Educational institution wins appeal for exemption correction under section 154 after claiming wrong provision

ITAT Kolkata allowed the assessee's appeal regarding rectification under section 154. The educational institution had mistakenly claimed exemption under section 10(23C)(vi) instead of the correct provision 10(23C)(iiiab) in their return. The assessee had consistently claimed exemption under section 10(23C)(iiiab) in previous and subsequent years, which was allowed. Following precedent from ITAT Lucknow in Desh Bharti Public School Samiti case, the tribunal held this was a mistake apparent from record rectifiable under section 154. The CIT(A)'s finding was set aside, directing the AO to allow the claim under the correct provision.

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Issues:
The appeal is against the order of Ld. CIT(A), NFAC, Delhi regarding rectification order u/s. 143(1) of the Income-tax Act, 1961.

Delay Condonation:
The appeal was time-barred by 22 days due to the pandemic period excluded by the Hon'ble Supreme Court. The delay was condoned, and the case was adjudicated.

Grounds Raised by Assessee:
The grounds raised by the assessee included failure to comply with conditions precedent, misinterpretation of provisions of s. 154 of the Income Tax Act, and rejection of claim u/s. 10(23C)(iiiab) of the Act.

Brief Facts:
The assessee, a University, claimed exemption u/s. 10(23C)(vi) of the Act which was rejected. A rectification application was filed to correct the claim to u/s. 10(23C)(iiiab) which was also rejected.

Arguments:
The assessee claimed exemption u/s. 10(23C)(iiiab) consistently and sought rectification of the inadvertent mistake. The Rule of Consistency was emphasized, and reliance was placed on past assessment orders.

Decision:
The Tribunal found it was an inadvertent mistake and rectifiable under s. 154 of the Act. The claim under sec. 10(23C)(iiiab) should have been allowed, following a similar decision by the ITAT Lucknow. The Ld. AO was directed to allow the claim, and the appeal of the assessee was allowed.

Conclusion:
The Tribunal allowed the appeal of the assessee, setting aside the finding of the Ld. CIT(A) and directing the Ld. AO to allow the claim under section 10(23C)(iiiab) of the Act.

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