Shiksha Samiti, Rewari vs Department Of Income Tax

ITA NO. 5083/Del/2012

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "G", NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. No. 5083/DEL/2012 A.Y. : 2008-09 Assistant Commissioner of M/s Shiksha Samiti, Kanina, Income Tax, VS. Distt. Mahendergarh (Haryana) Rewari Circle, Aayakar Bhawan, Model Town, Rewaari (APPELLANT) (RESPONDENT)

Department by : Shri B.R.R. Kumar, Sr. DR Assessee by : Shri R.S. Singhvi, Adv.

Date of Hearing : 11-02-2015

Date of Order : 16-02-2015

ORDER

PER H.S. SIDHU : JM Revenue has filed this Appeal against the impugned order dated 20.7.2012 passed by the Ld. CIT(A), Rohtak relevant to assessment year 2008-09.

2. The following grounds have been raised :-

"1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the additions made by the AO amounting to Rs. 20,98,900/- as according to him the assessee was not entitled for claim of exemption of surplus income of Rs. 20,98,900/- u/s. 10(23C)(iiiad) of the I.T. Act, 1 ITA NO. 5083/Del/2012

1961 as the total receipts during the year exceeded Rs. 1.00 crore; the Ld. CIT(A) deleted the said addition without appreciating the facts of the case brought on record by the AO.

2. That the appellant craves for the permission to add, delete or amend the ground of appeal before or at the time of hearing of appeal."

3. The brief facts of the case are that the assessee society filed return of income declaring NIL total income after claiming the whole of its surplus of Rs. 20,98,900/- as exempt u/s. 10(23C)(iiiad) of the Act. The AO issued notice u/s. 148 for reopening the assessment on the grounds that the annual receipts (capital and revenue) for the year under consideration exceeded Rs. 1.00 crore and as such it is not eligible for exemption u/s. 10(23C)(iiiad). During the assessment proceedings, AO noted that the AR of the assessee has submitted that the receipts of the society are only Rs. 60,24,857/- and an amount of Rs. 39,14,102/- was received as donation towards corpus fund. The donation towards corpus funds shall not be added towards receipts of the society. AO further noted that the corpus fund was to construct building of the society and therefore, it should be treated as capital receipt of the society. The AO therefore held that the receipts of the society exceeded Rs. 1.00 Crore and therefore exemption u/s. 10(23C)(iiiad) is not allowed. The AO thus made the assessment vide his assessment order dated 19.12.2011 passed u/s. 148/143(3) of the I.T. Act and brought to tax the surplus income of Rs. 20,98,900/- in the hands of the assessee.

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ITA NO. 5083/Del/2012

4. Against the aforesaid assessment order dated 19.12.2011, assessee filed the Appeal before the Ld. CIT(A), who vide impugned order dated 20.7.2012 deleted the addition in dispute by allowing the Appeal filed by the Assessee.

5. Aggrieved with the above order dated 20.7.2012 passed by the Ld. CIT(A), Rohtak, Revenue is in appeal before the Tribunal.

6. We have heard both the parties, perused and considered the

relevant records available with us, especially the orders of the

Revenue authorities. We find that the Ld. CIT(A) has observed

that the assessee-society is running an educational institution and is

registered u/s. 12A of the Act. Ld. CIT(A) noted that in the present

case, the total receipts of the educational institution of

Rs. 69,24,857/- whereas society received Rs. 39,15,102/- as

donation towards corpus fund. Ld. CIT(A) further noted that the list

of the donors for the surplus fund has been furnished to the AO and

the AO held in the assessment order that the corpus fund was for

construction of building of the society. Ld. CIT(A) relied upon the

decision of the ITAT, Chandigarh Bench in the case of Sh. Mahadevi

Tirath Sharda Maa Seva Sangh Vs ITO in ITA No. 1091/Chd/2009

Order dated 29.01.2010 holding that amounts contributed

voluntarily by the donors with specific direction that it shall form

part of corpus would not constitute income of the society. Therefore

the receipts of the educational institution are below Rs.1.00 Crore

and as such exemption u/s 10(23C)(iiiad) is allowable. We find that

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the Ld. CIT(A) further observed that ITAT, Delhi in the case of Jat

Education Society Vs DCIT in ITA Nos. 3769 & 3770/Del/2008 vide

order dated 11.03.2011 has held that for the purpose of section

10(23C)(iiiad), in the term 'aggregate annual receipts' refers to the

receipts by the educational institution and not that of the society. In

the present case also the receipts of the educational institution are

only Rs.69,23,857/- and the corpus donation was received by

society. Therefore, Ld. CIT(A) has rightly held that the exemption

claimed u/ s 10 (23C) (iiiad) is allowable. Ld. CIT(A) has considered

the issue and the submissions made by the AR and rightly observed

that the AO himself held that the donations received by the society

of Rs.39,15,102/- are for the corpus fund for the construction of

building of the society. Donations for the corpus fund are exempt u/s

11 of the Act. In the present case, though the society was registered

u/s 12A of the Act, exemption u/s 11 was not claimed in the return of

income and as such it cannot be entertained. We find that the

corpus donations received by the assessee society are separated,

the annual receipts of the educational institution are only Rs

69,24,857/-. Keeping in view of the order of ITAT in the case of Jat

Education Society Vs DCIT (supra), exemption u/s. 10(23C)(iiiad) can

be denied if the aggregate annual receipts of each educational

institution is more than Rs 1.00 Crore. We are of the view that since

the annual receipts of the educational institution of the assessee

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society are below Rs. 1.00 crore, exemption u/s. 10(23C)(iiiad) of

the Act the surplus is allowable and accordingly. Ld. CIT(A) has

rightly deleted the addition in dispute. In view of the above, we are

of the view that no interference is called for in the well reasoned

order passed by the Ld. CIT(A), hence, we uphold the same.

7. In the result, the Appeal filed by the Revenue stands dismissed.

Order pronounced in the Open Court on 16/2/2015.

Sd/- Sd/-

[J.S. REDDY] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER

Date 16/2/2015 "SRBHATNAGAR" Copy forwarded to: - 1. Appellant -

2. Respondent - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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