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The Income Tax Officer, Ward VI (3) , Ludhiana Versus Shri Balaji Prem Ashram and Nikhil Vidyalaya

Exemption under section 10(23C)(iiiad) - CIT(A) allowed the claim - Held that:- From the perusal of the said proviso, we see that the provisions of this proviso are applicable only to clauses (iv), (v) (vi) and (via) of section 10(23) of the Act. Since the assessee is claiming exemption under section 10(23C)(iiiad) of the Act, there is no need to file Audit Report in Form No.10BB. In view of the above, the assessee has complied with all the conditions of section 10(23C)(iiiad) of the Act. We do .....

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r section 115BBC of the Act. The assessee has raised this issue before the learned CIT (Appeals) by taking a specific ground. However, from the perusal of the order of the learned CIT (Appeals), we see that the learned CIT (Appeals) has not adjudicated the said issue. In view of this, we restore this issue to the file of the learned CIT (Appeals) to adjudicate the same as per law. - ITA No.318/Chd/2013, ITA No.380/Chd/2014 - Dated:- 27-10-2015 - SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, .....

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148/- on which the exemption had been claimed in the return of income without specifying the section thereof. Along with the return, the assessee had also filed Audit Report under section 12A(b) of the Income Tax Act, 1961 (in short 'the Act'). The Assessing Officer observed that the assessee had been granted registration under section 12A of the Act vide order dated 26.5.2011, which was meant for assessment year 2009-10 onwards, therefore, the assessee was not eligible for exemption und .....

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restricted to advancement of education alone and, therefore it could be said that it is not existing solely for the purposes of education. He further observed that for claiming exemption under section 10(23C)(iiiad) of the Act as per Rule 16CC of the Income Tax Rules, Audit Report in Form No.10BB is required to be furnished under the tenth proviso to sub-section (23C) of section 10 along with return of income which was not filed by the assessee. In this way, the Assessing Officer held that the a .....

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view of the proviso to section 10(23C) of the Act anonymous donations referred to in section 115BBC on which tax is payable in accordance with the provisions of the said section are to be included in the total income of the assessee. 4. Aggrieved by the order of the Assessing Officer, the assessee went in appeal before the learned CIT (Appeals) and submitted that the assessee trust is running school and receipts of the trust are below ₹ 1 crore and as such, exemption under section 10(23C)( .....

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tional institution that comes within the purview of the exemption. It is thus clear that if the income of any person falls in clause covered by clause (23C) of section 10 of the Act, then such income is not includible in the total income of that person. The exemption under section 10(23C)(iiiad) of the Act is not to be seen qua the assessee but relevant to the activity of educational institution being carried out by an assessee. The assessee trust in the current year has constructed the building .....

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r of IT(exemption) Vs.Institute of Franciscan Clarist Sister of the Most Blessed Sacrament (2005) 196 CTR (del)582. iv) CIT vs. Vidya Vikas Vihar(2004)265 ITR 489(BOM) v) U.S Srivastava educational memorial Society vs. Asstt.CIT(2004)82ITJ(luck-trib)471. vi) Digember Jain Society for child welfare Vs.Director General of Income Tax(Exemptions). vii) CIT vs St.Mary's Malankara Seminary. viii) ITO vs. Baba Dhall Educational Society of India(2009) 27 SOT 391(Del)(ITAT-F.Bench) 5. After hearing t .....

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red to be filed in respect of assessee's claim of exemption under section 10(23C)(iiiad) of the Act. In view of these findings, the learned CIT (Appeals) deleted the addition made by the Assessing Officer. 6. Aggrieved by the said order of the learned CIT (Appeals), the Department has come up in appeal before us raising the following grounds of appeal : 1. The Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer and granting exemption u/s 10 (23C) (iiiad) of the I.T. A .....

