The Tax Publishers2020 TaxPub(DT) 5546 (Mad-HC)

INCOME TAX ACT, 1961

Section 10(23C)

Where advancing of interest-free temporary loan by assessee society to another society having similar objects was not an investment or a deposit and Revenue had sought to sustain order by contending that core issue was as to whether section 13(1)(c) read with section 13(3)(e) would stand attracted and there were several factual aspects, which had been missed out by AO to be taken into consideration, therefore, it would be appropriate that matter should be remanded to AO for a fresh consideration.

Exemption under section 10(23C) - Educational institution - Denying exemption under sections 10(23C)(vi), 11 and 12 - Certain advances received from another charitable trust

Assessee claimed exemption under section 10(23C)(vi) and alternatively under section 11. Though assessee made submissions before Assessing Authority concerned on several dates, since nothing transpired out of such proceedings, assessee placed reliance on deeming provision under the 9th proviso to section 10(23C). Assessment was completed under section 143(3) by denying exemption under sections 10(23C)(vi), 11 and 12. Certain advances were received from another charitable trust and amount was repaid to the another trust and in course of repayment, assessee paid excessively a sum which was recoverable from the other institution/trust. Assessee contended that amount was given to another charitable institution for educational purposes to enable them to construct a building as part of their college and that the same could not be considered as investment and hence, the provisions of sections 11, 12 and 13 had not been violated. Held: Advancing of interest-free temporary loan by assessee-society to another society having similar objects was not an investment or a deposit and that therefore, there was no violation of the provisions of section 13(1)(d) read with section 11(5) to render withdrawal of exemption under section 11. Revenue had sought to sustain order by contending that the core issue was as to whether section 13(1)(c) read with section 13(3)(e) would stand attracted. There were several factual aspects, which had been missed out by AO to be taken into consideration. Therefore, it would be appropriate that matter should be remanded to AO for a fresh consideration.

Followed:CIT v. Rajasthan and Gujarati Charitable Foundation, Poona (2018) 402 ITR 441 (SC) : 2017 TaxPub(DT) 5384 (SC). Relied:Queen's Educational Society v. CIT (2015) 372 ITR 699-SC : 2015 TaxPub(DT) 1436 (SC), DIT (Exemption) v. Acme Educational Society (2010) 326 ITR 0146 (Del) : 2010 TaxPub(DT) 2142 (Del-HC), Indian Institute of Engg Technology v. DDIT (Exemptions) & Vice-Versa 2018 TaxPub(DT) 5084 (Chen-Trib).

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2012-13



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