CHINTAMANI EDUCATION TRUST OF PARLI VAIJNATH,MAIN ROADBEED, PARLI (RURAL), INDIA, 431515, BEE vs. INCOME TAX OFFICER, EXEMPTION WARD, EXEMPTION WARD AURANGABAD,

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ITA 3078/PUN/2025Status: DisposedITAT Pune20 August 2026AY 2016-1717 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the exemption under Section 10(23C)(iiiad) should be considered based on the gross receipts of each individual institute, not the aggregate receipts of all institutions. Therefore, the assessee was entitled to the exemption.

What were the facts?

The assessee, Chintamani Education Trust, did not file its return of income and its assessment was reopened. The Assessing Officer treated the trust's surplus and capital expenditure as taxable income, denying exemption under Section 10(23C)(iiiad) because the aggregate receipts exceeded Rs. 1 crore, even though individual institutions' receipts were below this limit.

What were the issues?

Whether the exemption under Section 10(23C)(iiiad) is to be determined based on aggregate receipts of all institutions or individual institution receipts. Whether the penalty under Section 271(1)(c) is sustainable if the primary addition is deleted.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE

For Appellant: CA Anand Partani
For Respondent: Shri Rajesh Haladkar, Addl.CIT

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA Nos.3077 to 3079/PUN/2025 Assessment years : 2016-17 & 2018-19 Chintamani Education Trust of Parli ITO, Exemption Ward, Vaijnath Aurangabad Vs. Main Road Been, Parli (Rural), Beed – 431515, Maharashtra PAN: AABTC0071A (Appellant) (Respondent) Assessee by : CA Anand Partani Department by : Shri Rajesh Haladkar, Addl.CIT Date of hearing : 16-07-2026 Date of pronouncement : 20-08-2026 O R D E R PER R.K. PANDA, VP:

ITA No.3078/PUN/2025 and 3077/PUN/2025 filed by the assessee are directed against the separate orders dated 16.10.2025 of the Ld. CIT(A) / NFAC, Delhi i.e. one for quantum and the other appeal is against the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to assessment year 2016-17. ITA No.3079/PUN/2025 filed by the assessee is directed against the order dated 23.10.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19. For the sake of convenience, all these appeals were heard together and are being disposed of by this common order.

ITA No.3078/PUN/2025 (A.Y. 2016-17) 2. Facts of the case, in brief, are that the assessee is a trust and has not filed its return of income. The case of the assessee was reopened u/s 147 on the ground

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that the assessee has deposited cash of Rs.1,28,99,800/- during the assessment year 2016-17 in Vaidhyanath Urban Co-op. Bank Ltd., Parli Vaijnath, Beed. Further, it was found that the gross receipt of the year is Rs.1,97,80,079/- and its expenditure is Rs.1,32,60,297/- and there is a surplus of Rs.65,19,782/-. It was also noted that the assessee has not claimed depreciation in the Income & Expenditure Act meaning thereby the assessee has claimed capital expenditure. The Assessing Officer on verification of the Balance Sheet for assessment year 2016-17 noted that the assessee has claimed capital expenditure of Rs.57,72,721/- (in immovable properties Rs.56,13,445/- and for furniture Rs.1,59,276/-). He noted that the assessee is not registered u/s 12A for the assessment year 2016-17, hence, the surplus of Rs.65,19,782/- should be taxed for the year. Further, the capital expenditure of Rs.57,72,721/- should be treated as revenue receipt and should be taxed in the year 2016-17. In the light of the above facts brought on record, the Assessing Officer has reason to believe that the surplus of Rs.65,19,782/- and the capital expenditure of Rs.57,72,721/- has escaped assessment within the meaning of section 147. He, therefore, after obtaining sanction from the Addl. CIT, Exemption Range, Aurangabad on 25.03.2021 as per the provisions of section 151, reopened the assessment. Accordingly, a notice u/s 148 dated 26.03.2021 was issued and served on the assessee requiring it to file the return of income within 30 days from the service of the notice. However, the assessee did not file any return in response to the notice issued u/s 148. Thereafter, the Assessing Officer issued statutory notice u/s 143(2) dated 14.03.2022. Subsequently, the Assessing Officer issued notice u/s 142(1) in response to which the assessee filed certain details. It

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was submitted that the assessee is having 4 units and all the 4 units are independent institutions and also have different principals to manage each institute separately. Further, separate books of account are also maintained independently and the gross income of each unit is below Rs.1 crore. Thus, the income of the trust is exempt from tax u/s 10(23C)(iiiad). So far as the deposit of cash in the bank account is concerned, it was explained that such deposits are made out of the fees received from the students. The annual receipts for the year are Rs.1,96,81,115/- and the receipt for each institution was below the limit prescribed u/s 10(23C)(iiiad).

