2017 (7) TMI 771

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....ion u/s 10 (23C) (iiiad) on hostel rent receipts ignoring undisputed facts like hostel is providing to other charitable educational institute for students, establishment of hostel for students is also object, receipt is utilized for charitable purposes etc. 2. The grievance of the assessee in this appeal relates to the denial of exemption u/s 10 (23C) (iiiad) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on the hostel rent receipt. 3. Facts of the case in brief are that the assessee is a society registered with the Registrar of Society Uttar Pradesh under Societies Registration Act. The assessee is running school named Vidhan Public School from nursery to class 10th and filed its return of income on 30.9.2013 declaring....

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....bmitted that as under: "This is to cite the following judgments for your goodself to elaborate the non taxability of postal receipts: According to section 10(23C)(iiiad), any university and other education institution existing solely for educational purposes and not for the purpose of profit if the aggregate annual receipts of such institution do not exceed the amount of annual receipts as 1 crore. Also the pronounced Calcutta High Court judgment citation ITA no. 38 of 2001 viz Directors of Income Tax (Exemption) versus Sahu Jain Trust held that to enable the trust to carry out its charitable object in effective manner if rental income was received by way of sub lettering for that reason, the exemption could not have been denied by ....

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....additional income of society and it cannot be considered to be part of annual receipts of the school. Therefore, in our considered opinion assessee was eligible for exemption u/s 10(23)(iiiad) as annual school receipts did not exceed One crore" 6. Respectfully following above judgment, I am of the considered opinion that rent receipts cannot be held to be the receipts eligible for exemption u/s 10(23C)(iiiad). The action of the AO therefore call for no interference. Ground of appeal nos. 2 & 3 are rejected." 6. Now, the assessee is in appeal. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that in the succeeding year and preceding year, the exemption u/s 10 (23C) (i....

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....ugh the material available on the record, in the present case, it appears that the learned CIT(A) while denying the exemption to the assessee followed the decision of ITAT in the case of Param Hans Swami Uma Bharti Mission vs. ACIT, Circle Rewari, Rewari (supra). In the said case, it is noted that the income was from other source on account of interest of FDR. However, in the present case, the assessee received the rent from an educational institute namely Krishna Institute of Education and Technology, it also appears that the decisions now relied by the assessee were not available to the authorities below because there is no discussion about those decisions either in the assessment order or in the impugned order of the learned CIT(A). Furt....