PUSHP NIKETAN SCHOOL SAMITI,BIIJNORE vs. ITO, DHAMPUR
What did the Tribunal hold?
The Tribunal directed the deletion of Rs.1,62,749/- from the addition of Rs.2,45,757/- representing lab fees, founder day charges, and photograph charges, as these were related to the educational institute's activities.
What were the facts?
The assessee, an educational institution, declared NIL income. The AO made additions for non-vouched expenses, corpus fund, and interest income. The CIT(A) partly allowed the appeal.
What were the issues?
Whether interest and other income earned by an educational institution are eligible for exemption under Section 10(23C)(iii ad) of the Income Tax Act.
Which sections of the Income-tax Act were involved?
Section 10(23C)(iii ad),Section 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2015- 16 is directed against the order of Ld. CIT(A)-11, New Delhi dated 20.06.2019. The assessee has raised following ground of appeal:- 1. “Learned CIT(Appeals) erred in law and on facts in confirming the addition of interest and other income of Rs.2,45,757/- by not treating the same as income of educational institute.”
2. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that no one has been attending the proceedings on behalf of the assessee since 05.01.2021. Therefore, the appeal is taken up for hearing in the absence of the assessee and is being decided on the basis of the material placed on record.
Facts giving rise to the present appeal are that assessee society runs educational institution in the name of M/s. Pushp Niketan School Samiti DSM Road, Dhampur. The assessee filed its return of income declaring total income at NIL. The case of the assessee was taken up for scrutiny assessment. In response to the statutory notices, the Ld.AR attended the assessment proceedings on behalf of the assessee. The Assessing Officer (“AO”) thereafter, framed the assessment vide order dated 18.12.2017 u/s 143(3) of the Income Tax Act, 1961 (“the Act”) thereby, he made addition of Rs.4,99,601/- in respect of disallowance of expenses being non-vouched. Further, he made addition in respect of Corpus fund of Rs.1,25,366/- and addition in respect of interest income amounting to Rs.2,45,757/-.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, partly allowed the appeal of the assessee.
Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
Apropos to ground of appeal, Ld. Sr. DR opposed the grounds of appeal and supported the orders of the authorities below. He submitted that the only issue involved in this case is regarding taxability of addition of Rs.2,45,757/-.
7. I have heard Ld. Sr. DR for the Revenue and perused the material available on record and gone through the orders of the authorities below. It is seen that the assessee has filed written submission wherein it is stated that same amount shown as other income in the P&L Account including interest of FDR and saving accounts of Rs.83,008/- and other charges i.e. income of fine, Lab fee, Founder day charges, photograph charges etc of Rs.1,62,749/-. It is contended that the authorities below failed to appreciate that this income is integral part of running of school and the interest is incidental to such activity Page | 2 and also the receipt of running the educational institute is eligible for exemption u/s 10(23C)(iii ad) of the Act. It is seen from the record that Assessing Authority has stated in the assessment order that as per P&L Account, the assessee has shown other income (other receipts, interest on FDR and interest on HDFC Bank) of Rs.2,45,757/- i.e. accrued income which is not exempted. As per the assessee, the amount also included the Lab fee, Founder day charges, photograph charges etc which was certainly related to the income of the educational institute. Therefore, this amount should have been excluded by the AO and thus, a sum of Rs.1,62,749/- deserves to be deleted. I therefore, direct the AO to delete the addition of Rs.1,62,749/- out of the total addition of Rs.2,45,747/-. Thus, ground raised
by the assessee is partly allowed.
8. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 30th January, 2023.
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