2012 (11) TMI 941 - AT - Income Tax

Exemption u/s10(23C)(iiiad) Held that - Assessee is carrying only the activity of education and training, even though other incidental objectives are mentioned in the trust deed. It is also not disputed that the assessee had been filing returns from assessment year 1991-92 onwards up to assessment year 2006- 07 and the claims made by the assessee u/s 10(23C)(iiiad) had been accepted by the department for assessment year 1996-97 u/s 143(3) of the Act. when the assessee has been granted exemption u/s 10(22) with the same objectives, the assessee has to be granted exemption u/s 10(23C)(iiiad) if the annual receipt is within the limit prescribed. further,if the assessee meets the requirement of imparting education which can be training of any nature and if only such activity is carried on, the institution should be held eligible for deduction u/s 10(23C)(iiiad) of the Act there is no infirmity in the order of the first appellate authority in granting exemption u/s 10(23C)(iiiad) of the Act and same is confirmed. Disallowance u/s 11(1)(a) - Application of Income outside India Held that - issue is only academic not dealing with the same as already granted exemption u/s 10(23C)(iiiad) of the Act - In the result, the revenue s appeal is dismissed.

Summary

Issues:
1. Eligibility for exemption u/s 10(23C)(iiiad) of the Income-tax Act, 1961.
2. Disallowance made by the AO u/s 11(1)(a) on account of application of income outside India.

Eligibility for Exemption u/s 10(23C)(iiiad):
The appeal concerned the eligibility for exemption u/s 10(23C)(iiiad) of the Income-tax Act, 1961. The appellant, a trust focusing on rural banking training, claimed exemption based on its educational activities. The AO disallowed the exemption, contending that the trust had multiple objectives beyond education. Upon appeal, the CIT(A) allowed the exemption, emphasizing that the trust primarily engaged in educational activities. The CIT(A) referenced legal precedents to support the decision. The revenue appealed, arguing that the trust must be affiliated or registered to qualify as an educational institution. The AR countered, highlighting the trust's training activities and citing relevant case law. The ITAT observed that the trust's educational focus warranted exemption, noting prior acceptance of claims and legal precedents. The ITAT upheld the CIT(A)'s decision, emphasizing the trust's educational nature and adherence to exemption criteria.

Disallowance u/s 11(1)(a) - Application of Income Outside India:
The second issue pertained to the disallowance made by the AO u/s 11(1)(a) concerning the application of income outside India. However, the ITAT deemed this issue academic since exemption u/s 10(23C)(iiiad) had been granted. Consequently, the ITAT dismissed the revenue's appeal, as the primary matter of exemption eligibility had been resolved in favor of the appellant trust.

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