3.

However, the Assessing Officer was not satisfied with the submissions. Rejecting the various explanations given by the assessee, the Assessing Officer observed as under: “9.1 The above submission is perused and it is concluded that: The Act clearly provides exemption to institution as a whole. It is being reiterated again. The extract of the section is produced below: 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- 23C) any income received by any person on behalf of- 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 annual receipts as may be prescribed]; (Amount prescribed is Rs.1 crore vide rule 2BC.) From the above section, it is very clear that aggregate annual receipts of the institution should not exceed Rs.1 crore. Even though the books are maintained separately as claimed by the assessee, the return of income filed is for the institution as a whole and hence the total receipts from all the institutions will be taken as the receipt.

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With respect to the object to the institution, the assessee has not substantiated its claim with evidence in form of staff salary certificates, expense bills and vouchers. In absence of the same, as the head is objects other than education, the assessee's contention is not accepted.”

4.

He accordingly determined the total income of the assessee at Rs.78,09,762/- by making the following addition: i) Addition (being surplus for the year under consideration) Rs.65,19,782/- ii) Addition u/s 68 (unexplained cash credits) Rs.12,89,980/- Assessed income Rs.78,09,762/-

5.

Before the Ld. CIT(A) / NFAC, the assessee apart from challenging the addition on merit, challenged the validity of the re-assessment proceedings. The Ld. CIT(A) / NFAC gave part relief to the assessee by deleting the addition made by the Assessing Officer of Rs.12,89,980/- u/s 68. However, he dismissed the legal grounds challenging the validity of the re-assessment proceedings as well as the addition of Rs.65,19,782/- by observing as under: “5. DECISION: I have carefully considered the grounds of appeal, written submission and assessment order u/s. 147 r.w.s. 144B of the Act. 5.1. Ground no.1, 4 raised by the appellant against the action of the AO in issuing notice u/s. 148 of the Act and not considering the submissions made in response to various notices. On perusal of the assessment order, it is noticed that the AO had followed the due procedure as per the Act in re-opening the case u/s. 147 and completing the assessment u/s. 147 r.w.s. 144B of the Act. Ground nos.2, 3, 5, 6 raised by the appellant against the action of the AO in making addition of Rs.65,19,782/- by denying the exemption u/s.10(23C)(iiiad) of the Act, addition of Rs.12,89,980/- u/s. 68 r.w.s. 115BBE of the Act, which is not a part of draft assessment order / show-cause notice. All the grounds are clubbed together for the sake of convenience and appeal is adjudicated upon.

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5.2. The appellant stated that it is a Public Educational Trust registered under Bombay Public Trust Act. The trust is established for the purpose of imparting education in respect of pre-primary, primary and secondary studies and provided education in rural area. Further stated that the trust obtained 12A registration. It runs 4 independent educational institutions. The gross receipt of each educational institution is below Rs.one crore and the trust was entitled to exemption u/s. 10(23C)(iiiad) of the Act. The appellant furnished the furnished the copy of Audit Report, license for each unit. However, the appellant has not produced any documentary to show that the appellant trust had been granted registration u/s.12A of the Act or exemption 10(23C) of the Act. The main contention the appellant raised through grounds that the AO erred in disallowing the exemption u/s 10(23C) (iiiad) of the Act differing the view taken by the jurisdictional AO while completing the assessment for the A.Y. 2017- 18. In support of which the appellant furnished the copy of the assessment order and furnished the copy of the assessment order u/s. 144 of the Act and order u/s. 154 of the Act dated 04.09.2024 for the A.Y. 2021-22. On consideration of the assessment order, the appellant having gross receipts less than 1 Cr during the A.Y. 2017-18 and hence no addition was made. In the instant case, the gross receipts of the appellant were exceeding 1 Cr. and also not clear from the submissions of the appellant whether the trust had got registration u/s. 12A of the Act or exemption u/s 10(23C) of the Act. Therefore, I am of constrained to take view that the trust is not eligible to claim exemption u/s. 10(23C) of the Act. Accordingly, the ground raised on this issue are dismissed and hence the action of the AO is upheld.”

