MAHILA VIDYALAYA SOCIETY,LUCKNOW vs. THE INCOME TAX OFFICER, WARD 5(1), LUCKNOW

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ITA 32/LKW/2026Status: DisposedITAT Lucknow15 October 2026AY 2019-205 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 CIT(A) erred in upholding the denial of exemption under Section 10(23C)(iiiab) solely on the ground of belated filing of the return of income. The Tribunal reasoned that the eligibility for exemption under Section 10(23C)(iiiab) is primarily based on the nature and objects of the institution and its funding, not on the procedural aspect of filing the return within the statutory time. The belated filing, while a procedural lapse, does not automatically disqualify an institution from claiming exemption if it otherwise meets the substantive criteria. The Tribunal found that the assessee society is established for educational purposes, is substantially financed by the State Government, and does not operate for profit. Therefore, the denial of exemption was incorrect. The Tribunal directed that the exemption as claimed by the assessee be allowed. No issue was expressly left undecided.

What were the facts?

The assessee, Mahila Vidyalaya Society, filed an appeal against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals)-1, Bengaluru, dated 12.11.2025. This order pertains to the assessment year 2019-20. The appeal challenges the denial of exemption claimed by the assessee society under Section 10(23C)(iiiab) of the Income Tax Act. The denial was upheld by the CIT(A). The assessee argues that the exemption was wrongly denied, particularly because the return of income was filed belatedly. The assessee contends it exists solely for educational purposes, is wholly and substantially financed by the State Government, and has no element of profit, making it eligible for the claimed exemption.

What were the issues?

1. Whether the CIT(A) erred in upholding the denial of exemption under Section 10(23C)(iiiab) to the assessee society, considering the material facts and provisions of law. 2. Whether the CIT(A) erred in holding that the belated filing of the return of income beyond the statutory time renders the exemption claim under Section 10(23C)(iiiab) not allowable. Assessee's Contentions: - The exemption claimed under Section 10(23C)(iiiab) should be allowed as the denial by the CIT(A) is contrary to law. - The CIT(A)'s holding that a belated return invalidates the exemption claim is erroneous, misconceived, and bad in law, and the order should be quashed. - The assessee society exists solely for educational purposes, not for profit, is wholly and substantially financed by the State Government, and has no element of profit, thus being eligible for exemption under Section 10(23C)(iiiab). Revenue's Contentions: - The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

10(23C)(iiiab)

AI-generated summary — verify with the full judgment below

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

Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY

आयकर अपीलीय अधिकरण ‘ए’ न्यायपीठ, लखनऊ। IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW श्री कुल भारत, उपाध्यक्ष एवं श्री ननखखल चौिरी, लेखा सदस्य के समछ BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER आयकर अपील सं/ ITA No.32/LKW/2026 ननिाारण वर्ा/ Assessment Year: 2019-20 Mahila Vidyalaya Society v. The Income Tax Officer, 1, Mahila College, Aminabad- Ward-5(1) 226018. Aaykar Bhawan, 5, Ashok Marg, Hazratganj, Lucknow-226001. PAN:AABAM0397A अपीलार्थी/(Appellant) प्रत्यर्थी/(Respondent) अपीलार्थी कक और से/Appellant by: Shri Rakesh Garg, Advocate प्रत्यर्थी कक और से /Respondent by: Shri B. Shriniwas Kumar, CIT(DR) सुनवाई कक तारीख / Date of hearing: 12 08 2026 घोर्णा कक तारीख/ Date of 15 10 2026 pronouncement: O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals)- 1, Bangaluru dated 12.11.2025 pertaining to the assessment year 2019-20. The assessee has raised the following grounds of appeal: - “01. Because the CIT(A) has erred on facts and in law in upholding the order denying exemption as claimed by the assessee society under section 10(23C)(iiiab), the denial of exemption is contrary to the provisions of law, the exemption as claimed be allowed. 02. Because the CIT(A) has erred on facts and in law in holding that since the return of income filed by the assessee is belated, beyond the statutory time, the exemption claimed under section 10(23C) (iiiab) is not allowable, the order passed by the CIT(A) is erroneous, misconceived, bad in law, the same be quashed.

ITA No.32/LKW/2026 Page 2 of 5 03. Because the CIT(A) has failed to appreciate that the assessee society is existing solely for educational purposes and not for the purposes of profit, wholly and substantially financed by the State Government having no element of profit, is eligible for exemption u/s.10(23C)(iiiab), the exemption as claimed be allowed.” 2. The facts, in brief, are that the appellant is a society registered in the office of the Registrar of Society, Uttar Pradesh. It is running a fully government financed educational institution in the name of Mahila Vidyalaya Intermediate College & Mahila Vidyalaya Degree College. The society is completely controlled by the Government of Uttar Pradesh and income is exempt u/s 10(23C)(iiiab) of the Income Tax Act, 1961 (“Act”, for short). For the year under consideration, the ITR of the assessee society was processed u/s 143(1) of the Act on 29.03.2021. While processing the return of income, the Assessing Officer (“AO”, for short) made an addition of Rs.10,50,35,101/- ignoring status of the society as stated in the Income Tax Return (ITR) for the A.Y. 2019-20. Aggrieved by this, the assessee filed an appeal before the Ld. CIT(A), who rejected the claim of the assessee on the basis that the income tax return was filed after the due date of filing of income tax return. Now the assessee is in appeal before this Tribunal.

3.

