BIHAR ANIMAL SCIENCES UNIVERSITY,BIHAR vs. DC/AC EXEMPTION CIR PATNA, PATNA BIHAR

Brief facts of the case are that, Assessee is an University established by Bihar Animal Sciences University Act (BASU). The Assessee became operational from 13.06.2017 and since the inception, Assessee has been claiming exemption of its income u/s

The case of the Assessee taken for scrutiny for the reason that during the relevant period, Assessee has received interest income and made deposits. The source of the FDRs made remained unexplained and interest received during the year has remained undeclared. The Assessee filed return of income in response to notice issued u/s 148 of the Act declaring NIL income after exemption u/s 10(23C)(iiiab) of the Act of Rs.30,70,086/-. An Assessment Order came to be passed on 21.02.20224 treating the interest income of Rs.2,12,99,197/- earned from bank deposits as taxable under the head of “Income from Other Source” on the ground that Assessee has not filed return u/s 139(4C) of the Act which disentitles the Assessee from claiming exemption u/s 10(23C)(iiiab) of the Act. Aggrieved by the Assessment Order dated 21.02.2024, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 29.11.2025, dismissed the Appeal filed by the Assessee.

The Learned Counsel for the Assessee vehemently submitted that, admittedly Assessee is fully and/ or substantially financed by the Government of Bihar and Central Government and exists solely for educational purpose since its inception. The Assessee has been

Per Contra, the Ld. DR submitted that, to claim exemption u/s 10(23C)(iiiab) of the Act, one of the mandatory requirements is to file the return u/s 139(4C) of the Act and non-filing of return u/s 139(4C) of the Act disentitles the Assessee from claiming the

We have heard the parties and perused the material available on record. The Assessee earned interest income of Rs.2,12,99,194/- from the bank deposits which has been taxed by the Assessing Officer under the head of ‘income from other source’ on the ground that Assessee has not filed return u/s 139(4C) of the Act which disentitles the Assessee from claiming exemption u/s 10(23C)(iiiab) of the Act. It is an admitted fact that Assessee has not filed return of income u/s 139(4C) of the Act. As per section 10(23C)(iiiab) of the Act, it is mandatory requirement to file the return of income u/s 139(4C) of the Act. Therefore, the Authorities below rightly held that non-filing of the return u/s 139(4C) of the Act disentitles the Assessee from claiming exemption u/s 10(23C)(iiiab) of the Act. However, the entire interest income cannot be taxed and the Assessee is entitle for deduction of expenses. The income should be computed in accordance with the strict Commercial Accounting Principles. In other words, corresponding deduction of expenses incurred to earn such interest income shall be granted to the Assessee. With the above observations, the issue is remitted to the file of the Assessing Officer for compliance.