Educational purpose exemption survives when outreach and extension activities form part of the university's educational framework.

An educational institution did not lose its character as existing solely for educational purposes under section 10(23C)(vi) merely because its memorandum included extra mural studies, extension programmes and field outreach activities. Those activities were treated as part of the modern educational framework required by the University Grants Commission and as supporting the educational process, not as independent commercial or charitable objects. The revenue's narrow view that any object beyond classroom teaching defeated exclusivity was rejected, and the institution was held to satisfy the exemption condition.

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Issues: Whether an educational institution can be said to exist solely for educational purposes for the purposes of section 10(23C)(vi) of the Income-tax Act, 1961, when its memorandum also includes extra mural studies, extension programmes and field outreach activities.

Analysis: The institution was running a formal educational establishment and had been declared a deemed university under section 3 of the University Grants Commission Act, 1956. The inclusion of extra mural, extension and field outreach activities in its memorandum was not an independent commercial or charitable object, but a condition imposed by the University Grants Commission as part of the modern concept of education and institutional excellence. Those activities were treated as aiding and enlarging the process of education by developing knowledge, skill and character through wider social interface, rather than detracting from the educational character of the institution. The narrow view taken by the revenue authority that any additional object beyond classroom teaching destroyed the requirement of exclusivity was rejected.

Conclusion: The institution was held to exist solely for educational purposes and satisfied the requirements of section 10(23C)(vi); the refusal of exemption was unsustainable.

Final Conclusion: The writ petition succeeded, the impugned refusal was set aside, and the institution was directed to be granted exemption for the relevant assessment year and onwards.

Ratio Decidendi: For the purpose of section 10(23C)(vi) of the Income-tax Act, 1961, activities expressly required as part of a university's educational framework and intended to further the educational process do not negate the condition that the institution exists solely for educational purposes.

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