COMMISSIONER OF INCOME TAX Vs. CHILD EDUCATION SOCIETY

JUDGEMENT

(1.) THE respondent School is enjoying exemption under Section 11 of the Income-Tax Act (hereinafter referred to as 'the Act'). Alongwith this, exemption under Section 80 G of the Act has also been given to the respondent assessee from time to time. For the period w.e.f. 1st April, 2000 to 31st March, 2003, the exemption under Section 80 G of the Act was granted to the respondent on 30th May, 2000. This exemption was renewed for a further period starting from 1st April, 2003 to 31st March, 2006 vide orders dated 16th December, 2003. After the expiry of this period, the assessee made another application for exemption under Section 80 G (5) of the Act on 30th March, 2006. The respondent, however, vide its communication dated 17th October, 2006 sought leave to withdraw the said application with liberty to file it afresh subsequently. Orders dated 19th October, 2006 were passed allowing the assessee to withdraw the application and the application was thus dismissed. Subsequently, the assessee filed fresh application dated 12th June, 2007 for the same purpose namely seeking exemption under Section 80G (5) of the Act. This application was dismissed by the Director of Income-Tax (Exemption), (DIT for short), on 16th October, 2008. The application was rejected on the ground that the assessee was forcing the parents of the students in the school to give donation. It was also alleged that the assessee had indiscriminately issued Certificate under Section 80 G of the Act. The DIT took note of the facts that same happened in the earlier assessment years also because of which the assessee was denied exemption under Section 11 of the Act which order was confirmed by the CIT (A) and against those orders, appeals were filed by the assessee which were pending before the ITAT. He, thus, was of the opinion that when exemption under Section 11 of the Act was not allowed, there was no question of giving exemption under Section 80G of the Act.

(2.) IT also appears from the orders dated 16th January, 2008 passed by the DIT that the DIT treated the said application for exemption filed by the respondent seeking exemption w.e.f. 1st April, 2007. According to the assessee, this was apparent mistake, inasmuch as, application was filed for renewal of exemption w.e.f. 1st April, 2006 and not 1st April, 2007. This application of the assessee under Section 154 of the Act was dismissed by the DIT vide orders dated 15.7.2009.

(3.) IT would be necessary to point out at this stage that the appeals which were filed by the assessee against the orders of the Assessing Officer and the CIT (A) denying exemption under Section 11 of the Act were allowed by the ITAT. In respect of assessment years 2005-06, in fact, the CIT (A) had reversed the order of the Assessing Officer granting exemption under Section 11 of the Act which order was not challenged by the Department. The Tribunal while allowing the appeal, returned the finding that there was no violation or irregularities committed by the assessee and, therefore, the assessee was entitled to exemption under Section 11 of the Act.