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2020 (1) TMI 689 - AT - Income TaxDisallowance of claim of exemption u/s 11 in respect of consultancy fee received - claiming exemption u/s 10(23C) - HELD THAT:- On a perusal of the additional evidences filed before us, prima facie, we are of the view that the assessee has been recognized as a deemed university, hence, falls within the category of university/other educational institution covered under section 10(23C)(iiib) or 10(23C)(vi) of the Act. Further, it has been recognized as an educational institution by competent authorities of the Government. Now it is fairly well settled that the proviso to section 2(15) applies only to the activity of “the advancement of any other object of general public utility” as per the definition of charitable purpose under section 2(15) of the Act. It is the contention of the assessee that since it is engaged in the activity of providing education, the proviso to section 2(15) of the Act is not applicable. The aforesaid aspect has not been examined or dealt with by the Tribunal in assessment year 2010–11 probably because no pleading to that effect was taken by the assessee. The contention of the assessee regarding applicability of the proviso to section 2(15) of the Act requires examination keeping in view the decision of DIT (E.) v/s Lala Lajpatrai, [2016 (4) TMI 641 - BOMBAY HIGH COURT] wherein has held that the test to determine as to what would be a charitable purpose within the meaning of section 2(15) of the Act is to ascertain what is the dominant object/activity. The Court has observed that if the dominant object is the activity of providing education, it will be charitable purpose under section 2(15) of the Act, even though, some profit arises from such activity. Therefore, assessee’s contention regarding applicability of proviso to section 2(15) of the Act requires examination. Further, assessee’s claim of exemption u/ 10(23C)(iiiab) or 10(23C)(vi) of the Act also requires examination keeping in view the orders passed by the learned Chief Commissioner of Income Tax, Mumbai, under section 10(23C)(vi) of the Act and also considering the fact that the assessee has been recognized as a deemed university and receiving substantial grant from the Government. Since the aforesaid claim of the assessee has not at all been examined by the Departmental Authorities, we are inclined to restore the issue to the file of the AO for re–examination and direct him to adjudicate the issue keeping in view the additional evidences filed by the assessee and the decisions to be cited before him. We make it clear that the AO must consider all the contentions of the assessee with regard to the applicability of the proviso to section 2(15) of the Act as well as the claim of exemption under section 10(23C)(iiiab) or under section 10(23C)(vi) of the Act. Needless to mention, the Assessing Officer must provide reasonable opportunity of being heard to the assessee before deciding the issue through a speaking order - Assessee’s appeals are allowed for statistical purposes.
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