AI Drafter 
TaxTMI 
TaxTMI 
2013 (7) TMI 1225
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....registered with the IT Department having PAN AABTN2289D. It made an application in prescribed form for approval under s. 10(23C)(vi) of the IT Act for asst. yr. 2009-10 onwards. The said application has been rejected by impugned order dt. 31st Aug., 2010 passed by the Chief CIT, Ghaziabad on following grounds: (A) The approval under s. 10(23C)(vi) of the Act is available only to an educational institution existing solely for the educational purposes while the memorandum of the society stipulates other objects as well. (B) The application for exemption of the income-tax should have been filed by the educational institution while the application in the instant case has been made by the society. (C) The aims and objects of the society provides for free education but the income and expenditure account filed along with the application shows that the institution has been charging fees and which is against the objects of the society. 2. Challenging the said order, petitioner has come up in writ petition before this Court. 3. We have heard Sri Ashish Bansal, advocate for the petitioner and Sri Shambhu Chopra, learned counsel appearing for the Department. ....
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....u Chopra, counsel for the Department contended that the application filed by the petitioner society was rightly rejected as not maintainable and since the society has not been formed with the sole object of imparting education, but its memorandum of association reflects that it has other aims and objects as well and, therefore, it has rightly been denied approval under s. 10(23C)(vi). 7. The first and foremost question which is required to be considered is whether the application for approval under s. 10(23C)(vi) at the instance of the petitioner society was maintainable or not and if the view taken by the prescribed authority that such application should have been filed by the educational institution itself, is legally sustainable. Before insertion of s. 10(23C)(vi), such cases were covered by s. 10(22) which was to the following effect: 10(22) any income of an university or other educational institution, existing solely for educational purposes and not for purposes of profit. The aforesaid provision was amended by Finance (No. 2) Act, 1998, w.e.f. 1st April, 1999 and in its place s. 10(23C)(vi) has been inserted which is as follows: 10(23C)(vi) any univers....
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....as an educational institution if the society was running an educational institution. We are of the view that an educational society or a trust or other similar body running an educational institution solely for educational purposes and not for the purpose of profit could be regarded as 'other educational institution" coming within s. 10(22) of the Act. [See CIT vs. Doon Foundation (1986) 53 CTR (Cal) 440 : (1985) 154 ITR 208 (Cal) and Agarwal Shiksha Samiti Trust vs. CIT (1987) 66 CTR (Raj) 95 : (1987) 168 ITR 751 (Raj)]. It will be rather unreal and hypertechnical to hold that the assessee-society is only a financing body and will not come within the scope of 'other educational institution' as specified in s. 10(22) of the Act. 9. Similar view has been taken by Delhi High Court in its judgment in Digember Jain Society for Child Welfare vs. Director General of IT (Exemptions) (supra) wherein it was observed as under: The Supreme Court in Aditanar Educational Institution vs. Addl. CIT (1997) 139 CTR (SC) 7 : (1997) 224 ITR 310 (SO, has held that a society or a trust or other similar body running educational institutions solely for educational purposes and hav....
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.... held that even though the aims and objects of the society may contain several objects but if it has been proved by material on record that the society is not perusing any other activity apart from education then in such case, the society will qualify for grant of approval under s. 10(23C)(vi) of the Act. It was observed as under: In the facts and circumstances, we are of the opinion that as of now the petitioner society running educational institution by the name of C.P. Vidya Niketan Inter College at Kaimganj, District Farrukhabad imparts education to students from Class VI to XII, in the absence of any allegation or material, the object clause providing for other charitable activities, would not disentitle the society from approval under s. 10(23C)(vi) of exemption. The proviso added to s. 10(23C)(vi), specially provisos 2, 3, 12 and 13, give sufficient powers to check the abuse of the exemption. The mere possibility, therefore, that the society may in future pursue activities, which are not charitable, or closely connected with education for making profit, would not constitute the grounds to reject the approval under s. 10(23C)(vi). 12. Perusal of the impugned order....