Case Number: ITA 5392/DEL/2019
Appellant: DCIT, Central Circle, Ghaziabad
Respondent: Society for Educational Excellence, Ghaziabad
Assessment Year: 2010-11
Result: 2010-11
Case Filed On: 2019-06-14
Order Type: Final Tribunal Order
Date of Order: 2023-02-21
Pronounced On: 2023-02-21
The Income Tax Appellate Tribunal, Delhi Bench ‘B’, New Delhi, heard the case ITA 5392/DEL/2019 filed by the DCIT, Central Circle, Ghaziabad against the Society for Educational Excellence, Ghaziabad. The primary issue was the denial of exemption under Section 11 of the Income Tax Act, 1961.
The appellant, DCIT, Central Circle, Ghaziabad, challenged the order of the CIT(A), Kanpur, dated 29.03.2019, which granted exemption under Section 11 to the Society for Educational Excellence. The DCIT argued that the exemption was wrongly granted and should be denied.
The grounds raised by the Revenue included:
The representative of the DCIT argued that the CIT(A) wrongly granted exemption under Section 11 without considering the necessity of maintaining separate books of accounts for hostel and transport facilities. The DCIT contended that the expenses were non-verifiable and not wholly and exclusively incidental to the main educational activity of the trust.
The representative of the Society for Educational Excellence argued that the CIT(A) correctly relied on the earlier ITAT order, which granted the benefit of Section 11 to the assessee. The respondent contended that the hostel and transport facilities were incidental to the main educational activities and did not constitute a separate business requiring separate books of accounts.
The Tribunal observed that the issue of allowability of exemption under Section 11 had been decided in favor of the assessee by the Coordinate Bench of the Tribunal in the assessee’s own case for earlier assessment years. The Tribunal noted that the CIT(A) correctly followed the earlier ITAT order, which held that hostel and transport facilities provided to students and staff were incidental to the educational activities and did not constitute a separate business requiring separate books of accounts.
The Tribunal cited the earlier ITAT order, which referenced various judicial decisions, including the Karnataka High Court’s decision in CIT vs. Karnataka Lingayat Education Society, where it was held that providing hostel facilities to students and staff is incidental to the main educational objective and not a separate business.
The Tribunal also referenced the decision in Krishna Charitable Society vs. Addl. CIT, which held that transport and hostel facilities for students and staff cannot be considered business activities but are incidental to the main educational objectives.
The Tribunal upheld the CIT(A)’s decision to grant exemption under Section 11 to the Society for Educational Excellence. The Tribunal found no merit in the grounds of appeal raised by the Revenue and dismissed the appeal.
The order was pronounced in the open court on 21.02.2023.
-Sd/- (Anil Chaturvedi) ACCOUNTANT MEMBER -Sd/- (Yogesh Kumar U.S.) JUDICIAL MEMBER
Dated: 21st February, 2023.
Copy forwarded to:
Asstt. Registrar, ITAT, New Delhi
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