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0 along with return of income for claiming exemption u/s 10 (23 C)(iiiad), as per rule 16CC of I.T. Rule 1962. 3. The Ld. CIT(A) has erred in not directing the Assessing Officer to charge tax u/s 115BBC(1) of the I.T. Act on donations received by the trust as the assessee has not produced the records of the identity indicating the name and address of the donors. 4. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed off. 7. The learned D.R. while ar .....

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n Form No.10B of the Act along with return of income, which goes to prove that the assessee intended to claim exemption under section 11 of the Act while it was not having registration under section 12A of the Act. In this view, it was prayed that the order of the Assessing Officer be confirmed. 8. The learned counsel for the assessee reiterated the submissions made before the lower authorities. Our attention was invited to the trust deed, whereby one of the objects of the society of the assesse .....

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g the year. Reliance was placed on a number of judgments to the effect that even if the assessee intended to claim exemption under section 11 of the Act while filing its return of income, it was not available to it due to the lack of registration under section 12A of the Act, the exemption available to it under section 10(23C)(iiiad) of the Act cannot be denied if it fulfils all the requirements of the said section. On the issue of filing of Audit Report as required by tenth proviso to sub-secti .....

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, whereby the Assessing Officer had physically verified the educational activity of the assessee, specially mentioning that the assessee is running the schools for educating the deaf, dumb, mentally retarded and poor students approximately 252 in numbers. In this view, it was prayed that the assessee be held to be eligible for exemption under section 10(23C)(iiiad) of the Act. 9. We have heard the learned representatives of both the parties, perused the findings of the authorities below and cons .....

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d it satisfies all the conditions given in that provision. Under section 10(23C)(iiiad) of the Act, any university or other educational institution existing solely for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of ₹ 1 crore can avail of this exemption. Undoubtedly, the annual receipt during the relevant assessment year of the assessee does not exceed ₹ 1 crore. The only is .....

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f balance sheet and other papers filed in the Paper Book, it is seen that the only activity carried on by the assessee during the year is relating to the education only. The fact of educational activities being carried out by the assessee has been confirmed by the Assessing Officer himself in the Remand Report dated 18.2.2014 filed by him before the learned CIT (Appeals) during the appellate proceedings for the assessment year 2010-11. In this report, the Assessing Officer confirmed that the ass .....

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er activity other than education has been pursued by it. The exemption under section 10(23C)(iiiad) of the Act is available on the educational activities of an assessee and if the assessee is carrying on only this sole activity during the year, the exemption cannot be denied to it on the basis that it has other objects also in its trust deed. There is no allegation by the Assessing Officer that the assessee has deviated from its objects. If in any of the subsequent years, the assessee carries on .....

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sessee on the ground that it has objects other than education also. In this regard, reliance placed by the learned counsel for the assessee on the judgment of Hon'ble Calcutta High Court in the case Birla Vidhya Vihar Trust (supra) is not out of place, whereby it has been held that a trust may have income from several sources but the sole object is the educational and the income has not diverted for personal profit, the trust is entitled for the benefit under section 10(23C)(iiiad) of the Ac .....

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has been very clearly provided in the Circular No.14(XL-35) dated 11.4.1995 (supra) issued by the CBDT, whereby it has been instructed that the officers of the Department must not take advantage of the ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars bef .....

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10 of the Act. The tenth proviso to section 10(23C) of the Act reads as under : Provided also that where the total income, of the fund or institution or any university or other educational institution or any hospital or other medical institution referred to in sub- clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisions of the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous year, such trust or inst .....

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id proviso, we see that the provisions of this proviso are applicable only to clauses (iv), (v) (vi) and (via) of section 10(23) of the Act. Since the assessee is claiming exemption under section 10(23C)(iiiad) of the Act, there is no need to file Audit Report in Form No.10BB. In view of the above, the assessee has complied with all the conditions of section 10(23C)(iiiad) of the Act. We do not find any infirmity in the order of the learned CIT (Appeals) and confirm the same. The ground Nos. 1 a .....

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