2002 (12) TMI 74

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....terial facts are as follows: During the course of assessment proceedings of the respondent-society, hereinafter referred to as the assessee, for the aforenoted assessment year, the Assessing Officer noticed that the assessee had given interest-free loans to: (i) its Secretary and Principal of the school, namely, Shri G.C. Lagan, in the assessment years 1987-88, 1991-92 and 1992-93; (ii) its Vice-Principal, namely, Shri Bharat Bhushan, and (iii) one Bal Vikas Public School, in which the said Shri G.C. Lagan was also one of the trustees. Besides, the assessee had also paid rent for the use of the building, belonging to one of the trustees, for running the school. He, thus, felt that by giving these loans and paying the rent, the assessee had....

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....ers of the assessee and that during its existence for the last 25 years, the assessee has not carried on any activity other than education and further it has not collected any donations or contributions. The Revenue challenged the order of the Commissioner of Income-tax (Appeals) before the Tribunal, but without any Success. The Tribunal, while observing that, on the facts and circumstances, they were satisfied with the reasoning and the conclusions arrived at by the Commissioner of Income-tax (Appeals), affirmed the view taken by him. Hence, the present appeal. The following questions, stated to be substantial questions of law, have been proposed in the appeal memo. "1. Whether, on the facts and in the circumstances of the case, the Inc....

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.... support of this proposition, learned counsel has placed reliance on the decision of the Madras High Court in Vinjane Centre v. Dy. CIT [2002] 258 ITR 191, wherein it has been held that the Tribunal being the final fact finding authority, it is expected to apply its mind and record separate findings on each issue and an order merely quoting the findings recorded by the Commissioner of Income-tax (Appeals) does not show application of mind by the Tribunal and, therefore, cannot be sustained. Mr. Goyal, learned counsel for the assessee, on the other hand, supporting the orders passed by both the appellate authorities, submits that any alleged violation of section 13(1)(c) is of no consequence in so far as the question of exemption under sect....

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....t is to make profit. In evaluating or appraising the above, one should also bear in mind the distinction/difference between the corpus, the objects and the powers of the concerned entity." Thus, the question of eligibility of exemption under the said section has to be determined with reference to the objects of the assessee (society) and the exemption cannot be denied merely because while the working of the society some surplus results. Similarly, in the context of exemption under section 10(22), the conditions as stipulated in either section 11 or 13 of the Act are irrelevant. In the present case, as noticed above, while holding that the assessee is entitled to exemption under section 10(22) of the Act, the Commissioner of Income-tax (Ap....