Wednesday, April 9, 2014

No sec. 10(23C) relief to Govt. approved educational unit if it was not funded by Govt.

Where assessee-institute was approved as Government autonomous body for educational purpose but was not wholly or substantially financed by Government, exemption under section 10(23C) (iiiab) could not be allowed.
a)  The assessee, an educational institution, claimed its income as exempt under section 10(23C)(iiiab) by contending that institute was approved by the Punjab Government and it was 100% funded Govt. Autonomous Body.
b)  The Assessing Officer disallowed exemption claimed by assessee on ground that assessee-society had been granted exemption under section 10(23C)(vi).
The Tribunal held in favour of revenue as under:
1)  The assessee-institute was an educational institute but his main motto was profit. It was also approved as the 100 per cent Govt. autonomous body;
2)  The Government had not financed any paisa to the institute in the last 5 years because the institute was already having a good amount lying in Fixed Deposits with Banks;
3)  The assessee was not fulfilling the conditions regarding the institutions ought to have been wholly or substantially financed by the Government. The assessee had not produced any documentary evidence to prove that the assessee had got approval from the prescribed authority for the exemption under section 10(23C)(iiiab);

4)  Therefore, the assessee was not entitled to exemption under section 10(23C)(vi).- Dy. CIT v. Malout Institute of Management & Information Technology [2014] 43 228 (Amritsar - Trib.)