TMI Blog2023 (2) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... (23C)(iiiad) are applicable and consequently the income of the institution is exempt as the assessee trust has satisfied all the conditions as prescribed under the provisions of Section 10(23C)(iiiad) of the Act. Besides there is no allegation by the CIT(E) that the assessee is involved in any other activity for profit and not for educational purposes. Accordingly we set aside the order of Ld. CIT(E) and allow the appeal of the assessee. - I.T.A. No. 145/Kol/2022 - - - Dated:- 17-2-2023 - Shri Rajesh Kumar, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri Akkal Dudhwewala, FCA For the Respondent : Shri Biswanath Das, CIT DR ORDER PER RAJESH KUMAR, AM: This is the appeal preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year the assessee has derived gross total income of Rs. 1,09,82,810/- from dividend, interest and surplus from sale of investments and has also incurred an expenses amounting to Rs. 41,83,984/- on running of school and thus ,after claiming deduction of other miscellaneous expenses , has declared a surplus of Rs. 58,92,648/-. The Ld. CIT(E) further observed that though there was no receipt from any school, it has claimed the surplus as exempt u/s 10(23C)(iiiad) of the Act. The Ld. CIT(E) observed that since there is no receipt from educational institution/activities , the exemption u/s 10(23C)(iiiad) of the Act has wrongly been allowed thereby rendering the said assessment framed as erroneous and prejudicial to the interest of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial on record, we observe that undisputedly the assessee is engaged in running educational institution. The assessee trust is registered u/s 12A/12AA of the Act and has claimed exemption u/s 10(23C)(iiiad) of the Act. During the year, the assessee has derived gross income of Rs. 1,09,82,810/- by way of dividend, interest income and capital gain on sale of shares on mutual funds. The assessee has not charged any fee from the students who are studying in this school as the school is running in a very remote and backward area and assessee is imparting education to only uplift the educational standard of the students of that area. The assessee is also incurred expenses of Rs. 41,83,984/- for the purpose of running school and has surplus of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of profit and if the aggregate annual receipts of such university or educational institution does not exceed Rs. 1 crore, the income would be exempt. In this case also, the receipt from the aggregate annual receipt from educational institution is less than Rs. 1 crore and therefore the provisions of Section 10(23C)(iiiad) of the Act are applicable and consequently the income of the institution is exempt from tax. We note that though the assessee trust has total receipt of Rs. 1,09,82,810/- by way of dividend, interest and capital gain on sale of shares on mutual fund but the funds are being accumulated in order to improve the infrastructure of the school and also to construct the new schools in accordance with the aims and objectives of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, if the aggregate annual receipts of such hospital or institution do not exceed the amount of annual receipts as may be prescribed.] 4.1. A perusal of the above relevant provision of the Act would show that there is no requirement under the aforesaid provision that the income/receipt of the Trust/Society should come from the charitable/philanthropic activity itself. The only requirement is that the hospital/institution should exist solely for philanthropic purposes and not for purposes of profit and the aggregate annual receipt of such hospital/institution should not exceed the amount of annual receipt as may be prescribed, which is Rs. 1 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is out of the interest income from the investment has been made of surplus lying with it. However, there is no allegation that such surplus is applied for any purpose other than the charitable activity. Now, the only allegation is that the appellant Trust has applied only 12% of its receipts and accumulated 88%. We find that under the provision of Section 10(23C)(iiiae) of the Act, there is no limit prescribed for application of receipts and accumulation of receipts. Therefore, the appellant Trust is within its rights to accumulate the receipts as per its requirement. It had been explained by the assessee Trust to the Ld. CIT(E] that the surplus of investment was being accumulated for spending in future years for the objects and purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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