The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) allowed the claim for exemption under Section 10(23C)(iiiad) of Income Tax Act,1961 for a music education trust.
Gandharva Mahavidhyalaya Trust,appellant-assessee,a charitable trust registered under Section 12AA and engaged in music education, filed its return declaring a gross income of Rs. 82,20,640. It claimed Rs. 30,62,684 as expenses under Section 11 and Rs. 57,57,960 as exempt under Section 10(23C) of the Act.
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Centralized Processing Centre (CPC) Bangalore disallowed the exemption claim, leading the trust to seek rectification under Section 154. The Commissioner of Income Tax(Appeals)[CIT(A)] dismissed the appeal, stating that the applicability of Section 10(23C) was a debatable issue and beyond the scope of rectification.
The two member bench comprising Dr.BRR Kumar (Vice President) and TR Senthil Kumar (Judicial Member) reviewed the appeal, including the return of income, CPC’s order, rectification order, and CIT(A)’s order. The main issue was whether the assessee qualified for exemption under Section 10(23C)(iiiad) of the Income Tax Act.
Read More: Educational Institution is Eligible for Exemption u/s 10(23C) (iiiab) of Income Tax Act: ITAT
The assessee had been engaged in music education since 1961 and was authorized by the Government of Gujarat to grant degree and postgraduate qualifications. Its syllabus was determined by the state’s Department of Education, and it was registered under Section 12AA.
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Under Section 10(23C)(iiiad), educational institutions operating solely for education and not for profit, with annual receipts not exceeding Rs. 5 crores, were eligible for exemption. The ITAT found that the institution met these conditions, as it had been exclusively engaged in education and had income below the prescribed limit. The Revenue had not contested that education was its sole activity since 1962.
Based on these findings, the tribunal allowed the exemption claim of Rs. 57,57,960 and directed the Revenue to cancel the demand notice.
In short,the appeal filed by the assessee was allowed.
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