Ancillary educational activities may retain charitable character even when they generate surplus, preserving exemption for the institute.

The Tribunal held that an institute's conduct of examinations, coaching and regulation of members remained within the scope of education and charitable purpose where those activities were ancillary to its main educational objects. It further held that generation of surplus did not, by itself, convert the institute's activities into business or defeat exemption, particularly when consistent coordinate bench and writ decisions had already accepted the same view in the assessee's own case. The exemption claim was therefore upheld and the Revenue's challenge failed.

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Issues: Whether the assessee institute's activities, including conduct of examinations, coaching and regulation of members, fell within the meaning of education so as to constitute charitable purpose and entitle it to exemption.

Analysis: The appeal was decided by following the coordinate bench decision in the assessee's own case and the later writ decision in its favour. The Tribunal noted that the assessee's coaching and related activities were ancillary to its main educational objects and did not amount to business merely because surplus income was generated. The Revenue could not distinguish the earlier decisions or show any reason to depart from the consistent view that the institute is an educational institution whose income is exempt.

Conclusion: The issue was decided against the Revenue and in favour of the assessee; the exemption claim was upheld.

Final Conclusion: The impugned order was sustained and the Revenue's appeal failed.

Ratio Decidendi: Activities that are ancillary to the main educational objects of an institution do not lose their charitable character merely because they generate surplus, and such an institution may remain eligible for exemption where the governing statutory conditions are satisfied.

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