School exemption eligibility and gross receipts assessment required reconsideration under section 10(23C)(iiid) and the basic exemption limit.

An assessee running a school claimed exemption under section 11 despite not being registered under section 12AA. The record indicated that its gross receipts were below the threshold for exemption under section 10(23C)(iiid), yet the assessment taxed the gross receipts without accounting for the resulting loss or the basic exemption limit. The matter was remitted to the Assessing Officer to examine eligibility under section 10(23C)(iiid) and pass a fresh order in accordance with law.

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Issues: Whether the assessee, which was not registered under section 12AA, was entitled to exemption and whether the assessment of tax on gross receipts without considering the basic exemption limit required reconsideration.

Analysis: The return had been filed claiming exemption under section 11, but the assessee was not registered under section 12AA. The record also showed that the assessee was running a school and its gross receipts were below the monetary threshold prescribed for exemption under section 10(23C)(iiid). The assessment had proceeded by taxing the gross receipts without considering the resulting loss and without applying the basic exemption limit.

Conclusion: The issue was remitted to the Assessing Officer to examine the assessee's eligibility under section 10(23C)(iiid) and to pass a fresh order in accordance with law.

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