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Issues involved:
The judgment involves issues related to the addition to total income, denial of exemption u/s 10(23C)(vi) of the ITA, status determination of the appellant, and treatment of Capital Outlay Contribution as a Revenue Receipt. Additionally, the judgment addresses the eligibility of the appellant to claim exemption u/s 10(23C)(vi) based on the time elapsed from the date of application, and the set-off of past business losses before deciding the tax liability for a specific assessment year. Grounds raised by the assessee: The assessee challenged the first appellate order on various grounds, including the total addition to income, denial of exemption u/s 10(23C)(vi), status determination, and treatment of Capital Outlay Contribution. Additionally, the assessee raised additional grounds related to the time elapsed since the application for approval u/s 10(23C)(vi) and the set-off of past business losses for a particular assessment year. Adjudication of additional grounds: The Tribunal allowed the adjudication of the first additional ground raised by the assessee, which was deemed legal in nature and did not require consideration of fresh material outside the record. The Tribunal directed the parties to proceed with arguments on this additional ground. Eligibility for exemption u/s 10(23C)(vi): The appellant's eligibility for exemption u/s 10(23C)(vi) was contested based on the pending approval application before the Chief Commissioner of Income Tax. The appellant argued that the delay in approval should not affect its eligibility, emphasizing its bona fide educational activities. The appellant highlighted the timely submission of the application and the lack of fault in the approval process. Opposition to the appellant's submissions: The Department opposed the appellant's arguments, stating that the absence of approval justified treating the appellant as an A.O.P. The Department contended that the Tribunal could not question the Chief Commissioner's inaction on the exemption application under Section 253 of the Income Tax Act. Deemed approval of exemption application: The Tribunal considered the inaction of the Chief Commissioner on the exemption application and discussed the implications of such inaction. The Tribunal deliberated on whether the inaction could be deemed as approval after a reasonable time period, especially in the absence of a prescribed time limit before the relevant amendment. Decision and direction of the Tribunal: The Tribunal concluded that the appellant should be treated as enjoying approval of exemption u/s 10(23C) for the claimed period in its application, considering the reasonable time elapsed since the submission. The Tribunal set aside the orders of the authorities below and directed the Assessing Officer to frame the assessment afresh, granting the appellant the deemed approval for the relevant period. Result: The appeal was allowed for statistical purposes, with the Tribunal's decision pronounced in open court on 31st May 2011.
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