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2018 (6) TMI 90 - AT - Income TaxExemption u/s 10 - rejecting the claim of exemption and making the adjustment u/s 143(1) - whether declining the claim of exemption made in the return of income, while processing such return of income u/s 143(1) would ipso facto authorized and entitled the Revenue to treat the disallowance so made as a recoverable demand without making any further inquiry as provided under the Act, for the purpose of scrutiny assessment? - Held that:- Issue of claim of exemption by the assessee whether it falls under the category u/s 10(23C)(iiiab) or under section 10(23C)(iiiad) is debatable. As per Section 10(23C)(iiiab), exemption is available if any university or other educational institution existing solely for educational purposes and not for the purpose of profit and which is wholly or substantially financed by the Government. It is not in dispute that the assessee University is established by the Government of Madhya Pradesh. Nothing is on record suggesting that the assessee is not existing for educational purposes. The issue whether contention of the assessee that it is solely existing for educational purpose and the Government has financed it requires verification by conducting detailed enquiry and this can not be done by mere stating adjustments u/s 143(1) of the Act, which, thus, can be done only by way of scrutiny assessment. We, therefore, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of M/s. Bharat Oman Refineries Limited, Mumbai vs. ITO, Bhopal [2015 (1) TMI 100 - MADHYA PRADESH HIGH COURT] hold that the issue being debatable, authorities below ought to have made the detailed scrutiny as provided u/s 143(3) of the Act - decided in favour of assessee.
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