Trust qualifies for tax exemption under section 10(22) for educational activities.

The court held that the trust qualified for exemption under section 10(22) of the Income-tax Act as its income was derived solely from educational activities, and the trust operated for educational purposes without profit motives. Despite the broad objects clause of the trust, the court emphasized that its current activities were limited to running educational institutions. The surplus income generated was reinvested back into the schools for educational and developmental purposes, demonstrating a non-profit orientation. The court dismissed the petition, finding no error in the Tribunal's decision and no referable question of law.

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Issues Involved:
The judgment discusses the exemption claim u/s 10(22) of the Income-tax Act, 1961 by a trust constituted for educational purposes, the interpretation of the trust's objects, and the utilization of surplus income from educational activities.

Exemption Claim u/s 10(22):
The assessee, a trust running educational institutions, claimed exemption u/s 10(22) for surplus income derived during the assessment year 1983-84. The assessing authority initially rejected the claim, but the Commissioner (Appeals) and the Tribunal ruled in favor of the assessee, stating that the income was exempt as the institutions were not run for profit. The Tribunal declined a reference on the exemption question u/s 10(22), leading to an application u/s 256(2) to compel the reference.

Interpretation of Trust's Objects:
The Revenue argued that the trust's objects were wide, indicating it was not solely for educational purposes, especially since surplus income was generated. However, the court disagreed, noting that while the trust's objects were broad, it was currently engaged only in educational activities, specifically running two schools. The court emphasized that the trust's objects clause did not mandate engagement in all listed activities, but rather empowered it to do so.

Utilization of Surplus Income:
The court highlighted that the surplus income generated from the educational institutions was reinvested back into the schools for their educational and developmental activities. It was noted that the trust was not profit-oriented, as the surplus was not distributed but used for the schools' benefit. The court emphasized that the income derived solely from the educational institutions, which existed for educational purposes without profit motives, aligning with the requirements of u/s 10(22).

The court concluded that the trust qualified for exemption u/s 10(22) as its income was solely from educational activities, and the trust operated for educational purposes without profit intentions. It was emphasized that the trust's existence during the relevant years was primarily for educational objectives, despite the expansive objects clause. The court dismissed the petition, finding no error in the Tribunal's order and no referable question of law arising from it.

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