9911796707
TMI Blog1996 (6) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... esearch work in art, literature, science and technology, etc. In order to attain the main objects, the society receives donations, grants from persons and also conducts chits for raising funds for the purpose of running the educational institutions. The petitioner claimed exemption under section 80G of the Income-tax Act for donations received. By proceedings dated February 5, 1981, the Commissioner of Income-tax granted exemption under section 80G for the assessment years 1980-81 and 1981-82. Exemption was renewed for the years 1982-83, 1983-84, 1984-85 and 1985-86. Thereafter, the petitioner filed applications for exemption on various dates for the assessment years 1988-89, 1989-90, 1990-91 and 1991-92. By exhibit P-7, the Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion had been granted to the petitioner society regarding the donations, under section 80G for the various assessment years up to 1987-88. The same position was existing in the assessment years in question. According to learned counsel for the petitioner, the Commissioner has not applied his mind in passing exhibits P-7, P-9 and P-11 orders. Income of a university or other educational institution existing solely for educational purposes and not for the purpose of profit is not liable to be included in the total income. He further submitted that under section 80G donations to certain funds and charitable institutions are liable to be deducted in computing the total income of the assessee. The relevant clause in question for the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to exemption with regard to the business income derived and supported exhibits P-7, P-9 and P-11. The first point to be decided is whether it was justified on the part of the Commissioner to deny exemption under section 80G on the ground that the society is deriving income from running chits. There is no dispute that the income derived from the chits is being made use of for educational purposes. Section 10(22) of the Income-tax Act states as follows : " any income of a university or other educational institution, existing solely for educational purposes and not for purposes of profit. " The position is well established on the strength of decisions that if a society exists solely for educational purposes and it runs an education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of compulsory contribution for seats in the college. Thus, going by the reasoning of the Division Bench in CIT v. Sree Narayana Chandrika Trust [1995] 212 ITR 456 (Ker) and other decisions, it is clear that if an institution exists solely for the purpose of education and it derives income from any other source and if that income is used only for the purpose of education, then it will come under section 10(22) of the Income-tax Act. It is clear from the memorandum of association of the society that chits are being conducted in order to make use of the commission for the purpose of education. There is no case for the Department that this amount is being used for any other purpose. In such circumstances, I hold that the Commissioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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