9911796707
TMI Blog2001 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... which is claimed to be exempted from payment of tax under section 10(22) of the Income-tax Act, 1961, as an educational institution solely existing for the educational purpose not for the purpose of profit and two appeals for the assessment years 1985-86 and 1987-88 arising out of penalty appeals under section 221(1) of the Act. "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the income of the assessee was exempt under section 10(22) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in cancelling the penalty levied under section 221 of the Income-tax Act, 1961?" The facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for two years for the year ended on March 31, 1986 and March 31, 1987. The Assessing Officer was of the view that had all steel furniture prepared by the students under the SKY was sold directly to the other institutions, the school would have earned profit but the same has been sold to one Atex Industries which was owned by the son of Z. H. Iraqi, Trustee Secretary, and also the society was running a stationery shop under the name of Jodhana Suppliers in the premises of the society. The books and other stationery items were supplied to the students and thus another son of the said Mr. Z. H. Iraqi was deriving income from his dealings in the society premises. The Assessing Officer was further of the view that while accounts of stone c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Iraqi and his wife, Smt. Zefrinissa, were the founder members. Lal Bahadur Shastri Middle School was established on July 1, 1966, as a primary school and other institutions were also established in due course of time. Shri Iraqi and other members of his family property for running the school. The Tribunal pointed out that taking into account the past history of the society as also its activities and contribution in educational field the learned Commissioner of Income-tax (Appeals) had himself admitted the position that the assessee-society was established with the sole aim of promotion of education and in that process the society had opened as many as six schools all of which were recognised by the Educational Department and four out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hours of need. Finally, the Tribunal summed up its findings and conclusions in para. 28 of its order in the following manner: 'To sum up, the above discussion leads us to conclude that looking to the past history of the assessee in obtaining the various objects in the field of education and its running several educational institutions it cannot be said that the society had changed its character from an educational institution to that of a profit-making institution. The SKY was carried on by it in the direction of educating the students in making certain items used in the educational institutions. The stone crushing unit was also not established for the purposes of making any profits or earning income. The intention to run the SKY and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viation from the object of the society. Likewise stone crushing activity was also run only for two years in the context of a scheme sponsored by the Central Welfare Board and that would not detract from the fact that the institutions existed solely for the purpose of educational purposes and not for the purposes of profit. All these findings are pure findings of fact and do not involve any application of legal principles. No questions of law arise out of the order of the Tribunal, in our opinion, so far as regular assessment proceedings are concerned, and need not be answered. Question No. 2 is merely consequential to follow the result of answer to question No. 1. We, therefore, decline to answer the same also. No order as to costs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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