Case Law Details
Society For Dental Health Vs ITO (ITAT Ahmedabad)
On perusal of the findings of the Ld. CIT(E) and the contentions of the assessee, we find that while assessee had included endowment funds grants received from the Government in its total receipts to demonstrate that it was substantially financed by the Government, Ld. CIT(E) has excluded the endowment grants while calculating the percentage of Government financing and while doing so has given no reasons for excluding the same. There is therefore, we find no basis given by the Ld. CIT(E) for rejecting the claim of the assessee that it was entitled alternatively to claim its income as exempt u/s.10(23C)(iiiab) of the Act.
The Ld. CIT(E), we find has rejected this contention of the assessee by stating that the assessees claim of utilization of its income in capital asssets tantamounts to revising its return and therefore the contention is not acceptable. We are not in agreement with the same. The assesse’s claim of exemption of its entire income has remained unchanged and unrevised. What has only changed is the basis of the claim that too without foregoing its original basis and as an alternate only and that too when confronted with the prospect of being denied exemption of 15% of Govt. grants as originally claimed. The same does not tantamount to revising its return by any chance. Also if the alternate basis of claim of the assessee was as per law the assessment order could not be held erroneous in allowing benefit of exemption u/s 11 to the assessee. Without any finding to the contrary the Ld.CIT(E) we hold had erred in finding the assessment order erroneous on this count.
In view of the above, it is abundantly clear that there was no basis with the Ld. CIT(E) at all for arrive at his finding that the assessment order passed in the present case was in error by allowing the assessee exemption of 15% of its income from Government grants. We therefore hold that the Ld.CIT(E) has failed to find any error causing prejudice to the Revenue in the present case. The order passed by the Ld. CIT(E) u/s. 263 of the Act is therefore not sustainable in law and is accordingly set aside.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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