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TMI Blog1983 (10) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... Devi Educational Institution, Madras, who is the assessee in T.C. No. 477 of 1978 returned a surplus income of Rs. 4,127 for the assessment year 1973-74 and claimed exemption on the ground that it is an educational institution coming within the scope of s. 10(22) of the I.T. Act, 1961. The ITO held that the assessee was not an educational institution but was only an educational trust registered under the Societies Registration Act, that though some steps have been taken by the educational society to start an educational institution in Karunanidhi Nagar, no educational institution has yet come into existence and, therefore, s. 10(22) was not applicable in the assessee's case and that the institution can, however, come within the category of charitable institutions covered by s. II. In that view, he denied the exemption under s. 10(22) and brought the surplus income of Rs. 4,127 returned by the assessees to tax. On appeal by the assessees, the AAC went into the question and found that the assessees had taken the following steps for setting up the educational institutions: i. Application made to Registrar, University of Madras, for affiliation of a proposed Women's college; ii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee as an educational institution and grant them exemption in terms of s. 10(22). Aggrieved by the order of the Tribunal holding that the assessee-society as in educational institution, the Revenue has sought and obtained the reference oil the question set out in T.C. No. 477 of 1978. The assessee-society has been collecting donations for the establishment of the educational institution in pursuance of the objects of the trust. Two of the donors who had donated to the assessee-society claimed exemption on the ground that the donation has been made to the assessee-society which is an educational institution. That claim was not accepted by the ITO. But, however, the said claim was accepted by the AAC and exemption was granted in respect of the donations made to the assessee-society. The said view of the AAC has been upheld by the Tribunal oil the ground that since the donations have been made to the assessee-society which has been, held to be an educational institution, they are entitled to claim exemption in relation to such donations. Aggrieved by the said view of the Tribunal, the Revenue has sought and obtained a reference referring the common question set out in T.Cs. Nos. 486 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring in s. 10(22) should be read ejusdem generis with the expression " University " occurring earlier and, if so read, " other educational institution " can only refer to institutions in the nature of university. This court rejected the said contention and held that any educational institution would fall within the scope of s. 10(22), even though it may have or may not have anything to do with a university and, therefore, the college run by the society in that case would come within the term " other educational institution " in s. 10 (22). It also held that since the sole, purpose for which the society had come into existence was " education " at the level of college and school, it should be taken to come within the expression " other educational institution " in s. 10(22) and that an educational society could be regarded as an educational institution if the society itself is running an educational institution. This court, however, had expressed the view that all the income of the society running a college or educational institution would not be exempt under s. 10(22) and it is only the income which has a direct relation or is incidental to the running of the institution, as such, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence solely for educational purposes and not for the purpose of profit ; but that is not sufficient to satisfy s. 10(22) which contemplates that an educational institution which claims exemption of its income should exist solely for educational purposes and not for the purpose of profit. Therefore, the existence of an educational institution is necessary for its income to be exempted under that section. In this connection, the learned counsel for the Revenue contends that since the college which is the main object of the trust has not yet been established, the educational institution cannot be taken to have come into existence and so long as such an educational institution has not come into existence, s. 10(22) cannot have any application. Even though the main object of the assessee-trust is to establish a college and that has not been established, if it conducts other educational institutions or carries on other educational activities, it may claim the benefit of s. 10(22) and it is not necessary that all the activities or the purposes which are educational and which are referred to in the trust deed should come into existence or performed before claiming the benefit under s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust) within the definition of educational institution. After analysing the facts and circumstances of this case, if the Tribunal had gone into the question as to whether the three activities carried on by the assessee-society will make it an educational institution and had given a finding one way or the other, we would be in a position to answer the question referred to us. But in the absence of any findings as to the nature of the activities actually carried on by the assessee, it is not possible for us to answer the question referred to us. Therefore, without answering the question referred to us, we direct the Tribunal to rehear the appeal filed by the revenue in the light of the observations made by this court in Aditanar Educational Institution's case [1979] 118 ITR 235, as also the observations made by us in the course of this judgment. The reference in T.C. No. 477 of 1978 is accordingly returned unanswered. As regards the question referred in the other two cases, namely, T.C. Nos. 486 and 487 of 1978, as already stated, the Tribunal held that the assessees are entitled to claim exemption under s. 80G as the donation has been made to an educational institution. Now that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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