Itat/231/2023 Ia No: Ga/1/2023, Ga/2/2023 Commissioner Of Income Tax Exemptions Kolkata v. Shri Venkateshwara Educational Institute

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/231/2023IA NO: GA/1/2023, GA/2/2023COMMISSIONER OF INCOME TAX EXEMPTIONS KOLKATAVSSHRI VENKATESHWARA EDUCATIONAL INSTITUTE BEFORE :THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM ANDTHE HON’BLE JUSTICE SUPRATIM BHATTACHARYADATE : 8 January, 2024. Appearance :Mr. Aryak Dutt, Adv.Mr. Amit Sharma, Adv...for appellantMr. J.P. Khaitan, Sr. Adv.Mr. Pratyush Jhunjhunwala, Adv.…for respondent The Court :- It appears that there is a delay of 42 days in filing the appeal. Weare satisfied with the reasons given by the appellant department for not preferring theappeal within the period of limitation. Hence, the delay in filing the appeal is condoned. This appeal filed by the revenue under Section 260A of the Income Tax Act1961(the Act) is directed against the order dated 17.2.2023 passed by the Income TaxAppellate Tribunal “B” Bench, Kolkata (the Tribunal) in I.T.A. No.145/Kol/2022for theassessment year 2017-18. The revenue has raised the following substantial questions of law forconsideration : i)Whether the Learned Income Tax Appellate Tribunal has committedsubstantial error in law in setting aside the order of the Commissioner ofIncome Tax (Exemptions), Kolkata and holding that the assessee iseligible for exemption under Section 10(23C)(iiiad) of the Income Tax Act,1961 in spite of the fact that the assessee does not exist solely for theeducational purpose and it has profit motive ?substantial error in law in setting aside the order of the Commissioner ofIncome Tax (Exemptions), Kolkata and holding that the assessee iseligible for exemption under Section 10(23C)(iiiad) of the Income Tax Act,1961 in spite of the fact that the assessee does not exist solely for theeducational purpose and it has profit motive ? ii)Whether the Learned Income Tax Appellate Tribunal has committedsubstantial error in law in holding that the assessee is squarely coveredby the provisions of Section 10(23C)(iiiad) of the said Act despite the factthat the assessee’s activities are not solely for educational purpose andthat there is no receipt from any educational institution and its source ofincome consists of dividend income, interest income and capital gainwith a surplus of 53% of total receipts ?substantial error in law in holding that the assessee is squarely coveredby the provisions of Section 10(23C)(iiiad) of the said Act despite the factthat the assessee’s activities are not solely for educational purpose andthat there is no receipt from any educational institution and its source ofincome consists of dividend income, interest income and capital gainwith a surplus of 53% of total receipts ? iii)Whether the Learned Tribunal has substantially erred in law in allowingthe appeal of the assessee and holding that the assessee is eligible forexemption claimed under Section 10(23C)(iiiad) of the said Act despitethe fact that the assessee failed to fulfill the conditions for being eligiblefor exemption under Section 10(23C)(iiiad) of the said Act ?the appeal of the assessee and holding that the assessee is eligible forexemption claimed under Section 10(23C)(iiiad) of the said Act despitethe fact that the assessee failed to fulfill the conditions for being eligiblefor exemption under Section 10(23C)(iiiad) of the said Act ? We have heard learned Counsel on either side. The respondent/assessee is a trust registered under Section 12A/12AA of theAct and it claimed exemption under Section 10(23C) (iiiad) by way of dividend, interestincome and capital gain on sale of shares of mutual funds. The assessee admittedly isrunning an educational institution in a very remote and/or backward area and doesnot charge any fee from the students towards studying in the said school. The learnedAdvocate after considering the factual aspects found that the covenant in the trust We have heard learned Counsel on either side. The respondent/assessee is a trust registered under Section 12A/12AA of theAct and it claimed exemption under Section 10(23C) (iiiad) by way of dividend, interestincome and capital gain on sale of shares of mutual funds. The assessee admittedly isrunning an educational institution in a very remote and/or backward area and doesnot charge any fee from the students towards studying in the said school. The learnedAdvocate after considering the factual aspects found that the covenant in the trust deed clearly show that the assessee is solely formed for the purpose of establishingschool and educational institution and this fact has not been disputed by the revenue.Further the Tribunal noted that the assessee has incurred a sum of Rs.41,83,984/- onvarious expenses connected with the rent and maintenance of the school. Further theTribunal found that the total receipt by way of dividend, interest and capital gain onsale of shares of mutual fund were accumulated in order to improve the infrastructureof the school and construction of new schools with the aim and object of the assesseetrust. The Tribunal also referred to a decision of the Coordinate Bench in the case ofSwasthya Sewa Sansthan vs.CIT(E), Kolkata in ITA No. 363/Kol/2020 dated 9.2.2022wherein the facts were more or less identical and relief was granted to the said trust. Further the learned Tribunal also noted that there is no allegation made by thedepartment that the assessee was involved in any other activity for profit and not foreducational purposes. Thus, we find that the Tribunal rightly granted relief to theassessee, taking note of the facts and circumstances of the case and we find that noquestion of law arises much less substantial questions of law. There is nothing for consideration in this appeal at this stage.Accordingly, the appeal stands dismissed. .(T.S. SIVAGNANAM)CHIEF JUSTICE pkd/GH. (SUPRATIM BHATTACHARYA,J.)