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TMI Blog2011 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... m the activity, it is not possible to carry on educational activity in such a way that the expenditure exactly balances the income and there is no resultant profit. Orders declining registration are quashed and case remanded to decide on principles. - Civil Writ Petition No.4155 of 2011 Civil Writ Petition No.4119 of 2011 - - - Dated:- 3-10-2011 - MR.JUSTICE HEMANT GUPTA, MR.JUSTICE G.S.SANDHAWALIA, JJ. Present: Mr. Sandeep Goyal, Advocate for the petitioner. Ms. Urvashi Dhugga, Sr. Standing Counsel for the respondent. G.S.SANDHAWALIA, J. This order will dispose of two Civil Writ Petitions No.4119 and 4155 of 2011 as facts and law involved in these petitions are common. However, the facts of Civil Writ Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes or it has other activities also which were not related to education. The petitioner was also asked to explain the surplus for the last three assessment years i.e. 30.54%, 45.32% and 48.8%, and the petitioner was asked to analyse the above profit with respect to utility thereof. Accordingly, detailed reply was submitted on 22.9.2010 and stress was laid down that aims and objects of the society were mainly in the context of imparting education and for establishing schools, hostels, libraries, reading rooms and play grounds etc. And further that income was not to go to the members of the society in any manner rather the society exists solely for imparting education and falls within the ambit of Section 10(23C) (vi) of the Act. As far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be mentioned here that for the grant of exemption/approval u/s 10(23C)(vi), the basic requirement of sub-clause (vi) of clause (23C) of section 10 is that the educational institution seeking exemption should be existing solely for the purposes of education and not for the purposes of profit. Here the emphasis is laid on the word solely . Keeping in view the above facts, it is held that in the light of observation of the Supreme Court which were not taken note of in the case of Pinegrove International Charitable Trust case by the Hon ble Punjab Haryana High Court (C.W.P. No.6031 of 2009) order dated 29.1.2010 and the fact that the profits are held not to be incidental as they do not arise merely for one year but systematically, the educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional institution would cease to exist solely for educational purposes and not for purposes of profit merely because it has generated surplus income over a period of 4/5 years after meeting its expenditure? (B) Whether the amount spent on acquiring/constructing capital assets wholly and exclusively becomes part of the total income or its becomes entitled to exemption under Section 10 (23C(vi) of the Act? (C) Whether an institution registered as a Society under the Societies Registration Act, 1960, lose its character as an educational institution, eligible to apply for exemption under Section 10(23C)(vi) of the Act? After considering the case law on the subject, the Division Bench came to categorical conclusion after relying up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutions, percentage of reservation/control over the said institutions, fixation of quota of admissions in respect of unaided institutions and fee structure etc. Therefore, the reasoning given by respondent is totally perverse and not sustainable. The respondent has only relied upon few observations made regarding fixation of fee while losing sight of the fact that what was the main issue that was being decided. The issue having been directly decided by the Division Bench of this Court, is binding upon the respondent. Respondent has also rejected the application of the petitioner on the ground that assessee s aims and objects are not related to education purposes. The aims and objects of the assessee s society are reproduced below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. 9. Using the income and funds of the society for the objectives of the society. 10. Helping the working organisations as per objectives of the society. 11. Collecting the money from public and donations or the achieving of objects of the society. Obtaining grant and aids from Central Govt. State Govt., other Govt., semi Govt. And other organisations. 12. The income, funds and property of the society would be used for the purposes of society only and no member or office bearer of the society would take and dividend, bonus or benefit in direct or indirect manner. In case the society is wound up, then all the properties, receivables and payables of the society shall be passed on to a society who has similar aims and object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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