NATIONAL INSTITUTE FOR TEACHER EDUCATION,KHETRI vs. INCOME TAX OFFICER, WARD 1(4), GUWAHATI , GUWAHATI

Facts

The assessee, National Institute for Teacher Education, an educational institution and unit of Bharali Education Foundation, did not file its income tax return for AY 2017-18. During the demonetization period, it deposited Rs. 12,97,000 in cash. The Assessing Officer completed assessment u/s 144, adding the cash deposit as business income. The CIT(A) dismissed the assessee's appeal, holding it was a separate taxable entity and denied exemption u/s 10(23C)(iiiad).

Held

The Tribunal held that the assessee is an educational institution, and the cash deposit of Rs. 12,97,000/-, being less than the total fees received from students (Rs. 82,08,600/-), could be presumed to be from student fees. It clarified that registration u/s 12A/12AA is not a prerequisite for exemption u/s 10(23C)(iiiad) if the institution exists solely for educational purposes and its receipts are below the prescribed limit. The CIT(A)'s order was set aside, and the AO was directed to delete the addition.

Key Issues

Whether the assessee is a separate taxable entity; whether it is entitled to exemption u/s 10(23C)(iiiad) without registration u/s 12A/12AA; and whether cash deposits during demonetization constituted taxable business income.