ST MARKS SCHOOL SOCIETY,JHANSI vs. DCIT(CPC), BENGULURU

O R D E R

PER MANISH AGARWAL, AM:

ST Marks School Society vs. DCIT 2. At the outset, it is seen that assessee is a society and running educational institutions. The return was filed in ITR-7 electronically, wherein the assessee has claimed exemption u/s 12A and 10(23C)(vi) of the Act. However, no registration was granted to the assessee u/s 12A or 10(23C)(vi) of the Act, and, therefore, the CPC has computed the income of the assessee wherein gross receipts was considered as income and no deduction towards the expenditure claimed as application out of the gross receipt were allowed. Against such order an appeal was filed before the Ld. CIT(A), who though has confirmed the action of CPC in taxing the income of the assessee in absence of registration u/s 12A or 10(23C)(vi) under normal provisions of the Act however, direct the AO to allow the expenditures incurred for earning the gross receipts. The relevant directions given by the Ld. CIT(A) as contained in para 6.25 are as under: “6.25 However, in the instant case, the AO has failed to follow the provisions of the statute and considered the total receipts as income of the assessee, which is not acceptable as per the provisions of the statute. In view of this, while giving effect to this order, the AO is directed to re-compute the taxable income of the assessee after allowing deduction towards expenditure incurred for earning the income i.e. gross receipts of all the educational institutions run by the society put together, which worked out to Rs. 3,21,86,665/-, if any, under respective heads of the income. Also, the AO is directed to deny the assessee's claim of exemption claimed u/s. 10(23C)(iiiad) of the Act since the aggregate annual receipts of the assessee society derived from various educational institutions run by the assessee society has exceeded the threshold limit of Rs. 1,00,00,000/- as prescribed in Rule 2BC of the Income Tax Rules, 1962.”