6.

Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds: a. On the basis of facts and the circumstances of the case and in law, the learned CIT(A) has erred in upholding the addition of Rs.65,19,782/- denying the exemption u/s 10(23C) (iiiad) of the Act by considering the aggregate annual receipts of the trust as a whole exceeds Rs.1 crore which is not correct. The annual receipts of each institution does not exceeds Rs.1 crore each therefore, exemption u/s 10(23C) (iiiad) cannot be denied and thus addition is liable to deleted. b. The Ld CIT(A) and the Ld. AO is erred in disallowing the exemption u/s 10(23C)(iiiad) of the Act differing the view taken by the jurisdictional Ld. AO while completing the assessment proceedings for the AY 2017-18 and AY 2021-22. Thus, deny of exemption u/s 10(23C) (iiiad) of the Act is not correct without any adverse findings. c. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that the appellant trust was granted

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provisional registration under section 12A and no separate registration is required to claim exemption under section 10(23C)(iiiad) of the Act. d. The learned AO was not justified in levying penalty under section 271(1)(c) of the Income Tax Act, 1961. e. The appellant craves leave to add, amend, and alter any or withdraw any grounds of appeal at or before the time of Appeal hearing.

7.

The Ld. Counsel for the assessee referring to the statement of facts along with appeal memo drew the attention of the Bench to the same and submitted that the assessee trust is running the following four independent educational institutions for imparting education: “a. Shri Chintamani Education Trust Unit 1 (Krishna Nursery) Pre-Primary Section from Nursery to UKG (certificate dated 28.10.1996) b. Shri Chintamani Education Trust - Unit II (Foundation Primary School)- Primary Section from 1st standard to 4th standard (certificate dated 31.10.2000) c. Shri Chintamani Education Trust Unit III (Foundation Secondary School) Secondary Section from 5th Standard to 10th Standard. (certificate dated 14.08.2003) d. Shri Chintamani Education Trust Unit IV (Preprimary and Primary Foundation School) Kalamb.”

8.

He submitted that each institute runs separately and annual receipts of each institute does not exceed Rs.1 crore. Therefore, the exemption u/s 10(23)(iiiad) cannot be denied. He submitted that each of the institutes was maintaining separate receipt and payment accounts, registered separately and also maintains the books of account independently.

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9.

Referring to the decision of the Hon’ble Allahabad High Court in the case of Manas Sewa Samiti vs. Addl.CIT reported in (2021) 439 ITR 79 (All), he submitted that the Hon’ble High Court, following the decision of Hon’ble Jammu & Kashmir High Court in the case of Vivekanand Society of Education & Research vs. CIT & Anr vide IT Appeal No.23 of 2014, order dated 29.12.2017 and various other decisions, has held that where there are more than one such institutions, which are under a particular society or trust, such as the assessee society in the present case, the aggregate annual receipts of each of the educational institutions would have to be considered separately and not together. He submitted that since in the instant case the assessee society also runs 4 educational institutions which are maintaining separate books of account and run separately, therefore, the gross receipt s of each of the institutes, whose receipt is less than Rs.1 crore, has to be considered and accordingly exemption u/s 10(23C)(iiiad) cannot be denied to the assessee trust.

10.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

11.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the only issue to be decided in the instant appeal is regarding the allowability of exemption u/s 10(23C)(iiiad) in respect of the trust who is running 4 educational institutions whose combined gross receipt for the

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year under consideration was Rs.1,97,80,079/- but the gross receipt of each of the institutes is less than Rs.1 crore.

12.

