IN THE ITAT, DELHI BENCH

G.S. PANNU, V.P. & SUDHANSHU SRIVASTAVA, J.M.

Pradeep Education Society Vill v. CIT

ITA No. 2334/Del/2017

9 June, 2020

In favour of assessee.

Assessee by: R.P. Basra, CA

Department by: Sushma Singh, CIT(DR)

Sudhanshu Srivastava, JM

This appeal has been preferred by the assessee against Order, dated 28-2-2017 passed by the learned Commissioner (Exemptions), Chandigarh {CIT(Exemptions)} wherein, vide the impugned order, the learned Commissioner (Exemptions) has rejected the assessee s application for approval under section 80G(5)of the Income Tax Act, 1961 (hereinafter called the Act ),

2.0 The brief facts of the case are that the assessee society is running a school and a B.Ed. college at Village Deshalpur, PO Nuna Majra, Bahadurgarh, Haryana. The school is affiliated to Central Board of Secondary Education and the B.Ed. college is affiliated to National Council for Teacher Education and MD University at Rohtak,

2.1 The assessee s society was given approval under section 12AA of the Act vide Order dated 29-7-2016. Immediately after the grant of registration under section 12AA of the Act, the assessee society made an application before the learned Commissioner (Exemptions) for grant of approval under section 80G (5) of the Act. The stated aims and objectives of the society are to open and operate Engineering Colleges, technical institutions, study centres for professional studies and competitive entrance examinations etc. and to establish educational systems for adult education besides other objectives. The learned Commissioner (Exemptions), while considering the assessee s application for approval under section 80G, observed that the assessee society was running educational institutions and the aggregate annual receipts have been increasing year after year. It was also observed by the learned Commissioner (Exemptions) that the quantum of the surplus, cash balance, fixed assets etc, had also been increasing and further that all these increases were relatable to the fee receipts from the institutes being run by the society. The learned Commissioner (Exemptions) went on to infer that the main emphasis of the assessee society had been on assets creation and the only expenditure incurred towards the objects of education was towards salaries. The learned Commissioner (Exemptions) also observed that even the provisions relating to deduction of tax at source were not being followed. Apart from this, the learned Commissioner (Exemptions) also observed that the assessee had been receiving interest from FDRs and had been collecting huge fees for each and every facility being provided to the students. It was also observed that there was no history of any donation ever having been received by the assessee so far but the assessee has been in the practice of advancing funds to various concerns on a regular basis. The learned Commissioner (Exemptions) further observed that the assessee society has sufficient funds which were required for the propagation of its objects and also for financing future expansion. It was also stated by the learned Commissioner (Exemptions) that the assessee society has failed to elaborate on the target group of persons from whom the donation was to be sought and that there was no list of people who have shown the inclination to donate to the society. The learned Commissioner (Exemptions) also observed that since there were investible surpluses available with the assessee society, there was no rationale for seeking donations, With these observations, the learned Commissioner (Exemptions) rejected the assessee s application for approval under section 80G of the Act,