TaxTMI 
TaxTMI 
2014 (8) TMI 278
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....ng before the High Court. The ld. representative further submitted that the application filed by the assessee for condonation of delay in filing the application for registration is pending before CBDT. According to the ld. representative, grant of exemption u/s 11 does not require registration u/s 12AA of the Act. Even otherwise, according to the ld. representative, the assessee is entitled for exemption u/s 10(23C)(iiiab) and (iiiad) of the Act since the receipt of each educational institution is less than Rs. 1 crore. According to the ld. representative, the aggregate income of the trust should not be taken for the purpose of section 10(23C) of the Act. Each institution shall be taken as such for the purpose of exemption u/s 10(23)(iiiab) and (iiiad) of the Act. Therefore, in respect of the institution, whose annual receipt is less than Rs. 1 crore has to be granted exemption u/s 10(23C) (iiiad) of the Act. Moreover, when the government substantially finances, such institution is exempted under section 10(23C)(iiiab) of the I.T. Act. For the purpose of computing the aggregate receipt, the government aid has to be excluded. Since these points were not considered by the lower autho....
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....e is not entitled to claim exemption from payment of tax u/s 11 & 12 of the Act. Here also, the appeal is now said to be pending before the High Court, therefore, in view of the judgment of the Apex Court in U.P. Forest Corporation & Anr (supra), the assessee is not entitled for exemption u/s 11 of the Act. 6. Now the assessee claims that it is entitled for exemption u/s 10(23)(iiiab) and (iiiad) in respect of the educational institution whose income is less than Rs. 1 crore. The assessee also claims that one of the institutions receives substantial aid from government, hence the income of that institution has to be excluded. Therefore, the question now arises for consideration is whether the each educational institution has to be taken as independent units or the trust has to be taken as a unit for assessment. This issue came up before the Delhi Bench of this Tribunal in Jat Education Society (supra). The Delhi Bench of this Tribunal found that for the purpose of section 10(23)(iiab) and (iiiad), the annual gross receipt of each educational institution run by the assessee has to be taken separately and it cannot be clubbed together in the hands of the trust for examining the fulf....
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....the purpose of profit could be regarded as " other educational institution" coming within section 10(22) of the Act . (See CIT v. Doom Foundation [1985] 154 ITR 208 (Cal) and Agarwal Shiksha Samiti Trust v. CIT [1987] 168 ITR 751 (Raj). It will be rather unreal and hypertechnical to hold that the assessee-society is only a financing body and will not come within the scope of "other educational institution" as specified in section 10(22) of the Act. The object of the society is to establish, run, manage or assist colleges or schools or other educational institutions solely for educational purposes and in that regard to raise or collect funds, donations, gifts, etc. Colleges and schools are the media through which the assessee imparts education at the levels of colleges and schools and so, such an educational society should be regarded as an "educational institution" coming within section 10(22) of the Act. We hold accordingly. In our view, the judgment of the High Court does not merit interference. The plea of the Revenue to the contrary is untenable and we repel the same. All the appeals filed by the Revenue shall stand dismissed, but there shall be no order as to costs." 8. We ha....
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....r mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit, shall be one crore rupees.]" Therefore, one crore of rupees is the aggregate annual receipts which is prescribed under the rules. In other words, if the aggregate annual receipts of an educational institution is less than one crore, the income from such educational institution in the hands of the assessee, is not taken into consideration in computing the total income of the assessee. Sub-clause (vi) provides that any University or other educational institution existing for educational purpose and not for the purpose of profit other than those mentioned in sub-clause (iii)(ab) and sub-clause(iii)(ad) and which may be approved by the prescribed Authority, they are also entitled to the said benefit. In other words, sub-clause (iii)(ab), subclause (iii)(ad) and clause (vi) applies to three categories of institutions. Now, we are concerned with the meaning to be attached to the word "aggregate annual receipt". The argument is other educational institution referred ....
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.... to club the annual receipts of all educational institutions run by the assessee society, they could have said so in clear terms. On contrary what is stated in the said Section is the aggregate annual receipts of such University or such educational institution referring to other educational institution. Other educational institution is to be understood with the context of the first word i.e., the University. Both in the University and any educational institutions, education is imparted. The University is a statutory body. But there are a number of educational institutions which are not run by a statutory authority which are imparting education, the word "other educational institution" has to be understood in the context of other than any University. If so understood, all that it means is every educational institution existing solely for educational purpose and not for the purpose of profit, if the aggregate annual receipts of such educational institution exceeds Rs. 1 crore, then the income from such educational institution received by the assessee is excluded from his total income. In an educational institution the amount are calculated periodically. It may be calculated under dif....
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....re. Therefore, irrespective of the expenditure incurred by those institutions, the exemption is based on the total receipts. Even if the word "aggregate" has to be understood s suggested by the Revenue as the annual receipts of such educational institutions put together, probably, the said provision regarding exemption would be of no use at all. Especially, if the society is running a medical college or any engineering college or other professional courses, then the annual receipt of each institution would run to few crores and therefore, the very object of granting exemption to such genuine institution would be lost. Therefore, the word "aggregate annual receipt" has to be understood with the context which it is used and the purpose for which the said provision was inserted, keeping in mind, the Scheme of the Act. Therefore, if an assessee is running several educational institutions, if any of them is wholly or substantially financed by the Government, then the income from such educational institution received by the assessee is not included while computing his total income e. Similarly, income from each educational institution if they are not receiving any aid from the Government....