Smt. Ashrafi Devi Shiksha Samiti Vs ITO (ITAT Delhi)
ITAT Delhi held that exemption under section 10(23C)(iiiad) of the Income Tax Act granted on the basis of provisional registration under section 10(23C)(i) of the Income Tax Act even in absence of approval u/s. 12A. Accordingly, appeal of assessee allowed.
Facts- The appellant assessee, a Society registered under the Society Registered Act, 1860, running an educational institution. During the course of processing, AO show caused the assessee proposing adjustment/ addition of Rs.77,43,697/- on the reasoning that the assessee was not registered u/s. 12A of the Act; therefore, it could not claim any benefit u/s. 11 & 12 of the Act. In response, the assessee claimed exemption under section 10(23C)(iiiad) of the Act even it was not registered u/s. 12A of the Act. The AO(CPC) did not entertain the new claim u/s. 10(23C)(iiiad) of the Act while processing the said ITR. Consequentially, AO enhanced the income by Rs.77,43,697/-.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the issue before us is only that whether the adjustment of Rs.77,43,697/-, in absence of approval under section 12A and 10(23C)(i) rws 10(23C)(vi) of the Act can be done in the processing of ITR under section 143(1) of the Act. In principle, we are in agreement of the finding of the Ld. Addl/JCIT(A)-9, Mumbai as the impugned order is well reasoned. But the anomaly has arisen after the approval vide order dated 08.07.2024 under section 10(23C)(i) rws 10(23C)(vi) of the Act for the relevant year as the assessee entire income having derived from the educational institution is fully exempted even after the said adjustment of Rs.77,43,697/- as the tax cannot be levied on the exempted income. In such facts and circumstances, we have no option except to restore the matter back to the AO to give effect to the order passed under section 10(23C)(i) rws 10(23C)(vi) of the Act for relevant year as the assessee is entitled for claiming exemption under section 10(23C) of the Act. We, therefore, direct the AO to allow the benefit of section 10(23C) of the Act and allow consequential relief to the assessee.
