NATIONAL LAW INSTITUTE UNIVERSITY ,BHOPAL vs. DCIT(EXEMPTION), BHOPAL

ITA 423/IND/2024Status: DisposedITAT Indore09 October 2025AY 2015-1636 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal addressed the grounds raised. Grounds 1 and 2, challenging the validity and legality of the orders, were not pressed by the assessee and were dismissed. Regarding Ground No. 3, concerning the addition of Rs. 5,42,75,671/- on account of 'Reserve & Surplus of Mess', the judgment does not explicitly state the Tribunal's finding or reasoning on this specific ground. It appears to have been omitted from the provided text. However, regarding Ground No. 4, the Tribunal held that the hostel/mess facility provided to students is an activity incidental to imparting education, citing the Supreme Court decision in New Noble Educational Society. Therefore, the provisions of Section 11(4)/(4A) and CBDT Circular Para 3 were not applicable. The Tribunal accepted the assessee's claim for 15% exemption on the basis of gross receipts from hostel/mess activity, following the decision in Artificial Limbs Manufacturing Corporation of India. Consequently, the addition of Rs. 20,21,992/- was directed to be deleted. Ground No. 5, a general ground, was dismissed as not pressed. The appeal was allowed in terms of the decision on Ground No. 4.

What were the facts?

The assessee, National Law Institute University, Bhopal, is challenging an order passed by the CIT(A)-NFAC, Delhi, which upheld the assessment order of the DCIT (Exemption), Bhopal, for Assessment Year 2015-16. The assessee, a university established under state law, was granted registration under Section 12AA effective from April 1, 2014, entitling it to exemption under Sections 11/12 from AY 2015-16. The assessee filed a return declaring Nil income after claiming exemption. The Assessing Officer (AO) completed the assessment, determining total income at Rs. 5,62,97,660/- after making adjustments. The assessee appealed to the CIT(A) but did not succeed. The present appeal before the ITAT concerns grounds related to additions made by the AO and confirmed by the CIT(A). The appeal was filed with a delay of 74-78 days, which the Tribunal condoned.

What were the issues?

1. Whether the Assessing Officer was justified in making an addition of Rs. 5,42,75,671/- on account of 'Reserve & Surplus of Mess' (Ground No. 3)? The assessee argued that this amount represented the unutilized opening balance of the mess account, which was not treated as income or expense. The revenue contended that this amount was income that should have been offered for tax. 2. Whether the CIT(A) was justified in confirming the addition of Rs. 20,21,992/- on account of treating income from mess as business income under Section 11(4) (Ground No. 4)? The assessee argued that the mess facility provided to students was incidental to imparting education and not a business. The revenue contended that it was a business activity and therefore subject to specific provisions for exemption calculation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 10(23C),Section 11,Section 12,Section 11(4),Section 11(4A),Section 11(1)(a),Section 11(2),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Ashish Goyal & N.D. Patwa, ARs
For Respondent: Shri Anoop Singh, CIT-DR
Hearing: 10.09.2025Pronounced: 09.10.2025

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first-appeal bearing DIN & Order No.: ITBA/NFAC/S/250/2023-24/1058947878(1) dated 21.12.2023 [“impugned order”] passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”], which in turn arises out of assessment-order dated 12.12.2017 passed by learned DCIT (Exemption), Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal.

National Law Institute University ITA No. 423/Ind/2024 - AY 2015-16

2.

The registry has informed a delay of 78 days (the assessee has calculated 74 days) in filing this appeal. Ld. AR for assessee invi

The order continues below.

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