Lower-threshold education exemption available where gross receipts stay below the prescribed limit, despite dispute over the primary claim.

An educational society running a school was discussed in the context of exemption under section 10(23C) of the Income-tax Act, 1961. Although exemption had been claimed under section 10(23C)(vi), the admitted gross receipts were below the prescribed threshold relevant to section 10(23C)(iiiad). On those figures, the lower-threshold exemption was available, and the rectification addition was not sustainable to that extent. The alternative exemption claim was accordingly accepted, and the assessee obtained relief from the addition made in rectification proceedings.

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Issues: Whether the assessee was entitled to exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961, where exemption claimed under section 10(23C)(vi) was disputed and the gross receipts were below the prescribed limit.

Analysis: The assessee was an educational society running a school. The return had been filed claiming exemption under section 10(23C)(vi), but the record showed gross receipts of Rs. 2,74,05,110, which were below the statutory limit of Rs. 5 crore relevant for the alternative exemption category. On that factual basis, the assessee satisfied the conditions for exemption under section 10(23C)(iiiad). Since the alternative claim was legally available on the admitted figures, the addition made in rectification was not sustainable to that extent.

Conclusion: The assessee was held entitled to exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961, and the alternative plea was accepted in favour of the assessee.

Final Conclusion: The appeal succeeded on the alternative exemption claim, and the assessee obtained relief from the addition made in the rectification proceedings.

Ratio Decidendi: An educational institution whose gross receipts are below the prescribed monetary limit can validly claim exemption under the applicable lower-threshold clause even if the primary exemption claim is disputed.

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