2020 (12) TMI 404 - HC - Income Tax

Exemption u/s 10(23)(vi) - whether the present petitioner, namely Bihar Combined Entrance Competitive Examination Board would be entitled for exemption under the provisions of Section 10(23)(vi)? - HELD THAT - We are of the considered view that the authority below, while concluding that the petitioner was not an educational institution, did not have complete material, including as to whether it was generating any profit by taking fees for conducting the examination. After the matter was heard for some time, learned counsel for the parties were ad-idem that the matter can be remanded back to the authority for consideration afresh, by affording opportunity to the parties to place all material, enabling the authority to arrive at a decision in accordance with law.

Summary

Issues involved:
1. Entitlement for exemption under Section 10(23)(vi) of the Income Tax Act.

Analysis:
The primary issue in this case was whether the petitioner, Bihar Combined Entrance Competitive Examination Board, would be entitled to exemption under Section 10(23)(vi) of the Income Tax Act. The petitioner sought relief to quash the order dated 26.9.2014 for the assessment year 2013-14 and for a direction to grant approval under the said section. The Court noted that the competent authority had rejected the petitioner's claim for exemption in the impugned order. The key contention revolved around whether the petitioner qualified as an educational institution existing solely for educational purposes and not for profit, as per the provisions of Section 10(23)(vi).

The arguments presented by the parties were crucial in determining the outcome of the case. The petitioner's counsel relied on previous decisions by the Court and the Delhi High Court to support their claim for exemption. On the other hand, the respondent's counsel referred to a decision by the Apex Court in a different case. The Court observed that the authority below did not have complete material to conclude that the petitioner was not an educational institution, especially regarding whether it generated profit from examination fees.

After hearing both parties, the Court decided to remand the matter back to the competent authority for a fresh consideration. The parties were directed to appear before the authority with additional material on a specified date. The authority was instructed to provide a fair hearing, comply with principles of natural justice, and pass a speaking order. The Court emphasized the need for an expeditious decision, preferably before the end of the financial year. The judgment left all issues open, granting liberty to the parties to seek further legal remedies if necessary.

In conclusion, the Court quashed the impugned order, remanded the matter for reconsideration, and provided detailed directions for the authority to follow in reaching a decision. The judgment highlighted the importance of a thorough review of all relevant material and adherence to legal principles in determining the petitioner's eligibility for exemption under Section 10(23)(vi) of the Income Tax Act.