TaxTMI 
TaxTMI 
2025 (8) TMI 1263
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....ociety is registered u/s 12AA of the Income Tax Act, 1961 vide order dated 24.02.2014 of the Commissioner of Income Tax, Allahabad. The copy of letter of registration u/s 12AA of the Income Tax Act, 1961 placed on file. 3. In response to query letter dated 25.01.2016 the assessee has been filed revised Computation of income as under :- Total income as per revised Computation of Income Rs. 5,58,22,664/- Add: Accumulation of F.Y. 2010-11 & 2011-12 Rs. 2,27,00,000/- (applied for construction) Total Income Rs. 7,85,22,664/- Amount applied Rs.4,44,60,206/- Surplus Rs. 3,40,62,458/- 15% of total income Rs. 83,73,399/- Excess of 15% of total receipts Rs. 2,56,89,059/- 4. Thus, the assessee has surplus of Rs. 3,40,62,458/-, which is above 15% of the gross receipts. The amount of surplus above 15% is Rs. 2,56,89,059/- for which revised Form 10 has been filed on 03.03.2016 by the a assessee without resolution passed by the Trustees/Governing body. Hence, excess of 15% of gross receipt amounting of Rs. 2,56,89,059 is added to the income of the assessee. (Addition: Rs. 2,56,89,059/-) Vide impugned appellate order da....
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....tation of income as under :- Total income as per revised Computation of Income Rs. 5,58,22,664/- Add: Accumulation of F.Y. 2010-11 & 2011-12 (applied for construction) Rs. 2,27,00,000/- Total Income Rs. 7,85,22,664/- Amount applied Rs. 4,44,60,206/- Surplus Rs. 3,40,62,458/- 15% of total income Rs. 83,73,399/- Excess of 15% of total receipts Rs. 2,56,89,059/- 4. Thus, the assessee has surplus of Rs. 3,40,62,458/-, which is above 15% of the gross receipts. The amount surplus above 15% is Rs. 2,56,89,059/- for which revised Form 10 has been filed on 03.03.2016 by the assessee without resolution passed by the Trustees/Governing body. Hence, excess of 15% of gross receipt amounting of Rs. 2,56,89,059 is added to the Income of the assessee. (Addition: Rs. 2,56,89,059/-) Appellant's submission: In the aforesaid case the assessment was passed u/s 143(3) on 15.03.2016 on total income of Rs. 2,56,89,059/- against NIL income. The brief facts of the case are being discussed as under - The trust is a charitable trust and running an intermediate school in the name of Pandit Madan Swarup Public School. The schoo....
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....case where more than fifteen per cent of its income is accumulated on or after the 1stday of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years: and" As above the assessee is liable to apply excess of 15% to apply in subsequent five years and as such there is no question to deny the exemption u/s 10(23C)(vi). The learned AO assessed total income at Rs. 2,56,89,059/- with the objection that the revised Form 10 which was filed on 03.03.2016 by the assessee was without resolution passed by the Trustees/Governing body. In this regard it is submitted that the revised Form 10 was filed only after passing the resolution passed by the Trustees. But in the revised form 10 and the order of the AO there is a mistake that they are calculating earlier accumulated funds which has sufficient time to utilize. To check the application of funds first of all we will have to calculate the application of the current year and in case earlier accumulation's time to going to be lapsed in the year under consideration only then earlier accumulation shall be considered. In this case earlier accumulation has suffic....
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....,56,89,059/- and added the same to the income of the appellant. In view of the above facts let is examine the Section 11 and Section 10(23C) of the Act that is a specific exemption available to certain Government and non-government universities and educational institutions. Income received by any university or educational institution existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government is fully exempt from tax vide Section 10(23C)(iiiab). Hence, a Government educational institution is fully exempt from income tax without any separate approvals etc. as long as it is not for profit purpose. The exemption for non-government (private) educational institutions depends upon the aggregate annual receipts of the educational institution. Section 10(23C)(iiiad) provides that an educational institution having receipts upto Rs. 1 crore can claim full exemption under the above clause without requiring a separate approval or registration. Exemption in the case of an educational institution having receipts exceeding Rs. 1 crore is governed by Section 10(23C)(vi) which states that income earned by....
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....ese sections have similar conditions and requirements for claiming the exemption. However, Section 10(23C) has less requirements when it comes to accumulation of income i.e. there is no need to file a separate Form and no need to specify the purposes of accumulation. In these circumstances the AO was not justified in ignoring the approval u/s 10(23C)(vi) and calculating wrong unutilized amount more than 15% and taxing the same. Appellant's submission is found to be correct that while calculating the excess of 15% amount to be disallowed, AO erred in considering the accumulated amount from F.Y. 2010-11 & 2011-12 of Rs. 2,27,00,000/- that was applied for construction during the year, as the current years income and calculated a higher figure of Rs. 2,56,89,059/- as the excess of 15% of gross receipt but in fact the correct figure of funds accumulated to be applied in subsequent year is Rs. 29,89,040/- only. So at best the addition could have been made only to the extent of Rs. 29,89,040/ -. Alternatively appellant's income is completely exempted by sec 10(23C)(vi) without any need to file the Form No. 10 as required in the case of 12AA registered trusts. In this scen....
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....f the I. T. Act. He also relied on the decision of Hon'ble Gauhati High Court in the case of Assam Co. (India) Ltd. CIT [2002] 256 ITR 423. (E.1) Learned D.R., in rejoinder, submitted that in the return of income and during the assessment proceedings, the assessee had not claimed relief u/s 10(23C) of the Act and had instead claimed relief u/s 11 read with section 12A of the Act. After completion of the assessment proceedings, the assessee cannot go back in time and claim benefit u/s 10(23C) instead of benefit u/s 11 read with section 12A of the Act. (F) We have heard both sides. We have perused the materials on record. We find that the approval was granted to the assessee u/s 10(23C) of the Act by Chief Commissioner of Income Tax, Allahabad for assessment year 2005-06, vide order dated 14/11/2014. Further, in view of the aforesaid circular by CBDT, dated 27/10/2010, the approval was valid to the assessee u/s 10(23C) of the Act for the assessment year under consideration. Moreover, the assessment order was passed on 15/03/2016, which was well after the aforesaid date of 14/11/2014. During assessment proceedings, the assessee had also filed revised computation of income in....