SNEHLATA,REWARI vs. ASSESSING OFFICER, SONIPAT

ITA 5462/DEL/2026Status: DisposedITAT Delhi30 July 2026AY 2024-255 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the stipend received by the assessee for pursuing her Post Graduate Medical education is intended to meet the cost of education and is therefore exempt under Section 10(16) of the Act. The stipend cannot be equated to salary.

What were the facts?

The assessee, a qualified MBBS doctor, received an educational stipend of Rs. 18,34,578/- from Aligarh Muslim University while pursuing her Post Graduate Degree. She claimed this stipend as exempt scholarship under Section 10(16) of the Income Tax Act, but the lower authorities treated it as taxable salary.

What were the issues?

Whether an educational stipend received by a postgraduate medical student is to be treated as exempt scholarship under Section 10(16) or as taxable salary.

Which sections of the Income-tax Act were involved?

Section 10(16),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: CA (VC)

Hearing: 08.07.2026Pronounced: 30.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER

ITA No.5462/Del/2026 Assessment Year:2024-25 Snehlata, Vs. ITO, WARD-1, MINERVA Ward No. 6, COMPLEX, Village Kumbhawas, ATLAS ROAD, Gokapur (211), Rewari- SONIPAT-131001 122502, HARYANA, SONIPAT Haryana, Rewari PAN: LRBPS4938N (Appellant) (Respondent)

Assessee by Sh. Anirudh Bharadwaj, CA (VC) Department by Sh. Nirmal Nangia, Sr. DR

Date of hearing 08.07.2026 Date of pronouncement 30.07.2026

ORDER This assessee’s appeal for assessment year 2024-25, arises

against the Commissioner of Income Tax (Appeals)/National

Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s

order dated 23.4.2026 involving proceedings under section 143(3)

of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

It emerges during the course of hearing that the assessee

presses for her sole substantive ground on merits challenging

both the learned lower authorities’ action treating her

ITA No.5462/Del/2026

educational stipend as taxable salary instead of exempt

scholarship under section 10(16) of the Act amounting to Rs.

18,34,578/-, in the assessment order and upheld in the lower

appellate discussion.

That being the case, both the parties vehemently reiterate

their respective stands against and in support of the impugned

stipend. I wish to make it clear that there is no dispute in

principle that the assessee is an individual; a qualified MBBS

doctor, who during the relevant previous year, was pursuing a

full time Post Graduate Degree Course namely MS (General

Surgery. And that during this period, she received stipend

amounting to Rs. 18,34,578/- from Aligarh Muslim University

which was solely for pursing PG Medical education and

compulsory residency training attached to the academic

programme, and, thus, she claimed exemption u/s. 10(16) of the

Act treating the same as scholarship/stipend granted to meet the

cost of education. I find that this tribunal in ITA No.

132/Chandi/2021–Hiteshi Aggarwal vs. PCIT, Panchkula has

decided the instant issue of stipend received by postgraduate

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ITA No.5462/Del/2026

medical students is intended to meet the cost of education, as

exempt as follows :-

“3. Shri Rakesh Cajla appearing on behalf of the assessee submitted that the assessee is a medical doctor by profession. During the period relevant to A.Y. 2016-17 the assessee was pursuing her Post Graduation degree in Guru Gobind Singh Medical College, Faridkot. During the Post Graduation Course she received stipend in the nature of scholarship aggregating to Rs. 8,61,202/- . TDS of Rs. 101,000/- was deducted by the college on the aforesaid stipend. The assessee in her return of income for the A.Y. 2016-17 inadvertently declared stipend / scholarship as salary. Thereafter, she revised her return of income declaring income of Rs. 15,816/- after claiming exemption under section 10(16) of the Act in respect of stipend and claimed refund of the TDS deducted by the college. 4. In scrutiny assessment proceedings, the Assessing Officer (the A.O.) made detailed inquiry. A specific query was raised by the A.O. regarding exemption claimed under section 10(16) of the Act vide notice issued under section 142(1) dt. 12/10/2018. The assessee furnished detailed reply with supporting documents, the same is at page no. 15 & 16 of the paper book. The A.O. thereafter issued notice dt. 25/10/2018 under section 133(6) to the Principal Guru Gobind Singh Medical College, Faridkot to clarify regarding nature of payment made to the assessee during F.Y 2015-16. In reply to the notice it was informed on behalf of the college that the payment made to the assessee during the F.Y. 2015-16 was in the nature of stipend. The ld. Counsel referred to the reply from tax consultant of the college at page 17 and statement of stipend paid to the assessee at page no. 5 of the paper book. The ld. Counsel further referred to the scholarship bond executed by the assessee at page 6 to 10 of the paper book. The ld. Counsel submitted that under the provision of Section 10(16) of the Act scholarship granted to meet the cost of education is exempt from tax. In support of his submissions he placed reliance on following decisions: (i) Dr. Rahul Tugnait Vs. ITO in ITA No. 197/Chd/2008 decided on 30/06/2008 (ii) CIT Vs. Rippen Ahuja, 54 I.T. Reps 285 (P&H) (iii) Kusum Lata(Smt.), Panchkula Vs. CIT, Panchkula [2014] I.T. Reps 243 (ITAT Chd) 5. The ld. Counsel pointed that the stipend / scholarship was paid to the assessee in accordance with the Punjab Government Notification dt. 23/12/2013. The A.O. after examining the issue in detail accepted the revised return filed by the assessee and passed the assessment order dt. 26/11/2018. The ld. Counsel submitted that the PCIT has erred in invoking revisional jurisdiction under section 263 of the Act as the A.O. after making detailed enquiry has passed the assessment order. The assessment order is fair and justified, hence, requires no interference in revisional jurisdiction. 3 | P a g e

