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TMI Blog2008 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... section are not fulfilled. Conversely, income not covered by section 10( 22 ) would still be exempt under section 11 if conditions of that section are not fulfilled. Similarly, the 10th Edition of Law of Income-tax by Sampath Iyengar that institutions which are exempt under section 10( 22 ) may also be exempt under section 11 of the Act. In fact, it is difficult to conceive the idea of availability of exemption on the ground that one is activity oriented and the other is institution oriented. Further, the Tribunal in the case of Vodithala Education Society [ 2007 (10) TMI 437 - ITAT HYDERABAD] did not grant exemption under section 11, not on this ground but because of the factual position in that case insofar as that there was a clear violation of the provisions of section 13(1)( c ) of the Act. Therefore, there is no gainsaying that the Division Bench of the Tribunal has held that where an institution is eligible for exemption under section 10( 23C ), it cannot claim exemption under section 11 of the Act. And how can the Tribunal hold so when the judgment of the Supreme Court in the case of Bar Council of Maharashtra[ 1981 (4) TMI 8 - SUPREME COURT] stares in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the appeals, the substance of the grievance of the department is against granting exemption under section 11 of the Income-tax Act, 1961 ( the Act ) to the assessee despite the provisions of section 10( 23C ) of the Act. 3. The assessee is a registered society running educational institutions. The main object of the society is to impart education and that it does not exist for the purpose of profit as mentioned in the statement of facts filed before the CIT(A). It is registered under section 12A of the Act vide registration certificate No. P.R. No. 12A/386/76-77, dated 19-7-1976. For assessment year 2003-04, it returned nil income claiming exemption under section 11 of the Act. The Assessing Officer observed that the aggregate annual receipts of the assessee exceeded Rs. one crore and yet had not obtained the approval of the prescribed authority as mandated by sub-clause ( vi ) of section 10( 23C ) of the Act. The reply of the assessee was that it has already applied for approval under section 10( 23C ) of the Act. At the same time, it was claimed that since the assessee was registered under section 12A of the Act, it also had the option to claim exemption under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the total income of a person any income received by such person on behalf of any university or other educational institution existing solely for educational purposes and not for purposes of profit. Thus, it has to be noted that the exemption under section 11 and section 10( 23C ) is available to a person only. The only difference is that under section 11, the exemption will be available to the extent such income is applied to charitable or religious purposes. On the other hand, under section 10( 23C ), any income derived by the person on behalf of the educational institution will be exempt. Because of this difference, i.e., application of income in section 11 and receipt of income under section 10( 23C ), it is argued by the learned Departmental Representative that whereas exemption under section 11 is activity based, exemption under section 10( 23C ) is institution based and, therefore, an institution cannot claim exemption under section 11. However, while making this argument, the learned Departmental Representative, it seems, has missed out on the provisions of section 12 of the Act. Sub-section (2) of section 12 provides that the value of any services, being medical or educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution oriented. How can an institution avail exemption under section 10( 23C ) without carrying out any activity. If the argument of the learned Departmental Representative is to be accepted, then section 12 will be rendered otiose and section 12AA which speaks of registration of trust as well as institution will also be partly redundant. The contention of the learned Departmental Representative that this conclusion would be against the order of the Division Bench of the Tribunal in the case of Vodithala Education Society ( supra ), to which I am a party, is not well founded. In that case, the observations of the Tribunal that section 11 may not override the provisions of specific section i.e., section 10( 23C ) is a mere passing observation which is indicated by the use of the word may . In fact, this was not the contention of the department also in that case as is evident from the arguments of the learned Departmental Representative contained, in paragraphs 4 and 5 of the said order in the case of Vodithala Education Society ( supra ). Further, the Tribunal did not grant exemption under section 11, not on this ground but because of the factual position in that case insofa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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