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Issues involved: Interpretation of sub-section (22) of section 10 of the Income-tax Act, 1961 regarding exemption for educational institutions and refund of income-tax deducted at source.
Judgment Summary: The High Court of Allahabad allowed the petitioner, Katra Education Society, to amend its application and seek an additional relief of quashing the assessment order dated March 28, 1977. The petitioner claimed exemption from income-tax under sub-section (22) of section 10 of the Income-tax Act, 1961, and refund of Rs. 325 deducted at source by a company distributing dividends. The Income-tax Officer rejected the petitioner's claim for refund, stating that the petitioner did not fall under the ambit of section 10(22) as it was not a university or an educational institution but a society running various educational institutions. The court noted that the term "institution" was not defined in the Act and opined that an educational society running educational institutions could be considered an educational institution. The Income-tax Officer's narrow interpretation of section 10(22) was deemed erroneous. The court quashed the Income-tax Officer's order dated October 16, 1976, and the assessment order dated March 28, 1977, directing the Officer to reconsider whether the petitioner qualified under section 10(22) and decide on the refund application. If the Officer found the petitioner ineligible under section 10(22), a fresh assessment for the year 1974-75 could be made. The parties were directed to bear their own costs in the case.
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