Case Law Details
Institute of Chemical Technology Vs National Faceless Assessment Centre(NFAC) (ITAT Mumbai)
ITAT Mumbai held that exemption under Section 10(23C) of the Income Tax Act is available to the payments received for consultancy services provided by university.
Facts- When the assessee was part of Mumbai University, the income earned by it formed part of income of the Mumbai University and was exempt under Section 10(23C) of the Act. For the A.Y.2013-14, the assessee filed its return of income u/s. 139 of the Act declaring ‘nil’ income after claiming exemption u/s. 11 of the Act.
It was submitted that, out of the total fee received from such projects, only 1/3rd is taken by the assessee and the balance amount is paid to the faculty who undertakes the research project. It was submitted that the activities undertaken by the assessee is not in the nature of business but only for research and training purpose and therefore is part of its main activity of imparting education on the latest technical development.
AO observed that, nowhere in the objects of the Institution the assessee is required to provide consultancy service. Further, he also observed, while making payment of consultancy fee, major companies have deducted tax under section 194C and 194J of the Act.
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