2014 (10) TMI 399

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.... of Writ Petition No.363 of 2012 is being taken into consideration. The petitioner is a society duly registered under the Societies Registration Act and is running and managing an educational institution since inception under the name and style of "The Chintels School" at 121 HIG Ratan Lal Nagar, Kanpur Nagar, Uttar Pradesh. The main object of the petitioner is to run and manage a school for educational purposes. According to the petitioner, the society is existing solely for education purpose and till date the petitioner society has never undertaken any other activity except the educational activity. Under Section 10(23C)(vi) of the Act all educational institutions existing solely for educational purposes and not for purpose of profit ar....

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....erson, any income falling within any of the following causes shall not be included - ** ** ** (23C)(vi):- Any income received any any person on behalf of - (i) to (v)** ** ** (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority. The First, second, third, thirteenth and fourteenth Proviso of Section 10 (23C) reads as under: "First Proviso: - Provided that the fund or trust or institution [or any university or other educational institution or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v) [or sub-c....

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....n referred to in sub-clause (v) is notified by the Central Government [or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that-- (i) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not - (A) applied its income in accordance with the provisions contained in clause (a) of the third proviso; or (B) invested or deposited its funds in accordance with the provisions contained ....

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....Board of Direct Taxes, 2008 (301) ITR 86 analysed the aforesaid provisions and, while setting aside the order and remitting the matter back for a fresh consideration clarified that if the petitioner fulfils the threshold conditions of the actual existence of an educational institution under Section 10(23C)(vi) of the Act, the authority could not reject the application. In American Hotel & Lodging Association (supra) the authority was required to consider the nature and genuineness of the activities. The third proviso only sets out the conditions, which must be adhered to by the institution and compliance therewith is not to be tested at the stage of approval since they require considerations of facts and findings, which takes place in futu....