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TMI Blog1988 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... nd maintaining these three schools and to establish other educational institutions. By a resolution dt. 21st March, 1981 the A.M.M. Chartitable Trust made a gift of certain shares to the A.M.M. Educational Society for the purpose of running those institutions. In the previous year ended 31st March, 1982 corresponding to the asst. yr. 1982-83, with is the first assessment for this society, the assessee had earned income of Rs. 1,62,316 being dividend received on shares as well as profit by way of sale of some shares. This assessee spent a sum of Rs. 1,23,000 in its accounts. A sum of Rs. 223 was incurred towards printing and stationery and bank charges retaining a balance of income of Rs. 39,093. The assessee claimed that this balance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by sale of certain shares. The assessee spent a sum of Rs. 1,10,000 in respect of Sir Ivan Stedeford Hospital which was shown as a donation in its accounts. After deducting certain stationery and other expenses of Rs. 239 the balance of Rs. 35,237 was claimed as exempt under s. 10(22A) of the IT Act, 1961. By his order dt. 18th March, 1985 the ITO rejected this claim and brought to tax this sum of Rs. 35,237. On a review of this order, the Commissioner was of the opinion that the taxable income has been wrongly computed inasmuch as the amount shown as donation had been allowed as an expenditure. He accordingly set aside assessment order and directed the ITO to re-do the assessment treating the assessee as not entitled to exemption under ss. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the original assessment have been stated to have been dismissed as infructuous consequent to the passing of the orders under s. 263. Therefore, if this issue is not taken up in these appeals then the assessee would be left without a remedy unless those appeals are revived and the issue is decided therein. We are of the opinion that such a procedure would be an exercise in futility when the entire subject of the assessment is before us and the question will be whether the Commissioner is right in directing the ITO to recompute the income of the assessee in such a manner as to deny all the exemptions available to the assessees. Hence we proceed to consider the question whether the assessees are entitled to the exemption under s. 10 (22) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cational institution existing solely for educational purposes and not for purposes of profit shall not be included in the total income of any person. The Revenue referred in this connection to the following passage in the case of Aditanar Educational Institutional (1979) 118 ITR 235 at 241 242 (Mad): "Mr. A.K. Sen, the learned counsel for the assessee, gave a categorical answer to a question as to whether an assessee like the present one could merely by running an institution for educational purposes, get exemption for all its income whether it related to the educational purposes or not. Quite fairly, and in our opinion, rightly, he stated that the expression "existing" used in s. 10(22) clearly showed that the matter would have to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is itself not the person whose income has been computed as well as an institution claiming exemption under s. 10(22), viz, an assessee who is having other activities from which income is taxable and in computing the total income of that assessee other activities from which income is taxable and in computing the total income of that assessee the income attributable to an educational institution alone is being excluded such as in the case of CIT vs. Devi Educational Institution and Ors. (1984) 43 CTR (Mad) 48 : (1985) 153 ITR 571 (Mad). In the present case, it is not in dispute that A.M.M. Educational Society which is being regarded as an educational institution within the scope of s. 10(22) existed solely for running the three educationa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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