AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 632
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....he eye of law and on facts. 2. On the facts and circumstances of the case, learned CIT(A), ITD has erred both on facts and in law in confirming the order of the AO despite the fact that reopening the assessment under Section 147 of the Act and consequent reassessment without complying with the statutory conditions and the procedure prescribed under the law are bad and liable to be quashed 3. On the facts and circumstances of the case, learned CIT(A), ITD has erred both on facts and in law in confirming the order of the AO despite the fact neither there is any material available with the AO nor the same was supplied to the assessee on the basis of which he has formed the belief that the information received by him suggests that income chargeable to tax has escaped assessment. 4. On the facts and circumstances of the case, learned CIT(A), ITD has erred both on facts and in law in confirming the order of the AO despite the fact that notice under section 148 of the Act has been issued ignoring the first proviso to section 148 which provides that notice under section 148 shall not be issued unless there is "information" with the AO at the time of reopening whi....
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....ts and circumstances of the case, the learned CIT(A), ITD has erred both on facts and in law in confirming the above said action of the AO despite the fact that the appellant university exists solely for educational purposes and not for purpose of profit, and is wholly or substantially financed by the government, and nothing adverse has been pointed out by the AO or CIT(A) in this regard. 12. On the facts and circumstances of the case, the learned CIT(A), ITD has erred both on facts and in law in confirming the above said action of the AO ignoring the fact that the assessee has been granted exemption in subsequent year AY 2019-20 passed under section 147/144B of the Act dated 19.12.2023 and thus, the rule of consistency to be applied as there was no change of facts during the subsequent year." 3. Brief facts of the case:-In case of the assessee, specific information was flagged as per Risk Management Strategy formulated by the CBDT under clause (i) to explanation (1) to section 148 of the Income-tax Act 1961. As per the specific information, the assessee Chaudhary Charan Singh Haryana Agricultural University, PAN:AAAJC1002E had not filed its return of income for the A.Y....
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....s 10(23C)(iiiab) of the Act and therefore the exemption claimed u/s 10(23C)(iiiab) of the Act was not allowable. The AO, thereafter, disallowed the exemption of Rs. 25,47,64,090/- u/s10(23C)(iiiab)of the Act and assessed the total income at Rs. 25,47,64,090/-. 5. Aggrieved with the said order, the assessee filed an appeal before the ld. CIT(A). The Ld. CIT(A) while dealing with this issue as contested by the assessee in its third ground of appeal did not agree with the contention of the assessee and dismissed the appeal of the assessee by observing as under:- "5.3 3rd Ground of Appeal: That the A.O. failed to understand the status of composition of appellant which is a renowned state university formed for education purpose by an act of parliament notified in the gazette of India dated 02/04/1970 by ministry of Law as "The Haryana and Punjab agricultural university, 1970" The said university act was later on bifurcated between Haryana and Punjab states and the name of university in Haryana changed into Chaudhary Charan Singh Haryana Agriculture University, Hisar. It is herein submitted that the university was not formed for any profit motive except to impa....
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....been inserted by Finance Act, 2022 and further not applied to section 10(23C)(iiiab) of the Act and therefore the same was not applicable to the assessee. He further submitted that the AO and CIT(A) have wrongly denied the exemption u/s 10(23C)(iiiab) by wrongly interpreting the provisions of section 10(23C)(iiiab) and section 139(4C) of the Act. He further submitted that the provisions of section 139(4C)(e) of the Act, nowhere mentioned filing return of income u/s 139(1) of the Act as a condition for claiming exemption u/s 10(23C) (iiiab) of the Act. He further submitted that the ld. CIT(A) incorrectly interpreted the decision of the ITAT Bangalore in the case of M/s Kenchappa Samajika Shikshana vs Assistant Commissioner of Income Tax, in ITA No.1974/Bang/2018 and submitted that filing of the return in a case like of the assessee is only and administrative requirement and does not inherently affect the substantive right to the exemption u/s 10(23C) of the Act. It was further submitted by him that disallowing of exemption claimed u/s 10(23C)(iiiab) of the Act despite the fact that exemption in subsequent year i.e. AY 2019-20 has been grante....
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....e as per section 139 of the income Tax Act 1961 when the accounts are approved by Director, Chandigarh the time of return as per 139 has been expired. Now the university has filed its return of income in response to notice issued u/s 148 and claimed exemption u/s 10(23C) (iiiab) of income tax Act, 1961. • University was formed with the basic objective of : a) making provision for imparting education in different branches of study, particularly agricultural, animal sciences b) furthering the advancement of learning and prosecution of research, particularly in agriculture and other allied services c) undertaking the extension of such sciences to the rural people of the territories within which the University is required by this Act to function d) such other expenses as the appropriate Government may, by notification in Official Gazette 5. However, Ld. AO made disallowance of exemption claimed u/s 10(23) iiiab) of the IT Act amounting to Rs 25,74,64,090/- holding that claim of the assessee was not allowable as it had not filed its return of income in compliance to provisions u/s 139(1) of the Act. Therefore, claimed exemption i....
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....r purposes of profit, and the second is that the university or other educational institution is wholly or substantially financed by the Government. 12. In the present case, assessee is a renowned state university formed for education purpose by an act of parliament notified in the gazette of India dated 02/04/1970 by ministry of Law as "The Haryana and Punjab agricultural university, 1970' The said university act was later on bifurcated between Haryana and Punjab states and the name of university in Haryana changed into Chaudhary Charan Singh Haryana Agriculture University, Hisar. Copy of Haryana and Punjab agricultural university, 1970 is placed at PB Pg. no. 36-67. 13. The objects of the university are stated in the section 7 of the said Act (at PB Pg. no. 39). Thus, the university exists solely for educational purposes and not for purposes of profit. 14. Assessee has duly submitted the documents evidencing that no amount is received by the assessee, rather unadjusted balance is adjusted by the State Govt. 15. Therefore, assessee has duly met the conditions applicable for claiming exemption u/s 10(23C)(iiiab) of the Act. 16. ....
