2026 (3) TMI 884

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.... Year 2016-17. 2. Before us, Ld.AR for the assessee submits that as per section 10(23C)(iiiad), annual receipts are to be considered for the purposes of allowing exemption to the educational institutions. Ld.AR submits that AO has wrongly considered gross receipts which includes voluntarily towards building fund as part of annual receipts to deny the exemption available u/s 10(23C)(iiiad) of the Act to the assessee. For this, reliance is placed on the judgment of Co-ordinate Bench of Chennai Tribunal in ITA No.611 & 612/Chny/2022 in the case of M/s. Sathyam Educational & Charitable Trust vs ITO order dated 06.04.2023 wherein it is held that the annual receipts should only be considered for the purpose of section 10(23C)(iiiad) and the co....

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.... 8. "At the outset, the Ld.AR submitted that disallowance made by the AO u/s. 10(23C)(iiiad) of the Act, by clubbing corpus fund with other receipts is not justified for the submissions of the assessee. As per provisions of Sec.10(23C)(iiiad) of the Act, the aggregate annual receipt of the school should be the receipts collected for Rs. 49,19,960/- only. The corpus donation received with specific direction by the Trust to develop infrastructure for Rs. 72,18,000/- is a capital receipt and the same cannot be taxed in the hands of the assessee, irrespective of the fact whether registration u/s. 12AA of the Act, has been granted or not. To substantiate its contentions, the assessee drew our attention to the order of the Ld.CIT(A), wherein, t....

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....AT, which upheld CIT (A) 's order and held that- The amounts contributed, as corpus donations for Infrastructure development shall form part of corpus would not constitute income of the society. Therefore, the receipts of the educational institution are below Rs. 1.00 Crore and as such exemption u/s 10 (23C)(iiiad) is allowable. For the purpose of section 10(23C)(iiiad), in the term 'aggregate annual receipts' refers to the receipts by the educational institution and not that of the society. b. Divine Education Institute & social Development Society Vs. ITO (Del - Trib) Corpus fund, which is meant for Specific purpose to meet out capital expenditure, cannot be a part of annual receipts of educational i....