ITA No.5462/Del/2026

Per contra Shri Vikram Batra, representing Department vehemently defended the order passed by the PCIT under section 263 of the Act. The ld. DR submitted that the assessee in her original return of income had offered the income under the head ‘Salary’ thereafter, she revised her return and changed her stand by claiming exemption under section 10(16) of the Act.

We have heard the submissions made by rival sides and have examined the orders of the authorities below. The PCIT has invoked revisional jurisdiction under section 263 of the Act to reject the assessment order dt. 26/11/2018 wherein the A.O. has accepted the revised return filed by the assessee claiming exemption under section 10(16) of the Act in respect of stipend / scholarship received during her Post Graduation Degree in anesthesia.

A perusal of the records reveal that during assessment proceedings a specific query was raised by the A.O. in respect of assessee’s claim of exemption under section 10(16) of the Act. The assessee in response to that notice furnished a detailed reply. The A.O. also issued notice under section 133(6) of the Act to Guru Gobind Singh Medical College, Faridkot where the 4 assessee was pursuing her Post Graduation Degree. The college also confirmed that the payments made to the assessee during F.Y. 2015-16 were in the nature of stipend. The assessee has also furnished stipend statement for the F.Y. 2015-16 at page 5 of the paper book and Bond executed by the assessee for scholarship at page 6 to 10 of the paper book. A perusal of aforesaid bond shows that the assessee was selected for Government scholarship and the payments were made to the assesse in accordance with the Government Notification. The college had deducted TDS on the payment of stipend, the assessee claimed refund of TDS in her revised return. The A.O. after making detailed inquiry accepted the revised return. The A.O. allowed assessee’s claim after making detailed inquiries. We find no error in the assessment order.

For invoking revisional jurisdiction under section 263 of the Act, twin condition as envisaged under section 263 of the Act have to be satisfied i.e the assessment order should be erroneous and prejudicial to the interest of the Revenue. Even if one of the twin conditions is not satisfied, the provision of section 263 of the Act cannot be invoked. 10. In the light of the facts discussed above, we are of the view that there is no error in the assessment order. The PCIT has erred in invoking revisional jurisdiction under section 263 of the Act.

11.

We find that the Coordinate Bench in the case of Dr. Rahul Tugnait Vs. ITO (supra) wherein the facts were somewhat similar held that the assessee is eligible to claim deduction u/s 10(16) of the Act on stipend received during post graduation course. In the said case the assessee / appellant had joined Rajinder Government Medical College, Patiala to pursue his Post Graduation Degree. He had received stipend in the form of scholarship during his Post Graduation course from the college. He had executed the Bond similar to the 4 | P a g e

ITA No.5462/Del/2026

one executed by the assessee in the instant case. The Coordinate Bench after examining the 5 fact held that the assessee was eligible for claiming exemption under section 10(16) of the Act in respect of scholarship / stipend received during his Post Graduation studies. The stipend / scholarship cannot be equated to salary. The issue raked up by the ld. PCIT in reivisional jurisdiction in the present case is identical to the one adjudicated by the Tribunal. It is neither the case of “lack of inquiry”, therefore the impugned order is liable to be quashed. We hold and direct accordingly.”

I adopt the above extracted detailed reasoning

mutatis mutandis to delete the addition in the instant

case in very terms.

No other ground or argument has been pressed.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open court on 30th July, 2026.

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 30th July, 2026. SR BHATNAGAR Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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