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Facts
The assessee, an Educational Society, filed its return of income claiming exemption under Section 10(23C)(vi) of the Income Tax Act. However, it was not registered under this section, leading the CPC to deny the exemption and tax the gross receipts. The assessee contended that it was eligible for exemption under Section 10(23C)(iiiad) as its gross receipts were below Rs. 1 Crore and it was engaged in imparting education.
Held
The Tribunal held that the assessee is a charitable institution engaged in imparting education, and its gross receipts were below the Rs. 1 Crore threshold for exemption under Section 10(23C)(iiiad). The Tribunal found that claiming exemption under the wrong section due to an inadvertent mistake should not deprive the assessee of its legal claim.
Key Issues
Whether the assessee is eligible for exemption under Section 10(23C)(iiiad) despite inadvertently claiming it under Section 10(23C)(vi) and whether the CPC's rejection of a rectification application under Section 154 was justified.
Sections Cited
10(23C)(vi), 10(23C)(iiiad), 154, 139(4), 143(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI MANISH AGARWAL
Assessee by Shri Deepak Singh, Adv. Department by Shri Sailendera Srivastava, Sr.DR Date of Hearing 21/05/2025 Date of Pronouncement 24/06/2025 O R D E R
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of the Learned Addl./ Joint Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Patna [Ld. CIT(A) in short] passed u/s 250 of the Income Tax Act, 1961 (‘the Act’ for short) in Appeal No. NFAC/2018-19/10277775 dated 05.12.2024 for Assessment Year 2019-20.
Maya Sikshan Prashikshan Sansthan vs. ITO 2. Brief facts of the case are that the appellant is an Educational Society and filed its return of income u/s 139(4) of the Act on 30.01.2020 wherein inadvertently exemption u/s 10(23C)(vi) of the Act was claimed. Since, assessee was not registered u/s 10(23C)(vi) of the Act, the CPC while processing the return has denied the exemption and taxed the gross receipt of the assessee society without allowing any deduction towards the application of income as claimed.
Against such order, the application for rectification u/s 154 of the Act was filed by the assessee before the CPC wherein it was claimed that inadvertently the claim was made u/s 10(23C)(vi) of the Act whereas the assessee is entitled for exemption u/s 10(23C)(iiiad) as the gross receipt of the assessee was below Rs.1 Cr. and it is engaged in the activity of imparting education. The CPC has rejected the rectification application, against which an appeal was filed before the Ld. CIT(A). The Ld. Addl./Jt. CIT, Patna vide impugned order has dismissed the appeal by holding that there is no mistake apparent on record in the order passed by the CPC and, therefore, the rectification application filed u/s 154 has rightly been dismissed by CPC and, accordingly, the appeal of the assessee was dismissed. Against such order, the assessee society preferred the present appeal before the Tribunal.
Before us, the Ld. AR of the assessee reiterated the same arguments which were placed before the Ld. CIT(A) and it is further submitted that claiming exemption u/s 10(23C)(vi) as against Maya Sikshan Prashikshan Sansthan vs. ITO 10(23C)(iiiad) is a mistake apparent from the record as the gross receipts were below the maximum ceiling provided in section 10(23C)(iiiad) and inadvertently in the return of income filed, the exemption was claimed in wrong section which is a rectifiable mistake u/s 154 of the Act. For this proposition, he placed reliance on the judgment of Co-ordiante Bench of ITAT, Kolkata in the case of University of Burdwan C/o S.H. Ghosh & Associates vs. ACIT (ITAT Kolkata). Further reliance is placed on the judgment of Co-ordinate Bench of ITAT, Lucknow in the case of Desh Bharti Public School Samity vs. DCIT (2022) 195 ITD 600 (Lucknow Trib.) It is further submitted by the Ld. AR that the assessee is having gross receipts of Rs.95,55,914/- which are below the maximum ceiling provided u/s 10(23C)(iiad) and further it is a charitable institution engaged in the activity of imparting education. The Ld. AR thus submitted that merely by stating wrong section in return of income, genuine claim of the assesse should not be denied and, therefore, he prayed for cancellation of the order of Ld. Addl./Jt. CIT(A) and requested for necessary relief.
On the other hand, Ld. CIT-DR supported the orders of the lower authorities and requested for the confirmation of the same.
Heard both the parties. From the perusal of the order, it is seen that CPC in the intimation order u/s 143(1), it is seen that the CPC has taxed gross receipt declared by the assessee at Rs.95,55,914/-. Further while rejecting rectification application filed by the assessee u/s 154, the CPC has not given any reasons. The Ld. Addl./ Joint