The Commissioner of Income-tax (Exemptions), Chandigarh v. The Rural Education & Women Welfare Society
[Citation -2020-LL-0113-103]

Citation 2020-LL-0113-103
Appellant Name The Commissioner of Income-tax (Exemptions), Chandigarh
Respondent Name The Rural Education & Women Welfare Society
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 13/01/2020
Judgment View Judgment
Keyword Tags rejection of registration • denial of registration • condonation of delay • educational purpose • source of income • surplus • grant approval • genuineness of activities
Bot Summary: ITA No.434 of 2019: This appeal has been filed against the order dated 17.1.2019 passed by the Income Tax Appellate Tribunal Camp Bench at Jalandhar allowing the appeal of the assessee and thereby holding it entitled for exemption/approval under Section 10(23C)(vi) of the Income Tax Act, 1961 for brevity 'the Act'. The Commissioner of Income Tax, Chandigarh for short, 'CIT' while dealing with the application under Section 10(23C) of the Act considered the fact that there is denial of registration under Section 12AA of the Act. The application under Section 10(23C)(vi) of the Act was rejected vide order dated 31.10.2017. Learned counsel for the revenue argues that the Tribunal erred in relying upon the decision of this Court in the case of the assessee for registration under Section 12AA of the Act. It is contended that the CIT while rejecting the application apart from rejection of registration under Section 12AA of the Act relied upon the fact that one of the objects of the assessee was not solely for educational purpose. From the perusal of the paper book, it is evident that one of the factor considered by the CIT was denial of registration under Section 12AA of the Act. It would be pertinent to note here that while dealing with the issue of Section 12AA of the Act, the Tribunal dealt with the objection with regard to amassing capital fund and fixed assets.


IN HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No.434 of 2019 (O&M) Date of Decision: 13.01.2020 Commissioner of Income Tax (Exemptions), Chandigarh Appellant Versus M/s Rural Education & Women Welfare Society, SBS Nagar Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN Present: Mr. Denesh Goyal, Sr. Standing Counsel for Revenue. AJAY TEWARI, J (Oral): CM No.20179-CII of 2019: This is application for condonation of delay of 11 days in filing present appeal. Allowed as prayed for. delay of 11 days in filing present appeal is condoned. ITA No.434 of 2019: This appeal has been filed against order dated 17.1.2019 passed by Income Tax Appellate Tribunal Camp Bench at Jalandhar (for short, 'the Tribunal') allowing appeal of assessee and thereby holding it entitled for exemption/approval under Section 10(23C)(vi) of Income Tax Act, 1961 [for brevity 'the Act']. Following substantial questions of law are raised: I. Whether on facts and circumstances of case MANOJ KUMAR Hon'ble ITAT is right in not adjudicating fact that 2020.01.17 10:20 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 434 of 2019 [2] assessee's stated objects does not aim to have its activities 'solely for education', which is one of main condition for granting approval u/s 10(23C)(vi)? II. Whether on facts and circumstances of case, Hon'ble ITAT is right in not adjudicating issue that despite assessee's receipts in excess of Rs. Two crores form F.U. 2013-14 onwards, applicant did not filed its return of income, which is necessary for purpose of determination of genuineness of activities? III. Whether on facts and circumstances of case, Hon'ble ITAT has erred in not adjudicating issue that assessee has filed application for grant of approval u/s 10(23C)(vi) for first time on 17.10.2016, though assessee has been claiming exemption u/s 10(23C) (vi) and simultaneously filing its audit report in form 10BB from F.Y. 2013-14? IV. Whether on facts and circumstances of case, Hon'ble ITAT has erred in not adjudicating findings of CIT(E) that main emphasis of society is mainly on creation of assets rather than dedeployment of funds towards deduction? V. Whether on facts and circumstances of case, Hon'ble ITAT is right in not adjudicating issue that assessee society has generated surplus over reasonable permissible limit i.e. 6% to 15% of gross receipts, as laid down by Apex Court in case of Viswesvaraya Technological University Vs. ACIT in Civil appeal Nos. 4361-4366 of 2016 (supra)? VI. Whether on