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Issues: (i) Whether an institution imparting education only below class I was covered by the Right of Children to Free and Compulsory Education Act, 2009 and required to comply with its admission norms; (ii) Whether non-compliance with that Act could justify denial of approval under section 10(23C)(vi) of the Income-tax Act, 1961.
Issue (i): Whether an institution imparting education only below class I was covered by the Right of Children to Free and Compulsory Education Act, 2009 and required to comply with its admission norms.
Analysis: The expression "elementary education" in section 2(f) of the Right of Children to Free and Compulsory Education Act, 2009 means education from class I to class VIII, and "school" in section 2(n) refers to a recognised school imparting such elementary education. Section 12(1)(c) applies to schools covered by section 2(n), and the proviso extends those obligations to pre-school education only where the school already imparts elementary education. An institution teaching only below class I does not fall within that statutory definition.
Conclusion: The institution was not covered by the Right of Children to Free and Compulsory Education Act, 2009 and was not obliged to comply with its admission provisions.
Issue (ii): Whether non-compliance with that Act could justify denial of approval under section 10(23C)(vi) of the Income-tax Act, 1961.
Analysis: Approval under section 10(23C)(vi) turns on whether the institution exists solely for educational purposes and not for profit, and on the genuineness of its educational activities. Non-compliance with another statute, by itself, is not a ground under the Income-tax Act for refusing such approval, particularly when the Revenue does not dispute the genuineness of the educational activity.
Conclusion: Denial of approval under section 10(23C)(vi) on the ground of alleged non-compliance with the Right of Children to Free and Compulsory Education Act, 2009 was not justified.
Final Conclusion: The refusal of approval was set aside and the authority was directed to grant approval under section 10(23C)(vi).
Ratio Decidendi: Non-compliance with a statute other than the Income-tax Act, 1961 cannot by itself justify refusal of approval under section 10(23C)(vi) where the institution's educational activities are genuine and it falls outside the other statute's operative scope.
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