TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1425
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....sions for educational institutions were not required to file return of the income upto the assessment year 2002-2003. With effect from 1-4-2003, it was made mandatory to file return for educational institutions where aggregate annual receipts exceeds Rs.1 crore in accordance with section 139 (4C) of the Act of 1961. As per the society it had been filing returns voluntarily and in the years 2004-2005 and 2005-2006, the annual receipts of the petitioners-society were exceeded of Rs.1 Crore, hence, the application for exemption was filed and the exemption was granted. 3. The petitioner No.1 filed an application seeking exemption under section 10(23C)(vi) of the Act of 1961 for the assessment year of 2007-2008 accounting period 1-4-2006 to 31-3-2007. The Chief Commissioner of Income-tax vide letter dated 7-2-2008 sought certain clarifications from the petitioner No.1-society in regard to exemption. It has been mentioned in the letter that two objects of the society, namely, appear to be non-educational and they are independent to other objects of the society, hence, the petitioner-society was directed to explain its claim to the effect that the society exists solely for educati....
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....as been rejected, which is against the principle of inconsistency. In support of her contentions, learned Senior Counsel relied on the following judgments:- (i) [1999] 7 SCC 120 (Dr. Preeti Shrivastava v. State of M.P.); (ii) [2008] 10 SCC 509 (American Hotel and Lodging Association Educational Institute v. Central Board of Direct Taxes); (iii) [1992] 193 ITR 321 (M/s. Radhasoami Satsang v. CIT); (iv) [2008] 300 ITR 75 (Delhi) (Director of Income-tax (Exemptions) Escorts Cardiac Disease Hospital Society); and. (v) [1980] 2 SCC 31 (Additional Commissioner of Income-tax , Gujarat v. Surat Art Silk Cloth Manufacturers Association). 6. Contrary to this, learned Senior Counsel appearing on behalf of the respondents No. 2 and 3/Department has contended that the objects particularly c and d of the petitioner society are contrary to the object of the educational purpose and as per the provisions of section 10(23C)(vi) of the Act of 1961, it is obligatory on the part of the authority to examine the record and object of the society and the authority has objectively examined the objects and came to the conclusion that the petitioner-society does not ex....
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....not apply. Therefore, earlier prior to 1-4-1999 when exemption was given to the appellant, there was no assessment nor demand. Section 10(22) had an automatic effect. Once an applicant institution came within the phrase "exists solely for educational purposes and not for profit" no other conditions like application of income were required to be complied with. The prescribed authority was only required to examine the nature, activities and genuineness of the institution. The above phrase was the only requirement for initial approval. The mere existence of profit/surplus did not disqualify the institution if the sole purpose of its existence was not profit-making but educational activities as section 10(22) by its very nature contemplated income of such institution to be exempted. Under section 10(22) the test was restricted to the character of the recipient of income viz. Whether it had the character of educational institution in India, its character outside India was irrelevant for deciding whether its income would be exempt under section 10(22). 36. The moot question in section 10(22) was whether the activities of the applicant came within the definition of "income of educ....
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....year. 39. In Oxford University Press this Court found that the applicant was a branch of Oxford Press which was part of Oxford University but its activity in India was restricted to publishing books, journals, periodicals, etc. The Tribunal held that because Oxford Press is part of the university its income was exempt under section 10(22) as it stood at the relevant time. It is in this context that the words "existing solely for educational purposes and not for the purposes of profit" in section 10(22), which words also find place in section 10(23C)(vi), came for consideration. This Court held that location of the university is not relevant, what is relevant is " whether there is imparting of education in India. Therefore, the test formulated by this Court to decide the character of the recipient of income under section 10(22) is whether there is in fact existence of an activity which is in the nature of "imparting of education in India". This is how the words "in India" have come into judgment and not by incorporation from section 11(1)(a) of the 1961 Act, as contended on behalf of the Department. 40. We shall now consider the effect of insertion of provisos to sec....
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....dance to the PA as to the meaning of the words "application of income to the objects for which the institution is established". Therefore, the twelfth proviso is the matter of detail. 9. The Hon'ble Supreme Court further in the case of Sole Trustee, Loka Shikshana Trust v. Commissioner of Income-tax, Mysore, [1975] 101 ITR 234, has held as under in regard to the word "education" used under section 2(15) of the Act of 1961:- "The sense in which the word "education" has been used in section 2(15) in the systematic instruction, schooling or training given to the young is preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word "education" has not been used in that wide and extended sense, accordingly to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, som....