We find an identical issue had come up before the Hon’ble Allahabad High Court in the case of Manas Sewa Samiti vs. Addl.CIT (supra). In that case the assessee claimed benefit u/s 10(23C)(iiiad) on the ground that the total receipts of the institution was below the prescribed limit of Rs.1 crore. However, the Assessing Officer denied the benefit of section 10(23C)(iiiad) since the aggregate fee / receipts of the institutes and the receipts of the society breached the prescribed upper limit of Rs.1 crore. That reasoning came to be approved and affirmed by the CIT. On further appeal, the Tribunal confirmed the order of CIT. When the assessee challenged the order of the Tribunal before the Hon’ble High Court, the Hon’ble Allahabad High Court, following various decisions, allowed the claim of the assessee by observing as under: “11. Having considered the submissions advanced by the learned counsel for the parties and having perused the record, the benefit granted under Section 10(23C)(iiiad) is only with reference to an activity of running a University or other educational institution, existing solely for educational purposes. By virtue of Section 10(23C)(iiiad) such receipts are excluded from the income received by the "person", who may have run such University or other educational institution. 12. Thus, the benefit has been granted with respect to receipts arising from a specified activity. The benefit is not conditioned or restricted to the person who may have established or may have run such activity or who may have been in receipt of such receipts. 13. Though, obviously, the issue whether that benefit is available or not would arise only in the course of assessment proceedings of a person/assessee , who may have engaged in such activity, at the same time, it is not the intent of the Act to look at the aggregate income or receipt of such person for the purpose of granting the benefit under section 10(23C)(iiiad) of the Act.

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14.

In fact, as lucidly explained in the decision of the Karnataka High Court, it is the receipt of each individual University or other educational institution that would be looked at to determine whether the receipt would qualify for the benefit conferred under Section 10(23C)(iiiad), read with Rule 2 BC of the Income Tax Rules, 1962. 15. In paragraphs 20, 21, 23 and 24 of the report in CIT Vs. M/S Childrens Education Society (Supra) decision, it was held as under:- 20. Now, we are concerned with the meaning to be attached to the word "aggregate annual receipt". The argument is, other educational institution referred to in the said sub-clause refers to all educational institutions run by the assessee and aggregate annual receipts of such other educational institutions means the aggregate of annual receipts of all such educational institutions put together. Otherwise, the use of the word "aggregate" loses its meaning. We find it difficult to accept the said argument. 21. Firstly, if the word "aggregate annual receipts" of other educational institution is to be understood as clubbing of annual receipts of all educational institutions run by an assessee society, then it will also include the annual receipts of an educational institution which is wholly or substantially financed by the Government. If that was intention of the Legislature, they would not have introduced separate sub- clauses as (iii)(ab) and (iii)(ad). If such interpretation is placed, sub-clause (iii)(ab) becomes otiose. Therefore, it is not possible to place such an interpretation. If an assessee society is running several educational institutions, if some of them are wholly or substantially financed by the Government in terms of sub-clause (iii)(ab), the income on behalf of such educational institution received by the assessee is exempted from being computed the total income of the assessee. If the assessee is running other educational institutions which are not wholly or substantially financed by the Government, then the benefit of that exemption is also extended to the income derived from such educational institutions and received by the assessee under sub-clause (iii)(ad) reading with sub-clause (iii)(ad) along with Rule2 BC. It was contended, the Legislature used the word "aggregate annual receipt" and "amount of annual receipts" and therefore, the provisions are not one and the same. The word "aggregate" has been defined in Chambers 21st Century Dictionary as under: "aggregate - noun = a collection of separate units brought together, a total taken altogether, bring together." In Wharton's Law Lexicon, it is defined as thus: "a collocation of individuals, units or things in order to form a whole" 23. No doubt, education has become a business, a very profitable business also. But it requires huge investment. It is the duty of the Government to

