The Assistant Commissioner Of Income Tax (Exemption), Bhopal, vs. Barkatullah Vishwavidyalaya

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE VIVEK RUSIA & HON'BLE SHRI JUSTICE PRADEEP MITTAL ON THE 5th OF JANUARY, 2026 INCOME TAX APPEAL No. 36 of 2025 THE ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTION), BHOPAL, Versus BARKATULLAH VISHWAVIDYALAYA Appearance: Shri Siddharth Sharma - Advocate for the appellant. ORDER Per: Justice Vivek Rusia The appellant has filed this appeal under Section 260A of the Income Tax Act, 1961 against the order dated 18.10.2024 passed in ITA No.196/Ind/2024 by the learned Income Tax Appellate Tribunal, Indore in respect of Assessment Year 2011-2012. Facts of the case, in short, are as under :- 2. The respondent-assessee is a University established under the Madhya Pradesh Vishwavidhalaya Adhiniyam, 1973, to impart the education, supervision and maintenance of various colleges and educational institutions as per the regulations of the Government. The respondent University has furnished the return by filling zero in all the columns of the return without showing any receipt or claiming expenses, but the assessee 1 ITA-36-2025 NEUTRAL CITATION NO. 2026:MPHC-JBP:1135 Signed by: SHIVANI TIWARI Signing time: 1/13/2026 2:36:11 PM Signature Not Verified

has stated that the profit is exempted under Section 10(23C) (iiiab) of the Income Tax Act, 1961. 3. The case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 and notice under Section 148 of the Act was issued on 28.03.2018. In response to the said notice, the assessee filed a return of income electronically on 04.09.2018 declaring total income as "Nil". Thereafter, notice under Section 143(2) of the Act was issued on 28.09.2018 followed by notice under Section 142(1) dated 11.10.2018 along with the questionnaire. 3. The respondent submitted that the written submissions are that it is a Government Institution and was substantially financed by the Government, hence, its income is exempted under Section 10(23C) (iiiab) of the Income Tax Act, 1961. As per the local fund audit report, the gross receipt was recorded as Rs..78,14,61,375/- and a surplus shown Rs.21,12,38,098/- was shown after deducting the revenue and capital expenses of Rs.57,02,23,277/-. The assessee has shown exam fees and other receipts amounting to Rs.52.58 Crores. The Assessment Officer came to the conclusion that the university is wholly or substantially financed by the Government as contemplated under Section 10(23C) (iiiab) of the Income Tax Act, 1961. The fund received from the Government must be a direct grant/contribution from the Governmental sources and not the fee collected from the students; therefore, the assessee-University is not found eligible for exemption under Section 10(23C) (iiiab) of the Act and the surplus shown Rs.21,12,38,098 /- is treated as regular income of the assesse vide assessment 2 ITA-36-2025 NEUTRAL CITATION NO. 2026:MPHC-JBP:1135 Signed by: SHIVANI TIWARI Signing time: 1/13/2026 2:36:11 PM Signature Not Verified

order dated 26.11.2018. The Assistant Commissioner of Income Tax (Exemption), Bhopal (M.P.) assessed the total income of Rs.23,50,49,272/- for payment of tax. 4. Being aggrieved by the aforesaid order passed by the Assistant Commissioner of Income Tax (Exemption), Bhopal (M.P.), the respondent- assessee filed an appeal before the Commissioner of Income Tax Appeals, Unit-III, Coimbatore, in respect of Assessment Year 2011-12. Vide order dated 10.01.2024, the appeal was partly allowed. That the educational society or a trust or other similar body running an educational institution solely for educational purposes and not for the purpose of profit could be regarded as "Other Educational Institutions" running within Section 10(22) of the Act. The respondent University has not been found eligible for exemption under Section 10(23C) (iiiab) of the Act, and the surplus shown Rs.21,12,38,098/- has been upheld as regular income of the assessee. An order for initiation of penalty proceedings under Section 271(1)(c) is separately initiated. The learned counsel Appellate Authority has reduced the surplus from Rs.21,12,38,098/- to Rs.46,63,638/-. 5. Being aggrieved by the aforesaid order of the Appellate Authority, the DCIT (Exemption), Bhopal filed an ITA No.196/Ind/2024 A.Y. 2011-12, and the respondent-assessee filed the ITA No.241/Ind/2024 A.Y.- 2011- 12. By a common order dated 18.10.2024, the learned Income Tax Appellate Tribunal, Indore Bench, Indore, has remanded all the matters to the Assessment Officer to adjudicate the assessment afresh by allowing the benefit of exemption under Section 11/12 to the assessee. Hence, this appeal 3 ITA-36-2025 NEUTRAL CITATION NO. 2026:MPHC-JBP:1135 Signed by: SHIVANI TIWARI Signing time: 1/13/2026 2:36:11 PM Signature Not Verified

