Brief Facts of the Case and Question of Law :
Brief Facts
The assesse is engaged in providing educational services through its two institutes viz, Junior High School and Senior Secondary School. The annual receipts from both are as follows:
| 1. Junior High School | 46,12,186/ |
| 2. Senior Secondary School | 83,24,055/- |
| Total | 1,29,36,241/- |
The assesse claimed tax exemption of its income u/s 10(23C)(iiiad) as the gross annual income did not exceed Rs. 1 crore for both its schools. He submitted both these schools are separate institutions as separate permissions were available on record for both the schools.
However the AO denied this exemption as according to him the gross annual income of both the schools clubbed together exceeded Rs. 1 crore. The income should be clubbed together as both the schools were operating in the same premises.
The assesse appealed to CIT against the AO’s order and CIT dismissed AO’s order. Hence the revenue department appealed to ITAT.
Question of Law
Whether for the purpose of claiming exemption under section 10(23C)(iiiad), aggregate annual receipts should be considered or individual annual receipts should be considered.
Contention of the Assessee
The assessee contended that turnover of each institution should to be taken separately and not aggregate of all the institutions. The assessee also referred the judgment in the case of CIT v. Children Education Society reported in (2014) 264 CTR (Kar.) 389 where Hon’ble court concluded, aggregate annual receipts of other educational institutions referred to in section 10(23C) (iiiad) means total annual receipts of each educational institutions and not the aggregate of the annual receipts of all the educational institutions run by the assessee’s society put together”.
The assessee submitted that he was running two schools, namely M/s Chironji Lal Virendra Pal Saraswati Vidya Mandir Junior High School and M/s Chironji Lal Virendra Pal Saraswati Vidya Mandir Inter College, and gross receipts of each institution is less than one crore. The assessee also cited the following case laws on the same ground:
