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TMI Blog2016 (7) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the assessee is fees from school amounting to 44,79,685/-. The alleged bank interest according to the assessee was out of the deposits from collection of fees etc. Thus, the details of expenditure would indicate that the assessee has not incurred any expenditure except small amount on any other activities than the education. CIT(A) has highlighted masjid expenses of 21,900/- which is a very meager amount, which is not a deciding factor for the activities of the assessee. All these facts are to be seen in the light of subsequent years where registration under section 12A has been granted to the assessee. Taking into consideration all these facts and circumstances, allow the claim of the assessee and direct the AO to grant exemption under section 10(23C)(iiiad) of the Income Tax Act. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ol Building Fund. Since the assessee was not registered under section 12A, thus, according to the AO, the assessee cannot claim this amount. He accordingly made addition of ₹ 14,58,500/-. The AO has determined total taxable income of the assessee at ₹ 23,59,184/- as against NIL income disclosed by the assessee. Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. Before me, the ld.counsel for the assessee has contended that in various authoritative judgments at the end of the Hon'ble High Courts, it has been held that a trust or society might have various objects in their memorandum of association, but in if any particular year they are existing solely for the purpose of education, then, exemption under section 10(23C) should not be denied to such societies. In order to buttress his contentions, he relied upon following decisions: i) C.P. Vidya Niketan Inter College Shikshabn Society, 359 ITR 322 (All) ii) Hardayal Charitable & Education Trust, 355 ITR 0534 (All) iii) Vanita Vishram Trust, 327 ITR 121 (Bom) iv) Geetanjali Education Society, 339 ITR 333 (Kar) He placed on record copies of these judgments. For substantiating his claim that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses Rs.(-)42,51,507/- Net Surplus Rs.6,26,352/- Less: Deduction u/s. 10(23)(iiiad) Rs.6,26,352/- Taxable Income Rs.NIL 7. Before embarking upon an inquiry on the above facts, I deem it appropriate to take note of the proposition of law canvassed by the ld.counsel for the assessee on the strength of various authoritative pronouncements. The Hon'ble Allahabad High Court has considered this issue in the case of C.P. Vidya Niketan Inter College Shikshan Society (supra). The Hon'ble High Court was of the opinion that claim of the assessee under section 10(23C)(vi) cannot be denied merely on the ground that in the object clause the assessee has other objects also than the education. The Hon'ble High Court has also eliminated the apprehension of the Revenue that in future the assessee shall pursue such non-educational objects. According to the Hon'ble High Court there are various safeguards to deal with that situation. The discussion made by the Hon'ble High Court in para-23 of the judgment is worth to note. It reads as under: "23. In the present case the petitioner society is registered charitable society with the Registrar of Societies and is also registered under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. In that case, the Supreme Court considered its activities as reflected in the paragraph quoted above and therefore, while remanding the matter, made it clear that the appellant had fulfilled the threshold pre-condition of actual existence of the educational institution under Section 10(23C) (vi) with further direction to the Central Board of Direct Taxes not to reject the approval application on that ground. Two of the objects in that case as reflected in the judgment were also to offer the National Council the lowest possible prices for the products and services sold to or utilized by the schools under the umbrella of the Government of India and so also to utilize Indian Authors whenever possible in the development of customized programmes. The Supreme Court, despite these objects/activities, held that the institution in American Hotel was involved only in educational activities, perhaps on the ground that it was not carrying on those activities. 13. In the present case, it is not in dispute that the society has been conducting the primary and secondary school in the State of Karnataka since 2002. Nor is there any dispute before us that save and except for conducting scho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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