is before this Court. Submissions made by learned counsel for the appellant. 6. Shri Siddharth Sharma, learned counsel for the appellant/Revenue submits that learned Income Tax Appellate Tribunal, Indore Bench, Indore has erred in agreeing to the proposition that the assessee is entitled for the benefit of exemption under Section 11/12 of the Income Tax Act, 1961 as per the requirement prescribed in proviso to Section 12A(2) of the Act for Assessment year 2011-12 whereas the registration under Section 12A(1)(aa) was granted vide order dated 17.06.2019 for the assessment year 2019-20. The Assessment of the year 2011-12, under Section 143(3) read with Section 147 had already been completed on 26.11.2018, which cannot be reopened due to the subsequent registration under Section 12A(1)(aa) read with Section 12AA granted subsequently in the year 2019. 7. We are not impressed with the aforesaid submission advanced by Shri Siddharth Sharma, learned counsel for the appellant, because ITAT, Indore has already decided this issue in the case of "M.P. Raj Open School, Bhopal vs. Deputy Commissioner of Income-tax, Bhopal" reported in (2013) 141 ITD 721. 8. The learned A.O., Commissioner of Income Tax Appeal and ITAT, all have concurrently held that the respondent is not eligible for exemption under Section 10(23C) (iiiab) of the Income Tax Act, 1961. The Assessment Officer has not considered the applicability of Section 11/12 of the Income Tax Act, 1961 for granting the benefit of exemptions. The respondent has already been granted registration under Section 12A from the 4 ITA-36-2025 NEUTRAL CITATION NO. 2026:MPHC-JBP:1135 Signed by: SHIVANI TIWARI Signing time: 1/13/2026 2:36:11 PM Signature Not Verified

(VIVEK RUSIA) JUDGE (PRADEEP MITTAL) JUDGE year 2021 till the year 2023. Without considering such registration, the A.O. completed the assessment under Section 143(3) read with Section 147 for the assessment year 2011-12. The ITAT, Indore Bench in ITA No.924/Ind/2018 had already decided the alternative claim of assessees for the grant of exemption under Section 11/12 for the assessment year 2019-20 onwards. Vide order dated 17.06.2019 issued by Commissioner of Income Tax (Exemption), Bhopal, the assessee has been held entitled to the exemption under Section 11/12 of the Act for the preceding years also. 9. The learned ITAT has relied on the view taken by "ITAT, New Delhi Conference of Religious India vs. Ward-Exemption 1(3), New Delhi" and the CBDT Instruction No. F.No.173/193/2019-ITA-I that the respondent- assessee is entitled under Section 11/12 and remanded the matter back to the A.O. by giving an opportunity to the assessee to provide necessary information for the computation of the exemption under Section 11/12 of the Act. 10. Hence, we do not find any question of law involved in this appeal and the same is dismissed accordingly. Shivani

5 ITA-36-2025 NEUTRAL CITATION NO. 2026:MPHC-JBP:1135 Signed by: SHIVANI TIWARI Signing time: 1/13/2026 2:36:11 PM Signature Not Verified