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2016 (12) TMI 680 - ITAT BANGALORE

2016 (12) TMI 680 - ITAT BANGALORE - TMI - Benefit of exemption u/s 10(23C) - Whether the assessee was entitled for exemption when the gross receipts of the assessee society exceeded ₹ 1 crore from all the three educational institutions OR of each educational institution run by it? - Held that:- In consonance with the ruling of the Hon’ble Court the case of Commissioner of Income-tax and another v. Children’s Education Society (2013 (7) TMI 519 - KARNATAKA HIGH COURT) we are of the view th .....

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t the order of the CIT (A)-14 [LTU], Bangalore, dated 30.06.2016. The relevant assessment year is 2005-06. 2. The assessee society has, in its grounds of appeal, raised two effective grounds, namely: (1) that the Hon ble CIT (A)[LTU] ought to have held that the assessee was entitled to the benefit of exemption u/s 10(23C) of the Act under the facts and in the circumstances of the case; In the alternative and without prejudice, the CIT (A) ought to have held that the income of the assessee was to .....

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furnished a return of income on 31.5.2007, admitting Rs. Nil income along with auditor s report, statement of accounts etc. According to the AO, as the said return was belated, no action was initiated on it. Subsequently, a notice u/s 148 of the Act was issued on 27.11.2007, requiring the assessee society to furnish its return of income. As there was no response from the assessee, a notice u/s 142(1) was issued along with notice u/s 143(2) of the Act. In response, the assessee s authorized repre .....

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The gross receipts exceed (sic) exceeded ₹ 1 crore. The assessee is neither registered u/s 12A (a) nor notified u/s 10(23C) of the Act. Therefore, the entire income earned is taxable. Section 11 has no application. 4. Aggrieved, the assessee society took up the issue with the CIT (A)-LTU for consideration. According to the CIT (A), three hearing notices posting the case for hearing on 27.8.2015, 27.4.2016 and finally on 21.6.2016 were issued to the assessee society to comply with the same. .....

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ized as under: - That registration under s. 12A deserves to be granted to the assessee society with effect from AY 2005-6 itself, as the facts as well as the findings of the AO will establish that the conditions for the grant of registration, subject to codonation of delay in filing the application for registration are fulfilled. The society was established and exists solely for education purposes and not for profit and, there was no finding by an authority to controvert this claim. In the light .....

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f Karnataka in the case of CIT v. Children s Education Society [358 ITR 373 (Kar)], the assessee society was entitled to the benefit of exemption u/s 10(23C)(iiiad) as the gross receipts of each educational institution run by it were well below the limit of ₹ 1 crore prescribed by s. 10(23C)(iiiad) read with rule 2BC of the Income-t ax Rules and, therefore, the AO had erred in law in denying the benefit of the exemption under the said provision. The entire income of the assessee society fo .....

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produced by the learned Counsel for the assessee society in the form of a paper book. At the outset, we would like to point out that the entire income earned by the assessee society was brought under the tax net by the AO on a sole ground that The assessee is running 3 educational institutions in the name of St Miras High School at 3 places in Bangalore. The gross receipts exceeded ₹ 1 crore. Thus, the gamut of the issue before us for adjudication is: whether the assessee was entitled for .....

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34) Each educational institution is a separate entity controlled under various statutes for various purposes. The management of these educational institutions may be in the hands of the societies or the trust, but, for all other purposes, they are different, independent entities. Any person in section 10(23C) refers to the assessee and on behalf of refers to such institution. It may be an university, it may be an educational institution, it may be a hospital or other institutions of similar nat .....

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