The Commissioner Of Income Tax (Exemptions), Chandigarh v. M/S S.d. Educational Society

[TTA-150-201 1 IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH 105LTTA-150-201Date of Decision :10.12 2019 The Commissioner of Income Tax (Exemptions), Chandigarh ..--- Appellant Versus M/s S.D. Educational Society woe. RESPONCEnt CORAM : HON'BLE MR.JIUSTICE AJAY TEWAR*HON'BLE MR. JUSTICE VIVEK PURI*HON'BLE MR. JUSTICE VIVEK PURI 999 Present :Mr. Denesh Goyal, Advocatefor the appellant. 999 AJAY TEWARI, J. (Oral) 1]This appeal has been filed under Section 260A of the IncomeTax Act, 1961 (for short ‘the Act’) against the order dated 5.9.2018 of theIncome Tax Appellate Tribunal, Chandigarh Benches 'B' Chandigarh inITA No. 1676/CHD/2017 reversing that of the Commissioner and therebyallowing an application under Section 12AA of the Act. The appellanthas raised the following substantial questions of law :- “T.Whether on the facts and circumstances of thecase and in case, the Hon'ble ITAT ts correct in directing theregistration to be accorded instead of reverting it back forre-examination in the light of judgment of The Hon'bleAllahabad High Court in appeal No. 112 of2013 in the caseof CIT, Meerut Vs. M/s. A.R.Trust,Meerut, wherein it washeld that the Tribunal could have ordered for setting asidethe order ofRegistering Authority refusing registration but it [TTA-150-201 could not have directedfor registration straight away in asmuch as there has to be satisfaction recorded by theRegistering Authority which was lacking ?2 |Whether on the facts and circumstances of thecase and in law, the Hon'ble ITAT is right in notadjudicating the method adopted by the assessee by which ithas shown the receipts under different heads in receipt andpayment account in way to reduce the actual receipts ?5.Whether on the facts and circumstances of thecase, the Hon'ble ITAT 1s right in merely stating that theover a period of time claiming benefit u/s 10(23C)(iilad)does not deter the assessee from making application forregistration u/s I12A whereas ignoring the fact that nrational was provided for the change in track too by thesociety ? 4Whether on the facts and circumstances of thecase, the Hon'ble ITAT is correct in upholding thesubmissions of the AR that this case has been dismissedarbitrarily on the grounds ofsuspicious andpresumptions byCIT, whereas the CIT clearly established the fact that theassessee used a netting method to reduce the actual receipt ?5Whether on the facts and circumstances of thecase and in law,the Hon'ble is right in placing the relianceof the case ofCIT Vs. Appejay Education Soctetywhereinthe core issue was related to the misuse ofincome derived byCharitable institution from its charitable activities whereasin this case the issue is related to genuineness of activities asthe assessee produced incorrect accounts wherein usingnetting method with a intention to reduce the actual receiptsunder different heads in receipt andpayment account ?6.Whether on the facts and circumstances of thecase, the order of the Appellate Tribunal is contrary to theevidence and material on the record of the case andtherefore, perverse ?” A tew facts necessary for adjudication of the instant appeal [TTA-150-201 as narrated therein may be noticed. The respondent was registered in theyear 2004. It started the present school with effect from 1.4.2006 up toClass- Vth which was affiliated by the Central Board of SecondaryEducation (CBSE) for Class 10[th]on 28.3.2008 and upgraded to Seniorsecondary level on 25.3.2010. It had appointed total number of 26 statftmembers and had 266 students. It had collected a sum of Rs. 51.33 lakhsand had paid salaries of Rs. 52.48 lakhs. It had given all the details of feewhich had been collected by it for different classes, A tew facts necessary for adjudication of the instant appeal [TTA-150-201 as narrated therein may be noticed. The respondent was registered in theyear 2004. It started the present school with effect from 1.4.2006 up toClass- Vth which was affiliated by the Central Board of SecondaryEducation (CBSE) for Class 10[th]on 28.3.2008 and upgraded to Seniorsecondary level on 25.3.2010. It had appointed total number of 26 statftmembers and had 266 students. It had collected a sum of Rs. 51.33 lakhsand had paid salaries of Rs. 52.48 lakhs. It had given all the details of feewhich had been collected by it for different classes, 3The Commissioner however held that while getting thebenefit of Section 10(23C)(itiad) of the Act, the respondent had shown itsnet receipts from the use of school van Rs.3.20 lakhs but actually whathad transpired was it had received a sum of Rs.20 lakhs odd on account ofschool bus charges and had spent a sum of Rs.17 lakhs odd on its runningand had instead of reflecting this correctly, had reflected only Rs. 3.20lakhs. On this basis, the Commissioner held that the activities ofrespondent were not genuine. The Tribunal found that even if thisanomaly was there in accounting yet this could be easily corrected andthat the provision of Section 10(23C)(iliad) and 12AA of the Act operatein different fields as held by this Court in the case ofCIT vs. AppejayEducation Society 127 DTR 121— The Tribunal further held that theCommissioner had wrongly noticed that the no details of fee beingcharged have been supplied whereas all the details have been supplied,The Tribunal also faulted the Commission for coming to the conclusionthat the salary structure which was put in place by the respondent was notas per the salary structure of CBSE and at such low salaries goodeducation could not be given. The Tribunal correctly held that this was [TTA-150-201 not the job of the Commissioner to comment on the quality of educationand found that in the kind of area where the school was located, and thekind of fee it could generate, and the salaries which were paid, wereproportionate. We have also noticed that apart from this anomaly in theaccounting of the money, the Commissioner has not held that therespondent was either diverting any money or was generating any cashincome (beyond that which has been prescribed in the prospectus) or anyother thing which would impinge on its character as a charitableInstitution. 4In view of the above, no fault can be found with the findingsof the Tribunal. 5Consequently, the appeal is dismissed. onSince the main case has been dismissed, the pendingapplication, if any, also stands dispose of. (AJAY TEWARIT) JUDGE 10.12.2019anuradha (VIVEK PURI)JUDGE Whether speaking/reasoned4Yes/NoWhether reportable4Yes/No