PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER:

This appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax (Exemptions) [hereinafter referred to as CIT(E) u/s 10(23C)(vi) of the Income Tax Act, 1961 ( hereinafter referred to as 'Act') dated 30.12.2017.

2. The assessee before us has challenged the rejection of its application for grant of approval as an educational institution existing solely for educational purposes, under the provisions of Section 10(23C)(vi) of the Act, for the purpose of claiming exemption of its income under the said Section. The assessee has raised the following grounds of appeal :

1. That the Learned Commissioner (Exemptions) has erred in rejecting our application for registration under section 10(23C)(vi) of the Income Tax Act, 1961.

2. That the appellant's main object is to run educational institution that qualifies the provision of section 10(23C)(vi).

3. That the appellant has submitted the required document as desired by Ld. Commissioner (Exemptions). Although the submissions has been taken on record but the attachments have not been considered.

4. That the Ld. Commissioner (Exemptions) has erred in calculating the gross receipts of the appellant for the last 3 years as receipts mentioned in order does not match with the audited "Income & Expenditure Account" submitted. This doesn't impact registration under section 10(23C)(vi).

5. That the observation of the Ld. Commissioner (Exemptions) of depositing very less receipts in bank Accounts and correlating with "existing not for profit" is not valid and also factually incorrect. There is no requirement under section 10(23C)(vi) on the quantum of deposits made in bank.

6. That the Appellant craves to add, amend, alter or withdraw any ground or grounds of appeal.

3. During the course of hearing before us, ld. counsel for the assessee drew our attention to the facts of the case, as reproduced at page no.1 of the order of the CIT(E),that the assessee was a society created on 09-12- 16 and running a school namely “New Era Sr. Sec.School”.That it had filed an application in Form No. 56D requesting for grant of approval u/s 10(23C)(vi) of the Act on 09.12.2016. Thereafter, ld. counsel for the assessee pointed out that after calling for necessary information from the assessee, the ld. CIT (E) rejected the application of the assessee namely for three reasons ;

i) That education was not its sole objective which was a necessary pre-requisite for the purpose of grant of approval u/s 10(23C)(vi) of the Act;

ii) That in earlier years, the assessee had claimed exemption u/s 10(23C)(iiiad), which was inadmissible since its aggregate receipts had exceeded the prescribed limit of Rs. 1 Crore; and iii) That the assessee was depositing only small portion of its receipts in the banks, thus, keeping away a substantial chunk of public money from the banking channels.

4. Our attention was drawn to the relevant findings of the ld. CIT (E) at para 10 to 12 of the order as under :

“10. On 26.12.2017 & 27.12.2017, replies in response to above noted queries were received through e-mails. After perusal of written submissions, it is seen that the applicant society had aggregate receipts above Rs. 1 Crore in last two years. The summary of aggregate receipts of applicant society is given below- F.Y Gross Receipts (Rs.) 2014-15 77,37,379/- 2015-16 1,12,14,834/- 2016-17 1,18, 12,9?9/ -

A further perusal of the copy of the ITRs with reference to the Receipts and Payment accounts, reveals that the applicant has claimed inadmissible exemption u/s 10(23C)(iiiad) in the preceding years as its aggregate receipts had exceeded Rs. 01 Crore in F.Y 2015-16 and F.Y 2016-17. Moreover, perusal of MoA provided by applicant reveals that the MoA does not restrict the operations of the applicant that would satisfy the condition "solely for education". This is a mandatory condition for granting approval u/s 10(23)(vi). Although, the applicant has provided separate copy as regards the