2010 (11) TMI 1125 - HC - Income Tax

Summary

Issues Involved:
1. Delay in filing the application for exemption u/s 10(23C)(vi) for the assessment year 2008-09.
2. Non-educational nature of some objects for the assessment year 2009-10.

Summary:

Issue 1: Delay in Filing the Application for Assessment Year 2008-09

The petitioner sought to declare the proceedings of the Chief Commissioner of Income-Tax dated 26-5-2010 as illegal and arbitrary, and to direct the first respondent to grant approval u/s 10(23C)(vi) of the Income-Tax Act, 1961. The petitioner, a society registered under the Andhra Pradesh (Telangana Areas) Public Societies Registration Act, 1350 Fasli, submitted an application in Form 56D on 27-5-2009 for the assessment year 2008-09. The application was rejected as it was beyond the time limit prescribed under the fourteenth proviso to section 10(23C)(vi) of the Act. The court noted that no power is vested with the Chief Commissioner of Income-Tax to entertain an application beyond the statutory period by condoning the delay. The fourteenth proviso, inserted by the Finance Act, 2006, provides a time-limit for filing such applications, and the Chief Commissioner, being a creature of statute, cannot condone the delay. Hence, the rejection of the application for the assessment year 2008-09 on the ground of delay was upheld.

Issue 2: Non-Educational Nature of Some Objects for Assessment Year 2009-10

For the assessment year 2009-10, the petitioner's application was rejected on the grounds that some of their objects were non-educational and they were not registered under A.P. Act 30 of 1987. The court emphasized that to be eligible for exemption u/s 10(23C)(vi), an institution must exist solely for educational purposes and not for profit. The original objects of the petitioner included activities such as "eradicating unemployment" and "encouraging social activities among students," which do not relate solely to education. The court referred to various judgments to highlight that the term "solely" means exclusively for educational purposes. Even if the petitioner's contention regarding the non-requirement of registration under A.P. Act 30 of 1987 is accepted, the object of "eradicating unemployment" cannot be considered integrally connected with or ancillary to the object of providing education. Therefore, the rejection of the application for the assessment year 2009-10 was upheld. The writ petition was dismissed without costs.