Loading judgment…
Facts
The assessee, an educational trust, claimed exemption under Section 11 of the Income Tax Act. However, due to an error in filing software, it was treated as Section 10(23C), and Form 10BB was not filed. Consequently, the exemption was denied, and income was computed on total receipts.
Held
The Tribunal held that the issue requires re-examination by the Assessing Officer to determine the eligibility of the assessee under Section 10(23C) or Section 11 of the Act.
Key Issues
Whether the assessee, an educational trust, is eligible for exemption under Section 11 or 10(23C) of the Income Tax Act, and whether the non-filing of Form 10BB leads to the denial of such exemption.
Sections Cited
12A, 11, 10(23C), 143(1), 12AA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI S. RIFAUR RAHMAN
ORDER
PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER:
This appeal by the assessee is directed against the order dated 16.7.2025 of the Ld. Addl/JCIT(A)-1, Guwahati pertaining to assessment year 2018-19.
Brief facts of the case are that assessee is an educational trust registered u/s. 12A of the Act. The income of the assessee is from running an educational institution. This income is exempt u/s. 11 of the Income Tax Act. The assessee duly filed the return claiming deduction u/s. 11 with Report on Form No. 10B and with all particulars mentioned in computation of income. Due to one error at the time of filing software instead of taking section 12A wrongly took it as section 10(23C). The department denied the deduction u/s. 11 and computed the total receipt as income. Against the aforesaid action, the Assessee preferred the appeal before the Ld. CIT(A), who vide his order dated 16.7.2025 affiremd the action of CPC, Bangalore by dismissing the appeal of the assessee. Aggrieved, assessee is in appeal before us.
None appeared on behalf of the Assessee/applicant.
Heard the Ld. DR and perused the records. We find that CPC Bangalore vide communication dated 9.12.2019 had intimated the assessee in respect of the proposed adjustment amounting to Rs. 8,25,12,474/-. We observed that CPC, Bangalore vide order u/s. 143(1) dated 20.3.2020 has computed income at Rs. 7,73,31,591/- as against NIL income declared by the assessee by disallowing the exemption of Rs. 8,25,12,474/- claimed by the assessee on the following reasons: (i) Assessee approved under section 10(23C) (iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C) (via) and claiming exemptions under Sr. No. 4i to 4viii in Part B-T1, but the Audit Report in Form 10BB is not e-filed alongwith the return of income. (ii) In Schedule Part-BT-I, the exemptions claimed in Sl. No. 4[i+4ii+4iii+4v+4vi+4vii+viii) is more the income offered in Sl. No. 1 (voluntary contribution forming part of corpus] and Sl. No. 2 [voluntary contributions other than corpus) and Sl. No. 3 [Aggregate of income referred in sections 11, 12 and sections 10(23C) (iv) or 10(23C)(v) or 10(23C)(vi) or 0(23C) (via) derived during the previous year of Schedule Part-BTI. CPC, Banglore in pursuance of the communication dated 9.12.2019 computed the income vide order u/s. 143(1) dated 12.10.2021 at Rs. 7,73,31,591/- against Rs. NIL declared by the assessee i.e. disallowance / addition of Rs. 7,73,31,591/-.
We find that assessee is a charitable educational trust running educational institution and registered u/s. 12A/12AA of the Act, as per 2 | P a g e certificate of registration u/s. 12A/12AA issued by the revenue authority. It is an admitted fact that during the year under consideration the assessee received a sum of Rs. 7,73,31,591/- as receipts on account of mainly tuition fee and some other miscellaneous receipts related to tuition fee. The disallowance was made on the basis that assessee had claimed exemption u/s. 10(23C) of the Act and accordingly was required to file Form 10BB, which was not filed, hence, the exemption claimed was disallowed, which was confirmed by the ld. CIT(A). 5.1 In view of the aforesaid background and in the interest of justice, we deem it fit and proper to remit back the issue in dispute to the file of the Assessing Officer with the directions to check the eligibility of the assessee u/s. 10(23C) of the Act or u/s. 11 of the Act and accordingly decide the issue in dispute afresh, in accordance with law, after giving adequate opportunity of being heard to the assessee to canvass its case.