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MUMBAI: The Maharashtra State Board of Technical Education (MSBTE), has emerged a topper in the arena of tax litigation.
The Mumbai bench, of the Income-tax Appellate Tribunal (ITAT), which adjudicates direct tax litigation, held that its income is eligible for exemption under section 10 (46) of the Income-tax (I-T) Act.
Pramod Kumar, vice president and Saktijit Dey, a judicial member who comprised the ITAT bench, in their order dated May 27, agreed that MSBTE is covered by the definition of a ‘state’ under India’s Constitution and hence it is entitled to immunity from taxation under the I-T Act.
MSBTE is an autonomous board set up by the government of Maharashtra to regulate matters pertaining to diploma level technical education in the state. The common entrance test (CET) which is the gateway of admission for future engineers also comes within its ambit.
The I-T litigation before the bench related to the financial year 2010-11. The bench noted that the issue under litigation was already covered by ITAT’s decisions passed for earlier years.
In these cases, ITAT has observed that sources of income of MSBTE comprise of grants from the Maharashtra government, fees from candidates to appear for various exams, receipts from education material, receipts from other government bodies for conducting courses and exams like CET and interest on deposits. None of these receipts indicates that MSBTE is carrying on any activities in the nature of trade, commerce or business. Rather, it is engaged in the regulation of educational activities as per the statutory obligation conferred on it. It is completely controlled financially as well as administratively by the state government.
Following the same view, as earlier, the ITAT passed an order in favour of the autonomous board.



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