The Commissioner Of Income Tax (Exemptions), Chandigarh v. M/S The Rural Education & Women Welfare Society, Sbs Nagar

ITA No. 434 of 2019} 1] IN THE HIGH COURT OF PUNJAB & HARYANAAT CHAN DIGAR ITA No.434 of 2019 (O&M)Date of Decision: 13.01.2020 The Commissioner of Income Tax (Exemptions), Chandigarh Versus Appellant M/s The Rural Education & Women Welfare Society, SBS Nagar Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEESH JHINGAN Present:Mr. Denesh Goyal, Sr. Standing Counseltor the Revenue. AJAY TEWARI, J (Oral): 4444 CM No.201791CII of 2019: This is an application for condonation of delay of 11 days infiling the present appeal. Allowed as prayed for. The delay of 11 days in filing thepresent appeal is condoned. IT ANo.434 of 2019: This appeal has been filed against the order dated 17.1.2019passed by the Income Tax Appellate Tribunal Camp Bench at Jalandhar (forShort, ‘the Tribunal’) allowing the appeal of the assessee and thereby holdingit entitled for exemption/approval under Section 10(23C)(v1) of the IncomeTax Act, 1961 |for brevity ‘the Act']. Following substantial questions of laware raised: ifWhether on the facts and circumstances of the case theHon'ble ITAT 1s right in not adjudicating the fact that ITA No. 434 of 2019|2] ll. TTL. TV. VI VIL. the assessee’s stated objects does not aim to have itsactivities ‘solelyfor education’, which is one of the maincondition for granting approval u/s 10(23C) (v1)Whether on the facts and circumstances of the case, theHon'ble ITAT is right in not adjudicating the issue thatdespite assessee’s receipts in excess of Rs. Two croresform F.U. 2013-14 onwards, applicant did not filed itsreturn of income, which is necessary for the purpose ofdetermination ofgenuineness of activities?Whether on the facts and circumstances of the case, theHon'ble ITAT has erred in not adjudicating the issue thatthe assessee has filed application for grant of approvalu/s 10(23C) (v1) for the first time on 17.10.2016, thougthe assessee has been claiming exemption u/s 10(23C)(vi) and simultaneously filing its audit report in formLOBB from F.Y. 2013-14? Whether on the facts and circumstances of the case, theHon'ble ITAT has erred in not adjudicating the findingsof the CIT(E) that the main emphasis of the society 1smainly on creation of assets rather than dedeployment offunds towards deduction? Whether on the facts and circumstances of the case, theHon'ble ITAT is right in not adjudicating the issue thatthe assessee society has generated the surplus over thereasonable permissible limit 1.e. 6% to 15% of the grossreceipts, as laid down by the Apex Court in the case ofViswesvaraya Technological University Vs. ACIT inCivil appeal Nos. 4361-4366 of2016 (supra)?Whether on the facts and circumstances of the case, theHon'ble ITAT is right in not adjudicating the issue thatthe emphasis of the society mainly on adding to theirvehicles, busses etc during FY 2013-14 and 2014-15creating there by an additional source of income thatcannot directly qualifyfor the tag “education” ?Whether on the facts and circumstances of the case, the ITA No. 434 of 2019}3] order of the Appellate Tribunal is contrary to theevidence and material on the record of the case andtherefore, perverse?” Before proceeding further, it may also be noticed thatregistration under Section 12AA of the Act was allowed to the assessee inappeal by the Tribunal, the order was upheld by this Court. TheCommissioner of Income Tax (Exemptions), Chandigarh [for short, 'CIT(E)'] while dealing with the application under Section 10(23C) of the Actconsidered the fact that there is denial of registration under Section 12AA ofthe Act. The application under Section 10(23C)(v1) of the Act was rejectedvide order dated 31.10.2017. Appeal was preferred before the Tribunal, thesame was allowed vide order dated 17.1.2019, hence the present appeal.Before proceeding further, the aims and objects of the assesseeare reproduced as under: Before proceeding further, it may also be noticed thatregistration under Section 12AA of the Act was allowed to the assessee inappeal by the Tribunal, the order was upheld by this Court. TheCommissioner of Income Tax (Exemptions), Chandigarh [for short, 'CIT(E)'] while dealing with the application under Section 10(23C) of the Actconsidered the fact that there is denial of registration under Section 12AA ofthe Act. The application under Section 10(23C)(v1) of the Act was rejectedvide order dated 31.10.2017. Appeal was preferred before the Tribunal, thesame was allowed vide order dated 17.1.2019, hence the present appeal.Before proceeding further, the aims and objects of the assesseeare reproduced as under: “, . . to promote the quality and scope ofeducation in Rural Area and manage the affairs of SadhuSingh DAV, Rural Public School, Mukandpur; to work forsocial, Moral, intellectual upliftment of general publicespecially women; to provide for and make satisfactorytransport arrangements for school and college girl studentsto general public especially; to collaborate with suchgovernment/NGO's working for the similar objectives ofRural Welfare; to create and build suitable infrastructure forchildren/wards of Punjabi settled abroad (NRIs) for theireducation in India; to acquire land, buildings and to makeconstruction for the expansion of Sadhu Singh DAV, RuralPublic School, Mukandpur; to raise funds and to collect ITA No. 434 of 20191/4] donations and to issue receipts for the samefrom the generalpublic and its members in the form of cash and kind to beutilizedfor thefulfilment of the aims and objects. ”’ Learned counsel for the revenue argues that the Tribunal erred in relying upon the decision of this Court in the case of the assessee forregistration under Section 12AA of the Act. It is contended that the CIT (E)while rejecting the application apart from rejection of registration undersection 12AA of the Act relied upon the fact that one of the objects of theassessee was not solely for educational purpose. From the perusal of the paper book, it is evident that one of thefactor considered by the CIT (E) was denial of registration under Section12AA of the Act. It would be pertinent to note here that while dealing withthe issue of Section 12AA of the Act, the Tribunal dealt with the objectionwith regard to amassing capital fund and fixed assets. It was concluded thatcorpus created and the land and building was acquired out of donations, forsetting up the school. Further, the point of fee receipt was also consideredand it was held that the same was spent for running the school. The only issue raised by learned counsel for the Revenue needs to be considered is that the object “to work for social, moral, intellectualupliftment of general public especially women” brings the object of theassessee out of the phrase “solely for educational purpose”. The contentionraised is not well founded. From the objects quoted above, it is forthcomingthat the assessee was promoting quality education in the rural areas andmanaging the affairs of Sadhu Singh DAV, Rural Public School,Mukandpur. The object for upliftment of general public especially women is only with regard to its sole object of educational purpose only, as the ITA No. 434 of 2019}5| intellectual upliftment of general public especially women can onlyenvisage education and nothing else. In view of the above discussion, no interference is called for in the conclusion arrived at by the Tribunal. There is no merit, the appeal is dismissed. IAJAY TEWARI]JUDGE JIAVNEESH JHINGANJUDGE January 13, 2020mkI. Whether speaking/ reasonedYes/Noa. Whether reportableYes/No