Institute Management Committee of Government ITI Peth Vs ITO (ITAT Pune)
ITAT Pune held that the assessee institute is substantially funded by the Central Government and hence the assessee institute would be entitled to exemption by virtue of provisions of section 10(23C)(iiiab) of the Income Tax Act.
Facts- The assessee is an Educational Institution namely Institute Management Committee Government Industrial Training Institute, Peth, Nashik. It is funded by the Central Government, Ministry of Labour and Employment. Accordingly, assessee claimed exemption u/s.10(23) (iiiab) of the Income Tax Act. However, the CPC vide its Intimation order dated 11.07.2023 passed u/s.143(1)(a) of the Act denied the exemption u/s.10(23C)(iiiab) on the ground that the assessee institution is not substantially financed by the Government and therefore not eligible for the exemption claimed by it.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held that ostensibly the assessee received grant of Rs.2.50 crore during the period 2008-09 to 2011-12 and the said Grant received by the institute from the Central Government was utilized making Fixed Deposit. So far as the gross receipts during the year is concerned, out of total gross receipts of Rs.26,13,473/- the institute has received Rs.19,32,473/- on account of Interest from Fixed Deposit made from Govt. Grant and Saving Bank Account and the same accounts for more than 50% of Grant receipts during the year. These facts reveal that the assessee institute is substantially funded by the Central Government and the assessee would be entitled to exemption by virtue of provisions of section 10(23C)(iiiab) of the Act.
