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2022 (12) TMI 867 - AT - Income TaxExemption u/s 11 and 12 - Appellant is a separate and independent entity which is not registered u/s 10(23C) (iiiad) - HELD THAT - AR before us vehemently pleaded that up to AY 2014-15, it is a fact that assessee had erroneously treated itself as an independent entity and filed its returns. However, the assessee would still be entitled for exemption u/s 10(23C) (iiiab) and not u/s 10(23C)(iiiad) of the Act as the assessee is an educational institution wholly and substantially financed by Government. This is a fresh claim made by the assessee before us. Considering all we deem it fit and appropriate to remand this entire appeal to the file of the ld.AO for denovo adjudication in accordance with law. All the arguments of the assessee could be made before ld.AO in the set aside proceedings. The assessee is at liberty to furnish fresh evidences, if any, in support of all its exempts. Needless to mention that the assessee be given reasonable opportunity of being heard. AO is hereby directed to frame fresh assessment for the year under consideration in accordance with law by considering the aforesaid observations and the evidences filed by the assessee on record. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
Issues:
1. Delay in filing appeal by the assessee. 2. Assessment of income tax exemption under sections 10(23C)(iiiad), 11, and 12 of the Income Tax Act, 1961. 3. Classification of the assessee as a Body of Individuals (BOI) for tax purposes. 4. Validity of the assessee's independent status and filing of returns. Issue 1: Delay in filing appeal The appeal in ITA No. 4975/Mum/2019 for A.Y. 2014-15 was delayed by 2 days, and the assessee filed a petition for condonation of delay. The delay was condoned, and the appeal was admitted for adjudication. Issue 2: Assessment of income tax exemption The assessee, an educational institution under SNDT Women's University, claimed exemption under section 10(23C)(iiiad) of the Act. The Income Tax Officer treated the assessee as a BOI and denied the exemption. The CIT(A) upheld this assessment, stating that the exemption was not claimed by the assessee and that it was not entitled to exemptions under sections 11 and 12 as an independent entity. Issue 3: Classification as a Body of Individuals The AO treated the assessee as a BOI, separate from SNDT Women's University, rejecting the plea that the assessee was only a constituent of the university. The CIT(A) upheld this classification, leading to the taxation of the entire income of the assessee. Issue 4: Validity of independent status The affidavits filed by the Principal and Registrar of the assessee's college clarified that it is part of SNDT Women's University and does not have independent status. The PAN obtained independently was deemed erroneous, and the financial affairs were merged with the university from AY 2015-16 onwards. The Tribunal remanded the case to the AO for fresh assessment, allowing the assessee to make a fresh claim for exemption under section 10(23C)(iiiab) based on being wholly and substantially financed by the government. In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, remanding the case for fresh assessment to determine the eligibility for exemption under section 10(23C)(iiiab) and clarifying the incorrect independent status of the assessee as a constituent of SNDT Women's University.
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