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of <h1>ITAT upholds CIT(A) decision granting exemption under section 11 to assessee society</h1> <h3>Asst. Director of Income-tax (Exemption) – I, Hyderabad Versus Sri Chaitanya Educational Trust, Hyderabad</h3> Asst. Director of Income-tax (Exemption) – I, Hyderabad Versus Sri Chaitanya Educational Trust, Hyderabad - TMI Issues involved:Department's appeal against CIT(A)'s order regarding exemption under sections 10(23C) and 11 of the Income Tax Act for assessment years 2009-10 & 2010-11.Analysis:1. Issue 1: Eligibility for exemption under section 11 without approval under section 10(23C):The Department contested the CIT(A)'s decision allowing exemption under section 11 to the assessee society, even without approval under section 10(23C). The CIT(A) held that registration under section 12A sufficed for exemption under section 11, citing judicial precedents like CIT vs Bar Council of Maharastra and others. The ITAT concurred, emphasizing that fulfillment of conditions under sections 11 to 13 warranted exemption under section 11, irrespective of section 10(23C) approval. The ITAT also noted the CIT(A)'s directive for the Assessing Officer to verify if no additional charges beyond prescribed fees were collected for student admissions, in line with previous ITAT decisions.2. Issue 2: Denial of exemption based on educational institution status:The Assessing Officer denied exemption under section 11 to the assessee due to its status as an educational institution, insisting on approval under section 10(23C)(vi). However, the ITAT disagreed, citing established ITAT rulings that allowed exemption under section 11 even without section 10(23C)(vi) approval if all conditions were met. The ITAT upheld the CIT(A)'s order, highlighting that the Assessing Officer's stance was unfounded. Notably, the ITAT mentioned the Assessing Officer's grant of exemption under section 11 for the subsequent assessment year 2011-12, indicating consistency in treatment.3. Conclusion:The ITAT dismissed the Department's appeals, affirming the CIT(A)'s order granting exemption under section 11 to the assessee society for the relevant assessment years. The ITAT underscored the precedence of registration under section 12A for exemption under section 11 and emphasized adherence to prescribed conditions. The decision highlighted the importance of verifying compliance with fee regulations for student admissions to determine eligibility for exemption. The ITAT's ruling aligned with established judicial interpretations and upheld the principle that section 10(23C) approval was not a prerequisite for claiming exemption under section 11, provided all statutory conditions were satisfied.
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