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TMI Blog2019 (3) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes. The school has been issued with recognition orders by the concerned authorities. It is further mentioned that all the funds generated by the institution have been utilized for the school development purpose only. When the applicant itself is an educational institution, namely, the school, this Court fails to understand as to why the respondent has been insisting that there should be a written memorandum containing the objects of the school. The object of the applicant can only be to run the school and nothing else. This has been made explicit in the application form itself. Of course, the educational agency for the applicant is a trust. But then, the school has been enjoying the status of an independent assessee. Since it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t known as Malco Educational Trust which has been running the institution since 1986. The Trust is enjoying exemption in terms of Section 12 AA of the Income Tax Act. However, the petitioner school has been recognised as a regular assessee under the Income Tax Act, 1961. Even though the Trust which is running a school was granted registration under Section 12 AA of the Act vide approval dated 21.01.1987, in view of the accrual of more benefits, the petitioner submitted an application for obtaining exemption under Section 10 (23 C) (vi) of the Act. The application submitted by the school was however rejected by the impugned order dated 17.09.2014 by the respondent. The same is assailed in this writ petition. 2.Heard the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in sub-clause ( iiiab ) or sub-clause ( iiiad ) and which may be approved by the prescribed authority shall not be included. 6.The petitioner's application dated 28.09.2013 clearly mentions that the school is being run solely for educational purposes. The school has been issued with recognition orders by the concerned authorities. It is further mentioned that all the funds generated by the institution have been utilized for the school development purpose only. The funds of the school are invested in school building, computers accessories, furniture, lab equipments, library books and water plant etc., It has further been asserted in the application itself that it is not carrying on any business. The trustees have been the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT). Merely because there has been a surplus generation beyond a percentage in a year, that would not mean that the petitioner institution would not come under the category of not for profit institution . The petitioner has stated that whatever surplus is generated would go only towards the development of the school. The petitioner cannot be faulted for parking the surplus in an interest bearing account. In fact, the petitioner must be complimented for managing their finances in a prudent manner. Only if it can be shown that there has been diversion of the surplus generated by the institution, the authority would be justified in rejecting the application or withdrawing the exemption granted. This power of the authority is always availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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