DY.CIT(EXEMPTION), BHUBANESWAR vs. NATIONAL INSTITUTE OF TECHNOLOGY,NIT, ROURKELA

Shri M.K.Gautam, ld CIT DR appe Shri M.K.Gautam, ld CIT DR appeared for the revenue assisted b ared for the revenue assisted by Shri Dharmashoka Panda, intern from Birla School of Law (BGU), Shri Dharmashoka Panda, intern from Birla School of Law (BGU), Shri Dharmashoka Panda, intern from Birla School of Law (BGU), Bhubaneswar, and Shri P.R.Mohanty, ld AR appeared for the assessee Bhubaneswar, and Shri P.R.Mohanty, ld AR appeared for the assessee Bhubaneswar, and Shri P.R.Mohanty, ld AR appeared for the assessee

It was submitted by ld CIT DR that the assessee, admittedly, is an educational institution substantially financed by the Government of India. It was the submission that in the course of assessment proceedings, the Assessing Officer had noticed that prior period expenses of Rs.3,91,30,948/- , which the assessee was asked to substantiate. The assessee had failed to substantiate the same and consequently, the Assessing Officer had invoked the provisions of section 69C of the Act and disallowed the same. It was the submission that on appeal, the ld CIT(A) had deleted the addition by holding that the expenses were prior period expenses and that the assessee had the benefit of exemption u/s.10(23C)(iiiab). It was the further submission that the assessee had produced the ledger account in respect of prior period expenses for the first time before the ld CIT(A). It was the submission that the order of the ld CIT(A) was erroneous and the same is liable to be reversed.

In reply, ld AR vehemently supported the order of the ld CIT(A). It was the submission that the assessee had the benefit of exemption u/s.10(23)(iiiab) as also the registration u/s.12AA of the Act. It was the submission that in any case any addition made to the total income would remain exempted. It was the submission that the expenses which have been disallowed by the Assessing Officer were prior period expenses, which P a g e 2 | 4 were fully vouched. It was the submission that the assessee’s accounts are audited by the Government Audit. It was the submission that the order of the ld CIT(A) is liable to be confirmed.

We have considered the rival submissions. A perusal of the order of the ld CIT(A) clearly shows that admittedly, the assessee is entitled to exemption u/s.10(23C)(iiiab). A perusal of the assessment order also shows that the assessee is also registered u/s.12AA of the Act by the Commissioner of Income Tax, Sambalpur. Once the assessee has the exemption u/s.10(23C)(iiiab) of the Act, any addition would still result to Nil taxable income. Further, the revenue has not been able to dislodge the findings of fact arrived at by the ld CIT(A) in respect of prior period expenses. This being so, we find no infirmity in the order of the ld CIT(A) and same stands confirmed.

In the result, appeal of the revenue stands dismissed.