KANHA EDUCATION SOCIETY,GWALIOR vs. ITO EXEMPTION, GWALIOR
Facts
The assessee, an educational society, filed its return declaring nil income. The CPC, Bangalore, made an adjustment for Rs. 95,58,383/- for want of registration under Section 12A/12AA or 10(23C). The assessee's appeal before the CIT(A) was dismissed.
Held
The Tribunal noted that the assessee's gross receipts were below Rs. 1.00 crore and the primary object was educational. The CIT(A) dismissed the appeal on grounds of non-registration and 'mistake apparent from records' under Section 154, without addressing the core issue of exemption eligibility. The Tribunal restored the matter to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether the assessee is eligible for exemption under Section 10(23C)(iiiad) despite not having specific registration, given its educational nature and gross receipts below Rs. 1 crore.
Sections Cited
2(15), 10(23C)(iiiad), 143(1)(a)(ii), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI M. BALAGANESH & SHRI SUNIL KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 407/Agr/2025 Assessment Year: 2018-19
Kanha Education Society, Vs. Income-tax Officer Geeta Colony, Dal Bazar, Gwalior. (Exemption), Gwalior. PAN :AABAK8463F (Appellant) (Respondent)
Assessee by Sh. Rajendra Sharma, Advocate Department by Sh. Anil Kumar, Sr. DR
Date of hearing 20.11.2025 Date of pronouncement 08.12.2025
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 01.07.2025 passed in Appeal No. NFAC/2017-18/10359370 by the Ld. ADDL/JCIT(A)-1, Guwahati u/s. 250 of the Income-tax Act, 1961
(hereinafter referred to as “the Act”) for the assessment year 2018-19, wherein the ld. CIT(Appeals) has dismissed assessee’s first appeal. 2. Brief facts state that the appellant is an educational society registered
under the provisions of M.P. Societies Registration Act, 1973. The main and dominant object of the society is purely for educational purposes in terms of section 2(15) of the Act and not for the purposes of profit. The aggregate
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receipts of the assessee society for the year under consideration do not
exceed Rs. one crore. Assessee filed ITR-7 along with Form-10B for A.Y.
2018-19 on 09.10.2018, declaring nil income. CPC, Bangalore, vide,
communication dated 04.12.2019, intimated the appellant assessee for the
proposed adjustment u/s. 143(1)(a)(ii) of the Act, amounting to
Rs.95,58,383/-. Further, CPC, vide order dated 10.03.2020 passed u/s.
143(1) of the Act computed assessee’s income at Rs.95,58,383/- as against
nil. Appellant assessee filed rectification application on 18.03.2024 against
the order passed u/s. 143(1) dated 10.03.2020. The same was rejected by
the Assessing Officer, vide order dated 20.03.2024 passed u/s. 154 of the
Act.
Aggrieved assessee filed first appeal against the order dated
20.03.2024 passed u/s. 154 of the Act, before Ld. CIT(Appeals), which was
dismissed.
Appellant assessee has approached this Tribunal against the
impugned order dated 01.07.2025 passed by the ld. CIT(Appeals), raising
following ground :
“ON THE FACTS & in the circumstances of the case, the learned CIT(A) has erred in law & fact in appreciating the fact that the appellant educational institution is existing solely for educational purposes and not for the purpose of profit, its gross receipts do not exceed Rs.1.00 Crore & it is entitled to exemption of its income u/s 10 (23C)(iiiad) of the Income Tax Act, 1961. It is prayed that the claim of exemption of income u/s 10(23C) (iiiad) of the Income Tax
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Act, 1961 be allowed as per application made u/s 154 before the AO & as contested in the appeal before the CIT(A), NFAC. …………………….”
Perused the records. Heard learned AR for the appellant assessee and
learned Sr. DR for the respondent revenue.
Learned AR has submitted that learned CIT(Appeals) has committed a
mistake by passing the impugned order, ignoring the fact that the impugned
disallowance was made by CPC, Bangalore merely on the ground that the
assessee was not registered u/s. 12A/12AA or 10(23C)(iv) or 10(23C)(v) or
10(23C)(vi) or 10(23C)(via) of the Act, but has claimed exemption in the ITR,
further submitting that the appellant society is entitled to claim exemption u/s.
10(23C)(iiiad), as its gross receipts did not exceed Rs.1.00 crore and no
approval either u/s. 10(23C)(iiiad) or any registration u/s. 12A/12AA is
required for claiming the exemption u/s. 10(23C)(iiiad) of the Act. Prayed to
restore the matter back to the ld. CIT(Appeals) for passing the order on
merits a fresh.
Learned Sr. DR has submitted that the assessee trust was neither
registered u/s. 12A nor u/s. 10(23C) of the Act. However, when questioned
by the Bench as to whether any such registration is required for claiming
exemption u/s. 10(23C)(iiiad) of the Act, learned Sr. DR, instead of clarifying
the issue, prayed to restore the matter back to the file of learned
CIT(Appeals) for deciding the matter a fresh on merits. 3 | P a g e
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The main point for determination under appeal is as to whether learned
CIT(Appeals) erred in dismissing assessee’s appeal, by declining exemption
claimed u/s. 10(23C)(iiiad) of the Act, despite assessee’s gross receipts
being below Rs. 1.00 crore?
We notice that CPC, Bangalore has disallowed assessee’s claim of
exemption u/s. 10(23C)(iiiad) of the Act for want of registration under
sections quoted hereinabove. In the instant case, the assessee seems to
have exercised his option to claim exemption only u/s. 10(23C)(iiiad) of the
Act and not under section 11 of the Act. CPC, Bangalore has not raised any
question in respect of the genuineness of the gross receipts of the assessee.
Rule 2BC(1) of the Income-tax Rules, 1962 provides that for the purpose of
sub-clause (iiiad) of clause (23C) of section 10, the amount of annual receipt
on or after the first day of April, 1998 of any university or other educational
institution, existing solely for educational purposes and not for the purposes
of profit, shall be one crore rupees. The present matter relates to A.Y. 2018-
19 and the amendment to this section has been effected vide Finance Act,
2021 w.e.f. 01.04.2022, wherein the aforesaid limit has been raised to Rs.
5.00 crore. Therefore, the case of the assessee for the relevant assessment
year 2018-19 falls under the limit of Rs.1.00 crore only.
Learned CIT(Appeals) has observed that the appellant did not submit
copies of accounts before him. This apart, he, further observed that the issue 4 | P a g e
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of whether “any university or other educational institution existing solely for
educational purposes and not the purposes of profit” was not covered within
the meaning of “mistake apparent from records”, as envisaged u/s. 154 of
the Act, hence, dismissed the appeal. We find that the issue before learned
CIT(Appeals) was limited to the extent as to whether assessee’s claim of
exemption u/s. 10(23C)(iiiad) was allowable despite its non-registration
under the aforesaid sections. This apart, assessee has filed the copies of its
balance sheet and profit and loss account before this Tribunal for the
relevant year, which, of course, needs verification. However, no finding has
been given by the ld. CIT(Appeals) on this issue. Keeping the prayers of both
the parties in view, we deem it just and appropriate to restore the matter
back to the ld. CIT(Appeals) for deciding the matter afresh, keeping our
observations made hereinabove in view. Aforesaid point is accordingly
decided in positive in favour of the assessee. Appeal is liable to be allowed
for statistical purposes.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 08.12.2025.
Sd/- Sd/- (M. BALAGANESH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 08.12.2025 *aks/-
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