TaxTMI 
TaxTMI 
2022 (12) TMI 23
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.... its return of income claiming exemption under section 10(23C)(iiiab) of the Act. 2.1 During the course of assessment proceedings, the AO observed that as per the assessee's society audit report right from A.Y. 2008-09 to 2013-14, it has not received any money from the Government except for A.Y. 2006-07 where Rs. 50 lacs has been received and in A.Y 2007-08 where Rs. 1 Crore has been received. It was accordingly observed by the AO that the assessee society is not being wholly or substantially financed by the Government, being one of the essential conditions for claiming exemption under section 10(23C)(iiiab) of the Act and a show cause was issued to the assessee society as to why the exemption so claimed should not be denied to the assessee society for the year under consideration. 2.2 In response the assessee society submitted that it has been established by the Government of Punjab with the objective of imparting technical education both under degree and certificate level courses as literary, scientific and charitable institution without any profit motive. The assessee society works under the control of the Government of Punjab and is 100% financed by the Government of Punj....
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....for A.Y. 2013-14, the total receipt of the assessee society were Rs. 8,29,90,727/- and total expenditure was Rs. 6,23,87,823/- resulting in excess of income over expenditure of Rs. 2,06,02,904/-. It was accordingly held by the AO that the assessee society is not eligible for exemption under section 10(23C)(iiiab) of the Act and excess of income over expenditure amounting to Rs. 2,06,02,804/- was brought to tax. 3. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) and reiterated the submissions made before the AO. It was further submitted that the matter is squarely covered by the decision of Coordinate Bench in assessee's own case for A.Y. 2006-07 to 2012-13 (in ITA Nos 1391 to 1397/Chd/2017 dt. 17/01/2018). The submission so filed by the assessee society were considered but not found acceptable to the Ld. CIT(A) and the relevant findings of the Ld. CIT(A) which are under challenge before us reads as under: "As per the facts mentioned by the AO in the assessment order, the total receipts of the society for the year under consideration were Rs. 8,29,90,727/-but not a single rupee has been received from the Government during this year. In vi....
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....he exercise of control over the finance and audit by the C & AG is also not very relevant for the purpose of exemption u/s 10(23C)(iiiab) which prescribes that the institution should be wholly or substantially Financed by the Government which is not the fact in the case at hand where as per the facts mentioned in the assessment order, no finances has been received by the assessee during the year from the Government. Thus, it may be true that the assessee is an 'institution existing solely for the educational purposes and not for the purpose of profit' but it had failed to show that it was wholly or substantially financed by the Government during the year. Out of total receipts, the Government grant were nil and hence the condition of Rule 2BBB are not fulfilled by the assessee during the Financial Year 2012-13 relevant to Assessment Year 2013-14. Hence, the AO was right in disallowing the claim of exemption for the year under consideration keeping in view the nature of receipts for the year under consideration." 4. Against the said order and findings of the Ld. CIT(A) the assessee society is now in appeal before us. 5. During the course of hearing, the Ld. AR reiterat....
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....year to year basis and is in the -nature of grant to the institutional society. The fees structure and courses of the institution are prescribed by Government of Punjab, reviewed on annual basis as decided by the Committee of the Department of Technical Education and Industrial Training Punjab and Chandigarh. The revenue generated by Institute belongs to the Consolidated fund of the Government and the same has been permitted to be retained by the institution for achieving the objectives of the Society as yearly grant will stop the annual budget of the institute is passed everyday by the Department of Technical Education and Industrial Training through its meeting of the Finance Committee. Further, the accounts of the institution are subjected to audit by the office of the Controller and Auditor General, Punjab." From the perusal of the above it is not in dispute that the assessee fulfils the twin conditions of a) university or other educational institution existing solely for the educational purposes and not for purposes of profit, and b)which is wholly or substantially financed by the government. as stipulated under se....
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....laiming exemption under section 10(23C)(iiiab) of the Act. For A.Y 2006- 07 to A.Y 2012-13, the Coordinate Bench has held that the assessee is wholly funded by the Government and is eligible for exemption under section 10(23C)(iiiab) of the Act. Nothing has been brought on record in terms of whether the Revenue has challenged the said order of the Coordinate Bench or the order so passed has been upset by the Courts. Therefore, as on date, the order of the Coordinate Bench stands and continues to hold the field. 10. We find that the ld CIT(A) has referred to the order of the Coordinate Bench and has held that the condition as to whether the assessee is wholly or substantially financed by the Government is a question of fact which has to be ascertained and examined for each year and receipts for A.Y 2013-14 was never a subject matter of adjudication by the Tribunal and for the year under consideration, it has not been specified as to what extent and what amount was considered as Government Finance out of total receipts of Rs 8,29,90,727/-. During the course of hearing, the ld AR has submitted that both the lower authorities have failed to appreciate that the contents of the said l....