The Income Tax Appellate Tribunal ( ITAT ), Visakhapatnam recently remanded a matter to the Commissioner of Income Tax (Exemptions) ( CIT(E) ) citing the dearth of material on record to prove prior rejection of Income Tax Exemption Registration.
An Appeal was filed by Acharya Nagarjuna University, an educational institution established in 1976 which underwent rechristening to its present name in 2002. The University is managed by Senate Members of the Department of Higher Education, Andhra Pradesh State Government and has a number of Colleges under its wing.
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Acharya University is financed by the State Government and also receives grants from the University Grants Commission while availing exemptions under Sections 10(23C)(iiiab) and 10(23C)(iiiad) of the Income Tax Act, 1961 and not being liable to file returns of income.
The Appellant sought registration under Section 10(23C) of the Income Tax Act, 1961 and was granted registration under Clause (i) of first proviso to Section 10(23C) of the Act for the Assessment Year ( A.Y. ) 2022-23 to 2026-27.
The CIT(E) upon verification, identified that the Appellant had not registered under Section 12A or Section 10(23C) of the Income Tax Act, 1961 despite having been established for over 50 years and proceeded to issue demands against the financials of the Assessee for A.Y. 2015-16 and A.Y. 2018-19.
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The CIT(E) subsequently observed the Appellant’s flagrant violation of legal provisions by claiming income tax exemptions while being disqualified to do so and proceeded to cancel the Appellant’s registration citing furnishment of false and incorrect information resulting in a “specified violation” as per clause (e) of the explanation 2 of 15th Proviso to Section 10(23C)(vi) of the Income Tax Act, 1961.
Present Appeal has been lodged by Acharya Nagarjuna University submitting that the CIT(E) has erroneously cited the Appellant’s lack of registration under Sections 12A or 10(23C) of the Income Tax Act, 1961 while contradicting itself by stating that the Assessee has earlier claimed Registration under Section 10(23C) of the Act.
The ITAT Bench, presided over by Duvvuru RL Reddy, Judicial Member and S Balakrishnan, Accountant Member observed that CIT(E) has purported the Appellant’s earlier application for Registration under Section 10(23C) of the Act while not adducing any material on record regarding such application and its rejection.
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In light of the observations made, the ITAT proceeded to remit the case back to the file of the CIT(E) to meritoriously re-examine the case to decide on the approval of registration under Section 10(23C) of the Income Tax Act, 1961.
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