1982 (7) TMI 60 - HC - Income Tax

Summary

Issues Involved:
1. Whether the assessee-trust is an educational institution within the meaning of section 10(22) of the Income-tax Act, 1961, entitled to exemption in respect of its income as such.
2. Whether the finding of the Tribunal that the assessee was an educational institution within the meaning of section 10(22) of the Act and qualified for exemption in respect of its income as such is correct in law on the basis of the material on record.

Summary:

Issue 1: Educational Institution Status u/s 10(22)
The primary issue was whether the assessee-trust, Sindhu Vidya Mandal Trust, Baroda, qualifies as an educational institution u/s 10(22) of the Income-tax Act, 1961, and is thus entitled to income tax exemption. The trust runs primary and secondary schools and aims at the advancement of education and welfare of students. The Income Tax Officer (ITO) initially rejected the exemption claim, but the Appellate Assistant Commissioner (AAC) reversed this decision, recognizing the trust as an educational institution. The Tribunal upheld the AAC's decision, leading to the Revenue's appeal.

Issue 2: Tribunal's Finding on Educational Institution Status
The Tribunal's finding that the assessee-trust is an educational institution was challenged. The court examined the definition of "institution" and concluded that the trust, being an organization established for educational purposes, fits within the meaning of "educational institution" u/s 10(22). The court referenced the Oxford Dictionary and various case laws, including Mayor & C. of Manchester v. McAdam and CIT v. Radhaswami Satsang Sabha, to support its conclusion. The court emphasized that the trust's activities and objectives align with the promotion of education, making it eligible for the exemption.

Conclusion:
The court held that the assessee-trust qualifies as an educational institution u/s 10(22) of the Act and is entitled to claim exemption on its income. Both questions referred to the court were answered in the affirmative and against the Revenue, with no order as to costs.