The Tax Publishers2020 TaxPub(DT) 4326 (Ctk-Trib)

INCOME TAX ACT, 1961

Section 11 Section 2(15)

Assessee-educational trust enjoyed registration under section 12AA and it was also not the case of AO that activities of assessee were not in accordance with its objects stated in the trust deed or assessee was doing or conducting any activities beyond its objects which were in the nature of commercial activities for profit motive. Also, surplus of funds arising out of the receipts from students had been utilized for expansion of infrastructure by assessee trust, therefore, benefit of section 11 could not be denied to assessee only on the allegation of charging of extra fees from prescribed limit.

Charitable trust - Exemption under section 11 - Denial on the ground of collection by educational trust of extra fee over and above prescribed fee -

Assessee, registered charitable educational trust, established for imparting B.Tech, Diploma and equivalent course in Odisha claimed exemption under section 11. AO denied exemption holding that on account of assessee having collected extra fees over and above the prescribed fees. Proviso to section 2(15) got attracted to assessee's case. Held: Undisputedly, assessee trust enjoyed registration under section 12AA and it was also not the case of AO that activities of assessee were not in accordance with its objects stated in the trust deed or assessee was doing or conducting any activities beyond its objects which were in the nature of commercial activities for profit motive. Also, surplus of funds arising out of the receipts from students had been utilized for expansion of infrastructure by assessee trust. Even, issue was pending for adjudication before High Court of Orissa in the respective writ petitions filed by the assessee and High Court allowed assessee to retain extra amount of fees from prescribed limit till disposal of writ petitions. Even if assessee did not succeed in said writs, then also, excess or extra charged fees was to be adjusted towards fees of respective students from whom it had been collected during completion of their courses. Therefore, in the totality of facts and circumstances of case, benefit of section 11 could not be denied to assessee only on the allegation of charging of extra fees from prescribed limit.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11



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