MATA LALTI DEVI FOUNDATION,ARA vs. ITO, WARD- 1 (4), ARA

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ITA 411/PAT/2025Status: DisposedITAT Patna28 November 2025AY 2021-224 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's appeal was barred by limitation by 244 days, but condoned the delay as the reasons were found to be bonafide and genuine, with no objection from the Revenue. Regarding the first issue, the Tribunal found that while the assessee did not claim exemption under Section 10(23C)(iiid) in its original return, there is no bar to taking an additional claim in appellate proceedings. The Tribunal held that the CIT(A) had misinterpreted the ratio laid down in Goetze (India) Ltd. (supra), as an appellate authority can adjudicate such issues. The Tribunal concluded that the assessee's trust is not required to be registered to claim exemption for income from educational activities if gross receipts do not exceed ₹1 crore, in conformity with Section 10(23C)(iiid). Therefore, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition. On the second issue, the Tribunal agreed that only the net income should be assessed to tax but did not adjudicate this alternative submission as the main plea was allowed.

What were the facts?

The assessee, Mata Lalti Devi Foundation, is an educational institution incorporated on March 5, 2014, and affiliated with CBSE since November 26, 2018. For Assessment Year 2021-22, it filed a return of income on December 31, 2021, declaring total receipts of ₹96,43,153. The Assessing Officer (AO) processed the return under Section 143(1) of the Income Tax Act, 1961, vide an intimation dated August 23, 2022. The AO assessed the entire gross receipt as income, disallowing the application of funds totaling ₹96,48,618. The assessee appealed this order to the CIT(A), Lucknow, which was dismissed on October 8, 2024. The assessee's appeal to the ITAT was filed 244 days beyond the limitation period, which was condoned by the Tribunal.

What were the issues?

1. Whether the assessee, being an educational institution, is entitled to exemption under Section 10(23C)(iiid) of the Income Tax Act, 1961, even if it did not claim such exemption in its original return of income, and if registration under the Act is mandatory for claiming such exemption when gross receipts do not exceed ₹1 crore? Assessee's contentions: The assessee argued that as an educational institution, its income is exempt under Section 10(23C)(iiid) and it is not required to obtain registration. It also submitted that registration under Section 10(23)(vi) is only required if turnover exceeds ₹1 crore, which was not the case for the year under consideration (gross receipts were ₹96,43,153). Revenue's contentions: The revenue, through the DR, did not raise any objection regarding the condonation of delay. The CIT(A) dismissed the exemption plea, relying on the decision of Goetze (India) Ltd. v. Commissioner of Income Tax (CIT) 284 ITR 323 (SC), stating that an alternative submission made during appellate proceedings cannot be entertained if not claimed in the original return. 2. Whether only the net income, after allowing deduction of expenses, should be assessed to tax, and not the gross receipt.

Which sections of the Income-tax Act were involved?

Section 10(23C)(iiid),Section 10(23)(vi),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA

Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

For Appellant: Shri Manish Rastogi, AR
For Respondent: Shri Ashwani Kr. Singal, DR
Hearing: 24.11.2025Pronounced: 28.11.2025

This is an appeal preferred by the assessee against the order of the CIT (A), ADDL/JCIT(A)-1, Lucknow (hereinafter referred to as the “Ld. CIT(A)”] dated 08.10.2024 for the AY 2021-22.

2.

At the outset, we note that the appeal of the assessee is barred by limitation by 244 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons, hence, we condone the delay and admit the appeal for adjudication.

3.1. In the appellate proceedings, the learned CIT (A) dismissed the plea of the assessee on the ground that original return of income, the assessee has not made any claim under qua this exemption and this is an alternative submission made by the assessee during the course of appellate proceedings which cannot be entertained by relying on the decision of Goetze (India) Ltd. v. Commissioner of Income Tax (CIT) 284 ITR 323 (SC).

After hearing the rival contentions and perusing the materials available on record, we find that the assessee has not made any claim u/s 10(23C)(iiid)of the Act in the return of income filed for the instant assessment year. In our considered view even though the assessee has not claimed as such, but in the appellate proceedings there is no 3.2. The second plea raised by the assessee that it is only the net income which is to be assessed to tax and not the gross receipt as has been done by the learned AO. Even this argument of the assessee trust is fully meritorious. We even opine that net income of the assessee as computed after allowing deduction of expenses incurred is to be assessed as income. But since, we have allowed the main plea of the assessee, therefore, we are not adjudicating this alternative submission of the assessee.

4.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 28.11.2025.

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