DEPUTY DIRECTOR OF INCOME TAX (E) Vs. VIDYANANDA EDUCATIONAL
LAWS(IT)-2014-5-68
INCOME TAX APPELLATE TRIBUNAL
Decided on May 23,2014

Deputy Director Of Income Tax (E) Appellant
VERSUS
Vidyananda Educational Respondents

JUDGEMENT

CHANDRA POOJARI,AM. - (1.) THIS appeal of the Revenue is directed against the order of the CIT(A) -IV, Hyderabad dated 14/11/2013 for the AY 2010 -11, wherein the revenue has raised the following effective grounds of appeal: "2. The CIT(A) erred in holding that the assessee is entitled for exemption u/s 11 of the IT Act, 1961 even in absence of approval under sub -clause (vi) to section 10(23C) of the IT Act, 1961. 3. The CIT(A) ought to have appreciated the fact that approval under sub -clause (vi) to section 10(23C) of the IT Act, 1961 is distinct from registration u/s 12A of the IT Act, 1961. 4. The CIT(A) ought to have appreciated that obtaining approval from the prescribed authority is mandatory, as per the plain meaning of section 10(23C)(vi) of the IT Act, 1961, whenever the gross receipts of an educational institution exceed Rs. 1 crore. 5. On the facts and in circumstances of the case and when the assessee has got income from Development fees, special fees and other fees etc., mentioned in para 7.1 of the assessment order and when it has been held by the Hon'ble Income Tax Appellate Tribunal, Hyderabad in their order in the case of Vasavi Academy of Education, Hyderabad in ITA No. 1120/Hyd/2009, that the assessee would not be entitled for exemption either u/s 11 or u/s 10(23C) in case it collected any money by whatever name it is called i.e., donation, building fund, auditorium fund etc., over and above the prescribed fees for admission of students, under that circumstance, the CIT(A) is not justified in directing the AO to allow exemption u/s 11 of the IT Act, 1961, to the assessee in this case. 6. On the facts and in circumstances of the case and when as per the statement of computation of total income dt. 24 -92010, signed by its General Secretary, filed by the assessee during the assessment proceedings, it has claimed depreciation, the CIT(A) is not justified in deleting the disallowance of depreciation made by the AO in the assessment.
(2.) BRIEFLY the facts of the case are that the assessee is a society registered u/s 1 2A and had claimed exemption u/s 11. The AO noted that the assessee had provided fee concessions to persons specified u/s 13(3) in violation of section 13. The AO also held that since the assessee was engaged in running an educational institution, it was eligible for exemption u/s 10(23C)(vi) and not u/s 11 , and that it had not obtained the requisite approval under that provision. The AO also disallowed the depreciation and assessed the total income at Rs. 10,54,46,998/ -.
(3.) ON appeal, as regards ground Nos. 2 to 4, the CIT(A) observed that to get exemption u/s 11 of the Act, the assessee should have registration u/s 12A of the Act. For this proposition, the CIT(A) relied on the following case laws: 1. CIT Vs. Bar Council of Maharastra, (1981) 130 ITR 28(SC) 2. American Hotel and Lodging Association/Educational Institute Vs. CBDT (2008) (170 Taxman 306) (SC) 3. Rajasthani Siksha Samiti {(ITA No. 80 and 91/Hyd/2008) 4. St. Theresa's Convent Society, Hyderabad (ITA No. 844/Hyd/08) 5. ADIT (Exemptions) Vs. Louis Educational Society, (ITA No. 1 456/Hyd/2008, dt. 26/12/2008) 6. AP Society for Knowledge (ITA No. 843/Hyd/09, dt. 09/10/2009. Against the order of the CIT(A), the revenue is in appeal before us.;


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