Godavari Shikshan Prasarak Mandal Sindhi Vs CIT (Exemption) (Bombay High Court)
The Bombay High Court considered a writ petition challenging an order dated 11 July 2025 that required the petitioner, an educational institution/trust, to deposit 15% of the tax demand as a precondition for grant of stay pending disposal of its statutory appeal. The petitioner contended that the entire demand ought to have been stayed on two grounds: first, that it was an educational institution wholly funded by the State Government and thus eligible for exemption under Section 10(23C)(iiiab) of the Income Tax Act, 1961; and second, that even assuming exemption was unavailable, only “income” could be taxed and not gross receipts without deduction of expenditure.
The High Court noted that the petitioner was not registered under Section 12A and had not filled Schedule IE-3 applicable to assessees claiming exemption under Section 10(23C)(iiiab). While these factual aspects were correctly recorded by the authority, the Court found that a crucial issue had been overlooked. The Assessing Officer had brought gross receipts to tax without considering the expenditure incurred by the petitioner. In the return for Assessment Year 2020–21, the petitioner had disclosed income of ₹1,83,33,150 and expenditure of ₹1,84,34,140. Before bringing any amount to tax, the authorities were required to consider the expenditure and determine taxable income, which had not been done.
