ST. Marks School Society Vs DCIT (CPC) (ITAT Agra)
In this case involving an educational society running St. Marks College/School, the appeal was filed against the order of the Commissioner of Income-tax (Appeals)/NFAC for Assessment Year 2018-19. The assessee society, registered under the Societies Registration Act since 1949, had filed its return in Form ITR-7 on 15.10.2018 declaring nil income after claiming exemption under Section 10(23C)(vi) of the Income Tax Act. While processing the return under Section 143(1), the Centralized Processing Centre disallowed the exemption claim and assessed the entire gross receipts of ₹2.09 crore as taxable income. The assessee challenged the adjustment, contending that CPC had no jurisdiction under Section 143(1) to deny exemption involving factual examination.
The CIT(A) partly allowed the appeal and directed recomputation of income after allowing expenditure incurred for earning the receipts of the educational institution. However, the CIT(A) denied exemption under Section 10(23C)(iiiad) on the ground that receipts exceeded ₹1 crore, even though the assessee had claimed exemption only under Section 10(23C)(vi). The assessee appealed before the Tribunal, and the earlier appeal was dismissed ex parte on 24.06.2025.
Separately, the Commissioner of Income Tax (Exemptions), Lucknow had rejected the assessee’s application for approval under Section 10(23C)(vi) on 30.09.2019. The Tribunal, in a separate proceeding dated 17.03.2020, held that the assessee society was entitled to recognition under Section 10(23C)(vi). Subsequently, the CIT(Exemptions) issued an order on 29.11.2023 granting registration but incorrectly stating that Sections 11 and 12 would apply from Assessment Year 2019-20. The assessee again approached the Tribunal, which on 13.02.2025 held that the CIT(E) had no jurisdiction to alter the statutory provision applicable to the assessee and concluded that approval under Section 10(23C)(vi) was available for Assessment Year 2018-19.
