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TMI Blog2013 (7) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in a backward area and is imparting education to boys and girls by charging a very nominal fees. Fee is being charged to meet out the running cost and surplus is being used for developing necessary infrastructure to promote education. It has further been claimed that the institution is providing fee concession to poor, handicapped and disabled students while no fee is being charged from SC and ST students. 2. The petitioner society is registered with the Income Tax Department having Pan No. AABTN 2289D. It made an application in prescribed form for approval under section 10(23C)(vi) of the Income Tax Act for assessment year 2009-2010 onwards. The said application has been rejected by impugned order dated 31-8-2010 passed by the Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich falls under any of the clauses stipulated thereunder is exempt and not income from other sources. Thus, it is not necessary that the 'person' which in the instant case is the society, should be having income only from one or other source stipulated under various clauses of section 10 and from no other source. 6. He further submitted that Rule 2-CA of the Income Tax Rules, 1962 which provides for application for approval being made in form 56D by educational institution is procedural one and cannot restrict or whittle down the scope and ambit of the statutory provision, i.e. section 10 which is applicable to a 'person' as defined under section 2(31) of the Act. Alternatively, he submits that it has been the specific case of petitioner s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd if the view taken by the prescribed authority that such application should have been filed by the educational institution itself, is legally sustainable. Before insertion of section u/s.10(23C)(vi), such cases were covered by section 10(22) which was to the following effect :- "10(22) any income of an university or other educational institution, existing solely for educational purposes and not for purposes of profit." The aforesaid provision was amended by Finance No.2 Act, 1998, w.e.f. 1-4-1999 and in its place section 10(23C)(vi) has been inserted which is as follows :- "10(23C)(vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was an institution existing for educational purposes and not for the purposes of earning any profit and the assessee itself could be termed as an "educational institution" coming within Section 10(22) of the Act. The High Court has concurred with this view. The High Court has further held that the medium through which the assessee could effectuate its objects is the college and by employing this medium, the assessee imparts education and it cannot be stated that the assessee is only a financing body and does not, on facts, come within the scope of "other educational institution" occurring in Section 10(22) of the Act. Reliance was placed on the decision of the Allahabad High court in Katra Education Society vs. Income Tax Officer [1978 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educational activity. There is no purpose of profit. As of today, its only activity is education, namely, running of various schools and no other activity." 11. In view of the authoritative pronouncement of law by the Apex Court and various High Courts, we have no hesitation in holding that the application filed by the petitioner society cannot be rejected on the ground that it is not at the instance of "educational institution" as referred to under section 10(23C)(vi) of the Act and Rule 2-CA of the Income Tax Rules, 1962. 12. The next question which now arises for consideration is whether an application can be rejected on the ground that the memorandum of association of the society provides for various other objects apart from education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity apart from eduction then in such case, the society will qualify for grant of approval u/s. 10(23C)(vi) of the Act. It was observed as under :- "In the facts and circumstances, we are of the opinion that as of now the petitioner society running educational institution by the name of C.P. Vidya Niketan Inter College at Kaimganj, Distt. Farrukhabad imparts education to students from Class VI to XII, in the absence of any allegation or material, the object clause providing for other charitable activities, would not disentitle the society from approval under Section 10 (23C)(vi) of exemption. The proviso added to Section 10 (23C)(vi), specially Proviso 2, 3, 12 and 13, give sufficient powers to check the abuse of the exemption. The mere po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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