Income Tax Appellate Tribunal
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Income Tax Appellate Tribunal (ITAT): Coram of Anil Chaturvedi (Accountant Member) and Suchitra Kamble (Judicial Member) allowed the appeal filed by the assessee challenging the assessment order made by the Income Tax authorities.

The assessee society was duly registered, and the renewal was granted for the period of 5 years. Society was granted registration under Section 12AA of the Income-tax Act, 1961. The society was granted an exemption under Section 10(23C) (vi) of the Income Tax Act. The return of income filed was filed declaring NIL income.

Assessing Officer made addition of Rs 93,88,000 towards net surplus from hostel activity and also disallowed Rs 3,26,11,455 regarding the claim of depreciation made by the assessee.

Being aggrieved by the assessment order the appeal of the assessee was partly allowed.

Analysis, Law and Decision

Tribunal stated that it was undisputed that the assessee was carrying educational activity.

Income from these activities declared by the assessee was NIL and the assessee earned gross receipt of Rs 16,26,69,407 on account of educational activity whereas the assessee was also running hostels for the students as per the UGC Guidelines which is an ancillary activity.

Tribunal further expressed that, in the absence of any evidence to show that the hostel facilities were provided to anybody other than students and staff of the trust, the hostel facilities provided by the educational institution shall be construed to be the intrinsic part of the ‘educational activities’ of the assessee and they cannot be considered different than activities of the society of ‘education’.

Hence, the addition amounting to Rs 93,00,088 made by the AO and sustained by the CIT(A) was not correct.

CIT(A) and the Assessing Officer failed to consider that the hostel facility is incidental to achieve the object of providing education as per object of the society and hence comes under the charitable purpose which is exempt under Section 11 of the Income Tax Act, 1961. 

In light of the decision of Supreme Court in CIT v. Rajsthani & Gujarati Charitable Foundation Poona, wherein it was held that the depreciation in respect of cost of the assets allowed to the assessee as expenditure is allowable, the issue regarding the depreciation in respect of hostel facilities was squarely covered in favour of the assessee.

In view of the above discussion, the appeal of the assessee was allowed. [Ideal Institute of Technology Society v. JCIT, 2021 SCC OnLine ITAT 662, decided on 3-11-2021]


Advocates before the Tribunal:

Appellant by: Sh. C. S. Aggarwal, Sr. Adv, Sh. Ravi Pratap Mall, Adv

Respondent by: Ms Sunita Singh, CIT DR

Patna High Court
Case BriefsHigh Courts

Patna High Court: The Division Bench of Sanjay Karol, CJ and S. Kumar, J., dealt with an issue of vital public importance and significance, i.e. non-existence of toilet for girls in colleges of Patna.

On 22-11-2019, the High Court had highlighted in its order that the functionaries of the State were apathetic in not bothering to cater to the needs of the girl students in various educational institutions. That even though funds were available, but there was no coordination between intra and inter-departments. The Court had directed the state to take appropriate action, ensuring speedy construction of toilets in all the Government colleges/Universities in Patna town.

The Bench observed that in Patna University, 528 toilets were functional; while in various other constituents, affiliated, minority, B.Ed. And government Colleges, there were 877 toilets out of which 24 + 29 were non-functional and 376 more toilets were required. As per the stand taken by State, the toilets were to be constructed outside the campus of the girl’s college/school whereas according to the Petitioner, it ought to be within the campus itself.

However, again on 09-01-2020, the Bench directed the Vice-Chancellor of both the Universities, namely, Patliputra University, Patna as also Patna University to submit details regarding whether any toilet, more so for ladies, stand established within the campus of the institution, if not, whether toilet stand established outside the campus of the institution, having exclusive excess to the students as also the teachers of the respective institutions and whether sanitisation facilities and other conveniences were available or not. Noticing that several institutions within the municipal limits of Patna, were not having any infrastructure of public conveniences i.e. public toilets for ladies within their respective campuses the Bench directed to make alternative arrangement within the campus.

Amicus Curiae, Archana Sinha presented a chart before the Court indicating the infrastructure available in the educational institutions, based on the affidavits filed by the Universities. The Bench constituted a committee of three Lady Advocates comprising of Adv. Archana Sinha, Adv. Anukriti Jaipuriyar and Adv. Amrisha Srivastava to visit each one of the Institutions referred to in the chart, for ascertaining the exact status of the existence and functionality of infrastructure, specifically, with respect to:

  • Existence of Ladies’ Toilets in 20 educational institutions affiliated with Patna University, 10 educational institutions affiliated with Patliputra University and 31 Government Schools;
  • Availability of sanitary napkins vending and disposable machines.

