The Income Tax Appellate Tribunal (ITAT), Chandigarh bench directed readjudication for granting exemption under Section 10(23c)(iiiab) of Income Tax Act, 1961 in respect of imparting the education through Charitable trust.
Assessee, Chandigarh Institute of Hotel Management & Catering Technology Filed an application for registration under section 12A of the Income Tax Act on the ground that the assessee was involved in the educational activity and hence, was eligible for registration as a Charitable Institution to claim deduction under section 11 of the Income Tax Act. The said application of the assessee was rejected by the CIT(E)
Aggrieved by the order,the assessee filed a second appeal before the tribunal.
The said appeal of the assessee bearing was adjudicated alongwith the appeal of the assessee for assessment year 2013-14 bearing agitated against the denial of exemption to the assessee claimed under Section 10(23C)(iiiab) of the Income Tax Act.
Before the bench, Rakesh Khanna, counsel for the assessee submitted that assessee has been running an educational Institution in the name and style of Chandigarh Institute of Hotel Management & Catering Technology which was solely for the purpose of education and not for profit and that the said educational Institute was separate from the Hotel. activity run by the assessee.
Further, the hotel and Educational Institute were separate entities and separate books of account were being maintained.
The Tribunal decided both the appeals of the assessee and restored the matter to the file of the Assessing Officer.
The Tribunal further in respect of the claim of exemption under section 10(23C)(iiiab)Income Tax Act, restored the matter in relation to the registration under Section 12A of the Income Tax Act for the assessment year under consideration, directing CIT(E) to examine the activities of assessee and then grant exemption accordingly.
Thereafter the CIT(E) granted registration under Section 12A of the Income Tax Act however regarding the activity of the assessee not discussed.
Rohit Sharma, Counsel for the revenue supported the decision of lower authorities .
It was observed by the tribunal that the case of the assessee has been that it is involved in education activity and is entitled to grant registration as a charitable Institution involving educational activity, but CIT(E) granted registration to the assessee as an Institution involved in “advancement of other objects of public utility”.
The tribunal reviewef the facts and submissions of the both parties The two member bench of Vikram Singh Yadav, (Accountant Member) and Sanjay Garg, (Judicial Member) that restored the matter to the file of the CIT(E) with a direction to decide regarding the claim of the assessee being a charitable Institution involved in the activity of imparting education.
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