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TMI Blog2001 (2) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... examinations and to give certificates, scholarships and prizes. (ii)To promote information on banking and kindred subjects by lectures, discussions, books, correspondence with public bodies and individuals, or otherwise. (iii)To collect and circulate statistics, and other information, relating to the business of banking in India. (iv)To acquire by purchase, donation or otherwise and to maintain, extend and improve a library consisting of works on banking, commerce, finance, political economy, and kindred subjects. Clause (4) of the memorandum says that the income of the assessee shall not be distributed by way of dividend to its members and clause (8) says that in case of winding up, the assets shall not be distributed to the members but shall be handed over to another institution which has similar objects. 3. It appears that from the inception (1928) the income of the assessee has been exempt under the IT Act in its assessments and the position continued till the assessment year just prior of the assessment year now in appeal. For the year under appeal, the Assessing Officer was of the view that the object of the assessee was only to conduct examinations for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducation. We have gone through the mass of material contained in the paper book filed by the assessee. The objects are implemented by conducting coaching classes and by supplying study material. There are also continuous educational programmes. The syllabus to which our attention has been drawn on behalf of the assessee, contains subject which are connected to the banking business and are similar to the syllabi for any professional course. Various subjects and taught-rural economics, banking law and practice, principles of economics, Indian economic problems, and so on and so forth. The fees charged for tutorial classes are low, only ₹ 50 per subject and appeal to be heavily subsidised. The fees for correspondence course is ₹ 150 per subject and is subsidised. The examination fees are also low (Rs. 100 for six subjects) and also appear to be subsidised. It is no doubt true that there is no formal school or college in the sense in which we understand modern schools or colleges-fixed hours of study, lunch recess, principal, staff, playground, rules for discipline and the like-but that is no ground for holding that the activities pursued are not educational activities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over which it had administrative and supervisory control. The exemption under section 10(22) claimed by the Board was upheld by the Orissa High Court and this judgment has also been impliedly approved by the Supreme Court in the case of Aditinar Educational Institution v. CIT [1997] 139 CTR (SC) 7 : [1997] 224 ITR 310 (SC). In this judgment, the Supreme Court accepted the proposition that education could be imparted through the medium of colleges and schools and also through other media. It is, therefore, not necessary that an assessee in order to claim exemption of its income under section 10(22) should necessarily impart education through the medium of schools and colleges. In Gujarat State Cooperative Union v. CIT [1992] 103 CTR (Guj.) 206 : [1992] 195 ITR 279 (Guj.) the Gujarat High Court held that advancement of knowledge in the context of section 10(22) includes suitable methods of dissemination and though the primary method of sitting in a classroom may remain an ideal format of the initial education, it may become necessary to have a different outlook for further education. It was held further that it is not necessary to nail down the concept of education to a particular f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,61,05,925 2,34,67,585 Tutorial class Fees 8,55,939 12,96,326 9,65,817 14,69,306 7,80,015 12,22,725 12,08,580 Correspondence course fees 3,56,700 5,60,110 9,20,425 5,13,550 8,60,150 32,82,550 54,89,160 Interest dividend 1,03,26,080 1,46,74,957 1,65,55,288 2,18,25,341 1,15,02,970 1,61,09,133 1,43,69,029 Misc. income 2,37,436 1,32,712 1,45,808 1,23,704 2,10,785 1,85,769 8,32,173 Surplus 16,69,118 35,958 12,57,959 53,02,315 3,79,89,843 3,09,85,144 He cited Lok Sikshana Trust (supra) again to contend that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are substantial. But this has in part gone to subsidise the expenses in conducting tutorial classes and examinations and the supply of study material. The balance which remained as a surplus, after incurring all the expenses in running the institution, has been retained under reserves and surplus in the balance sheet as on 31-3-1996 and ploughed back into the activities pursued by the assessee (see Sch. I at p. 34 of annual accounts). In our view, it is not proper to infer a profit-motive from the consistency with which surplus is made, but the more important criterion is to see if such surplus is ploughed back for the furtherance of the activities pursued. This criterion is answered in the positive in this case. The surplus or the assets, even in the case of winding-up, are not to be divided amongst the members but have to be handed over to an institution or organisation having similar objects [clause (8) of the memorandum]. Thus, the surplus consistently resulting in each year is not proof per se of a profit-motive. 13. The next point made by the learned Departmental Representative was that the assessee is a body which exists merely to conduct CAIIB examinations and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strong indication that the authorities were satisfied about the corrections there of. That cannot be permitted to be changed unless there are strong factual or legal grounds and none has been found by us. The action of the Assessing Officer appears to us to be contrary to the principles laid down by the Supreme Court in Radhasaomi Satsang Sabha v. CIT [1991] 100 CTR (SC) 267 : [1992] 193 ITR 321 (SC). 15. In the assessee's appeal, the claim is that the CIT(A) ought to have exempted the dividend and interest income also under section 10(22). It is pointed out that the section exempts any income of an educational institution and it is not a condition for the exemption that the income should be derived from or have nexus with any educational activity. It is pointed out further that wherever the legislature wanted to impose such a condition it expressly said so in the provisions and the provisions of section 10(20A), 10(21), 10(22B) or 10(27) are cited by way of contrast. It is also contended that this issue is now fully concluded by the judgment of the Supreme Court in Orissa State Warehousing Corporation v. CIT [1999] 153 CTR (SC) 177 : [1999] 237 ITR 589 (SC) and the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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