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TMI Blog2015 (12) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, the facts are being taken from ITA No. 133 of 2014. 2. ITA No. 133 of 2014 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 19.7.2013 (Annexure A-III) passed by the Income Tax Appellate Tribunal, Delhi Bench 'D', New Delhi (hereinafter referred to as "the Tribunal") in ITA No. 2543/Del/2011, relating to the assessment year 2007-08, claiming the following substantial questions of law:- a. Whether Hon'ble ITAT is justified in law in deleting the addition of Rs. 21,04,921/- made by the Assessing Officer by taxing the surplus as the assessee society viz. The Jat Education Society, which is the parent body of all the institutions, has not been grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 10(23C)(iiiab) of the Act to All India Jat Heroes Memorial College, an institution run by the assessee, by relying on an ispo facto erroneous non-contextual interpretation of the definition of the term 'Substantially financed by the Government' of the above section, by relying on unrelated statutory provisions of the Banking Regulation Act, 1949 and Section 40A(2)(a) of the Income Tax Act wherein the interpretation is qua an absolutely dis-similar fact of substantial interest of a person in a company or firm? 4. Put shortly, the facts necessary for adjudication of the present appeal as narrated therein are that the assessee filed its return on 31.10.2007 for the assessment year 2007-08 declaring nil income. The assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the Institution/Society run by the assessee received substantial contribution towards the corpus of the assessee or not so as to claim exemption under Section 10(23C)(iiiab) of the Act? 7. It would be expedient to reproduce clause (iiiab) of subsection (23C) of Section 10 of the Act which reads thus:- "Income not included in total income. 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- (1) to (23BBC) XX XX XX (23C)(iiiab) Any university or other educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government. (23D) onwards XX XX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the assessee is not entitled to exemption. The Tribunal committed serious error in interfering with the order of assessment and, therefore, he submits that case for interference is made out. 4. This Court had an occasion to consider s. 10 (23C)(iiiab) in the case of CIT vs. National Education Society (IT Appeal No. 808 of 2009), where it was held as under:- "Para 4. The word 'substantial' has not been defined under the IT Act. However, it has been the subject-matter of interpretation by various Courts in various contexts. The authorities in deciding what constitutes a 'substantial' portion of the finance have taken note of the statutory provisions contained in the Banking Regulation Act, 1949, where a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision." 11. In the present case, there has been financing by the Government when examined on individual institution basis to be ranging from 41% to 82% whereas when the percentage is taken for the society as a whole then it comes to 44.52% and 45.15% for the two years. The Tribunal after appreciation of evidence held that the Government was substantially financing and interested in the management of the respondent-assessee and, therefore, were eligible for exemption under Section 10(23C)(iiiab) of the Act. The relevant findings of the Tribunal are as under:- "9. In the above decision, the Hon'ble Court has considered 34.33% as substantial aid for the purpose of eligibility under the above said sections. In the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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