The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in an appeal filed before it, held that educational institution is eligible for exemption under Section 10(23C)(iiiab) of the Income Tax Act, 1961.
The aforesaid observation was made by the Pune ITAT, when an appeal was filed before it by the assessee, against the order of Commissioner of Income Tax (Appeals) [NFAC], Delhi, for A.Y.2014-15, emanating from the order under Section 154 of the Income Tax Act, passed by the Income Tax Officer, Exemption, Kolhapur.
The ground of the assessee’s appeal being that the rectification order passed by the AO and upheld by the CIT(A), rejecting the Appellant’s Claim under Section 10, is incorrect and contrary to the provisions of Section 154, the brief facts of the case were that the assessee was a public charitable trust registered under Bombay Public Trust Act.
The Assessee had filed its return of income for the year under consideration and the order under Section 143(1) was passed, by disallowing the Assessee’s claim for exemption of Rs.3,35,16,250/-. Being aggrieved by the same, the assessee had filed a rectification application under Section 154 of the Income Tax Act before the ITO, Exemption, Kolhapur, who rejected the assessee’s application, on the ground that the assessee had failed to furnish the details of Section 12AA registration and, therefore that, the assessee is not eligible for deduction under Section 11 of the Income Tax Act.
Aggrieved by the order of the ITO, Exemption, the assessee filed an appeal before the CIT(A), who also upheld the order of ITO, Exemption, for the reason that the issue involved is outside the ambit of Section 154 of the Income Tax Act and that there was no mistake apparent from the record.
And, it is being aggrieved by the order of the CIT(A), that the assessee has filed now filed the present appeal before Pune ITAT.
Hearing the opposing contentions of both sides, as submitted by Shri Bhuvanesh Kankani, the AR on behalf of the assessee, and by Shri Sardar Singh Meena, CIT M.G. Jasnani, the DR on behalf of the Revenue, the Pune ITAT observed:
“On perusal of the income and expenditure account, it is observed that total receipts of the assessee are Rs.4,48,00,293/-, out of which government grants are Rs. 3,04,40,401/-. Thus, it is observed that the government grants are around 68% for the year under consideration.”
Finally, the Coram of S.S Godara, the Judicial Member, and Dr Dipak P. Ripote, the Accountant Member, thus held:
“Since the assessee is substantially financed and it is an educational institution, the assessee is eligible for exemption under Section 10(23C) (iiiab). Therefore, we allow the appeal of the assessee.”
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