DR. BABASAHEB AMBEDKAR OPEN UNIVERSITY,AHMEDABAD vs. THE DY.CIT, CIRCLE-1, EXEMPTION, AHMEDABAD

"5.3.15. The appellant has relied upon a large number of judicial precedents, including Township Pvt. Ltd. Sri Adichunchunagiri Shikshana Trust. DIT v. Spic Educational United Educational Society v. JCIT. Genius Education Society v. ACIT. CIT v. Vatika Foundation, Shahzada Nand Charity Trust. Gujarat Oil & Allied Industries, and On careful examination. I find that none of these decisions advance the appellant's several Tribunal decisions rendered in the context of sections 11 and 12 of the Act. case in the present factual and legal matrix The decision in United Educational Society v. JCIT and Genius Education Society v. ACIT dealt with denial of exemption under sections 11 and 12 merely on account of belated filing of return prior to insertion of section 12A(1)(ba), where audit reports were ultimately furnished and registration under section 12A was undisputed. In the present case, the appellant's claim is under section 10(23C) and not under sections 11 and 12, and the mandatory audit report in Form No. 10BB was never validly filed nor condoned by the CBDT. The ratio of CIT v. Vatika Township Pvt. Ltd. relates to retrospectivity of amendments and does not dilute mandatory statutory conditions. The decision in DIT v. Spic Educational Foundation squarely supports the Revenue, holding that non-filing of prescribed audit report disentitles exemption. Similarly, Sri Adichunchunagiri Shikshana Trust dealt with depreciation under section 11 and has no bearing on exemption under section 10(230). Accordingly, the case laws relied upon by the appellant are either factually distinguishable, rendered in a different statutory regime, or do not support dilution of mandatory conditions prescribed under section 10(23C), and hence are not applicable to the present case.

5.3.16 Therefore, considering the appellant's failure to file Form 10BB, failure to obtain approval under section 10(23C)(vi), rejection of condonation by the CIT(Exemptions), absence of any subsequent condonation by CBDT, noncompliance with Rule 2BBB for claim under section 10(23C)(iiiab), lack of audited evidence, discrepancy in capital expenditure details, and absence of material to demonstrate exclusive application for educational objects, I find that the Assessing Officer was fully justified in denying the claim of capital expenditure of Rs. 13,13,00,782/- as application of income. The appellant's explanation is neither factually substantiated nor legally tenable. In view of the above detailed discussion and the explanation offered by the appellant lacking substance and merit, this ground is dismissed.

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5.4.9 Furthermore, the AO has rightly painted out inconsistencies in the receipts disclosure. The financials did not clearly classify the grant as corpus, revenue, capital, or restricted fund. No notes to accounts were provided to clarify whether the grant was subject to conditions. In absence of such clarification or supporting evidence, the AO is justified in treating the amount as income

5.4.10 Given the statutory non-compliance with section 10(230) (vi), absence of Form 10BB, absence of approval, absence of condonation by CBDT, failure to satisfy Rule 2BBB for alternate claim under section 10(23C)(iiab), failure to furnish sanction letter, utilisation certificate, or evidentiary proof of application of grant, the AO correctly added the amount of Rs.5,00,00,000/- to the income of the appellant. The explanations offered are neither supported by facts nor by law. In view of the above detailed discussion and since the explanation offered by the appellant lacks substance and merit, this ground is dismissed."

- 4. Aggrieved against the appellate order, assessee is in appeal before us raising the following Grounds of Appeal: - 1) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in confirming the re assessment order dated 29.03.2022 passed u/s 147 r.w.s 144B of the Income Tax Act, 1961? - 2) Whether, in facts and circumstances of the case, the Ld CIT(A) erred in not considering that no notice was issued by Ld. Assessing Officer u/s 143(2) of the Income Tax Act, 1961 and therefore the Assessment order was non-est?

- 3) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in holding that additional evidence under Rule 46A of the Income Tax Rules, 1962 is required to be filed only at the time of filing of appeal u/s 250 of the Income Tax Act, 1961, despite the fact that the additional evidence was on account of events subsequent to filing of Appeal ? - 4) Whether, in facts and circumstances of the case, the Ld. CIT(A) has contradicted himself as on one hand he refused to consider the additional evidence in para 5, whereas the same additional evidences are discussed in para 5.3.12 and 5.3.13 of his order? - 5) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in not grating exemption u/s 10(23C) (vi) of the Income Tax Act, 1961 despite granting of approval by Ld GIT(Exemption)? - 6) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in confirming the disallowance of exemption claimed by Assessee u/s 11 of the Income Tax Act. 1961 of Rs 1,53,65,909/-being 15% of gross receipt? - 7) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs. 13,13,00,782/- claimed towards capital expenditure? - 8) Whether, in facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition u/s 68 of the Income Tax Act, 1961 of Rs. 5,00,00,000/- being receipt of grant for construction? - 9) Whether, in facts and circumstance of the case, the Ld. CIT(A) erred in not entertaining the ground relating to initiation of penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961? - 5. At the outset, ld. Counsel appearing for the assessee submitted that registration u/s. 10(23C)(vi) of the Act was granted to the assessee by Ld. CIT(E) vide order dated 13-02-2024 for the Asst. Years 2015-16 to 2017-18 which is placed at Page No. 27 to 29 of the Paper Book, which reads as follows:

"Order for approval under section 10(23C)(vi) of the Income Tax Act, 1961

I. Applications in form 56D of the Income Tax Rules, 1962, claiming exemption under section 10(23)(vi) of the Income-tax Act, 1961, were filed by the applicant on 07/12/2023 for AY 2015-16 to 2017-18. The delay in filing of said application is condoned u/s. 119(2)(b) of the Act by the CBDT vide order No. F.No. 197/232/2021-ITA-I dated 22/09/2023

- II. After considering the application of the applicant and the material available on record, the applicant is hereby granted approval under section 10(23)(vi) of the Income Tax Act, 1961 with effect from the assessment year 2015-16 to 2017-18 subject to the conditions mentioned in paragraph (V)." - 6. We observe that approval u/s. 10(23C)(vi) of the Act was granted on 13-02-2024 which is including for the present Asst. Year 2015-16, but the Ld. CIT(A) passed this impugned order on 10-12-2025 much later without considering the same. Therefore, we hereby direct Ld. CIT(A) to consider the above exemption u/s. 10(23C)(vi) of the Act and decide the matter in accordance with the provisions of law. - 7. In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose.

Order pronounced in the open court on 12-02-2026

Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT True Copy JUDICIAL MEMBER Ahmedabad : Dated 12/02/2026

आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:-

- 1. Assessee - 2. Revenue - 3. Concerned CIT - 4. CIT (A) - 5. DR, ITAT, Ahmedabad - 6. Guard file.

By order/आदेश से,

उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद