Tribunal allows appeals challenging tax exemptions, remands for fresh decisions under Income-tax Act.

The Tribunal allowed both appeals for statistical purposes and remanded the matters to the respective authorities for fresh decisions based on the specific criteria outlined in the Income-tax Act. The denial of exemption under section 10(23C)(iiiab) was challenged on grounds that the educational institution was separate from the profitable hotel business. The denial of registration under section 12A was based on findings related to the hotel business. Both appeals were remanded for fresh decisions in accordance with the law.

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Issues:
1. Denial of exemption u/s 10(23C)(iiiab) of the Income-tax Act, 1961.
2. Denial of registration to the assessee society u/s 12A of the Act.

Issue 1: Denial of exemption u/s 10(23C)(iiiab) of the Income-tax Act, 1961:

The appeal was against the denial of exemption claimed under section 10(23C)(iiiab) of the Income-tax Act, 1961. The Assessing Officer observed that the educational institution must be solely for education without any profit motive to claim the exemption. The CIT(A) upheld this decision and added that the institution must be substantially financed by the Government. The appellant argued that the educational institute was separate from the profitable hotel business, and exemption should be granted. The Tribunal found that the lower authorities did not examine whether the institution was run solely for educational purposes and substantially financed by the Government. The matter was remanded to the Assessing Officer for a fresh decision based on these criteria.

Issue 2: Denial of registration to the assessee society u/s 12A of the Act:

The appeal challenged the denial of registration to the assessee society under section 12A of the Act. Both parties agreed that this denial was based on the Assessing Officer's findings regarding the hotel business run alongside the educational institute. As the matter related to the same issues as the first appeal, it was decided to remand this appeal to the CIT(E) for a fresh decision in accordance with the law.

In conclusion, the Tribunal allowed both appeals for statistical purposes and remanded the matters to the respective authorities for fresh decisions based on the specific criteria outlined in the Income-tax Act.

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