Case Number: ITA 645/DEL/2021
Appellant: Indian Academy of Highway Engineers, Noida
Respondent: CIT(Exemptions), Lucknow
Case Filed On: 2021-06-01
Order Type: Final Tribunal Order
Date of Order: 2022-06-30
Pronounced On: 2022-06-30
This article provides an in-depth analysis of the case ITA No. 645/DEL/2021, where the Indian Academy of Highway Engineers (IAHE) contested the rejection of their exemption application under Section 10(23C)(vi) of the Income Tax Act. The case delves into the grounds of rejection by the CIT(Exemptions) and the tribunal’s detailed judgment.
The Indian Academy of Highway Engineers, previously known as the National Institute for Training of Highway Engineers (NITHE), applied for an exemption under Section 10(23C)(vi) of the Income Tax Act. The application was necessitated due to a change in the institution’s name. Despite the change, the objectives and functional nature of the institution remained the same. The CIT(Exemptions), Lucknow, however, rejected the application, leading to the present appeal.
The primary issue was whether the Indian Academy of Highway Engineers was eligible for exemption under Section 10(23C)(vi) of the Income Tax Act. The appellant contended that they had previously been granted this exemption, and the current application was a procedural necessity due to the name change.
The CIT(Exemptions) argued that the institution was running on commercial lines and not engaged in charitable activities, as evidenced by the surplus it generated.
The appellant, represented by Sh. Akhilesh Kumar and Sh. Vipin Garg, Advocates, argued that the CIT(Exemptions) failed to appreciate that the exemption had been granted earlier and that the institution’s nature and objectives had not changed. They emphasized that IAHE was an autonomous body under the Ministry of Road Transport & Highways, Government of India, established to provide technical training in highway engineering.
The respondent, represented by Ms. Deepshikha Sharma, CIT(DR), defended the order of rejection, arguing that the institution’s activities were commercial in nature due to the fees collected for training programs, thus not qualifying for the charitable purpose exemption under Section 10(23C)(vi).
The tribunal noted that IAHE had previously been granted exemption under the same section and that the only change was in the institution’s name. They highlighted that the appellant’s application detailed the continuation of its objectives and activities, which aligned with the requirements of Section 10(23C)(vi). The tribunal found that the CIT(Exemptions) had not considered the historical context and the nature of IAHE’s activities properly.
The tribunal concluded that the CIT(Exemptions) had erred in rejecting the exemption application. The tribunal emphasized that the institution’s activities remained educational and were in line with the requirements of Section 10(23C)(vi). The surplus generated was incidental and used for the institution’s objectives.
Final Judgment:
Income Tax Appellate Tribunal, Delhi Bench ‘C’ New Delhi
Before: Sh. G.S. Pannu, Hon’ble President & Sh. Anubhav Sharma, Judicial Member
Order:
The appeal filed by the Indian Academy of Highway Engineers is allowed. The order under Section 10(23C)(vi) by the CIT(Exemptions) is set aside, and the CIT(Exemptions) is directed to issue the exemption certificate for the relevant assessment years. The tribunal emphasized that the institution’s objectives and activities were aligned with the requirements for exemption, and the rejection was based on an incorrect assessment of facts.
Order Pronounced and Signed in Open Court on 30th June 2022.
Signed:
Sh. G.S. Pannu, Hon’ble President
Sh. Anubhav Sharma, Judicial Member
Date: 30th June 2022
Indian Academy of Highway Engineers vs. CIT(E): Rejection of Exemption Application
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