IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No. 3713/Del/2024 Assessment Year: 2018-19 Wisdom Educational Trust, Vs Income Tax Officer, 2B/683, Lane No. 1, Chander Nagar, Ward-3(3), Saharanpur.

Saharanpur-247001.

PAN: AAATW 3385 L APPELLANT RESPONDENT Assessee represented by Shri Pratiyush Jain, CA Department represented by Shri Sanjay Kumar, Sr. DR Date of hearing 22.01.2025 Date of pronouncement 22.01.2025

O R D E R

PER SATBEER SINGH GODARA, JM:

This assessee’s appeal for assessment year 2018-19 arises against Commissioner of Income-tax, Appeal, Addl./JCIT(A)-1, Guwahati’s DIN and order no. ITBA/APLS/S/250/2024-25/1065919167(1), dated 21.06.2024, in case no. CIT(A), Muzaffarnagar/10006/2020-21, in proceedings u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.

Heard both the parties. Case file perused.

2. The assessee has raised following substantive grounds in the instant appeal:

“1. The Ld. JCIT(A) has grossly erred on facts and in law in confirming the additions on account of capital gains despite the appellant being covered under section 10(23C0(iiad)

2. The Ld. JCIT(A) has grossly erred in confirming that the CPC was authorized to confirm the addition under section 143(1) of the Income Tax Act.

3. The appellant prays for leave to add, modify and amend any of the grounds of appeal and to take any sub grounds of appeal within the aforesaid grounds of appeal.”

3. Suffice to say, both the learned lower authorities have held the assessee as not entitled for the impugned exemption u/s 10(23C) of the act qua the corresponding capital gains even if it’s gross receipts do not across the threshold amount of Rs. 1 crore.

4. That being the case, this tribunal’s coordinate bench order in ITA 456/Kol/2022 Rukmani Birla Educational Society v. ITO(E) has rejected the revenue’s very stand as under:

“3. Facts in brief are that the assessee is a society registered under the West Bengal Societies Registration Act, 1961 and has been established and existing solely for educational purposes and not for the purposes of profit. The assessee filed its return of income on 23.09.2019 declaring total income of Rs. 51,01,460/- which was processed u/s 143(1) vide order dated

27.05.2020 wherein the claim u/s 10(23C)(iiiad) of the Act was rejected. Prior to the issue of said order u/s 143(1)(a) of the Act, a communication of adjustment u/s 143(1)(a) of the Act dated 21.11.2019 was issued to the assessee where it was stated that the amount entered in Schedule SI was inconsistent with the corresponding amounts entered Schedules CG and OS which were duly replied submitting that the income of the assessee is exempt u/s 10(23C)(iiiad) of the Act. The assessee submitted that there was a problem in filing ITR-7 and the said form does not distinguish between gross receipts from the activity of running educational institute and the income from other sources and therefore dividend income earned by the assessee was claimed as exempt u/s 10(23C)(iiiad) of the Act. In the above said order passed u/s 143(1) of the Act, the AO taxed the dividend income in excess of 10 Lakhs u/s 115BBDA of the Act @ 10%, As a result addition of Rs. 1,01,70,999/- was made to the income of the assessee and demand of Rs. 10,71,125/- was raised. Thereafter the assessee moved a rectification petition u/s 154 of the Act dated 11.9.2020 and also filed an appeal before the First Appellate Authority simultaneously.

4. The Ld. CIT(A) dismissed the appeal of the assessee by justifying the taxing of dividend income in excess of 10 lakhs u/s 115BBDA of the Act as the earning of divided income is not a activity undertaken for running the educational institution.. However, at the same time, the Ld. CIT(A) gave a finding of fact to this effect that the assessee receipts from running of educational institution is exempt u/s 10(23C)(iiiad) of the Act. So in totality the appeal of the assessee was dismissed by the Ld