DCIT CEN CIR 2(4), MUMBAI vs. THE SOUTH INDIAN EDUCAITON SOCIETY, MUMBAI

This is an appeal filed by the Revenue. The relevant assessment year is 2012-13. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-48, Mumbai and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

The ground raised by the Revenue in this appeal is that the Ld. CIT(A) erred in granting exemption u/s 10(23C)(iiiab), even though the assessee-society failed to satisfy the necessary conditions that it exists solely for education and not for purpose of profit, as huge amount of capitation fee is charged by the assessee-society in cash and also it is not wholly and substantially financed by the Government.

The brief facts of the case are that the assessee filed e-return for the AY 2012-13 on 29.09.2012 declaring therein total income at Rs. Nil. The assessee is an AOP which runs educational institutions. During the year under consideration, the assessee claimed exemption u/s 10(23C)(iiiab). The Assessing Officer (AO) denied the said claim on the ground that in earlier years such claim of exemption was confirmed by the Ld. CIT(A) on the same facts.

Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) followed the order dated 16.09.2015 of the ITAT ‘E’ Bench, Mumbai in assessee’s own case for the AY 2003-04 to AY 2011-12 (ITA No. 6675 to 6683/Mum/2014) and allowed the appeal filed by the assessee. 5. Before us, the Ld. DR relies on the order passed by the AO. On the other hand, the Ld. counsel of the assessee relies on (i) the order of the CIT(A) and (ii) the order of the Tribunal in assessee’s own case for the AY 2003-04 to AY 2011-12. 6. We have heard the rival submissions and perused the relevant materials on record. We find that on identical facts, the ITAT ‘E’ Bench has decided the above issue in favour of the assessee for the AY 2003- 04 to AY 2011-12 (ITA No. 6675 to 6683/Mum/2014) holding as under: “It would not be out of place to mention here that even after the survey and search operation, the Government grants are still received by the institution which establishes the fact that even in the eyes of the Government, the institution is solely existing for imparting education. We therefore, direct the AO to grant exemption u/s 10(23C)(iiiab) of the Act.”