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provide education to all its citizens, as the Government is not able to shoulder the responsibility completely. Therefore, the field of education is now thrown open to private organizations. But for throwing open the field to the private operators, probably, the country would not have achieved in the field of education what it has achieved. Therefore, lot of funds are invested in running these educational institutions, either by creating a Society or a Trust. In course of time, they have expanded their activity providing course in various subjects at various levels and for that purpose they have established more than one educational institution. Each educational institution is a separate entity controlled under various statutes for various purposes. May be the Management of these educational institutions would be in the hands of the Societies or the Trust, but for all other purposes they are different, independent entities. That is the reason why Section 10 (23)(c) is worded as under: "Any income received by any person on behalf of..." 24. Here "any person" refers to the assessee and "on behalf of" refers to such institutions. It may be an University, it may be an educational institution, it may be a hospital or other institutions of similar nature. As all such institutions are independent entity and they generate income and when that income is received by the assessee, it becomes the income in the hand of the assessee and it is such income which is sought to be excluded while computing the total income of the assessee under Section 10. The test prescribed under the aforesaid provision is not the income of the educational education. It is the aggregate annual receipts of such educational institution that is prescribed at Rs.1 crore. Therefore, irrespective of the expenditure incurred by those institutions, the exemption is based on the total receipts. Even if the word "aggregate" has to be understood as suggested by the Revenue as the annual receipts of such educational institutions put together, probably, the said provision regarding exemption would be of no use at all. Especially, if the society is running a medial college or any engineering college or other professional courses, then the annual receipt of each institution would run to few crores and therefore, the very object of granting exemption to such genuine institution would be lost. Therefore, the word "aggregate annual receipt" has to be understood with the context in which it is used and the purpose for which the said provision was inserted, keeping in mind, the Scheme of the Act. Therefore, if an assessee is running several educational institutions, if any of them is wholly or substantially financed by the Government, then the income from such educational institution received by the assessee is not included while computing his total income. Similarly, income from each educational institution if they are not receiving any aid from the Government wholly or substantially in respect of which the aggregate annual receipt do not exceed Rs.1 crore received by the assessee, is also not included while computing annual total income of the assessee."

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16.

Similar view was taken by the Jammu and Kashmir High Court in M/s Vivekanand Society of Education and Research vs. CIT and another (Supra). It was held as under:- 13. On a plain reading of the above provisions, it is evident that any income received by any person on behalf of 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 aggregate receipts, as may be prescribed (which is Rs. 1 crore as per Rule 2BC of the said Rules), would not be included in the total income of that person. 14. It is not in issue that ,,the person‟ in the facts of the present case has reference to the assessee society. It is also not in issue that the expression ,,educational institution‟ has reference to the two institutions of the assessee society. It is also not disputed that these two institutions exist solely for educational purposes and not for purposes of profit. It is, therefore, clear that there is a distinction between the expression ,,any person‟ and ,,educational institution‟, and that the two are not the same. Had it been the intention of the legislature to have limited the scope of the provision to the interpretation which has been given by the Tribunal, it could easily have said that, if the aggregate annual receipts of any person from all institution(s) do not exceed Rs. 1.00 crore then the income derived there from would not be included in the total income of that person. But, this is not the case here. The reference here is pointedly to the aggregate annual receipts‟ of the educational institution. The expression, educational institution‟ and ,,any person‟ do not refer to the same entity and are distinct and different insofar as Section 10 (23C) (iiiad) of the said Act is concerned. 15. In our view, therefore, where there are more than one such institutions, which are under a particular society or trust, such as the assessee society in the present case, the aggregate annual receipts of each of the educational institutions would have to be considered separately and not together. Thus, if there are two institutions A and B and if the aggregate annual receipts of the Institution A is less than Rs. 1.00 crore, then the income received by a person (such as the assessee society) on behalf of the Institution A, would not be included in the total income of that person (such as the assessee society). At the same time, if the aggregate annual receipts of Institution B exceeds Rs. 1.00 www.taxguru.inITA No. 23/2014 Page 6 of 8 crore, then any income received by any person on behalf of Institution B would be included in the total income of that person. Similarly, by taking this logic further, if neither Institution A nor Institution B has aggregate annual receipts of Rs. 1.00 crore or more, any income received by any person on behalf of these institutions, would not form part of the total income for the purposes of income tax."

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17.

