1995 (12) TMI 13 - HC - Income Tax

Summary

Issues Involved:
1. Whether Oxford University Press, Bombay, is exempt u/s 10(22) of the Income-tax Act, 1961.

Summary:

Issue 1: Exemption under Section 10(22) of the Income-tax Act, 1961

The core issue was whether Oxford University Press, Bombay ("the Press"), part of Oxford University, is exempt from income tax u/s 10(22) of the Income-tax Act, 1961. The Press filed its return for the assessment year 1976-77, initially showing an income of Rs. 19.94 lakhs, later revised. Historically, the Press was assessed as a company. However, the Press claimed exemption u/s 10(22) during the assessment, arguing it was a branch of Oxford University, which existed solely for educational purposes.

The Income-tax Officer rejected this claim, noting that the Press also engaged in selling books from other publishers, thus not qualifying for exemption. The Commissioner (Appeals) overturned this, holding that the Press, being part of Oxford University, was entitled to exemption u/s 10(22).

The Revenue appealed to the Income-tax Appellate Tribunal, which upheld the Commissioner's decision, stating that the Press, as part of Oxford University, fulfilled the conditions for exemption since the University existed solely for educational purposes.

The Revenue contested this, arguing that the Press was not a University or an educational institution within the meaning of section 10(22). The High Court examined the interpretation of section 10(22), emphasizing that the exemption applies to the income of a University or educational institution existing solely for educational purposes and not for profit. The Court concluded that the University or institution must exist in India for educational purposes to qualify for exemption.

The Court held that Oxford University does not exist in India, and the Press's activities in India were commercial, involving printing, publishing, and selling books for profit. Thus, the Press could not be considered a University existing solely for educational purposes in India. The Court also noted that the Press had historically been assessed as a company and should continue to be assessed as such.

Conclusion:
The High Court ruled in favor of the Revenue, stating that Oxford University Press, Bombay, does not qualify for exemption u/s 10(22) of the Income-tax Act, 1961, as it does not exist in India solely for educational purposes. The question was answered in the negative, and in favor of the Revenue.