Harmony Educational Foundation Vs CIT (Exemption) (ITAT Pune)
ITAT Pune held that rejection of application for registration under section 12A read with section 12AB of the Income Tax Act since exorbitant fees are being charged and profiteering is not allowed in educational institutes. Accordingly, appeal of assessee dismissed.
Facts- Assessee i.e. Harmony Educational Foundation filed an application in Form No.10AB for registration u/s.12A on 13.01.2024. CIT(E) held that Assessee has claimed that it runs a School, but admittedly it does not have required permission from Government of Maharashtra or CBSE/SSC. Assessee has been running a School without any prior permission from the Government of Maharashtra or CBSE/SSC. CIT(E) further noted that inspite of having no permission to run a school, Assessee has been charging exorbitant fees from the students. Accordingly, CIT(E) rejected the application of the Assessee. Being aggrieved, the present appeal is filed.
Conclusion- The Hon’ble Supreme Court in the case of T M A PAI Foundation & Others Vs. State of Karnataka & Others has held that profiteering is not allowed in Educational Institutes. In the case of the Assessee, the Assessee has been earning more than 25% Net Profit which is nothing but profiteering. Thus, even on this ground, Assessee is not eligible for registration u/s.12A of the Act. The issue of exorbitant fee has been discussed by CIT(E) in his order.
