Substantial Government financing under section 10(23C)(iiiab) is...

Substantial Government financing under section 10(23C)(iiiab) is tested with reference to Government grants received during the relevant previous year, as prescribed by the Explanation and Rule 2BBB, and not by cumulative grants from earlier years. The provision requires those grants to exceed 50% of total receipts, including voluntary contributions, for that year. Because the assessee's Government grants fell below that threshold in each relevant year, the statutory condition for exemption was not met. The educational-purpose condition was not in dispute, but exemption was still denied and the denial was upheld.

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