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TMI Blog2018 (1) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... to the same entity and are distinct and different insofar as Section 10 (23C) (iiiad) of the said Act is concerned. Therefore, where there are more than one such institutions, which are under a particular society or trust, such as the assessee society in the present case, the aggregate annual receipts of each of the educational institutions would have to be considered separately and not together. As relying on M/S Children Education Society, (2013 (7) TMI 519 - KARNATAKA HIGH COURT) the aggregate annual receipts of other educational institutions means the total annual receipts of each educational institution, taken separately and not clubbed together. - Decided in favour of assessee - ITA No. 23/2014 & MP No. 01/2016 - - - Dated:- 29-12-2017 - MR. BADAR DURREZ AHMED, CHIEF JUSTICE MR SANJEEV KUMAR, JJ. Appearance: For the Appellant (s): Mr. Subhash C. Dutta, Advocate with Mr. D. S. Chauhan and Suraj Singh Wazir, Advocates. For the Respondent(s): Mrs. Aruna Thakur, Advocate. Badar Durrez Ahmed, CJ (Oral) 1. This appeal by the assessee, (Vivekanand Society of Education and Research, Kachi Chawani, Jammu), (hereinafter referred to as the assessee soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that the income in the hands of the society received on behalf of these institutions was to be included in the total income of the society and, consequently, after deducting the expenditures from the aggregate annual receipts, he arrived at the surplus figure of ₹ 69,27,948/- as income in the hands of the assessee society, which had been received by it on behalf of the said two institutions. The Assessing officer was of the view that since the sum total of the receipts of the two institutions clubbed together exceeds ₹ 1.00 crore, this income was not of the kind mentioned in Section 10 (23C) (iiiad) of the said Act and, therefore, was taxable in the computation of total income of the assessee society. 7. This view was, of course, rejected by the Commissioner of Income Tax (Appeals) when the assessee society appealed against the assessment order dated 31.12.2008. The CIT (A), by virtue of his order dated 26.04.2010 took the view that, the aggregate annual receipts of the two institutions cannot be clubbed together for the purposes of Section 10 (23C) (iiiad) of the said Act. He was of the view that if each of these institutions qualify in the sense that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- 2BC Amount of annual receipts for the purposes of sub-clauses (iiiad) and (iiiae) of clause (23C) of section 10 (1) For the purposes of sub-clause (iiiad) of clause (23C) of section 10, the amount of annual receipts on or after the 1st day of April, 1998, of any university or other educational institution, existing solely for educational purposes and not for purposes of profit, shall be one crore rupees. xxxx xxxx xxxx xxxx xxxx xxxx. 13. On a plain reading of the above provisions, it is evident that any income received by any person on behalf of any University or other educational institution existing solely for educational purposes and not for purposes of profit, if the aggregate annual receipts of such University or educational institution do not exceed the amount of aggregate receipts, as may be prescribed (which is ₹ 1 crore as per Rule 2BC of the said Rules), would not be included in the total income of that person. 14. It is not in issue that the person in the facts of the present case has reference to the assessee society. It is also not in issue that the expression educational institution has reference to the two institutions of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax v. M/S Children Education Society, (2013) 358 ITR 373 (Kar). In that decision, several questions had been framed. We are concerned with question nos. 2 and 3, which are as under:- 2. Whether, on the facts of the case, the Tribunal is correct in holding that the exemption in terms of provisions of Section 10(23C) (iiiad) of Income Tax Act, 1961, is available to the respondent- assessee as annual receipts of each of the institutions of the respondent- society is less than the prescribed limit under the said provision ? 3.Whether the Tribunal is correct in holding that the exemption in terms of Section 10(23C) (iiiad) of Income-Tax Act, 1961, is allowable ? 17. Those are the exact issues which arise in the present case also. The answer given to these questions is that the aggregate annual receipts of other educational institutions means the total annual receipts of each educational institution, taken separately and not clubbed together. Paragraph nos. 23, 24 and 25 of the said decision makes the position very clear:- 23. No doubt, education has become a business, a very profitable business also. But it requires huge investment. It is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine institution would be lost. Therefore, the word aggregate annual receipt has to be understood with the context in which it is used and the purpose for which the said provision was inserted, keeping in mind, the Scheme of the Act. Therefore, if an assesseee is running several educational institutions, if any of them is wholly or substantially financed by the Government, then the income from such educational institution received by the assesseee is not included while computing his total income. Similarly, income from each educational institution if they are not receiving any aid from the Government wholly or substantially in respect of which the aggregate annual receipt do not exceed ₹ 1 crore received by the assesseee, is also not included while computing annual total income of the assesseee. 25. Clause (vi) makes it clear that if educational institution do not fall under either of those two categories and still such educational institutions are also entitled to the exemption, provided such institutions are approved by the prescribed authority. Therefore all these three provisions apply under three differed spheres. Otherwise, there was no necessity for the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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