PCIT Vs Maharaji Education Trust (Delhi High Court)
Delhi High Court denies section 11 and 12 exemption to Charitable Trust charging capitation fee and further held that order of the ITSC is deemed to be conclusive for all the matters pertaining the concerned AY for which the settlement application has been accepted and processed by the ITSC.
With regards to the entitlement of benefits encapsulated in Section 11 and 12 of the Act, the High Court of Madras in the case of Mac Public Charitable Trust (supra) has held that collection of amount in excess of what has been prescribed as fee would render the objective of „charity‟ a farce and the same shall disentitle the assessee from claiming benefits under the said provisions.
Reverting to the facts of the present case, undisputedly, the assessee has engaged itself in charging capitation fee which is dehors the objective of the charitable trust. Therefore, the claim of the assessee for exemption as per Section 11 and 12 of the Act does not hold any water. In view of the aforenoted pronouncements of law, the ITAT has wrongly sustained the exemption claimed by the assessee.
Lastly, it is seen that the ITAT has placed reliance on the decision of the ITSC in the assessee‟s own case for the other AYs for computing the excess of income over the expenditure. It is however trite that the order of the ITSC is final and conclusive for a particular AY for which the application has been filed.
