TaxTMI 
TaxTMI 
2025 (2) TMI 281
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....facts and circumstances of the case; 2. The Ld.CIT(A) has erred in granting exemption u/s. 10(23C)(iiiac) of the Income Tax Act, 1961 to the assessee without appreciating the fact that the government grants received by the assessee during the financial year 2016-17 relevant to the assessment year 2017-18, had fallen short of the "stipulated" 50% of the total receipts and the assessee did not come under the purview of Section 10(23C)(iiiac) of the Income Tax Act, 1961; 3. The Ld.CIT(A) has erred in granting exemption u/s.10(23C)(iiiac) of the Income Tax Act, 1961 to the assessee without appreciating the fact that the assessee was not "wholly or substantially financed by the Government" within the meaning of Section 10(23C)(iiiac) of the ....
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.... of Section 10(23C)(iiiac) of the Income Tax Act read with Rule 2BBB of the Income Tax Rules, 1962 and was not eligible to claim exemption; 4. The Ld.CIT(A) has also erred in relying upon the decision of Hon'ble High Court of Karnataka in the case of CIT Vs. IIM, Bengaluru (2014) 49 taxmann.com 136. In the case relied upon, the issue was what does constitute 'wholly or substantially financed by Government? However, the issue involved in the present case is, what is the percentage of grants received by the government to the total receipts of the assessee and whether the assessee trust is eligible to claim exemption u/s. 10(23C)(iiiac) of the Income Tax Act, 1961? 5. The appellant craves leave to add, alter or amend all or any of ....
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....ied so long as the report is available before the completion of the assessment. On the above said findings, the Ld.CIT(A) had observed that the assessee is eligible for exemption u/s. 11 of the Act. Insofar as the disallowance u/s. 10(23C)(iiiac) of the Act is concerned, the Ld.CIT(A) considered the records and came to the conclusion that the grants by the Government exceeds more 50% as contemplated under the above section. The Ld.CIT(A) also relied on the Jurisdictional High Court judgment to allow the case of the assessee. 3. As against the said order of the Ld.CIT(A), the revenue is in appeals before this Tribunal. 4. At the time of argument, the Ld.DR submitted that the grant received by the assessee during the assessment year 2017-18....
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....ear, it will exceed the 50% prescribed u/s. 10(23C)(iiiac). Therefore we found that apart from the grants received during the assessment year, the assessee is also receiving interest income on the unspent grants which is also a grant and in that circumstances, the Ld.CIT(A) had granted the relief which is in accordance with law. The Ld.CIT(A) in his order in paragraph no. 4.1 had considered the said facts and also considered the fact that the assessee is an institute wholly and substantially managed by the Government of Karnataka and therefore they are entitled for deduction u/s. 10(23C)(iiiac) of the Act. The relevant finding of the Ld.CIT(A) is as follows: 4.1. The assessing officer did not proceed with verifications regarding exemption....
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....retaries to the various departments of Government of Karnataka as the Members. No members from the general public or non-government organisations are included in the governing council. Hence it is clear that the Institute is wholly and substantially managed by the Government of Karnataka. The appellant relied on the case of CIT Vs. IIM, Bengaluru' (2014) 49 Taxmann.com 136 (Karnataka) wherein the High Court of Karnataka held that the word "wholly or substantially financed by the Government cannot be confined only to the annual grants. Apart from providing annual grant, if the Government grants land, invests money in building and infrastructure and also running the Educational institutions all that has to be taken into consideration to d....