Scholarship By Hamdard Foundation, Exemption Under Income Tax Act Can’t Be Denied: Delhi HC
Hamdard National Foundation (India) (ITA 117/2021; ITA 156/2021; ITA 157/2021; ITA 16/2022)
Short Overview of the case:
Facts:
1. The AO ruled that the Assessee had given merit-cum scholarship/financial assistance to candidates predominantly belonging to a particular religious community, and therefore under Section 13(1)(b) of the Income Tax Act exemption under Section 11 could not be given to the Assessee.
2. The AO also contended that the Assessee had published an advertisement for educational scholarship in Urdu language and only in one newspaper.
3. The ITAT noted that the CIT(A) had made a factual finding with respect to the previous assessment year that the scholarships provided by Hamdard were not restricted to a particular religious community and therefore, there was no violation of the provisions of Section 13(1)(b)
4. The ITAT also ruled that it was not open to the AO to raise an issue selectively for few years and accept the findings of the CIT(A) with respect to the same issue for only some years.
The Hon Delhi HC held as below:
1. The list submitted by the Assessee showed that the benefit had been granted to students from all communities without any discrimination.
2. Just because the advertisement was published in Urdu language and only in one newspaper, it could not be presumed that it was targeted at the students belonging to a particular community.
3. Though the principle of res-judicata and estoppel are not applicable to taxation matters, a departure from a factual finding made with respect to the previous assessment years would result in contradictory findings.
4. Appeal by the revenue is dismissed.
