Lekheshwar Educational Trust v. Income Tax Officer

Parties Involved

Facts Summary

The assessee-trust, running an educational institution named 'Sunbeam School', filed its return of income for the assessment year 2016-17 on 29.03.2017, declaring Nil income by claiming exemption under section 10(23C)(vi) of the I.T. Act, 1961. The case was selected for limited scrutiny. The Assessing Officer noticed that the assessee had gross receipts of Rs.2,27,53,611/-, application of income at Rs.2,03,63,744/-, and excess of income over expenditure at Rs.23,89,867/-. The Assessing Officer held that the surplus income was taxable as the trust was neither registered under section 12A nor got approval under section 10(23C) of the Act. The assessee also claimed an expense under 'TDS Penalty' of Rs.16,970/- as revenue expenditure, which was disallowed. The ITO passed a rectification order under section 154 read with section 143(3) of the Act, assessing the total income at Rs.24,06,840/-. The assessee appealed to the CIT(A) and subsequently to the Tribunal.…

Legal Issues

• 1. Whether the exemption under section 10(23C)(vi) of the I.T. Act, 1961 was admissible for the assessment year 2016-17?
• 2. Whether the disallowance of TDS penalty as revenue expense was justified?
• 3. Whether the order passed under section 154 read with section 143(3) of the I.T. Act, 1961 was justifiable?
• 4. Whether the treatment of Rs.24,06,840/- as taxable income was justified?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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