MRPL Education Trust Vs CIT (ITAT Bangalore)
Bangalore ITAT: Unregistered Educational Trust Assessed as AOP Entitled to Set-Off of Brought Forward Losses
The Bangalore ITAT held that an educational trust, though not registered under section 12A or eligible for exemption under section 10(23C), is entitled to carry forward and set off brought forward excess expenditure if it is assessed as an Association of Persons (AOP). The Tribunal observed that once the Revenue assesses the trust in the status of an AOP, it cannot deny the statutory benefits available to an AOP under the Income-tax Act merely because the trust lacks registration under section 12A or section 10(23C).
In the present case, the assessee’s claim for exemption under section 10(23C)(iiiad) was denied as its annual receipts exceeded the prescribed limit and it was not substantially financed by the Government. The PCIT, in proceedings under section 263, also disallowed the set-off of brought forward excess expenditure. Reversing this view, the Tribunal held that the assessee, having been assessed as an AOP, was entitled to the benefit of the provisions relating to carry forward and set-off of losses under section 72, subject to satisfaction of the statutory conditions. The Assessing Officer was accordingly directed to allow the claim if it otherwise complied with section 72.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