Apropos the grounds of appeal, the Ld. Counsel for the assessee contended that the authorities below have misdirected themselves in not allowing the exemption claimed by the assessee under section 10(23C)(iiiab) of the Income-tax Act, 1961 (“Act”, for short). He further submitted that there is no dispute with regard to the fact that the assessee falls within the ambit of section 10(23C)(iiiab) of the Act, as the institutions are substantially financed by the Government of Uttar Pradesh. It was further contended that the assessee, being a society financed by the Government of Uttar Pradesh, is not liable to file Form No. 10 as prescribed under Rule 17(2) of the Income-tax Rules, 1962. He further submitted that, undisputedly, the assessee exists

ITA No.32/LKW/2026 Page 3 of 5 solely for the purpose of education and, therefore, is entitled to claim exemption u/s 10(23C)(iiiab) of the Act. Further, it is contended that the return of income for institution claiming exemption u/s 10(23C)(iiiab) of the Act falls u/s 139(4C) of the Act. There is no outer time limit to file the return of income for the institutions claiming exemption u/s 10(23C)(iiiab) of the Act. Since the institution exists solely for the purposes of education, its income is wholly exempt. The Ld. Counsel also filed a brief synopsis and placed reliance on the decision of the Co-ordinate Bench of this Tribunal rendered in the case of Haringhata Mahavidyalay vs ITO, Ward-43(1) in ITA. No.11/Kol/2024.

4.

On the other hand, the Ld. Departmental Representative (DR) vehemently opposed the submissions of the assessee. He strongly relied upon the decision of the Ld. CIT(A) and submitted that there is no error in the order passed by the Ld. CIT(A).

5.

We have heard the rival submissions of the parties and perused the material available on record. The only issue which needs our determination is whether the authorities below were justified in denying the exemption u/s 10(23C)(iiiab) of the Act. As regards the facts of the case, there is no dispute that the assessee filed its return of income on 30.11.2020, declaring total income at Nil for the assessment year 2019-20. The submission of the Ld. Counsel for the assessee is that the assessee falls within the ambit of section 10(23C)(iiiab) of the Act and, therefore, there is no prescribed time limit for filing the return of income in the case of such institutions. It was further submitted that the denial of exemption claimed under section 10(23C)(iiiab) of the Act is unsustainable in the eyes of law. He relied upon the decision of the Co-ordinate Bench of this Tribunal in in the case of Haringhata Mahavidyalay vs ITO (supra). We find that the Ld.

ITA No.32/LKW/2026 Page 4 of 5 CIT(A) after recording the fact decided the issue by observing as under: -

“5.2 The Ground of Appeal No.1 is against the disallowance deduction claimed u/s 10(23C) (iiiab) of the Act. 5.2.1 The Appellant has submitted that the Appellant Educational Trust running a fully government financed educational institution and there fully exempt under section 10(23C) (iiiab) of the Act. The Appellant's consultant made an inadvertent mistake while filing of the ITR and the g receipts were punched in the wrong column resulting in disallowance o same by CPC, Bengaluru. Further, the Appellant contended that provisions of section 10(23C) (iiiab) does not require to file Form 10 [i.e. Statement be furnished to the Assessing Officer/ Prescribed Authority under section (2) of section 11 of the Income Tax Act, 1961]. 5.2.2 The contention of the Appellant is perused and it is learnt that for the relevant A.Y. 2019-20, the Appellant filed the ITR after the due date 30.09.2019 and extended due date 31.10.2019 prescribed u/s 139(1) of the Act. Also, the Appellant's claim for eligibility u/s 10(23C)(iiiab) does not hold in case of the late filing of the ITR and Form 10 as prescribed under Rule 17(2) of the Income Tax Rules, 1962 It is learnt that the Appellant filed the Form 10 electronically on 30.11.2020 well after the due date of filing ITR. Therefore, it is evident that the Appellant Society failed to comply with all the conditions laid in the Act to claim deduction u/s 10(23C) (iiiab) of the Act. Accordingly, I hereby confirm the addition made by the AO. Hence, the ground of appeal is disallowed.” 6. The Ld. Counsel for the assessee has relied upon the decision rendered by the Co-ordinate Bench of this Tribunal in ITA. No.11/Kol/2024 dated 1st Oct, 2024. The relevant findings of the Co-ordinate Bench are reproduced as under: -

“3. The Ld. Counsel for the assessee has contended that there is no provision under the Income Tax Act vide which the exemption u/s 10(23C)(iiiab) of the Act can be denied to an assessee for non-filing or late filing of the income tax return as required u/s 139 of the Act and within the period specified u/s 139(1) of the Act. 4. The Ld. DR could not point out any relevant provision or section under the Income Tax Act, which disentitles the assessee from claiming exemption u/s 10(23)(iiiab) of the Act for non- filing/late authorities in denying the exemption to the assessee on this ground is not sustainable.” 7. The contention of the assessee is that, sofar as the assessee is concerned, there is no requirement under law to file income tax return and, therefore, there is no default on the part of the assessee. The contention of the assessee requires

ITA No.32/LKW/2026 Page 5 of 5 reconsideration by the Ld. CIT(A) in the light of the decision rendered by the Co-ordinate Bench of this Tribunal. Therefore, the impugned order is hereby set aside and restore the grounds to the file of the Ld. CIT(A) to decide it afresh. The grounds raised in this appeal are allowed for statistical purposes. 8. In the result, the appeal of the assessee in ITA. No.32/LKW/2026 is allowed for statistical purposes. Order pronounced in the open Court on 15/10/2026.

Sd/- Sd/- [ननखखल चौिरी] [कुल भारत] [NIKHIL CHOUDHARY] [KUL BHARAT] लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT DATED: 15/10/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent VIJAY Digitally signed 3. CIT by VIJAY PAL 4. DR PAL SINGH 5. Guard File Date: 2026.10.15 SINGH 15:52:06 +05'30' By Order Sr. Private Secretary

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