The assessee trust was registered u/s 12A/12AA of the Act-Assessment Year: 2017–2018-Assessment u/s 143(3) accepting the returned income, allowing the exemption u/s 10(23C)(iiiad). The CIT (E) issued the notice u/s 263 on the ground that there was  no  receipt from education institution or activities, but total income comprised off dividend, interest and surplus from sale of investments and treated the AO’s order as an erroneous in so far as prejudicial to the interests of the Revenue and accordingly, CIT (E) directed the AO to assess the income without allowing exemption u/s 10(23C)(iiiad)

The Hon’ble ITAT, while allowing the appeal of the Trust, observed the undisputed fact that the assessee trust was engaged in running an educational institution in which, no fee was charged from the students due to severe poverty and backwardness in the area and local residents were not sending their children to schools, incurred the huge sum towards educational expenses and maintenance of the school, that mere receipts from other sources other than educational activities more than 1 Crore could not be the ground to treat the assessment order passed by the AO, appreciating the crucial facts demonstrated from the submissions/explanations offered by the assessee trust in response to the queries raised by the AO and taking the plausible view to grant the benefit of the provisions of Section 10(23C)(iiiad) of the Act, could not fall within the phrase “an erroneous in so far as prejudicial to the interests of the Revenue”. Hence, the assessee trust entitled to exemption u/s 10(23C)(iiiad) of the Act and consequently, the order of the CIT (E) was to be set aside. (AY. 2017-18)