MAIT 192/2007 (1) HIGH COURT OF MADHYA PRADESH: JABALPUR (Division Bench) MAIT No. 192/2007 Commissioner of Income Tax, Bhopal Appellant/Revenue Versus M/s M.P. Pathya Pustak Nigam Respondent/Assessee (M.P. Text Book Corporation) Bhopal Coram: Honble Shri Justice Ajay Kumar Mittal, Chief Justice Honble Shri Justice Vijay Kumar Shukla, Judge Appearance: Shri Sanjay Lal, Advocate for Appellant/Revenue. Shri Abhijeet Shrivastava, Advocate for Respondent/Assessee. ORDER (Oral) (22.01.2020) Per: Ajay Kumar Mittal, Chief Justice: Revenue has filed present appeal under Section 260A of Income Tax Act, 1961 (in short Act) against order dated 22.06.2007 passed by Income Tax Appellate Tribunal, Jabalpur (for brevity Tribunal) in ITA No.287/Ind/2003. Assessment year involved is 1994-95. 2. This appeal was admitted on 30.11.2007 for determination of following substantial question of law:- Whether in obtaining factual matrix Income-tax Appellate Tribunal is justified in coming to hold that assessee-respondent herein, is entitled to exemption under Section 10(20) sic. [10(22)] of Income-tax Act, 1961 when element imparting education to students of MAIT 192/2007 (2) normal schooling is absent to attract exemption as engrafted under aforesaid provision? 3. Except unnecessary details, facts of case lie in narrow compass. Suffice it to say that assessee is Society registered under M.P. Societies Registration Act, 1959. assessee claimed exemption under Section 10(22) of Act for assessment year 1994-95. Keeping in view memorandum of association of assessee, Assessing Officer denied such exemption to assessee vide order dated 26.02.2002 (Annexure A-1). Feeling aggrieved by same, assessee preferred appeal before Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)], which was allowed vide order dated 21.01.2003 (Annexure A-2). learned Tribunal vide order dated 22.06.2007 (Annexure A-3) affirmed order of CIT(A) and dismissed appeal of Revenue on basis of its decision rendered in ITA No.363/Ind/1999 pertaining to same assessee decided on 25.10.2002 wherein it was observed that since assessee is playing role in imparting education in absence of which educational institution cannot be run which is in line with its aims and objects, therefore, limited profit for smooth running of institution or society is not prohibited and same would not render assessee society as wholly commercial. In this manner, present appeal has been filed by Revenue. 4. Learned counsel for appellant placed reliance upon Division Bench decision of this Court in ITA No.164/2012 (Commissioner of Income Tax vs. M.P. Text Book Corporation) decided on 10.07.2015 along with bunch of identical cases wherein matters pertaining to MAIT 192/2007 (3) different assessment years of assessee-Corporation involving identical issue have been remanded to Assessing Officer. 5. Learned counsel for assessee though argued in support of impugned order but he could not dispute aforesaid proposition. 6. We have heard learned counsel for parties. Nothing has been brought to our notice as to whether any further challenge was made to order passed in M.P. Text Book Corporation (supra) or that after remand order, Assessing Officer has maintained its earlier view and denied or allowed such exemption to assessee under Section 10(22) of Act or any party has further preferred any appeal to higher forum. 7. Supreme Court in Assam State Text Book Production and Publication Corporation Ltd. vs. Commissioner of Income Tax, Gauhati-I (2009) 185 Taxman 58(SC), which has been relied upon by Division Bench in M.P. Text Book Corporation (supra), has observed that all State-controlled Educational Committee(s)/Board(s) have been constituted to implement Educational policy of State(s) and therefore, they should be treated as educational institution. relevant extract of Supreme Court judgment reads as under:- Following judgment of Rajasthan High Court (CIT v. Rajasthan State Text Book Board, 244 ITR 667, we are of view that, in this case, High Court, in its impugned judgment, has not considered historical background in which Corporation came to be constituted; secondly, High Court ought to have considered source of funding, share-holding pattern and aspects, such as Return on Investment; thirdly, it has not considered letters issued by C.B.D.T. which are referred to in judgment of Rajasthan High Court granting benefit of exemption to various Board/Societies in country under Section 10(22) of Act; fourthly, it has failed to consider judgments mentioned MAIT 192/2007 (4) hereinabove; and lastly, it has failed to consider letter of Central Government dated 9th July, 1973, to effect that all State-controlled Educational Committee(s)/Board(s) have been constituted to implement Educational policy of State(s), consequently, they should be treated as Educational Institution. For afore-stated reasons, we are of view that, instead of remanding matter to High Court, it would be in fitness of things that matter stands remitted to Assessing Officer to consider it de novo in light of judgments of Rajasthan High Court and Orissa High Courts (Secondary Board of Education vs. Income Tax Officer (86 ITR 408), with reference to letter of C.B.D.T. dated 19 th August, 1975, referred to in judgment of Rajasthan High Court in case of Rajasthan State Text Book Board (supra) as also letter of Central Government dated 9th July, 1973, referred to above. 8. Following decision of Supreme Court in Assam State Text Book Production (supra), Division Bench of this Court in M.P. Text Book Corporation (supra) remanded matter to Assessing Officer for de novo consideration. relevant extract of judgment of Division Bench is reproduced as under:- 5. counsel for department did not point out any contrary decision on proposition answered by Supreme Court in aforesaid decisions as in case of Assam State Text Book Production and Publication Corpn. Ltd. (supra). Although substantial questions of law need not be answered but operative arrangement as directed by Supreme Court may have to be adopted even in these appeals of remanding matter to Assessing Officer for denovo consideration in light of decision of Supreme Court and decisions of Rajasthan High Court and Orrisa High Court referred to therein, which have been affirmed by Supreme Court. 6. To this limited extent, appeals will have to be allowed. 7. Counsel for respondent/assessee submits that since he would get opportunity before Assessing Officer denovo, appeals be disposed of leaving all questions left open, to be decided afresh by concerned Authorities on basis of above referred decisions, in particular, decision of Supreme Court. MAIT 192/2007 (5) 9. We are conscious of fact that provision contained in Sub- section (22) of Section 10 has been omitted from Act w.e.f. 1.4.1999 but assessment year involved in present case is 1994-95. In this view of matter, present case is squarely covered by judgment in Assam State Text Book Production (supra) and Division Bench judgment of this Court in M.P. Text Book Corporation (supra). 10. In view of aforesaid, impugned order passed by learned Tribunal is set aside. matter is remanded to Assessing Officer for de novo consideration. All questions are left open. 11. Accordingly, present appeal stands allowed and disposed of in same terms as in M.P. Text Book Corporation (supra). (AJAY KUMAR MITTAL) (VIJAY KUMAR SHUKLA) CHIEF JUSTICE JUDGE s/ Digitally signed by SACHIN CHAUDHARY Date: 2020.02.11 16:16:11 +05'30' Commissioner of Income-tax, Bhopal v. M. P. Pathya Pustak Nigam (M. P. Text Book Corporation)