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Facts
An educational trust claimed nil income for AY 2017-18, asserting exemption under Section 10(23C)(vi) of the Income Tax Act. The AO disallowed the claim for lack of requisite approval, assessing a total income of Rs. 1,23,02,490/-, which the CIT(A) upheld.
Held
The Tribunal held that the appellant was neither granted approval under Section 10(23C)(vi) nor registration under Section 12A for the relevant year. Since approval under Section 10(23C)(vi) is a mandatory condition precedent for claiming exemption, the appeal lacked merit.
Key Issues
Whether an educational trust can claim exemption under Section 10(23C)(vi) or Section 12A of the Income Tax Act without obtaining the mandatory prior approval or registration for the assessment year.
Sections Cited
10(23C)(vi), 143(3), 12A
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 26.03.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is a trust formed with the object of imparting education. The appellant is running a school affiliated to Central Board of Secondary Education, New Delhi. The return of income for AY 2017-18 was filed on 26.10.2017 disclosing Nil income after claiming exemption u/s. Shanthiniketan Educational and Cultural Society 10(23C)(vi) of the Income Tax Act, 1961 (the Act) of Rs. 1,20,68,745/-. Against the said return of income, the assessment was completed by the ITO, Ward 1(3), Thiruvananthapuram (hereinafter called "the AO") vide order dated 27.12.2019 passed u/s. 143(3) of the Act at a total income of Rs. 1,23,02,490/-. While doing so, the AO had disallowed the claim u/s. 10(23C)(vi) of the Act for want of requisite approval from the specified authority.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee submitted before us that the application for approval was filed before the Commissioner of Income Tax (Exemption) u/s. 10(23C)(vi) of the Act and till now approval was not received by the appellant. It is further submitted that the appellant trust was granted registration u/s. 12A of the Act on 24.04.2023. Thus, he submitted that the income is exempt from tax.
On the other hand, the learned Sr. DR submits that the order passed by the CIT(A) is a very reasoned one and in the absence of approval u/s. 10(23C)(vi) exemption cannot be granted.
We have heard the rival contentions and perused the material available on record. The appellant is a charitable trust formed with Shanthiniketan Educational and Cultural Society the object of imparting education. Admittedly, the appellant was not granted approval u/s. 10(23C)(vi) of the Act nor granted registration u/s. 12A of the Act for the year under consideration. In the absence of requisite approval the claim for exemption of income cannot be allowed as it is a condition precedent that approval u/s. 10(23C)(vi) is mandatory. We, therefore, do not find any merit in the appeal filed by the assessee.
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 24th June, 2025.