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TMI Blog2011 (10) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... used in Section 10(23C) of the Act, in a number of clauses. Therefore, it is imperative to understand the meanings assigned to such expression in the light of the context it is used. The expression stands judicially defined in the case of Aditanar Educational Institution v. Addl.CIT (1997 -TMI - 5552 - SUPREME Court) as that if after meeting expenditure, any surplus results incidently from activity lawfully carried on by an educational institution, it will not cease to be one existing solely for educational purpose. The AO had not found any irregularity in the accounts of the trust. There was no document to show that the trust was being run for any purpose of profit except for educational purposes. The assessee was entitled to exemption u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng exemption of income of Rs. 1,16,920/- u/s 10(23C) of the Income-tax Act. 3. That the action of the CIT(A) Patiala in confirming the action of the AO in not allowing exemption u/s 10(23C) is against the facts and circumstances of the case and by not considering our submissions properly. 4. That the CIT(A) has erred to consider that the appellant has rightly rebutted the objection levelled by Shri S.D.Verma one of the earlier trustee of the Trust regarding embezzlement of trust fund/profit for personal use, before the AO and also before him. 5. That the ld. CIT(A) has erred to consider that the AO has taken the profit as declared in the audited set of account and no disallowance of any expenditure has been made or any receipts added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act having regard to the provisions of Section 10(23C) of the Act as the receipts are less than Rs.1 crore. It was further argued that the earlier AO, as per order dated 03.03.2008 clearly mentioned as under : "The assessee is an educational institution and registered with the Registrar of Firms Societies, Punjab. The institution is stated to be existing solely for education purposes and as such exemption u/s 10(23C) of the Income-tax Act,1961 has been claimed. The receipts of the Institution do not exceed Rs. One Crore. Therefore, assessee's claim of exemption u/s 10(23C) is in order." 4. It was vehemently argued by the ld. 'AR' that there is no difference between the copies of Trust Deed submitted to the Registrar and to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of its aims and objectives for which it was created. The trust does not enjoy exemption u/s 11 of the Income-tax Act,1961. Moreover, registration u/s 12A applied by the trust was not granted by the department. The trust deed does not have the dissolution clause. As such any person can take benefit of the assets on its dissolution. As such, the trust is not entitled for exemption u/s 11 of the Income-tax Act,1961. The assessee has claimed exemption of Rs.1,16,920/- u/s 10(23C) of the Act which is not allowed." 7. The ld. CIT(A) upheld the findings of the AO. The relevant findings of the ld. CIT(A) are reproduced hereunder: "I have gone through the facts of the case in detail, rival contentions and find that AO has rightly denied the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used. The expression stands judicially defined by the Hon'ble Supreme Court in the case of Aditanar Educational Institution v. Addl.CIT [1997] 224 ITR 310 as that if after meeting expenditure, any surplus results incidently from activity lawfully carried on by an educational institution, it will not cease to be one existing solely for educational purpose. Similarly, Hon'ble jurisdictional High Court in the case of CIT v. Khalsa Rural Hospital Nursing Training Institute [2008] 304 ITR 20 (Punj. Har.) held that there was nothing on record to show that the assessee Trust was charged capitation fee. The AO had not found any irregularity in the accounts of the trust. There was no document to show that the trust was being run for any purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion not supported by any tangible material. 12. It is pertinent to indicate that Section 10(23C) has been substantially amended/enlarged, vide the Finance (No.2) Act,1998, w.e.f. 1.4.1999, in order to provide exemption to any income of a University or other educational institution or hospital or medical institution, which is wholly or substantially financed by the Government or the income of which does not exceed the prescribed limit or which may be approved by the prescribed authority. These amendments are consequential to the omission of Section 10(22) and 10(22A) providing exemption to educational and medical institutions, respectively. The aforesaid provisions are contained in sub-clauses (iiab), (iiiac), (iiiad), (iiiae), (vi) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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