2010 (10) TMI 30 - SC - Income Tax

Charitable purpose - exemption u/s 10(22) - personal benefit / motive - Held that - Assessing Officer has made serious allegations in the order of assessment that the entire organization had systematically not utilised the funds exclusively for educational purposes but for profit of the Bishop and his family members and therefore not entitled to an exemption under Section 10(22) of the Act - a detailed factual exercise needs to be carried out by the Tribunal

Summary

Issues: Allegations made by Assessing Officer, Detailed factual exercise by Tribunal, Exemption under Section 10(22) of the Act

In this Supreme Court judgment, the court, comprising the Chief Justice, Justice K.S. Radhakrishnan, and Justice Swatanter Kumar, considered serious allegations made by the Assessing Officer in the order of assessment. The court refrained from expressing an opinion on these allegations but emphasized the need for a detailed factual examination by the Tribunal. The specific issue highlighted was related to payments made towards a religious institution and appointments within the organization, indicating potential misuse of funds for personal gain rather than educational purposes. The court set aside the High Court's judgment and remitted the matter to the Tribunal for fresh consideration in accordance with the law. The judgment clarified that all contentions were kept open, and the civil appeals were allowed with no order as to costs. The central focus was on determining whether the organization was entitled to an exemption under Section 10(22) of the Act, highlighting the importance of proper utilization of funds for the specified purposes to qualify for such exemptions.