Section 10(23C) of the Income Tax Act

Income-tax Act, 2025: s.11

Section 10(23C) falls under section 10 of the Income-tax Act, 1961, which corresponds to section 11 (Incomes not included in total income) of the Income-tax Act, 2025.

Read section 11 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 10(23C) is CIT v. State Bank of Bikaner & Jaipur (43 Taxmann.com 411), cited in 524 of the 713 judgments on BharatTax that turn on this section.

Leading authorities on Section 10(23C)

CIT v. State Bank of Bikaner & Jaipur
43 Taxmann.com 411 · 2014 · High Court
524
citing judgments

Employee contributions to provident fund, ESI, and other welfare funds, if deposited by the due date for furnishing the return of income under Section 139(1), are allowable as a deduction and cannot be disallowed under Section 36(1)(va) read with Section 2(24)(x) or Section 43B, even if deposited after the due date prescribed by the respective welfare Acts.

CIT v. Tiny Tots Education Society
330 ITR 21 · 2011 · High Court
112
citing judgments

Charitable institutions are entitled to claim depreciation on assets even when the cost of acquisition has already been treated as an application of income for exemption purposes, as this does not constitute a double deduction.

American Hotel and Lodging Association Educational Institute v. CBDT
301 ITR 86 · 2008 · Supreme Court
111
citing judgments

An educational institution is eligible for exemption under Section 10(23C)(vi) if it exists solely for educational purposes, even if it generates incidental profits. The mere existence of profit does not disqualify an institution from exemption.

Asstt. CIT v. Thanthi Trust
247 ITR 785 · 2001 · Supreme Court
98
citing judgments

A charitable trust can earn income from business activities under Section 11(4A), including incidental businesses, and still claim exemption under Section 11, provided the income is applied towards its charitable objects. Generating a surplus from such activities does not automatically negate the charitable purpose.

Yuvraj v. Union of India
315 ITR 84 · 2009 · High Court
81
citing judgments

Reassessment under Section 148 is valid and does not constitute a mere change of opinion if the original assessment order demonstrates no application of mind to a specific issue, such as the assessability of capital gains or casual income. In such cases, the Assessing Officer is justified in issuing a notice under Section 148 to address the unexamined income escapement.

T.M.A. Pai Foundation v. State of Karnataka
8 SCC 481 · 2002 · Reported
81
citing judgments

Educational institutions are not commercial activities, and collecting fees for betterment and growth does not automatically disqualify them from being considered educational. Fees collected for value-added courses, training, or hostel facilities can be eligible for exemption under Section 11 if applied towards the institution's infrastructure.

Institute of Chartered Accountants of India (ICAI) v. DGIT (Exemptions)
358 ITR 91 · 2013 · High Court
80
citing judgments

An institution carrying out charitable objects, such as education or advancement of general public utility, does not lose its Section 11 exemption merely by collecting fees for activities like campus placements or educational guidance, as this does not constitute carrying on a business.

Trust (249 ITR 533) (Bom.) 3. CIT vs. Red Rose School (163 Taxman 19 (All.) 4. DIT(E) v. Alarippu (
172 ITR 698 · 1988 · High Court
61
citing judgments

Income received by a trust from sources like extra fees can be taxed at the maximum marginal rate, while other income remains eligible for exemption under Section 11 of the Income Tax Act.

Gujarat State Co-operative Union v. CIT
195 ITR 279 · 1992 · High Court
58
citing judgments

Education encompasses a broad range of activities beyond formal schooling, including systematic training designed to impart knowledge and skills, reflecting the acceptance of new ideas and the development of means to reach recipients. The definition of education should not be confined to a narrow or pedantic sense.

Bihar Institute of Mining & Mine Surveying v. CIT
208 ITR 608 · 1994 · High Court
57
citing judgments

An entity qualifies as an 'educational institution' under Section 10(22) of the Income-tax Act only if it is primarily engaged in imparting education, rather than merely assisting educational bodies or providing scholarships and grants. The focus must be on active educational activities.

Judgments on Section 10(23C)

Dy CIT (Exemption)-2(1), Mumbai vs. M/S. Uti Institute of Capital Markets (Now Known M/S. National Institute Securities Markets), Mumbai

In the result, the appeal filed by the department is dismissed

ITA 17/MUM/2021[2011-12]Status: DisposedITAT Mumbai06 Jan 2022AY 2011-12

Bench: Sri Kuldip Singh, Jm & Sri Prashant Maharishi, Am आयकर अऩीऱ सुं./ Ita No. 17/Mum/2021 (ननधधायण वर्ा / Assessment Year 2011-12) Dy. Commissioner Of Income M/S Uti Institute Of Capital Tax (Exemption)-2(1), Markets Room No. 519, 5Th Floor, (Now Known As M/S National Piramal Chambers, Lalbaug, Institute Securities Markets) बनाम/ Lower Parel, Nism Bhavan, Plot No. 82, Vs. Mumbai-400 012 Sector 17, Vashi, Navi Mumbai-400 705 (अऩीऱाथी / Appellant) (प्रत्यथी/ Respondent) स्थायी ऱेखा सुं./Pan No. Aaaan4685M अऩीरधथी की ओय से / Appellant By : None प्रत्मथी की ओय से / Respondent By : Shri Achal Sharma, Dr सुनवधई की तधयीख / Date Of Hearing: 30.12.2021 घोर्णध की तधयीख / Date Of Pronouncement : 06.01.2022 आदेश / O R D E R प्रशाुंत महर्षि, ऱेखा सदस्य के द्वारा / Per Prashant Maharishi, Am: 01. This Appeal Is Filed By The Dy. Commissioner Of Income Tax (Exemption) 2(1), Mumbai Against The Order Passed By The Commissioner Of Income Tax (Appeals)-1, Mumbai [In Short ‘The Cit(A)’] On 19.08.2020, Wherein The Appeal Filed By The Assessee Against The Assessment Order Passed Under Section 143(3) Of The Income-Tax Act, 1961 (Hereafter Referred As ‘Act’) Dated 19.03.2014 Was Allowed. M/S Uti Institute Of Capital Markets; Ay 11-12 02. The Only Issue Raised By The Learned Assessing Officer Is Allowance Of Carry Forward Of Deficit To The Assessee’S Trust.

For Appellant: NoneFor Respondent: Shri Achal Sharma, DR
Section 12ASection 143(3)