2015 (9) TMI 857 - SC - Income Tax

Grant of a certificate under Section 10(23-C) (VI) rejected - the appellants are not using the entire income for the educational purposes for which purpose the trust is established as concluded by HC - Held that - We are informed by the learned counsel for the appellants that the appellants have amended the objects of the Society w.e.f. 31.03.2008. If that is so, in our opinion, the appellants shall now make an appropriate application before the authorities for grant of certificate under Section 10(23-C) (VI) of the Act for the assessment years 2002-03 to 2007-08 along with the amended objects of the Society. In view of this subsequent development and keeping in view the peculiar facts and circumstances of the case, we set aside the order passed by the High Court and the authorities concerned. We now permit the appellants to file fresh application within a months time from today. If such application is filed within the time granted the authority will consider the same in accordance with law, keeping in view the amended objects of the Society w.e.f. 31.03. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Grant of certificate under Section 10(23-C) (VI) of the Income Tax Act, 1961; Non-usage of entire income for educational purposes by trust; Challenge against order of Chief Commissioner of Income Tax; Amendment of objects of the Society; Fresh application for certificate submission.

Analysis:
The Supreme Court heard appeals against a judgment of the High Court of Madhya Pradesh affirming the decision of the Chief Commissioner of Income Tax. The petitioners sought a certificate under Section 10(23-C) (VI) of the Income Tax Act to claim exemption, which was denied due to alleged non-utilization of the income for educational purposes as intended by the trust's establishment.

The appellants, dissatisfied with the Chief Commissioner's order, approached the High Court through writ petitions which were dismissed. The Supreme Court considered the case and noted that the appellants had amended the objects of the Society. Consequently, the Court directed the appellants to apply afresh for the certificate under Section 10(23-C) (VI) for specific assessment years, along with the amended objects of the Society effective from a specified date.

In light of the amendments and the unique circumstances, the Supreme Court set aside the High Court's order and allowed the appellants to submit a fresh application within a month. The authorities were instructed to review the new application in accordance with the law, considering the revised objects of the Society. The Court concluded by disposing of the Civil Appeals and leaving all contentions of both parties open for further consideration.