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TMI Blog2013 (8) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant is not entitled to exemption u/s 10(23C)(iiiab) or even u/s 10(23C)(iiiad) in respect of the society and some of its institutions. 2. On facts and in law, the Ld CIT(A) has erred in overlooking and ignoring the decision of Hon'ble ITAT Delhi in this case of assessment year 2003-04 & 2004-05 though it was produced before him and he has referred to it in para 6.2. of the appeal order. 3. On facts and in law, the Ld Assessing Officer has erred in holding that the appellant society cannot be allowed benefit of exemption u/s 10(23C)(iiiab) or even 10(23C)(iiiad) and the surplus in its hands is taxable. 4. On facts and in law, the Ld CIT(A) has erred in evolving a principle that for obtaining exemption u/s 10(23C) (iiiab), an institution must receive at least 60% of its total receipts as grant from the Govt. Though it was explained that the grant received varies from year to year depending upon the total receipts and deficit etc. 5. On facts and in law, the order of Ld CIT(A) has been passed in violation of provisions of law and also in defiance of the decision of Hon'ble jurisdictional ITAT and is hence arbitrary and incorrect. 6. On facts and in law the Ld CIT(A) has failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed the income of society at Rs.14,44,023/- consisting of net surplus of the three institutions and in respect of assessment year 2007-08, the total income was assessed at Rs.93,25,443/- consisting of incomes of two institutions namely Jat Education Society and All India Jat College, Rohtak. The Assessing Officer in respect of assessment year 2006-07 held that since three institutions were not financed and aided by the Govt. and therefore such institutions were not entitled for exemption u/s 10(23C)(iiiab). As regards assessment year 2007-08 is concerned, it was held that in case of All India Jat Hero Memorial College the gross receipts were Rs.6.13 crores which included grants received amounting to Rs.2.81 crores and since grants received were 45.94% of gross aggregate receipts, therefore, exemption under the above section was denied as being not substantial being less than 60%. . With respect to Jat Education Society, it was held that since the same was not registered u/s 12AA of the Act, it was not entitled to exemption u/s 11 of the Act. 4. Dissatisfied with the order, the assessee went in for appeal before Ld CIT(A). The Ld CIT(A) upheld the addition made by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.21,50,799/- in respect of Jat Education Society and it was pleaded that since the receipts were less than Rs. 1 crore, the addition made by the Assessing Officer and upheld by the Ld CIT(A) was not justified. In respect of other additions of All India Jat Heroes Memorial College, the assessee again submitted that percentage of grant in aid was 45% and keeping in view the Hon'ble Karnataka High Court judgment, this percentage was eligible to be considered substantially financed by the Govt. and deserved to be exempt u/s 10(23C)(iiiab) of the Act. 7. The Ld DR, on the other hand, relied upon the order of Ld CIT(A) and argued that no registration was there u/s 12AA of the Act. Therefore, the assessee was not eligible for exemption under the above sections. With respect to Hon'ble Karnataka High Court judgment, it was submitted that Department had not accepted the order of Court and has filed appeal against the order in Supreme Court. 8. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that there are two issues which need to be adjudicated in these cases. The first issue to be decided by us is as to whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions together, it was held by the Assessing Officer that exempted is not available to the assessee with regard to these three institutions because the assessee has not obtained the statutory approval of CCIT as required u/s 10(23C)(vi) of the Act. Now, the question is as to whether these institutions are covered by sub clause (iiiad) of clause 23C of section 10. As per the same, any income received by any person on behalf of any university or other educational institution existing wholly for educational purposes and not for purposes of profit if the aggregate annual receipt of such university or educational institution do not exceed the amount of annual receipt as may be prescribed is exempt. The amount of RS.l crore has been prescribed as per Rule 2(BC). As per the provisions of this sub clause (iiiad) of clause 23C of section 10, we are of the considered opinion that the term "aggregate annual receipts" of each educational institution is relevant and if any assessee is having more than one educational institution then the aggregate annual receipt of each of such educational institution has to be considered separately because this sub clause (iiiad) of clause 23C of section 10 doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10 because aggregate income of each of these institutions in each of these two years is below Rs.1 crore. The requirement of approval of CClT under sub clause (vi) of clause (23C) of section 10 is for those who are not covered by sub clauses (iiiab) or (iiiad) of clause (23C) of section 10. Since, these three institutions are covered by clause (iiiad), clause (vi) is not applicable. We, therefore, hold that income of these three institutions is also exempt." [Emphasis supplied] Therefore, following the above, we also hold that receipt of individual institution are to be considered for the purpose of applying the provisions of section 10(23C)(iiad). The second issue to be adjudicated by us is as to whether the institution/society received substantial Govt. aids to be eligible for exemption u/s 10(23C)(iiiab). This aspect has been considered by the Hon'ble Karnataka High Court in I.T.A. No.1133 of 2008 wherein it was held in para 6 & 7 as under:- "6. In the judgment relied on by the Commissioner of Income Tax Appeal, the institution was getting Government Aid to the extent of 78.5%. Therefore, the High Court held, the Government Grant is of substantial matter and that order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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