1994 (11) TMI 71

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....THA IYER J.--The assessee is a trust constituted by a deed dated September 1, 1977. The objects of the trust are to provide for: " (a) Institutions for spreading faith in God, the consciousness of the basic identity of religions, the spirit of religious and universal brotherhood. (b) Educational institutions of any kind either general, vocational, pedagogic or otherwise. (c) Hostels, boar....

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....l and developmental activities. The assessee claimed exemption under section 10(22) of the Income-tax Act, 1961, in respect of the income so received. The assessing authority, however, rejected the claim. The Commissioner (Appeals) took a different view and held that the entire income was exempt, inasmuch as the assessee was running only educational institutions and had no other source of income. ....

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.... educational purposes. It was also contended that since a surplus had been generated from the running of the schools, the institution must be treated as one run for profit. We find it difficult to agree with either of these submissions. It is true that the objects of the trust comprehend various items. But admittedly the trust is running only the two educational institutions referred to earlier....

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....ot distributed. It is not a profit-making organisation and the surplus earned from the schools is ploughed back into the schools themselves for their educational and developmental purposes. What is relevant under section 10(22) is the source of the income, whether it has been derived from an educational institution existing solely for educational purposes. The schools in question are not used for ....