2003 (12) TMI 51 - HC - Income Tax

Whether, Tribunal has erred in allowing benefit of section 10(22) of the Income-tax Act, 1961, even though it is not an educational institution but merely providing financial assistance? - the only issue arising for consideration in this appeal is as to whether the assessee, who is only providing financial assistance to educational institutions is entitled to the benefit of section 10(22) - In the present case, exemption under section 10(22) of the Act was disallowed to the assessee only on the ground that it was merely providing financial assistance to educational institutions like Lady Sri Ram College for Women, Sriram College of Commerce, etc., but was not running these institutions by itself. In view of the aforenoted authoritative pronouncement, no question of law, much less a substantial question of law, survives for our consideration

Summary

Issues:
- Interpretation of section 10(22) of the Income-tax Act, 1961 regarding educational institutions providing financial assistance.

Analysis:
The High Court of Delhi heard an appeal under section 260A of the Income-tax Act, 1961, filed by the Revenue against a composite order passed by the Income-tax Appellate Tribunal. The main issue in question was whether an assessee providing financial assistance to educational institutions is entitled to the benefit of section 10(22) of the Act. The court noted that a similar issue had been addressed by the Supreme Court in a previous case, where it was held that an educational society solely established for educational purposes, even if it provides financial assistance to colleges or schools, should be considered an 'educational institution' under section 10(22) of the Act.

The court emphasized that the object of the society, in this case, was to establish, run, manage, or assist colleges or schools solely for educational purposes. The court reiterated the Supreme Court's stance that the primary purpose of such societies is to impart education through these institutions, making them eligible for the benefits under section 10(22) of the Act. In the present case, the assessee was denied exemption under section 10(22) on the grounds of providing financial assistance to educational institutions without directly running them. However, following the authoritative pronouncement of the Supreme Court and the interpretation of the law, the High Court concluded that no substantial question of law remained for consideration. Consequently, the appeal by the Revenue was dismissed by the court.