Case Number: ITA 1130/DEL/2019
Appellant: Pushp Niketan School Samiti, Bijnore
Respondent: ITO, Dhampur
Assessment Year: 2015-16
Case Filed On: 2019-02-12
Order Type: Final Tribunal Order
Date of Order: 2023-01-30
Pronounced On: 2023-01-30
The present appeal filed by the assessee, Pushp Niketan School Samiti, for the assessment year 2015-16, is directed against the order of Ld. CIT(A)-11, New Delhi dated 20.06.2019. The main contention in the appeal revolves around the addition of interest and other income amounting to Rs.2,45,757/-, which the assessee claims should be treated as part of the educational institute’s income and thus eligible for exemption under section 10(23C)(iii ad) of the Income Tax Act.
The assessee, Pushp Niketan School Samiti, runs an educational institution named M/s. Pushp Niketan School Samiti DSM Road, Dhampur. The assessee filed its return of income declaring a total income of NIL. During the scrutiny assessment, the Assessing Officer (AO) made several additions, including:
Aggrieved by these additions, the assessee appealed before the Ld. CIT(A), who partly allowed the appeal but upheld the addition of Rs.2,45,757/-, leading to the present appeal before the ITAT.
At the time of hearing, no one represented the assessee, and the case was decided based on the material on record. The Ld. Sr. DR supported the orders of the authorities below, arguing that the addition of Rs.2,45,757/- was justified as it constituted accrued income that was not exempted under the Income Tax Act.
The Tribunal, after considering the submissions and examining the records, found that the assessee had shown the amount in the P&L Account, including interest from FDR and saving accounts of Rs.83,008/- and other charges such as income from fines, lab fees, Founder Day charges, photograph charges, etc., amounting to Rs.1,62,749/-. The assessee contended that these charges were integral to the running of the school and should be considered as income of the educational institute eligible for exemption.
The Tribunal noted that the authorities below failed to appreciate that the income was part of running the educational institute and the interest was incidental to such activity. Therefore, the Tribunal directed the AO to delete the addition of Rs.1,62,749/- out of the total addition of Rs.2,45,757/-, thereby partly allowing the appeal.
In conclusion, the appeal filed by Pushp Niketan School Samiti was partly allowed by the ITAT. The Tribunal acknowledged that the income from lab fees, fines, and other charges was integral to the educational institution’s operations and thus eligible for exemption. The AO was directed to delete the addition of Rs.1,62,749/- from the total addition, providing partial relief to the assessee.
The order was pronounced in the open Court on 30th January, 2023 by the Judicial Member, Shri Kul Bharat.
Order signed by:
Judicial Member: Shri Kul Bharat
Note: This article is based on the final judgment and analysis of the case ITA 1130/DEL/2019 involving Pushp Niketan School Samiti and the ITO, Dhampur.
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