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Facts
The assessee, an educational institution, did not file its return of income for AY 2017-18. The Assessing Officer denied the benefit of exemption under Section 10(23C)(iiiad) solely on the ground of non-filing, despite the assessee's claim that filing was not mandatory for that assessment year based on a later amendment.
Held
The Tribunal observed that the Assessing Officer had not properly examined the assessee's claim as a non-profit educational institution. While acknowledging the mandatory nature of filing under Section 139(1) when income exceeds the basic exemption limit, the Tribunal restored the matter to the Ld. CIT(A) for readjudication on the entitlement to exemption under Section 10(23C)(iiiad) and compliance with relevant conditions.
Key Issues
Whether the assessee is entitled to exemption under Section 10(23C)(iiiad) despite not filing a return of income. Whether the Assessing Officer properly examined the assessee's claim as an educational institution not for profit.
Sections Cited
10(23C), 10(23C)(iiiad), 139(1), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
O R D E R This is an appeal filed by the assessee against the order dated 03.01.2025, passed by the Addl./JCIT(A)-1, Nashik, for the assessment year 2017-2018.
Shri S.K.Kamaluddin, ld.AR appeared on behalf of the assessee and Shri Mrinmay Basak, ld. Sr. DR appeared on behalf of the revenue.
It was submitted by the ld. AR that the assessee had not filed its return of income. It was the submission that there was no monetary requirement of the assessee to file return of income insofar as the proviso to Section 10(23C) of the Act was amended to make it compulsory for filing of return of income only from the assessment year 2023-2024. It was the submission that the Assessing Officer denied the assessee the benefit of exemption u/s.10(23C)(iiiad) of the Act on the ground that the assessee had not filed its return of income. Ld. AR also relied upon the decision of the ITAT Indore Bench of the Tribunal in the case of Harda Nagar Bal Vikas 2 ITANo.404/KOL/2025 Samiti Harda, reported in [2025] 174 taxmann.com 680 (Indore-Trib). It was the submission that the Assessing Officer may be directed to grant the assessee the benefit of exemption u/s.10(23C)(iiiad) of the Act.
In reply, ld. Sr. DR submitted that no return of income u/s.139(1) of the Act in response to the notice u/s.142(1) of the Act, had been filed by the assessee. He relied on the orders of the ld. Assessing Officer and ld. Addl./JCIT(A).
I have considered the rival submissions. A perusal of the facts in the present case, shows that the Assessing Officer has not, in fact, questioned the non-filing of the return for claiming the exemption u/s.10(23C)(iiiad) of the Act. The Assessing Officer has categorically mentioned that the audit report of the assessee shows net profit of Rs.10,30,577/-. For not filing of the return though its basic net profit itself exceeded Rs.10,30,577/-, the Assessing Officer has denied the benefit of exemption u/s.10(23C)(iiiad) of the Act. It is now open to the assessee to decide whether it being filed its return of income or not. The provisions of Section 139(1) of the Act makes it compulsory for an assessee whose income exceeds the basic exempted limit to file its return of income. Here the assessee has not filed its return of income. It is also noticed that the Assessing Officer has not examined the profit and loss account and the balance sheet of the assessee. The assessee claims that the assessee is running an educational institution and is not for the purpose of profit. As the Assessing Officer has not properly examined the claim of the assessee and as it is noticed that the assessee has not represented during the appellate proceedings, therefore, in the interest of justice, the issues in this appeals are restored to the file of the