Appeal allowed for educational society, exempt under section 10(23)(iiiad) for AYs 2013-14 & 2014-15

The ITAT allowed the educational society's appeal, granting exemption under section 10(23)(iiiad) for AYs 2013-14 and 2014-15. The ITAT concluded that the society, despite having multiple objectives, operated solely for educational purposes during the relevant assessment years, with gross receipts below the exemption threshold. This decision overturned the AO's assessment treating the income as taxable and the CIT(A)'s dismissal of the appeal based on the society's multifarious objectives.

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Issues:
- Assessment of taxable income under section 144 of the Income-tax Act, 1961 for AYs 2013-14 & 2014-15
- Claim of exemption u/s 10(23C)(iii) by an educational society
- Dismissal of appeal by CIT(A) based on multifarious objectives of the society
- Appeal before ITAT challenging CIT(A)'s order

Assessment of Taxable Income:
The case involved an educational society that filed its return of income for AY 2013-14, claiming exemption u/s 10(23) of the Act. The Assessing Officer (AO) completed the assessment u/s 144, treating the income as taxable despite the society's claim for exemption. The society then appealed to the CIT(A), who dismissed the appeal, citing the multifarious objectives of the society as per the Memorandum of Association. The CIT(A) upheld the AO's decision to tax the income. The society further appealed to the ITAT, challenging the CIT(A)'s order.

Claim of Exemption u/s 10(23C)(iii):
The society argued before the ITAT that it existed solely for educational purposes during the relevant assessment year, despite having multiple objectives in its Memorandum of Association. The society's income and expenses were solely related to educational activities, with gross receipts below the threshold for exemption. The ITAT referred to a decision by the Kerala High Court to support the society's claim that even with multiple objectives, if no other activities were pursued, the institution could be considered to exist solely for educational purposes. The ITAT concluded that the society was eligible for exemption u/s 10(23)(iiiad) for the relevant assessment year, overturning the AO's decision.

Dismissal of Appeal by CIT(A):
The CIT(A) dismissed the society's appeal based on the presence of multiple objectives in the Memorandum of Association, emphasizing that no amendment had been made to comply with conditions for exemption. The CIT(A) held that the society's various activities were equally important, and the claim for exemption was not acceptable. The CIT(A) also noted that the society had not obtained exemption u/s 12AA of the Act, confirming the AO's decision to tax the income.

ITAT's Decision:
The ITAT considered the society's activities during the relevant assessment year and found that it had solely engaged in educational activities, with gross receipts below the exemption threshold. Referring to a relevant decision by the Kerala High Court, the ITAT concluded that the society's eligibility for exemption was justified, as it existed solely for educational purposes during the assessment year. The ITAT allowed the society's appeal, deleting the addition made by the AO, and granted exemption u/s 10(23)(iiiad) for both AYs 2013-14 and 2014-15. The ITAT's decision aligned with the society's argument that despite having multiple objectives, it operated solely for educational purposes during the relevant assessment years.

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