IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI BEFORE HON’BLE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER Assessment Years: 2021-22 Kumar Memorial Educational Trust, Income Tax Officer, No.21, Vellar Street, Exemption Ward, Udayarpalayam PO & TK, Perambalur, Trichy.

Tamil Nadu-621 804. [PAN: AAATK9001H]

Appellant Respondent Assessee by : Mr.N.Arjun Raj, Advocate Revenue by : Ms.R.Anitha, Addl.CIT Date of Hearing : 08.01.2026 Date of Pronouncement : 08.01.2026

O R D E R

PER INTURI RAMA RAO, A.M :

This appeal filed by the assessee is directed against the order of the Addl/JCIT(A) (herein after called CIT(A)’ in short], Mysore dated

23.06.2025 for Assessment Year-2021-22

2.0 Briefly the facts of the case are that the appellant is a public charitable trust formed for the purpose of rendering education. The appellant runs multiple educational institutions which are duly approved by the concerned Boards. The return of income for AY-2021-22 was filed on

31.03.2022 disclosing Nil income after claiming exemption u/s 10(23C)(iiiad) of the Income Tax Act, 1961. The said return of income was processed by CPC vide intimation dated 08.12.2022 u/s 143(1) by disallowing claim u/s 10(23C)(iiiad) for exemption on the ground that the aggregate annual receipts of the trust exceeds Rs.1 crore.

3.0 On receipt of the said intimation, the appellant’s trust filed a petition u/s 154 of the Act dated 20.05.2024 seeking the amendment of the intimation on the ground that the gross annual receipts from each educational institution does not exceed Rs.1 crore. For the purpose of claiming exemption u/s 10(23C)(iiiad), the aggregate turnover of the trust should not be considered, as held by the Hon’ble Karnataka High Court in the case of CIT Vs Children’s Educational Society 358 ITR 373 and also in the case of DCIT Vs M/s. Jat Educational Society, 10 taxmann.com 127(Delhi). However, the said petition was rejected by the ITO, Exemptions Ward, Trichy vide order dated 10.07.2024.

4.0 Being aggrieved by the above rectification order, an appeal was filed before the NFAC contending that the amended provisions of section 10(23C)(iiiad) have no application for the Assessment Year 2021-22. The law laid down by the Hon’ble Karnataka High Court in the Children’s Educational Society is squarely applicable. However, the NFAC had rejected the above contentions by holding that the amendment brought by Finance Act 2021 by inserting the explanation to section 10(23C)(iiiad) is only a clarificatory in nature and have retrospective effect. Being aggrieved, the appellant is in appeal before us in the present appeal.

5.0 The learned A.R submits that the amendment is only prospective in nature as it is made explicitly clear that the amended provisions would come into effect w.e.f. 01.04.2022. The ratio of the decision of the Hon’ble Karnataka High Court in the Children’s Educational Society is squarely applicable.

6.0 On the other hand, the learned Sr.DR vehemently opposed the above submissions and submit that the order passed by the NFAC is reasoned one and requires no interference by the tribunal.

7.0 We heard the rival submissions and perused the material on record. The issue that arises for our consideration is for the purpose of computing the aggregate annual receipts of Rs.1 Crore, whether the clubbing of annual receipts of all the educational institutions run by the assessee trust should be done or not. The issued was considered by the Hon’ble Karnataka High Court in Children’s Educational Society, wherein it is held as under :-

“…..18. Therefore, one crore of rupees is the aggregate annual receipts which is prescribed under the Rules. In other words, if the aggregate annual receipts of an educational institution is less than one crore, the income from such educational institution in the hands of the assessee, is not taken into consideration in computing the total income of the assessee.

19. Sub-clause (vi) provides that any University