The Bench further directed that each committee member would be entitled to a sum of Rs. 20,000 to be paid jointly by the Patna University, Patliputra University and the Government of Bihar. The Committee was directed to submit the report within a week and the matter was listed for further hearing on 23-03-2021.[Hindi News Daily Hindustan Patna Live v. State of Bihar,  2021 SCC OnLine Pat 495, decided on 09-03-2021]


Kamini Sharma, Editorial Assistant has reported this brief.


Appearance before the Court by: 

For the Petitioner/s: Amicus Curiae Shambhu Sharan Singh, Amicus Curiae Archana Sinha,

For the P.M.C.: Adv. Prasoon Sinha

For the State: AAG-4 Anjani Kumar

For the P.P.U.: Sr. Adv. P.K. Verma, Adv. Dr. Anand Kumar, Adv. Viveka Nand Singh, Adv. Ajay Bihari Sinha, Adv. Rakesh Kumar Singh

For Patna Universities: Adv. Sandeep Kumar

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: Manoj K. Tiwari, J., disposed of a writ petition while issuing directions which was filed by the member of General Body of a Society, which runs a Government Aided Inter College, namely, “Inter College Kimsar, Pauri Garhwal”.

Petitioner contended that last election to constitute Committee of Management was held in the year 2010 and term of elected Committee of Management had expired in 2013 and no elections were held thereafter, thus he was before the Court.

The Court reminded that Section 34(4) of Uttarakhand School Education Act, 2006 provided for the appointment of Authorized Controller and proviso to Section 34(4) provided that Authorized Controller shall not continue for a period exceeding five years in a school. The second proviso to Section 34(4) of the Act, however, was an exception to the provision contained in the first proviso and it provided that in exceptional circumstances, the Authorized Controller may continue to function even after a period of five years.

The Court stated that Inter College Kimsar was a private educational institution, run by society and the college has to be managed by an elected Managing Committee, whose term would be three years and thus not holding elections was against the bye-laws of the society and duly approved Scheme of Administration of the college.

The Court disposed off the petition with directions of holding the elections.[Alam Singh Rawat v. Additional Director of Education,  2021 SCC OnLine Utt 45, decided on 07-01-2021]


Suchita Shukla, Editorial Assistant has put this story together

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: Manoj K. Tiwari, J., while allowing the present petition, issued directions for the conduct of elections in the institute in question, holding that, “Holding elections at regular intervals is mandated by law, to ensure that democratically elected Management Committee looks after the affairs of the college.”

 Background

Grievance of the petitioner is that last election to constitute Committee of Management was held in the year 2010 and term of elected Committee of Management expired in 2013 and no elections were held thereafter. Presently an Authorized Controller appointed by respondent 1, is looking after the affairs of the Inter College.

 Observation

Court noted the relevant provisions of the Uttarakhand School Education Act, 2006 and said, “Section 34(4) of Uttarakhand School Education Act, 2006 provides for appointment of Authorized Controller and proviso to Section 34(4) provides that Authorized Controller shall not continue for a period exceeding five years in a school. The second proviso to Section 34(4) of the Act, however, is an exception to the provision contained in the first proviso and it provides that in exceptional circumstances, the Authorized Controller may continue to function even after period of five years… In the present case, last election was held in the year 2010 and thereafter no election has been held. Such state of affairs is against the byelaws of the society and duly approved Scheme of Administration of the college. Thus it is in the interest of all concerned that elections to constitute Management Committee are held at the earliest.”

 Decision

While allowing the present petition, Court issued the following directions;

(i) Authorized Controller shall get advertisement published in two newspapers for inviting applications from eligible persons for induction as member of the society within two weeks.

(ii) Competent Authority shall thereafter prepare a voter list within next three weeks.

(iii) Competent Authority shall fix a date for election at the earliest, but not later than two weeks from the date of preparation of voter list.

