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2025 (3) TMI 873 - HC - Income TaxExemption/approval u/s 10(23C) (vi) - determining if the trust existed solely for educational purposes and not for profit - petitioner submits that the trust was entitled for exemption u/s 10 (23C)(vi) with respect to the income of the educational institution and as per the plain reading of the said Section the income received was required to be exempted only if it was solely for the purpose of education. HELD THAT - Having noticed the law the aims and objects of the petitioner-trust we find that the findings arrived at by the Chief Commissioner of Income Tax in its impugned order do not warrant any interference. The exemption was claimed by the trust itself and not by an individual educational institute namely GHG academy. Thus it cannot be conclusively said that the trust was found and existed solely for advancing education purposes hence it was rightly not granted exemption. Accordingly the present writ petition is hereby dismissed.
ISSUES PRESENTED and CONSIDERED
The primary issue considered by the Court was whether the Shri Guru Hargobind Sahib Charitable Trust was entitled to an exemption under Section 10(23C)(vi) of the Income Tax Act, 1961, for the assessment year 2012-13. This required determining if the trust existed solely for educational purposes and not for profit, as stipulated by the relevant legal provisions. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: Section 10(23C)(vi) of the Income Tax Act, 1961, provides for exemptions to any university or educational institution existing solely for educational purposes and not for profit. The Court referenced several precedents, including the Supreme Court's decision in New Noble Educational Society, which clarified the interpretation of "solely" in the context of educational purposes. Court's interpretation and reasoning: The Court emphasized the importance of the term "solely" in determining eligibility for the exemption. It referred to the Supreme Court's ruling that institutions must have all their objectives aimed at imparting or facilitating education to qualify for the exemption. The Court found that the trust's objectives, as stated in its memorandum of association, included multiple non-educational purposes, thereby failing to meet the "solely" criterion. Key evidence and findings: The memorandum of association of the trust listed various objectives, including social, moral, intellectual, spiritual, and economic upliftment, setting up hospitals and dispensaries, organizing medical camps, providing economic assistance, and conducting meditation centers. The Court noted that these diverse objectives indicated that the trust was not solely focused on education. Application of law to facts: The Court applied the legal framework to the trust's stated objectives and found that the trust's activities were not exclusively educational. It highlighted that the trust's engagement in activities beyond education disqualified it from receiving the exemption under Section 10(23C)(vi). Treatment of competing arguments: The petitioner argued that the trust was entitled to the exemption based on its registration under Section 12AA and its charitable objectives. However, the Court, referencing the New Noble Educational Society case, concluded that the trust's broader objectives did not align with the statutory requirement of existing solely for educational purposes. The respondents' argument, supported by recent judgments, that the trust did not qualify for the exemption was upheld. Conclusions: The Court concluded that the trust did not meet the criteria for exemption under Section 10(23C)(vi) as it was not solely focused on educational purposes. Consequently, the petition challenging the denial of exemption was dismissed. SIGNIFICANT HOLDINGS The Court reiterated the principle that for an institution to qualify for exemption under Section 10(23C)(vi), it must exist solely for educational purposes. The judgment emphasized the Supreme Court's interpretation in the New Noble Educational Society case, which overruled previous judgments that allowed for incidental non-educational activities. Key legal reasoning included the necessity for institutions to maintain objectives solely related to education to qualify for the exemption. The Court's final determination was that the trust's diverse objectives disqualified it from receiving the exemption, leading to the dismissal of the writ petition.
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