TaxTMI 
TaxTMI 
2015 (9) TMI 1306
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....vi) and (via) of the Income Tax Act, 1961 (hereinafter referred to as 'the said Act) for the Assessment Year 2010-11 onwards relevant to the Assessment Year 2011-12 onwards. By virtue of the said order, the application of the petitioner for grant of exemption has been rejected. 2. The petitioner is registered as a Trust by the Deed of Settlement dated 21.07.1998 and is also registered under Section 12A of the said Act vide order dated 25.08.1998 for the Assessment Year 2010-11 onwards. The Trust is running a school in the name of Delhi Public School at New Town, Kolkata. 3. With regard to the application filed by the petitioner seeking exemption under Section 10(23C)(via) of the Act, the application has been rejected on the ground tha....
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....d from the students and the borrowing has resulted in heavy outgo of the money in the form of interest payment and further that the Trust has made donations towards corpus fund of another school whereas the funds should have been utilized for reducing the cost by return of a secured loan and, consequently, reducing the burden on the students. It has thus been held that the school is being run as a business and not as a charity. It has further been held that the trust in no way can be said to be existing solely for educational purposes and not for the purposes of profit. 6. The learned counsel for the petitioner has contended that for considering an application for grant of exemption under section 10(23C)(vi), what is relevant to be consi....
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....Ors., 2008 (301) ITR 86 SC has been relied upon by another Division Bench of this Court in Digambar Jain Society for Child Welfare vs. Director General of Income Tax (Exemptions): 456 Delhi 329 ITR where it has been held that by virtue of the Supreme Court‟s decision in American Hotel & Lodging Association (supra), it has been clarified that the amended provisions of Section 10(23C) (vi) are analogous to Section 10(22). It has also been laid down by the Division Bench that when an application for exemption is moved by a Trust, fund, university or other educational institution, the threshold conditions which are to be examined at the stage of grant or rejection of exemptions are: (i) actual existence of an educational institute, (ii) a....
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....fit. (2) The predominant object test must be applied - the purpose of education should not be submerged by a profit making motive. (3) A distinction must be drawn between the making of a surplus and an institution being carried on "for profit". No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit. (4) If after meeting expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes. (5) The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to educat....
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....t of approval for considering whether approval can be granted in the first instance or not. 14. The impugned order is accordingly set aside. 15. In Digambar Jain Society (supra), this Court after setting aside the impugned order therein had issued a mandamus directing the Revenue to grant exemption to the petitioner therein under Section 10(23C) (vi) of the said Act. The Court, while doing so, also directed that the concerned authority would be free to incorporate stipulations and conditions in terms of the third proviso. We find that it is an admitted fact in the present case that the only activity of the petitioner is that of running of a school and the petitioner is not indulging in any activity for the purposes of profit and these....