Thereafter, the Jammu and Kashmir High Court concurred with the opinion of the Karnataka High Court in CIT Vs. Children's Education Society [2013] 358 ITR 373. 18. A coordinate bench of this Court also appears to have offered a similar reasoning in ITA No.258 of 2013 (The Commissioner of Income Tax Alld. Vs. Wachaspati Madhupati Prani Sewa Sansthan) wherein, it was observed as under:- "We are in full agreement with the finding of the ITAT as we find that the assessee society is running a school and has admittedly received the tuition fee being the annual receipts below the prescribed limit of Rs.1 crore and according to us the exemption limit clearly provides the cut of figure of Rs.1 crore being the annual receipt of the educational Institution or the University, as the case may be, and not that of the total income of the society running the educational Institution or University. In the present case, the income of Rs.6,67,000/- towards the buildings/capital assets and Rs.4,01,900/- received towards donation cannot be part of the annual receipts of the University/College/School. Therefore, in our considered opinion the assessee is entitled for exemption under Section 10(23C)(iiiad) as annual income of the assessee society did not exceed Rs.1 crore." 19. Insofar as the decision of the Supreme Court relied upon by the learned counsel for the Revenue is concerned, it was a case pertaining to provision of Section 10(23C)(iiiab). The question that arose before the Supreme Court was whether the University receiving finance by the Government below one percent of its total receipts could be considered to be a University substantially financed by the Government. Those facts of law are not involved in the present case. Therefore, the said decision is found to be wholly distinguishable and hence inapplicable. 20. In the first place, for reasons given above, we find ourselves in complete agreement with the reasoning of the Karnataka High Court in CIT vs. Children's Education Society (Supra) as also the decision of the Jammu & Kashmir High Court in M/s Vivekanand Society of Education and Research vs. CIT and another (Supra). 21. Next, we find, the reasoning adopted by the assessing authority as affirmed by the appellate authority and the Tribunal, wholly erroneous in law. As noted above, the benefit of Section 10(23C)(iiiad) being activity centric, the limit of Rs. 1 crore prescribed thereunder had to be seen only with reference to the fee and other receipts of the eligible activity/Institution. Admittedly, those were below Rs. 1 Crore. In the facts of the present case, the eligibility condition prescribed by law was wholly met by the assessee. 22. The further reasoning offered by the assessing authority to disallow that benefit, on account of excess of income over expenditure of the Institution having been carried to the Society, is extraneous to the issue involved in the present case.

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23.

The fact that the Institution did not exist on its own and was run by the Society could never be a valid consideration to disallow that benefit. It is clearly not contemplated under the Act. Here, we may further note, according to the assessing authority itself, there were two accounts maintained. One for the Institution and the other of the Society. After the Income and Expenditure account of the Institution had been made, its excess of Income over Expenditure were carried to the account of Society for taxation and other purposes. That did not and it could not lead to the inference that the receipts of the Society were also the receipts of the Institution. That reasoning is based on no material or evidence on record. 24. Legally, it is only a figment of imagination. Even in the computation of the income, the assessing authority has recognized the difference between the two receipts being "Surplus as per Income/ Expenditure A/c of college". It was taken at Rs. 38,54,310 and, "Surplus as per Income/Expenditure A/c of Society" of the of society which was taken at Rs. 47,62,000/-. 25. Once that difference of the receipts was acknowledged by the assessing authority, there was absolutely no other material existing to treat the donations received by the Society to be receipts of the Institution. 26. Similarly, the further reasoning offered by the appellate authority to affirm the order of the assessing authority is wholly erroneous and contrary to law. Merely because the assessee Society was the person running the Institution, it did not cause any legal effect of depriving the benefit of Section 10(23C)(iiiad) which was activity specific and had nothing to do with the other income of the same assessee. 27. To complete the discussion, the Tribunal has also erred in looking at provisions Section 12 AA of the Act and the fact that the donations received by the Society may not have been received with any specific instructions. It is not relevant in the facts of the present case. It is so because here the assessee had only claimed the benefit of Section 10(23C)(iiiad) with respect to the receipts of the Institution, Information Management and Technology and it had not claimed any benefit with respect to the donations received by the Society. 28. In view of the above, the question of law is answered in the negative i.e. in favour of the assessee and against the Revenue. There would be no clubbing of the receipts of the Institution with the other income of the Society, for the purpose of considering the benefit of Section 10(23C)(iiiad).”

13.

In view of the decision of Hon’ble Allahabad High Court cited (supra) which in turn, has relied on various decisions of other Hon’ble High Courts and in absence of any contrary material brought to our notice by the Ld. DR, we hold that the assessee society is entitled to claim deduction u/s 10(23C)(iiiad) since none of

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the institutes run by it is having gross receipt of more than Rs.1 crore although the total gross receipts of all the institutions as a whole is exceeding Rs.1 crore. We, therefore, set aside the order of the Ld. CIT(A) / NFAC and allow the grounds raised by the assessee.

