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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 22.07.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC, Delhi. In this case, the assessee is seen to be running five Educational Institutions. The return of income was filed on 28.03.2018 showing ‘NIL’ income. The assessee had claimed exemption u/s 10(23C)(iiiad) of the Act. The assessee had also filed details of receipts individually of the 5 Institutions and demonstrated that the receipts in each case were less than Rs.1 crore p.a. and thereafter had claimed the exemption u/s 10(23C)(iiiad) of the Act.
The Ld. AO disallowed the claim of exemption filed by the assessee on the ground that the aggregate annual receipts of the five Educational Institutions was in the region of Rs.3,00,73,132/-. On this basis the Ld. AO held that the aggregate receipts were significantly more than Rs.1 crore and thus, he held that the assessee was not entitled for any exemption u/s 10(23C)(iiiad) of the Act.
Aggrieved with this action, the assessee approached the CIT(A) where also he could not succeed since the Ld. CIT(A) has given a finding that all the five Educational Institutions are being managed by the assessing society and thus, the aggregate of receipts deserve to be adopted for the purposes of section 10(23C)(iiiad) of the Act.
The assessee, being further aggrieved, has approached the ITAT with grounds challenging the action of authorities below.
Before us the Ld. AR argued with the help of a paper book and demonstrated that the audited financial statements of the assessee and the five Educational Institutions were duly presented before the Ld. AO and it was not proper on his part to disregard the same and claim that such audited accounts were never presented before him. The Ld. AR filed the audited accounts before this Bench with a lengthy declaration from the Principal Trustee to the extent that such documents were very much before the authorities below. Thereafter, the Ld. AR relied on the case of Children’s Education Society reported in 34 taxmann.com 285 (Karn.). The Ld. AR read out various relevant paragraphs from this case law and especially brought to our notice para 22 of this order whereby it has been held that eligibility for exemption should be considered for each Institution separately since they would be controlled under various statutes for specific purposes. It is held in this case law that even if the management of these Educational Institutions would be in single hand but for all intents and purposes they are different and independent entities. The Ld. AR also relied on the case of M/s Vivekanand Society of Education & Research [ITA No.23/2014, order dated 29.12.2017] (J&K – HC). The Ld. AR pointed out that in this judgment the issue is even more clearly set out in para 10 and the question of law has been answered in favour of the assessee following the Children’s Education Society case (supra).
The Ld. DR relied on the orders of the authorities below and stated that for all intents and purposes the society was maintaining consolidated accounts and the five Institutions were running under its auspices.
We have carefully considered the rival submissions and have gone through the documents before us. We find that this issue needs to be decided in favour of the assessee following the Children’s Education Society case (supra) and the Vivekanand Society of Education & Research case (supra), where the courts have unequivocally held that each constituent Institution of a Society should be examined for the purposes of ascertaining the amount specified u/s 10(23C)(iiiad) of the Act. In the light of this, it deserves to be held that the assessee deserves to be considered for exemption u/s 10(23C)(iiiad) of the Act.
In the result, appeal of the assessee is allowed.