Ramshree Education Of Technology Samiti v. Principal Commissioner Of Incometax, Gwalior And Others

W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others Gwalior, 20/08/2018 Shri Pankaj Bhatia & Shri Kunal Suryavanshi,learned counsel for the petitioner. Shri D.P.S. Bhadauriya, learned counsel for therespondents. With the consent of learned counsel for theparties, the matter is finally heard. Challenge is to an order dated 19/03/2018passed by Principal Commissioner of Income Tax,whereby Revision under Section 264 of the IncomeTax Act, 1961, filed by the petitioner has beendismissed. The Revision was directed against theassessment order passed by ACIT, Circle 1, Gwalioron 22/12/2016 in respect of the accounting year2009-10; and the demand order dated 26/12/2016whereby an amount of Rs. 40,77,690/- was directedto be deposited by the petitioner – assessee bearingPAN No. AAFFR4110D and demand notice dated20/02/2017 under Section 221(1) of the Income TaxAct, 1961. It is the contention of the petitioner that in theRevision, the petitioner had raised many groundsincluding that the notice issued under Sections 148, THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others 142(1) and 144 of 1961 Act was never served onthe petitioner and that it was beyond thejurisdiction of Assistant commissioner of IncomeTax, Circle-1, Gwalior to have initiated theproceeding of assessment / re-assessment of theincome relating to accounting year 2009-10. It isurged that though the Revisional Authority tooknote of the grounds and contentions raised in theRevision, however, glossing over the same passedthe order on merit dismissing the revision andupholding the demand raised, on the findings thatthe petitioner is not entitled for exemption underSection 10(23C)(iiiad) of 1961 Act. The order which is under challenge is in thefollowing terms:- “In order to examine the cash feesdeposited in saving bank account andclaim of exemption u/s 10(23C)(iiiad) ofthe I.T. Act, 1961, a letter dated05.02.2018 has been issued to theassessee. The assessee was alsorequired to produce books of account,fees receipts etc. In compliance, theassessee filed reply on 12.02.2018 andproduced books of account, feesreceipts etc on 22.02.2018 which hasbeen examined. W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others As per AIR information during theyear assessee had made cash depositsof Rs. 65,32,563/- in saving bankaccount maintained with PNB on PAN- whereas as per copy ofacknowledgment of return for A.Y. 2009-10, it has been found that assessee hasfiled return for A.Y. 2009-10 on31.08.2009 vide receipt no.459 withACIT/DCIT Circle-II, Gwalior on PAN- . However, jurisdiction overthe case lies with ACIT, Circle-I, Gwalior. The fees receipts issued by theinstitution has been examined and it hasbeen found that assessee is receivingfees on commercial basis as such, itcannot be said that institution is runningsolely for educational purpose and notfor the purpose of profit which is alsoevident from income and expenditureaccount which shows profit ofRs.4,86,165/-. Thus in my opinionassessee is not liable for exemption u/s10(23C)(iiiad) of the I.T. Act as claimedby the assessee. Further, on goingthrough income and expenditureaccount, it has been found that duringthe year total receipts of the assesseefrom all sources is Rs. 76,88,448/- whichincludes donation of Rs. 2,81,000/-. Ithas been found that before depreciation,the assessee has total surplus of Rs. THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others THE HIGH COURT OF MADHYA PRADESH W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others 12,37,041/- which is 16.09% of totalreceipts. Thus, the assessee has alsonot incurred 85% of total receipts asexpenditure which is necessary forclaiming exemption u/s 10(23C)(iiiad) ofthe I.T. Act.” Respondents have entered appearance andalso filed their reply along with affidavit of theRevisional Authority. Though an exception is taken by the petitioneragainst the affidavit filed by the RevisionalAuthority justifying the order, which as per thepetitioner is impermissible, as the order underchallenge has been passed by the Authorityconcerned in her capacity of quasi-judicial Authority.Be that as it may. Learned counsel appearing forrespondentsfairlysubmitsthatthepetitioner/assessee had raised a ground regardingnon-service of notice under Sections 148, 142(1)and 144 of 1961 Act, which is not being considered,the Revision has been dismissed on merit. In view of the submissions made on behalf ofthe respondents, we are of the considered opinionthat the matter deserves to be remitted to theRevisional Authority for fresh consideration of the shubh* Digitally signed by SHUBHANKAR MISHRA Date: 2018.08.23 17:51:00 +05'30' W.P. No. 9180/2018 Ramshree Education of Technology Samiti Vs. Principal Commissioner of IncomeTax, Gwalior and others Revision filed by the petitioner dwelling on all theissues raised therein. In view whereof, the impugned order is setaside. The matter is relegated to PrincipalCommissioner of Income Tax, Gwalior, forreconsideration of Revision preferred by thepetitioner. The Principal Commissioner of IncomeTax, Gwalior, shall, after affording opportunity ofhearing, decide the Revision in accordance with lawmeeting out the contentions raised in the Revision. The Revision be decided expeditiously,however, not later than 30 days from the date ofcommunication of this order. Petition is finally disposed of in above terms. No costs. (Sanjay Yadav) (Ashok Kumar Joshi) Judge Judge