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....es to sub-clause (iiiab), and thus there is no requirement under section 10(23C) of the Act which requires filing of return of income for claiming the exemption under section 10(23C)(iiiab) of the Act. 19. Thus, the twentieth proviso to section 10(23C) clears the aspect that prior to its insertion, there is no condition/requirement under section 10(23C) which mandates filing of return of income. Moreover, the said proviso is not applicable to the facts of the present case. AO and CIT(A) has wrongly denied the exemption u/s 10(23C) (iliab) by wrongly interpreting the provisions of section 10(23C) (iliab) and section 139(4C) of the Act. 20. The AO in 2d para on Page 3 of assessment order and CIT(A) in para 4.4 to 4.7 on page 7 to 9 of its order, has relied upon section 139(4C)(e), which reads as follows- "(4C) Every- (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause iiiab) or sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in sub-clause iiiac) or sub- clause (....
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....-ordinate Bench of ITAT, Bangalore in the case of M/s Kenchappa Samajika Shikshana vs ACIT in ITA No.1974/Bang/2018, wherein, in para no.7 of the order, the Co-ordinate Bench held as under:- "7. It can be seen from the provisions of section 139(4C) of the Act, filing the return of income on or before the due date u/s. 139(1) of the Act does not disqualify from claiming exemption u/s. 10(23C)(iiiad) of the Act. All that the provision requires is that if the total income for giving effect of provisions of section 10 exceeds the maximum amount which is not chargeable to income tax, they have to file a return of income in the prescribed form. The section further says that such return of income will be treated as if it is a return required to be furnished u/s. 139(1) of the Act." 10. Further, as discussed above in para no.5.1 of this order, the ld. CIT(A) relied upon the decision of Hon'ble Odissa High Court in the case of Stewart Science College (Christian Minority Educational Institution vs ITO, Ward-1(1) Cuttack) [2022] 449 ITR 257 (Ori.) to hold that section 10(23C)(iiiab) of the Act was not generally exempt for the petitioner in view of the decision of the Hon'ble Apex ....
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....orth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1). 11.3. We have carefully considered the above provisions and are of considered view that filing of return of income by the assessee for claiming exemption u/s 10(23C)(iiiab) is not mandatory. We agree with the submissions of the assessee that for claiming exemption u/s 10(23C)(iiiab) of the Act only two conditions are required i.e. the university or the other educational institution should exist solely for education purposes and not for purposes of profit, and the second, the university or other educational institution is wholly or substantially financed by the Government and in the case of the assessee both the above conditions are satisfied as evident from the copy of The Haryana and Punjab Agricultural University Act, 1970, vide which the assessee university was created in the name of 'The Haryana Agricultural University' and notified in Gazette of India dated 02.04.1970 by Ministry of Law, Govt. of India, which was later on substituted by Haryana Act No.15 of 1991 as Chaudhary Charan Singh Har....
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.... Dilip Kumar and Company & Ors. (2018) 9 SCC 1 = 2018 SCC OnLine SC 747 = 2018 (361) ELT 577 (SC)." 6.9. Viewed in aforesaid perspective, Section 10(23C)(iiiab) of the IT Act is not generally exempt qua the petitioner-College. Therefore, it is open for the Adjudicating Authority to examine whether the claim for exemption on the basis that the petitioner-College, claiming to be a minority institution on the basis of certification in the year 2021, is existing solely for educational purposes and not for purposes of profit and it is wholly and substantially financed by the Government. In case of ambiguity, the benefit tilts in favour of Revenue as laid down in Dilip Kumar and Company & Others, (2018) 9 SCC 1 = 2018 SCC OnLine SC 747 = 2018 (361) ELT 577 (SC). In the said case, 5-Judge Constitution Bench of Hon'ble Supreme Court of India has propounded as follows: "66. To sum up, we answer the reference holding as under: i. Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. ii. When there i....
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....his section shall not exceed one thousand rupees. (2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018.] 11.8. Moreover, there are sections in the Act, wherein, it is mentioned that the claim of the assessee shall not be admissible, if certain requirements as per law are not filed along with the return. For example, sub-section-7 of section 80IA of the Act for claiming deduction u/s 80IA(1) of the Act during the material period i.e. AY 2018-19 laid down a condition that the deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant. The relevant provisions of the said section are reproduced as under:- Deductions in....
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....sessee sufficiently explained the source of cash deposited in its bank account and also explained the source of investment to make time deposits in the bank account. Since, the assessee is a university and is exempted from tax u/s 10 (23C) of the Act and no other details/evidence is available on record, through which the contention of the assessee can be rejected, therefore, the explanation given by the assessee are considered as reasonable and return income of the assessee is accepted as such and no adverse inference is drawn in the case." 11.11. Therefore, in view of the above facts and discussion, we hold that the assessee is eligible for exemption u/s 10(23C)(iiiab) of the Act and the AO and the Ld. CIT(A) were not correct in not allowing the claim of exemption of Rs. 25,47,64,090/- as claimed by the assessee. Therefore, we delete this addition of Rs. 25,47,64,090/-. Accordingly, ground nos.7 to 12 of the appeal are allowed. 12. In view of the grounds no.7 to 12 of the appeal are allowed, the other grounds of appeal being ground nos. 1 to 6 become academic and are not adjudicated. 13. In the result, the appeal of the assessee is allowed. Order pronounced in the open....