ITA Nos. 778 and 779/Kol/2013

Decided On: 31.07.2020

Appellants: Kalyan Educational Society Vs. Respondent: Commissioner of Income Tax-Durgapur

Hon'ble Judges/Coram:
P.M. Jagtap, Vice President and A.T. Varkey


A.T. Varkey, Member (J)

1. Both these appeals preferred by the assessee are against the separate orders of Commissioner of Income-tax, Durgapur (hereinafter referred to as the Ld. CIT, Durgapur) dated 26.02.2013 denying registration u/s. 12AA of the Income-tax Act, 1961 (hereinafter referred to as the "Act") and denial of approval u/s. 80G of the Act.

2. Brief facts of the case are that the assessee is a Society registered under the West-Bengal Societies Registration Act, 1961 on 02.02.2005. The assessee filed on 17.08.2012 applications before the Ld. CIT, Durgapur for registration u/s. 12AA of the Act and for grant of approval u/s. 80G of the Act. The Ld. CIT, Durgapur notes that the assessee runs an educational institution namely, Camellia Institute of Engineering and Technology (hereinafter referred in short as "CIET)" at Bud-Bud, Burdwan. Further, the Ld. CIT, Durgapur observed after a perusal of the Income & Expenditure Account that the assessee had received by way of donation from students amounting to Rs. 27,75,400/- (Schedule-9) during the FY 2010-11 and Rs. 65,00,000/- (Schedule-12) during the FY 2011-12 over and above the Tuition Fees in both the years. The ld. CIT, Durgapur observes that the assessee had submitted the complete break-up of the donations received from the students mentioning their names, addresses, roll numbers, amount, and the stream in which the students got admission etc. in the Institute. Considering the said facts, the Ld. CIT, Durgapur was of the opinion that assessee was receiving donation connected with the admission of the students and therefore it has to be treated as collection of Capitation fees as held by the Hon'ble Supreme Court in TMA Pai Foundation Vs. State of Karnataka MANU/SC/0905/2002 : 2002 (8) SCC 4. Thereafter, the Ld. CIT, Durgapur relied on the decision of the Hyderabad Tribunal in Vodithala Education Society Vs. ADIT (Exemptions)-II, MANU/IH/5009/2007 : 20 SOT 353 (Hyd.) and held that the assessee is indulged in sale of education and, therefore, it cannot be considered as a charitable institution u/s. 2(15) of the Act because the purpose of the assessee as a whole is to make profit and therefore denied the registration u/s. 12AA of the Act.

3. Regarding the assessee's application for grant of exemption u/s. 80G of the Act, the Ld. CIT reproduced his observation as made in the order denying 12AA registration and held that the assessee did not satisfy the condition as laid down for grant of exemption u/s. 80G of the Act. Aggrieved, by both the action of ld. CIT, Durgapur, the assessee is before us.

4. According to Ld. AR, Shri S.K. Tulsiyan, the assessee Society runs the CIET which was accorded approval by the All India Council for Technical Education on 13.07.2010, which is evident from perusal of pages 28 to 43 of the paper book. According to him, all the students as mentioned in the said list for FY 2010-11 were given admission in the CIET in the month of August, 2010 and donations were received by the CIET after more than six months between February and March, 2011. It was pointed out by the ld. AR that all the students who gave donations in FY 2011-12 were the existing students of the college/institution. Therefore, according to Ld. AR, these donations were not received by the assessee at the time of admission and drew our attention to pages 1 and 2 of the paper book and especially to page 1 which gives the d........