ITA No.3077/PUN/2025

14.

Facts of the case, in brief, are that the Assessing Officer in the instant case rejected the claim of deduction u/s 10(23C)(iiiad) if Rs.78,09,762/- and rejecting various explanations given by the assessee, levied penalty of Rs.23,35,967/- u/s 271(1)(c) of the Act which has been upheld by the Ld. CIT(A) / NFAC. Since in the preceding paragraphs we have allowed the claim of exemption u/s 10(23C)(iiiad) and the entire addition has been deleted, therefore, the penalty has no legs to stand and is liable to be deleted. We hold and direct accordingly. The order of the Ld. CIT(A) / NFAC is, therefore, set aside and the grounds raised by the assessee are allowed.

ITA No.3079/PUN/2025 (A.Y. 2018-19)

15.

Grounds raised by the assessee are as under: a. On the basis of facts and the circumstances of the case and in law, the learned CIT(A) has erred in upholding addition of Rs.64,15,935/- treating the surplus of the income and expenditure account as unexplained credits under section 68 of the Income Tax Act. Hence, the impugned addition is bad in law.

15 ITA Nos.3077 to 3079/PUN/2025

b. On the basis of facts and the circumstances of the case and in law, the learned CIT(A) has erred in upholding addition of Rs.64,15,935 denying the exemption under section 10(23C)(iiiad) of the Act by considering the aggregate annual receipts of the trust as an whole exceeds Rs.1 crore which is not correct. The annual receipts of each institution does not exceed Rs.1 crore therefore. exemption under section 10(23C)(iiiad) cannot be denied and thus addition is liable to deleted. c. The Ld CIT(A) and the Ld. AO is erred in disallowing the exemption u/s 10(23C)(iiiad) of the Act differing the view taken by the jurisdictional Ld. AO while completing the assessment proceedings for the AY 2017-18 and AY 2021-22. Thus, deny of exemption u/s 10(23C)(iiiad) of the Act is not correct without any adverse findings. d. Under the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that the appellant trust was granted provisional registration under section 12A and no separate registration is required to claim exemption under section 10(23C)(iiiad) of the Act. e. Without prejudice to above grounds, under the facts and circumstances of the case and in law, the addition was made in the final assessment order without proposing the same in SCN / draft assessment order. Thus, the impugned addition is against the principal of natural justice and liable to be deleted. f. The Ld AO was not justified in initiating penalty proceedings under section 270A and 272A(1)(d) of the Income Tax Act, 1961. g. The appellant craves leave to add, amend, and alter any or withdraw any grounds of appeal at or before the time of Appeal hearing.

16.

After hearing both the sides, we find in the instant case also the Assessing Officer rejected the claim of deduction u/s 10(23C)(iiiad) on the ground that the aggregate gross receipts of the trust are more than Rs.1 crore although the receipts of each of the institutes is less than Rs.1 crore. While deciding ITA No.3078/PUN/2025 we have already held that the gross receipts of each institute has to be taken for calculating the threshold limit of Rs.1 crore and not the gross receipts of all institutes as a whole. Since the facts of the instant case are identical to the facts of the case decided in ITA No.3078/PUN/2025 in the preceding

16 ITA Nos.3077 to 3079/PUN/2025

paragraphs, therefore, following similar reasonings, we allow the grounds raised by the assessee since none of the institution run by the Trust has a gross receipt of more than Rs.1 crore. The appeal filed by the assessee is accordingly allowed.

17.

In the result, all the three appeals filed by the assessee are allowed.

Order pronounced in the open Court on 20th August, 2026.

Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 20th August, 2026 GCVSR Gajjala Chinna Digitally signed by Gajjala Chinna Venkata Subba Reddy Venkata Subba Reddy Date: 2026.08.20 12:53:32 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

17 ITA Nos.3077 to 3079/PUN/2025

S.No. Details Date Initials Designation 1 Draft dictated on 31.07.2026 Sr. PS/PS 2 Draft placed before author 04.08.2026 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Office 9 Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order

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