Appeal Granted: Educational Institution's Delay Condoned, Income Exemption Upheld u/s 10(23C)(iiiad.

The appeal was allowed, condoning a 238-day delay due to valid reasons provided by the educational institution. The assessee's income was initially assessed at Rs. 94,73,763 without exemptions under sections 11/12. However, the institution was granted exemption under section 10(23C)(iiiad) as its gross receipts were under Rs. 1 crore. The belated audit report filing did not affect this exemption. The order by the Assessing Officer was deemed arbitrary, but the exemption rendered other grounds moot. The decision was pronounced on 29/02/2024.

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Issues involved:
The appeal involves delay in filing, addition of income, disallowance of expenses, exemption under sections 10(23C)(iiiad) and 12A, and arbitrariness in the order.

Delay in filing appeal:
The appeal was delayed by 238 days, but the assessee, an educational institution, provided valid reasons for the delay. The institution, not familiar with tax deadlines, failed to promptly hand over the appeal order to their Chartered Accountant. Affidavits from the Treasurer and Principal confirmed this. The delay was condoned, and the appeal was admitted for adjudication.

Addition of income and disallowance of expenses:
The assessee, a Society running a school, had filed its return declaring total income as NIL. The CPC assessed the income at Rs. 94,73,763 without granting exemptions under sections 11/12 of the Act. The CPC denied the deduction towards application of income for charitable purposes as the audit report in Form 10B was not furnished with the return. However, the expenses claimed by the assessee were for charitable purposes, and the gross receipts were spent more than 85% towards charitable purposes. The assessee was eligible for exemption under section 10(23C)(iiiad) as its gross receipts were less than Rs. 1 crore. The belated filing of the audit report did not affect the eligibility for exemption under section 10(23C)(iiiad). The claim of exemption was allowed based on judicial precedents.

Arbitrariness in the order:
The order passed by the Assessing Officer was deemed arbitrary and against the provisions of law and facts of the case. However, since the assessee was entitled to exemption under section 10(23C)(iiiad), the other grounds raised by the assessee were not adjudicated upon.

Conclusion:
The appeal of the assessee was allowed based on the entitlement for exemption under section 10(23C)(iiiad). The relief granted under this ground rendered the other grounds raised moot. The decision was pronounced in the open court on 29/02/2024.

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