TaxTMI 
TaxTMI 
2026 (2) TMI 77
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....f appeal:- "1. The order passed by u/s. 250 passed on 31.01.2024 for AY 2017-18 by NFAC, [CIT(A)], Delhi (for short CIT(A)" upholding the denial of exemption u/s 10(23C)(iiiab) whereby making an addition of Rs. 4,28,98,710/- towards interest income made by A.O. is wholly illegal, unlawful and against the principles of natural justice. 2. The Id. CIT(A), has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced during appellate proceedings in relation to the exemption u/s 10(23C)(iiiab) and interest income 3. The Id CIT(A) has grievously erred in law and or on facts in denying exemption u/s 10(23C)(iiiab). 4. That the in the facts and circu....
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....he Government of Gujarat with the object of bridging the gap between the educational system and industry by conducting short-term courses to enhance employment opportunities. The governing body of the assessee consists of high-ranking officers of the State Government, and decisions relating to litigation are taken collectively and institutionally. It has been stated that routine income-tax matters are handled by the office staff, subject to approvals and sanctions of the governing body, and due to frequent transfers and changes of staff, delays occur in decision-making. 5. It has further been explained that after receipt of the appellate order dated 31.01.2024, the General Elections to the Lok Sabha were announced and the Model Code of C....
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....t condoned the delay by observing that some amount of latitude within reasonable limits is permissible in view of the bureaucratic set-up and procedural red tape. 8. Applying the aforesaid principles to the facts of the present case, we find that the assessee is a public charitable institution established and controlled by the State Government and the reasons for delay, as explained in the affidavit, are bona fide and duly supported by the surrounding circumstances. The delay has occurred due to institutional decision-making, administrative constraints, change of staff, operation of the Model Code of Conduct during elections, and the time taken in appointing a consultant and compiling records. There is no material on record to suggest th....
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....he assessee had not received any fresh grant from the Government of Gujarat and that its main receipts consisted of interest income earned on surplus funds parked with Gujarat State Financial Services Ltd. (GSFS), along with minor miscellaneous income. The Assessing Officer invoked Rule 2BBB of the Income-tax Rules, 1962, and held that interest earned on unutilized grants could not be treated as government grants received during the year. Relying heavily on the judgment of the Hon'ble Supreme Court in the case of Visvesvaraya Technological University v. ACIT reported in 68 taxmann.com 287 (SC), the Assessing Officer held that the assessee was not wholly or substantially financed by the Government during the relevant year. Accordingly, the e....
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....e of consistency, pointing out that in Assessment Year 2016-17, a scrutiny assessment under section 143(3) of the Act had been completed accepting similar claims on identical facts. 14. The assessee strongly distinguished the reliance placed by the Assessing Officer on the decision of the Hon'ble Supreme Court in Visvesvaraya Technological University. It was explained that in that case, the university was generating substantial income from student fees, and government grants formed only a negligible portion of total receipts, whereas in the present case, the assessee did not run any conventional educational institution, charged only nominal fees, and the entire financial structure was rooted in Government grants and Government-controlled....
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....f the Hon'ble Supreme Court in the case of Visvesvaraya Technological University. 18. From the facts on record, it is undisputed that the assessee is a trust established and controlled by the Government of Gujarat, and that it exists solely for educational and skill-development purposes without any profit motive. It is also undisputed that the surplus funds invested with GSFS represent unutilized Government grants received in earlier years and that such investment was made pursuant to binding directions issued by the State Government. The Circulars placed on record clearly show that the interest earned on such deposits is required to be transferred back to the Government of Gujarat and is to be treated as part of the State's revenue. In ....