Law:

Section:

JUDGMENT Jeevan Reddy, J.-This writ petition is filed by the governing body of Rangaraya Medical College represented by its secretary and principal, Mr. D. Sundarasiva Rao, for issuance of a writ of certiorari or any other appropriate writ, order or direction quashing the assessment order dated March 30, 1974, passed by the respondent, ITO, A-Ward, Circle I, Kakinada. Under the said order pertaining to the assessment year 1973-74, the ITO treated the petitioner, a society registered under the Societies Registration Act, as an association of persons, overruling its claim of being exempt from taxation by virtue of cl. (22) of s. 10 of the Act. It was held that the petitioner-society is founded on April 16, 1964, to manage the Rangaraya Medical College which was started by another society, namely, the Medical Education Society, Kakinada, six years earlier and that the college and the managing society are two different entities. It was further pointed out that there is no registered document transferring the buildings to the petitioner-society, that a compulsory contribution of Rs. 12,000 per seat is being collected by the society and that the bank accounts and deposits are maintained in the name of the society itself and not in the name of the college. It was further held that the petitioner-society is collecting Rs. 12,000 per seat and Rs. 300 as registration charges and that the said amount represents the sale price of a medical seat in the college and that this is a regular business transaction under the law of contract and the income by sale of seats is taxable. Further, the mere fact that the deposit made by the applicant for admission is subsequently treated as donation on admission being granted to him, does not in any manner affect this position. He, therefore, held that the claim of the petitioner, if at all, has to be examined only under s. 11 of the Act. It was then held that the memorandum of association of the petitioner-society does not authorise the construction of any buildings and that the construction of staff quarters is not necessary for managing and running the medical college nor such construction is mandatory upon the society and, therefore,…

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