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Facts
The assessee claimed exemption under section 10(23C)(iiiad) instead of 10(23C)(iiiab) of the Act due to a mistake. The Assessing Officer (AO) denied the exemption, and the assessee appealed.
Held
The Tribunal noted that the audit report was prepared under section 10(23C)(iiiab) and that the assessee's claim for exemption under this section should be considered. The AO was directed to consider the assessee's claim and the precedent regarding the exclusion of interest income for calculating the 50% limit.
Key Issues
Whether the assessee is eligible for exemption under section 10(23C)(iiiab) given the mistake in filing and the inclusion of interest income in total receipts.
Sections Cited
10(23C)(iiiad), 10(23C)(iiiab)
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Income Tax Appellate Tribunal, “SMCBENCH”,RANCHI
ĮċĊĭŊįēćıकीओरसे/Assessee by : Shri Devesh Poddar, Adv. �ȡ�è��ȧj � ȯ/Revenue by : Shri Khubchand Pandya, Sr.DR Ǖ��ȡ_�ȧ�ȡ�ȣ�/ Date of Hearing : 07/05/2025 �Ȫ��ȡ�ȧ�ȡ�ȣ�/Date of Pronouncement : 07/05/2025 आदेश/ O R D E R PerBench: Thisis an appeal filed by the assessee against the order dated 28.03.2023 of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, passed in ITBA/NFAC/S/250/2022-23/1051512419(1) for the assessment year 2017-2018.
Shri Devesh Poddar, Advocate appeared on behalf of the assessee. Shri Khubchand Pandya, Sr. DR appeared on behalf of the revenue.
It was submitted by the ld. AR that while filing return, the assesse had, by mistake, claimed exemption u/s.10(23C)(iiiad) of the Act in place of section 10(23C)(iiiab) of the Act. It was the submission that consequently the AO had denied the assesse the benefit of exemption as claimed. It was the submission that even the audit report of the assesse is under the provisions of section 10(23C)(iiiab) of the Act. It was the prayer that the AO may be directed to consider the assessee’s claim of exemption u/s.10(23C)(iiiab) of the Act. It was also the prayer that the total receipts of the assesse has been adopted by including the interest income. It was submitted that if the interest income is included then the total amount which has been received by the assesse would be above the prescribed limit for claim of exemption u/s.10(23C)(iiiab) of the Act. It was the submission that the interest income is not to be included has been decided by the ITAT Indore Bench of the Tribunal in the case of DCIT Vs. Sri Vaishnav Polytechnic College passed in vide order dated 06.11.2020. It was, thus, the submission that if the interest income is excluded the Government grant would exceed 50% as required for the claim of exemption u/s.10(23C)(iiiab) of the Act.
In reply, ld. Sr. DR vehemently supported the orders of the AO and ld. CIT(A).
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that even the audit report in the case of the assesse has been prepared u/s.10(23C)(iiiab) of the Act. This being so, the issues in this appeal are restored to the file of AO for readjudication and to consider the assessee’s claim for exemption u/s.10(23C)(iiiab) of the Act. The AO shall also take into consideration the decision of the coordinate bench of the Tribunal in the case of Sri Vaishnav Polytechnic College, referred to supra, wherein it has been held 50% for the purpose of determining the exemption u/s.10(23C)(iiiab) of the Act.
In the result, appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 07/05/2025.