High Court affirms Tribunal's decision for St. Xavier's School on tax exemption for educational income

The High Court of Patna upheld the Tribunal's decision, ruling in favor of the assessee, St. Xavier's School. The Court held that the school's income qualified for exemption under section 10(22) of the Income-tax Act, 1961 as it operated solely for educational purposes, regardless of other income sources or objectives of the society running the school. Each party was directed to bear their own costs, and the judgment was to be communicated to the Income-tax Appellate Tribunal, Patna.

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Issues involved: Interpretation of exemption u/s 10(22) of the Income-tax Act, 1961 for income of an educational institution.

Summary:
The High Court of Patna was tasked with determining whether the income of St. Xavier's School, Doranda, Ranchi, qualified for exemption u/s 10(22) of the Income-tax Act, 1961. The assessee, a registered society, operated the school solely for educational purposes. The Income-tax Officer initially exempted the school's income, but the Commissioner of Income-tax set aside the assessment, leading to an appeal by the assessee to the Tribunal. The Tribunal found the school to be an educational institution not run for profit, thus exempting its income u/s 10(22). The Revenue challenged this decision, arguing that the society had other objectives besides running the school. The Court held that if income falls within the criteria of u/s 10(22), it is exempt regardless of other income sources. Citing precedent, the Court affirmed that income from an educational institution solely for educational purposes is exempt. Consequently, the Court upheld the Tribunal's decision, ruling in favor of the assessee.

In conclusion, the Court affirmed that St. Xavier's School's income was exempt u/s 10(22) as it operated solely for educational purposes. Each party was directed to bear their own costs, and the judgment was to be communicated to the Income-tax Appellate Tribunal, Patna.

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