(iv) Authorized Controller shall handover charge to the newly elected Managing Committee, within seven days from the date of declaration of result of election.[Alam Singh v. Additional Director of Education, 2021 SCC OnLine Utt 45, decided on 07-01-2021]


Sakshi Shukla, Editorial Assistant has put this story together

Himachal Pradesh High Court
Case BriefsHigh Courts

Himachal Pradesh High Court: A Division Bench of Tarlok Singh Chauhan and Jyotsna Rewal Dua JJ. disposed of the petition giving relief to the students and awarding litigation expenses as compensation to be paid by the defaulting respondent college.

The instant petition was filed by students seeking the return of their original documents submitted to Himalayan School of Nursing, being run by the Himalayan Group of Professional Institutions, under the aegis of Maa Saraswati Education Trust, registered in the State of Haryana at the time of admission in course GNM i.e. General Nursing & Midwifery Diploma. Even after having approached the authorities on multiple occasions, the college failed to provide the original documents and later confessed to not having them in their possession and the same to be seized by CBI.

Counsel for the respondent submitted that the original certificates are not in their possession and has been seized by CBI. In view of this, Court asked CBI to file a reply. The reply by CBI stated that during search proceedings, files were found and seized for further investigation qua Himalayan Group of Professional Institutions, Kala Amb, Tehsil Nahan, District Sirmaur, H.P., before the Court of Special Magistrate (CBI)-cum-CJM, Shimla.

The Court relied on various judgments emphasizing the evolution of education and its importance, namely Tamil Nadu v. K. Shyam Sunder, (2011) 8 SCC 737 and observed when educator gets down to hand twisting and blackmailing by retaining the original certificates and other documents of its students so as to ensure that their wings are clipped and they do not migrate to any other college or for that matter leave the college.

The Court directed the CBI to retain the photocopies for investigation and return the original documents to the students to prevent any further mental trauma.

The Court further relied on a judgment titled Maharishi Dayanand University v. M.L.R. Saraswati College Education, (2000) 7 SCC 746 and held that petitioner students to be compensated for the legal expenses and hence Rs 50,000 each to be paid by the institution to the students.

In view of the above, the petition stands disposed off.[Twinkle Pundir v. State of H.P., 2020 SCC OnLine HP 1845, decided on 06-10-2020]


Arunima Bose, Editorial Assistant has put this story together

Kerala High Court
Case BriefsHigh Courts

Kerala High Court: A Division Bench of CJ Hrishikesh Roy and A.K. Jayashankaran Nambiar, J. opined that the students could not be compelled to continue in a college which according to their perception was detrimental to their career and laid that there was no reason to interfere with the judgment of the single Judge whereby students were allowed the inter-college transfer.

Respondent student sought inter-collegiate transfer from the Cochin Institute of Science and Technology to another self-financing college under the same university since the amenities and infrastructure in his college were inadequate. But the college principal did not accord permission for the inter-college transfer. Thus, the respondent herein had filed a petition before this Court and a Single Judge Bench[1] allowed the same holding that college could not arbitrarily reject issuance of NOC to students desirous of taking admission into another college/ institute. Aggrieved by the said decision, the appellant-college preferred the instant appeal.

The counsel for the appellant, Anoop V. Nair and M.S. Sandeep Sudhakaran contended that if such inter-college transfer was permitted, the functioning of the appellant college would itself be put to jeopardy as it might possibly adversely impact those opting to continue in the Cochin Institute of Science and Technology.

The Court relied on the judgment of Supreme Court in the case of K.S. Puttaswamy v. Union of India, (2017) 10 SCC 1, in which it was held that the right of a person to individual autonomy was matter of personal choice and preferences were integral to his dignity and thereby it was his fundamental right under Article 21 of the Constitution of India. It remarked that “freedom to choose the college of his/her choice for pursuit of their studies is according to us, an aspect of the Fundamental Right to privacy, guaranteed under Article 21 of the Constitution.”

The Court held that the appellants had not been able to show any condition either statutory or contractual which obliged a student admitted to their college to necessarily continue their course of study in the same institution and therefore when a student felt that he could secure better education in another college and there was no legal bar in exercise of such option, appellants could not compel the students to continue their curriculum from the same college. Hence, the Court dismissed the appeals for being devoid of merit.[Cochin Institute of Science and Technology v. Jisin Jijo, 2019 SCC OnLine Ker 1800, decided on 04-06-2019]

[1] https://blog.scconline.com/post/2019/06/12/ker-hc-college-cannot-arbitrarily-reject-issuance-of-noc-to-students-desirous-of-taking-admission-into-another-college-institute/