The Tax Publishers2020 TaxPub(DT) 4768 (Ind-Trib) : (2021) 186 ITD 0378

INCOME TAX ACT, 1961

Section 10(23C)(iiiab)

Before insertion of Explanation to clause 10(23C)(iiiab) with effect from 1-4-2015 setting out minimum threshold of 50% financing by government even institutions receiving substantial grant less than 50% of total contribution by government could also be held to be eligible for exemption under section 10(23C)(iiiab). In assessee's case government grant was 49.4%, though not exact 50% of the total receipt and it was substantial looking at the quantum of contribution as well as control of State Government in the functioning of assessee-society as well as movement of funds. Therefore, assessee was eligible for exemption under section 10(23C)(iiiab).

Exemption under section 10(23C)(iiiab) - Allowability - Grants received from govt. being less than 50% of total receipts -

Assessee, an educational institute, claimed exemption under section 10(23C)(iiiab). Revenue denied assessee's claim on the ground that assessee had not been substantially financed by the government during the year and grants received from govt. were less than 50 of total receipts of the year. Held: Before insertion of Explanation to clause 10(23)(iiiab) with effect from 1-4-2015 setting out minimum threshold of 50% financing by government's even institutions receiving substantial grant less than 50% of total contribution by government could also be held to be eligible for exemption under section 10(23C)(iiiab). In assessee's case government grant was 49.4% though not exact 50% of the total receipt of fee and grant during the year. Undoubtedly government grant was substantial looking at the quantum of contribution as well as control of State Government in the functioning of assessee society as well as movement of funds. Therefore, assessee was eligible for exemption under section 10(23C)(iiiab), since it was established with the sole object to run for educational purposes, and not for the purpose of profits.

Followed:CRM Jat Post Graduate College Indian Institute of Management

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15


INCOME TAX ACT, 1961

Section 143(3), 56

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