TaxTMI 
TaxTMI 
2009 (8) TMI 83
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the University Grants Commission Act, 1956. It is registered under Section 12A as well as Section 80G of the Act. However, its application for registration under Section 10(23C)(vi) of the Act has been rejected by the respondent vide its order dated 26.3.2008. The main reason given by the respondent is that education is not the only objective of the petitioner Institute inasmuch as the objective clause in the Memorandum of Association (for short, "MOA) of the petitioner Institute mentions that the institute is also established for "undertaking extra mural studies, extension programmes and field outreach activities to contribute to the development of society". This order is challenged by way of the present writ petition. 2. The core question which falls for consideration is as to whether aforesaid activities stipulated in the object clause is educational activity or it would be termed as an activity other than for educational purpose. In order to decide this question, it would be necessary to give the factual matrix of the case and also the contentions advanced by counsel for either side. 3. The petitioner Institute was registered on 5.5.2004 under the Societies Registrati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....specialization which are innovative and of very high academic standards at the Master"s (or equivalent) and/or research levels. It should also have a greater interface with society through extra mural, extension and field action related programmes." It, thus, specifically provides that in order to get recognition as a University, an institute should have a greater interface with society through extra mural, extension and field action related programmes. Along with these guidelines, model constitution of MOA/Rules which has to be adopted by all such institutions applying for "Deemed University" status is prescribed. It mentions that every such institution has to be registered as a "Society" under the Societies Registration Act, 1860 or as a Trust with trustees being appointed and vested with legal powers and duties and has to frame the MOA/Trust Deed, Rules and Bye-laws. The draft outline of the MOA is also provided, which specifically points out as to what would be the objectives mentioned in the MOA. It reads as under :- "3. Objectives The objectives for which the Institute is established are : (i) to provide for instruction and training in such branches of learning as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t be said that one of them is the primary objective and the others are ancillary to it. The mental process of the respondent can be gazed in the following discussion contained in the impugned order :- "9. I have considered the case of the applicant in the light of the above provisions of the Act, and the judgments of the Hon"ble Supreme Court and the High Court of Gujarat. The sub-clause (iii) of clause 3 of the MOA of the applicant society does not relate to formal education as defined by the Hon"ble Supreme Court and High Court of Gujarat in the cases cited above. The Society is having multiple objectives of which education is only one of them. Each object is independent of the other and it cannot be said that one of them is the primary object and the others are ancillary to it. It can also not be said that the main object is education and the others are related to it. Each object exists for a specific purpose for which it has been laid down. Due to the amendments brought about in the Income Tax Act and Income Tax Rules, approval u/s 10(23C)(vi) is no longer limited to periodical approval of three years. The approval is now given from a particular assessment year onwards....
X X X X Extracts X X X X
X X X X Extracts X X X X
....students by normal schooling." 10. We also take note of the judgment of the Gujarat High Court in the case of Saurashtra Education Foundation v. Commissioner of Income Tax, (2005) 273 ITR 139 (GUJ), which has been relied upon by the respondent in the impugned order wherein the Gujarat High Court discussed the term "other educational institutions" as appearing in Section 10(22) of the Act in the following manner :- "…white a trust holding property for the charitable purpose of education, as defined in Section 2(15) of the Income Tax Act, 1961, may also be an education institution existing solely for the purpose of education, the two institutions cannot be treated as belonging to the same class. An institution may be carrying on educational activities as are being carried on by the assessee herein without imparting formal education and without being affiliated to or accountable to any authority. Such a trust can certainly be considered as qualifying for exemption u/s 11(1)(a) read with section 2(15), it is the activities which are in focus whereas, in section 10(22) both the institution and the activities are in focus. An educational institution u/s 10(22) is, therefore, more....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elf as the petitioner is a "Deemed University" and, thus, has got the status of a university. 13. We have to remind ourselves that the main reason given by the respondent in rejecting the application of the petitioners was that the petitioner Institute is having multiple objectives, of which education is only one of them. In coming to this conclusion, the respondent has been swayed by the so-called other objectives, namely "greater interface with society through extra mural, extension and field action related programmes" stipulated in the MOA. What is perceived by the respondent is that these objectives are independent of each other and it cannot be said that the main object is education and others are related to it. It is here where the authority faltered in its approach. It is where the respondent faltered. The first aspect which was totally ignored was that this object is included at the instance of UGC, without which the UGC would not have entertained the application of the petitioner Institute for grant of status of "Deemed University". Obviously, the UGC would not insist on including an objective which is unrelated to "education". There is a clear purpose behind it. The af....