Sathyam Educational & Charitable Trust Vs ITO (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT), Chennai, considered two appeals filed by the assessee trust for Assessment Years 2014–15 and 2015–16 against orders of the Commissioner of Income Tax (Appeals), NFAC. Since the issues in both appeals were identical, they were disposed of through a consolidated order.
The primary issue was denial of exemption under Section 10(23C)(iiiad) of the Income Tax Act on the ground that the assessee’s gross receipts exceeded ₹1 crore. The Assessing Officer (AO) included corpus donations along with regular receipts such as school fees and other income to compute total receipts, thereby exceeding the prescribed threshold and denying exemption. The AO also rejected the assessee’s rectification application under Section 154, stating that there was no mistake apparent on record and that the assessee was not registered under Section 12AA during the relevant years.
The CIT(A) upheld the AO’s decision, concluding that there was no infirmity in the assessment and rejecting the assessee’s arguments.
Before the Tribunal, the assessee contended that corpus donations received with specific directions for infrastructure development are capital receipts and should not be included in “annual receipts” for the purpose of Section 10(23C)(iiiad). It was argued that only recurring receipts such as fees and other income should be considered, which were below ₹1 crore. The assessee also relied on judicial precedents supporting exclusion of corpus donations from annual receipts.
