Geetanjali University Trust v. Chief CIT

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The Tax Publishers2012 TaxPub(DT) 0804 (Raj-HC) : (2012) 044 (I) ITCL 0420 : (2013) 352 ITR 0427 : (2011) 203 TAXMAN 0626 INCOME TAX ACT, 1961 --Exerption under section 10(23C)--Educational institutionIllegal admission vis-a-vis profit motive--Assessee-trust was running a medical college. During year under consideration, the admissions made by trust were not on basis of merit/waiting list prepared on basis of RPMT Examination, which system has been approved by Medical Council of India and Rajasthan University. Against such admissions, a writ petition was filed and Single Judge of the High Court held that Medical Council of India regulations were mandatory and have to be complied with and declared the admissions as illegal. The Division Bench of this Court affirmed the decision of Single Judge. Assessee-trust, then approached the Supreme Court by filing Special Leave Petition and there the matter was still pending. Meanwhile, Chief Commissioner of Income Tax rejected the application of assessee for exemption from tax under section 10(23C) on the ground of illegal admission and involvement of profit motive of trust. Held: Since question of legality of the admissions made by the trust was still a matter subjudice before the Apex Court, of course, the Rajasthan High Court had held against the assessee-trust that such admissions were not made in accordance with law vide judgment of learned Single Judge as aforesaid and affirmed by the Division Bench. It cannot be said finally yet that assessee had committed any such illegality and no such opinion could be formed by the learned Chief CIT so long as the matter was pending before the Supreme Court of India and was not decided against the trust. Consequently, the present writ petition was allowed and impugned order was set aside and Chief Commissioner was directed to decide the issue afresh for relevant year. Income Tax Act, 1961, 10(23C) IN THE RAJASTHAN HIGH COURT VINEET KOTHARI, J. Geetanjali University Trust v. Chief CIT S.B. Civil Writ Petition No. 11799 of 2010 24 November, 2011 Petitioner by : Vikas Balia Respondent by : K.K. Bissa ORDER This writ petition has been filed by the petitioner assessee being aggrieved of the order dated 27-1-2010 passed by the Chief Commissioner of Income Tax, Udaipur under section 10(23C) of the Income Tax Act, 1961 rejecting the application of the petitioner Trust for exemption from tax for assessment year 2008-2009 in prescribed Form No. 56D. The petitioner Trust runs a medical college with attached hospital of 450 beds and imparts such education to 150 students of MBBS Course besides running the colleges of Pharmaceutical, Physiotherapy and Nursing having separate intake of students. During the relevant year 2008-2009, the admissions by the petitioner Trust were not made on the basis of merit list/waiting list prepared on the basis of RPMT-2008 Examination, which system has been approved by the Medical Council of India and Rajasthan University. Against such admissions made by the petitioner Trust, a writ petition, namely; Abhishek Sain v. Raj. University of Health Sc. [SBCWP No.10858/2008] was filed before the High Court & learned Single Judge of this court vide order dated 18-3-2009 held that Medical Council of India Regulations were mandatory and have to be complied with and admissions should have been given on the basis of Common Entrance Test of RPMT - 2008 and merit of Common Entrance Test RPMT - 2008 could not sacrificed even in the aided institutions for which admission to 85% of 150 seats have been made and accordingly the learned Single Judge declared the admissions made by the petitioner Trust against 85% of the seats as illegal. The Division Bench appeal filed by the petitioner Trust, namely DB Civil Special Appeal (Writ) No. 241/2009 also failed and Division Bench vide its judgment dated 3-9-2009 affirmed the decision of learned Single Judge, against which the petitioner Trust is said to have approached the Apex Court by filing Special Leave Petition, namely; SLP (Civil) No. 23763/2009 and there the matter is still pending before the Hon'ble Supreme Court. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0804 (Raj-HC) : (2012) 044 (I) ITCL 0420 : (2013) 352 ITR 0427 : (2011) 203 TAXMAN 0626

INCOME TAX ACT, 1961

--Exerption under section 10(23C)--Educational institutionIllegal admission vis-a-vis profit motive--Assessee-trust was running a medical college. During year under consideration, the admissions made by trust were not on basis of merit/waiting list prepared on basis of RPMT Examination, which system has been approved by Medical Council of India and Rajasthan University. Against such admissions, a writ petition was filed and Single Judge of the High Court held that Medical Council of India regulations were mandatory and have to be complied with and declared the admissions as illegal. The Division Bench of this Court affirmed the decision of Single Judge. Assessee-trust, then approached the Supreme Court by filing Special Leave Petition and there the matter was still pending. Meanwhile, Chief Commissioner of Income Tax rejected the application of assessee for exemption from tax under section 10(23C) on the ground of illegal admission and involvement of profit motive of trust. Held: Since question of legality of the admissions made by the trust was still a matter subjudice before the Apex Court, of course, the Rajasthan High Court had held against the assessee-trust that such admissions were not made in accordance with law vide judgment of learned Single Judge as aforesaid and affirmed by the Division Bench. It cannot be said finally yet that assessee had committed any such illegality and no such opinion could be formed by the learned Chief CIT so long as the matter was pending before the Supreme Court of India and was not decided against the trust. Consequently, the present writ petition was allowed and impugned order was set aside and Chief Commissioner was directed to decide the issue afresh for relevant year.

Income Tax Act, 1961, 10(23C)

IN THE RAJASTHAN HIGH COURT

VINEET KOTHARI, J.

Geetanjali University Trust v. Chief CIT

S.B. Civil Writ Petition No. 11799 of 2010

24 November, 2011

Petitioner by : Vikas Balia

Respondent by : K.K. Bissa

ORDER

This writ petition has been filed by the petitioner assessee being aggrieved of the order dated 27-1-2010 passed by the Chief Commissioner of Income Tax, Udaipur under section 10(23C) of the Income Tax Act, 1961 rejecting the application of the petitioner Trust for exemption from tax for assessment year 2008-2009 in prescribed Form No. 56D. The petitioner Trust runs a medical college with attached hospital of 450 beds and imparts such education to 150 students of MBBS Course besides running the colleges of Pharmaceutical, Physiotherapy and Nursing having separate intake of students. During the relevant year 2008-2009, the admissions by the petitioner Trust were not made on the basis of merit list/waiting list prepared on the basis of RPMT-2008 Examination, which system has been approved by the Medical Council of India and Rajasthan University. Against such admissions made by the petitioner Trust, a writ petition, namely; Abhishek Sain v. Raj. University of Health Sc. [SBCWP No.10858/2008] was filed before the High Court & learned Single Judge of this court vide order dated 18-3-2009 held that Medical Council of India Regulations were mandatory and have to be complied with and admissions should have been given on the basis of Common Entrance Test of RPMT - 2008 and merit of Common Entrance Test RPMT - 2008 could not sacrificed even in the aided institutions for which admission to 85% of 150 seats have been made and accordingly the learned Single Judge declared the admissions made by the petitioner Trust against 85% of the seats as illegal. The Division Bench appeal filed by the petitioner Trust, namely DB Civil Special Appeal (Writ) No. 241/2009 also failed and Division Bench vide its judgment dated 3-9-2009 affirmed the decision of learned Single Judge, against which the petitioner Trust is said to have approached the Apex Court by filing Special Leave Petition, namely; SLP (Civil) No. 23763/2009 and there the matter is still pending before the Hon'ble Supreme Court.