TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 1602
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....solely for educational purposes and not for the purposes of profit. The assessee filed its return of income on 23.09.2019 declaring total income of Rs. 51,01,460/- which was processed u/s 143(1) vide order dated 27.05.2020 wherein the claim u/s 10(23C)(iiiad) of the Act was rejected. Prior to the issue of said order u/s 143(1)(a) of the Act, a communication of adjustment u/s 143(1)(a) of the Act dated 21.11.2019 was issued to the assessee where it was stated that the amount entered in Schedule SI was inconsistent with the corresponding amounts entered Schedules CG and OS which were duly replied submitting that the income of the assessee is exempt u/s 10(23C)(iiiad) of the Act. The assessee submitted that there was a problem in filing ITR-7 and the said form does not distinguish between gross receipts from the activity of running educational institute and the income from other sources and therefore dividend income earned by the assessee was claimed as exempt u/s 10(23C)(iiiad) of the Act. In the above said order passed u/s 143(1) of the Act, the AO taxed the dividend income in excess of 10 Lakhs u/s 115BBDA of the Act @ 10%. As a result addition of Rs. 1,01,70,999 /- was made to the....
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....he educational institution for purpose of Section 10(23C)(iiiad) of the Act as it clearly talks about the annual receipt from the educational activities which apparently does not include the income of the society from a source other than from the educational activities of the society. We have also noted that the Ld. CIT(A) has unequivocally given a finding in the appellate order that the assessee is eligible to claim exemption u/s 10(23C)(iiiad) of the Act as its annual receipt from the educational activities does not exceed 1.00 Cr however concurrently held that the said exemption can not be extended to other income of the society which has been correctly brought to tax. Therefore considering the facts and circumstances of the case, we are not in concurrence with the conclusion drawn by the Ld. CIT(A) on this issue. We are supported in our conclusion by a series of decisions discussed hereinafter. In the case of CIT vs. Madrasa E-Bakiyath-Us-Salihath Arabic College (2014) 50 taxmann.com 81 (Madras) it was held that the sale proceed of land and bond cannot be equated to annual receipts as stated under section 10(23C) of the Act. The sale is in the nature of conversion of a capital ....
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....)(iiiad) of the Act which provide that where the university and other educational institution existing solely for educational purposes and not for purposes of profit and if the aggregate annual receipts of such university or educational institution does not exceed Rs. 1 crore, the income would be exempt. In this case also, the receipt from the aggregate annual receipt from educational institution is less than Rs. 1 crore and therefore the provisions of Section 10(23C)(iiiad) of the Act are applicable and consequently the income of the institution is exempt from tax. We note that though the assessee trust has total receipt of Rs. 1,09,82,810/- by way of dividend, interest and capital gain on sale of shares on mutual fund but the funds are being accumulated in order to improve the infrastructure of the school and also to construct the new schools in accordance with the aims and objectives of the assessee trust. The case of the assessee is squarely covered by the decision of Co-ordinate Bench of Kolkata in the case of Swasthya Sewa Sansthan vs. CIT(E), Kolkata in ITA NO. 363/Kol/2020 for AY 2017-18 dated 09.02.2022 wherein the Coordinate Bench has held that the income earned by the sa....
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....st is running a dispensary wherein the doctors from both Allopathy and Homoeopathy discipline of medicine visit the dispensary and the treatment is free of charge and even medicines are also given free of cost to patients. There is no denial of the fact that the appellant Trust is running the dispensary purely on philanthropic purposes. Since, the aforesaid medical treatment is given free of charge, hence there is no question of earning of any income from such activity. As observed above, there is no requirement of provision Section 10(23C)(iiiae)] of the Act that the income should be earned from such philanthropic activity, rather it is otherwise that the institution/Trust has done such an activity purely for charitable/philanthropic purposes and under such circumstances expectation of income from such activity will be against the spirit of the aforesaid statutory provision. There is no allegation that the institution is doing any activity other than the aforesaid medical dispensary. The annual income of the appellant Trust is out of the interest income from the investment has been made of surplus lying with it. However, there is no allegation that such surplus is applied for any ....