facts and circumstances of case, Hon'ble ITAT is right in not adjudicating issue that emphasis of society mainly on adding to their vehicles, busses etc during FY 2013-14 and 2014-15 creating there by additional source of income that cannot directly qualify for tag education ? MANOJ KUMAR 2020.01.17 10:20 I attest to accuracy and VII. Whether on facts and circumstances of case, authenticity of this document High Court,Chandigarh ITA No. 434 of 2019 [3] order of Appellate Tribunal is contrary to evidence and material on record of case and therefore, perverse? Before proceeding further, it may also be noticed that registration under Section 12AA of Act was allowed to assessee in appeal by Tribunal, order was upheld by this Court. Commissioner of Income Tax (Exemptions), Chandigarh [for short, 'CIT (E)'] while dealing with application under Section 10(23C) of Act considered fact that there is denial of registration under Section 12AA of Act. application under Section 10(23C)(vi) of Act was rejected vide order dated 31.10.2017. Appeal was preferred before Tribunal, same was allowed vide order dated 17.1.2019, hence present appeal. Before proceeding further, aims and objects of assessee are reproduced as under: . . . to promote quality and scope of education in Rural Area and manage affairs of Sadhu Singh DAV, Rural Public School, Mukandpur; to work for social, Moral, intellectual upliftment of general public especially women; to provide for and make satisfactory transport arrangements for school and college girl students to general public especially; to collaborate with such government/NGO's working for similar objectives of Rural Welfare; to create and build suitable infrastructure for children/wards of Punjabi settled abroad (NRIs) for their education in India; to acquire land, buildings and to make construction for expansion of Sadhu Singh DAV, Rural MANOJ KUMAR 2020.01.17 10:20 I attest to accuracy and Public School, Mukandpur; to raise funds and to collect authenticity of this document High Court,Chandigarh ITA No. 434 of 2019 [4] donations and to issue receipts for same from general public and its members in form of cash and kind to be utilized for fulfilment of aims and objects. Learned counsel for revenue argues that Tribunal erred in relying upon decision of this Court in case of assessee for registration under Section 12AA of Act. It is contended that CIT (E) while rejecting application apart from rejection of registration under Section 12AA of Act relied upon fact that one of objects of assessee was not solely for educational purpose. From perusal of paper book, it is evident that one of factor considered by CIT (E) was denial of registration under Section 12AA of Act. It would be pertinent to note here that while dealing with issue of Section 12AA of Act, Tribunal dealt with objection with regard to amassing capital fund and fixed assets. It was concluded that corpus created and land and building was acquired out of donations, for setting up school. Further, point of fee receipt was also considered and it was held that same was spent for running school. only issue raised by learned counsel for Revenue needs to be considered is that object to work for social, moral, intellectual upliftment of general public especially women brings object of assessee out of phrase solely for educational purpose . contention raised is not well founded. From objects quoted above, it is forthcoming that assessee was promoting quality education in rural areas and managing affairs of Sadhu Singh DAV, Rural Public School, Mukandpur. object for upliftment of general public especially women is only with regard to its sole object of educational purpose only, as MANOJ KUMAR 2020.01.17 10:20 I attest to accuracy and authenticity of this document High Court,Chandigarh ITA No. 434 of 2019 [5] intellectual upliftment of general public especially women can only envisage education and nothing else. In view of above discussion, no interference is called for in conclusion arrived at by Tribunal. There is no merit, appeal is dismissed. [AJAY TEWARI] JUDGE [AVNEESH JHINGAN] JUDGE January 13, 2020 mk 1. Whether speaking/ reasoned : Yes / No 2. Whether reportable : Yes / No MANOJ KUMAR 2020.01.17 10:20 I attest to accuracy and authenticity of this document High Court,Chandigarh Commissioner of Income-tax (Exemptions), Chandigarh v. Rural Education & Women Welfare Society
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