Case Law Details
ST Josephs FCC Province Thalassery Vs ITO (Kerala High Court)
Introduction: In a recent judgment, the Kerala High Court addressed an assessment order issued by the Income Tax Officer, Exemption Ward, Kannur. The case involves St. Joseph’s FCC Province Thalassery, the petitioner, who challenged the order dated 22.03.2023. The order by the Income Tax Officer determined the petitioner’s turnover for the Assessment Year 2016-17 to be Rs.1,02,85,571. The issue centered around whether the petitioner’s income qualified for an exemption under Section 10(23C)(iiiad) of the Income Tax Act, 1961.
1. Exemption Eligibility: Section 10(23C)(iiiad) of the Income Tax Act 1961 provided an exemption for income received by a person on behalf of any university or educational institution exclusively dedicated to educational purposes and not for profit. To qualify for this exemption, the aggregate annual receipts should not exceed Rs. 1 crore.
2. Inclusion of Previous Year’s Balance: The petitioner’s annual receipts were calculated by the Assessing Officer to be Rs.1,02,85,571. This calculation included a significant amount of Rs.9,45,475.96 from the previous year, which consisted of bank deposits and cash at hand. The petitioner argued that excluding this sum, which did not represent receipts for the current year, would bring their annual receipt for the Assessment Year 2016-17 below the Rs. 1 crore threshold.
3. Acknowledgment of Error: The counsel for the Revenue, Mr. Christopher Abraham, did not contest the fact that the amount of Rs.9,45,475.96 was erroneously included in the calculation. As a result, the Assessing Officer’s decision appeared to be incorrect due to a clear mistake in considering the previous year’s balance when computing the total receipt for the Assessment Year 2016-17.
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