. JUSTICE SABINA & HON'BLE MR. JUSTICE SATYEN VAIDYA -Between: INCOME TAX APPEAL No. 28 of 2017. THE COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHADIGARH. ….APPELLANT. (BY MS. VANDANA KUTHIALA, ADVOCATE) AND ADARSH VIDYA NIKETAN, NAYA BAZAR, NAHAN,DISTT. SIRMOUR, H.P., (A REGISTERED SOCIETY)PAN- THROUGH ITS PRESIDENT. ...RESPONDENT. (BY MR. VISHAL MOHAN, ADVOCATE). This appeal coming on for hearing this day, Hon'bleMs. Justice Sabina, delivered the following:- J U D G M E N T The appellant has filed the instant Appeal challenging the order, dated 24[th] January, 2017, passed by the Income TaxAppellate Tribunal, Chandigarh in ITA No.1219/CHD/2016. 2.At the time of admission of the appeal, on24.07.2017, following substantial questions of law were framed:- 3. “(i) Whether the ITAT has erred in ignoring thecontention that as per the scheme of the Act, the entityavailing the benefits of Section 10(23C) (iiad)) historicallyand for a number of years should seek approval u/s10(23C) (vi) and not registration u/s 12A, the two beingcompletely different codes in themselves, one relying onincome from property/voluntary donations and the otheron receipts? (ii) Whether as per the scheme of the Act and the ratio ofthe decision of the Hon'ble Supreme Court in the case ofthe Dental Council of India Vs. Subharti K.K. B. Charitabletrust and anr, the ITAT has exceeded its jurisdiction inpassing the impugned order? We have heard the learned counsel for the parties and have also gone through the record available on the filecarefully. 4.The respondent is running a school and had movedan application seeking registration under Section 12A of the Income Tax Act, 1961. The application moved by therespondent was dismissed by the Commissioner Income Tax(Exemptions), Chandigarh, vide its order, dated 26[th] September,2016. The operative part of the order reads as under:- “9. In the instant case, given all of the above, not only isthe applicant's status suspect it is also deemed to haveutilised its generic objects to focus mainly on running aneducational institution on commercial lines. Large Feeshave been collected under several additional heads apartfrom admission and tuition fees. The same have notbeen utilised for betterment of education but keptunutilized under separate heads of special funds,building funds and cash in hand. There is no charitablepurpose that gets reflected in the way the limb ofeducation has been invoked to impart in the instant case.Charity can't happen in education if despite hugedisposal funds (collected unduly from the students) theteachers are paid lowly amounts that don't even enablethem to reach the taxable bracket. The legislative intentnever has been to accord exemption from taxation tosuch entities that seek to profiteer under the garb ofeducation. The application under section 12A for grantof registration is accordingly rejected.” 5. Aggrieved against the said order, the respondent approached the Income Tax Appellate Tribunal and the appeal filed by the respondent was allowed vide impugned order dated24[th] January, 2017. 6.Admittedly, the respondent is running a school forthe last 34 years in a rented premises. It is the case of therespondent hat the funds were being saved by it with a view tohave its own building in future. Since, the school is being runfor the last so many years, it could not be alleged against therespondent that it was an institute with a profit motive. Therespondent is running a school in a rented premises, therefore,it is within its right to create funds for constructing its ownbuilding for running the school. 5. Aggrieved against the said order, the respondent approached the Income Tax Appellate Tribunal and the appeal filed by the respondent was allowed vide impugned order dated24[th] January, 2017. 6.Admittedly, the respondent is running a school forthe last 34 years in a rented premises. It is the case of therespondent hat the funds were being saved by it with a view tohave its own building in future. Since, the school is being runfor the last so many years, it could not be alleged against therespondent that it was an institute with a profit motive. Therespondent is running a school in a rented premises, therefore,it is within its right to create funds for constructing its ownbuilding for running the school. 7.In the factual background of this case, the learnedtribunal has rightly allowed the appeal filed by the respondent. 8.It has also been submitted by the learned counsel forthe respondent, during the course of arguments, thatprovisional registration has been granted under the amendedAct, for the year 2021. 9.For the foregoing reasons, we find no merit in the instant appeal and it is dismissed. All pending applications, ifany, also stand disposed of. (Sabina)Judge 6[th] April, 2022. (jai) (Satyen Vaidya)Judge