Khandra Primary Institution Vs ITO (ITAT Kolkata)
Kolkata ITAT: Section 12A Registration Not Required for Section 10(23C)(iiiad) Exemption; ITR Mandatory Only When Pre-Exemption Income Exceeds Basic Limit
Summary: The Kolkata Bench of the Income Tax Appellate Tribunal partly allowed the appeal of Khandra Primary Institution for Assessment Year 2017-18. The Assessing Officer had assessed income of ₹9,81,050 under section 144 of the Income-tax Act, 1961 after the assessee did not file its return, treating gross receipts as ₹53,31,981 and expenditure as ₹43,50,927 and denying exemption under section 10(23C)(iiiad), inter alia, on the basis that the assessee was not registered under section 12A and had not furnished the return under section 139(4C). The Tribunal held that registration under section 12A was not required for claiming exemption under section 10(23C)(iiiad). It further observed that section 139(4C)(e) required filing of return where the total income, without giving effect to section 10, exceeded the maximum amount not chargeable to income tax; according to the assessee’s shown negative income, that threshold was not exceeded even without claiming the exemption. However, the Tribunal found that the treatment of ₹20,74,500 shown under the head “development fund” and narrated as “development fees” required verification, as the relevant details had not been furnished. It therefore set aside the order of the Addl./JCIT(A) and remanded the matter to the Assessing Officer to consider the profit and loss account and provisions of section 10(23C), with the assessee directed to furnish evidence supporting its claim that the development fee was not includible in gross receipts and that section 10(23C)(iiiad) applied. The Assessing Officer was thereafter directed to grant the exemption if, on the facts and evidence furnished, the claim was allowable. The appeal was accordingly partly allowed for statistical purposes.
