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TMI Blog2010 (11) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) To open, run and continue the hostels for the poor students community; (iii) To organize seminars, workshops, debates, camps and forums, etc., for poor students community; (iv) To encourage social, educational and literary activities among the students; (v) To open, run and continue primary, secondary and high schools for students, and (vi) to conduct cultural programmes, help for poor people of community for their study. 2. The aforesaid objects are said to have been amended in the meeting held on' 27-1-2010, and the amended objects registered with the Registrar of Societies on 24-8-2009. The objects, after amendment, are as under : (a) To open, run continue an institution for providing higher, technical and medical education and training to the students community of students to promote literacy and eradicate unemployment, and (b) To open, run and continue primary, secondary and high schools for students. 3. It is the petitioners case that they have been running various educational institutions, including P. G. colleges, engineering colleges, etc., after obtaining necessary approval from the appropriate authorities; and they have been filing income-Tax retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, educational institutions are required to make an application, in the prescribed form and manner, to the prescribed authority for the purpose of grant of exemption or continuance thereof. The second proviso enables the prescribed authority, before approving any educational institution under sub-clause (vi), to call for such documents including audited annual accounts or information from the educational institution, as it thinks necessary, in order to satisfy itself about the genuineness of the activities of such educational institution. The second proviso also enables the prescribed authority to make such enquiries as it deems necessary. The fourteenth proviso to section 10(23C)(vi) of the Act, in its entirety, was inserted by the Finance Act, 2006, with effect from 1-6-2006, and, prior to its amendment by the Finance (No. 2) Act, 2009, required an educational institution which makes an application, on or after the first day of June, 2006, for the purpose of grant of exemption or continuance thereof to make an application at any time during the financial year immediately preceding the assessment year. After its amendment by the Finance (No. 2) Act, 2009, with retrospective ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption is sought. Such application cannot be made for any earlier period. The proposed amendment shall apply only in respect of applications which are made on or after 1-6-2006. This amendment will take effect from 1-6-2006. 8. The fourteenth proviso to section 10(23C), has been inserted by the Finance Act 2006, inter alia, to provide for a period of limitation for entertaining applications under section 10(23C)(vi) for grant of exemption on or after the 1st day of June, 2006. The Legislature has, however, not made any provision for condonation of the delay in presenting such an application. The Chief Commissioner of Income-Tax, being a creature of the statute, cannot travel beyond the statutory provisions, and could not, therefore, have condoned the delay in presenting the application under section 10(23C)(vi) beyond the period of limitation (Roland Educational and Charitable Trust v. Chief CIT (2009) 309 ITR 50 (Orissa)). 9. Inasmuch as the fourteenth proviso does not empower the Chief Commissioner of Income-Tax to condone the delay in filing the application, the order passed by him, rejecting the petitioners application for the assessment year 2008-09 on the ground that it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption is claimed is a part of the income of the institution (Oxford University Press (2001) 247 ITR 658 (SC)). The activities of the institution, its objects, its source of income and its utilization, must be analysed by the prescribed authority to ascertain whether it exists solely for education and not for profit, and it is his duty to ascertain whether the income is applied wholly and exclusively for the educational objects for which purpose the applicant is established ( Addl. CIT v. Surat Art Silk Cloth Manufacturers Association (1980) 121 ITR 1 (SC) : American Hotel (2008) 301 ITR 86 (SC)). 12. The test of predominant object of the activity is to be seen, whether it exists solely for education and not to earn profit (Addl. CIT v. Surat Art Silk Cloth Manufacturers Association (1980) 121 ITR 1 (SC) : American Hotel (2008) 301 ITR 86 (SC); Pinegrove International Charitable Trust v. Union of India (2010) 327 ITR 73 (P&H)). The decisive test is whether, on an overall view of the matter, the object is to carry on educational activities or to make profit (Aditanar Educational Institution (1997) 224 ITR 310 (SC). 13. If there are several objects of a society some of which relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively, to the objects for which it is established. The word "wholly" refers to the quantum of expenditure and the word "exclusively" refers to the motive, object or the purpose of expenditure (Pinegrove International Charitable Trust (2010) 327 ITR 73 (P&H); Vanita Vishram Trust (2010) 327 ITR 121 (Bom)). 15. The threshold conditions are aimed at discovering the actual existence of an educational institution and approval of the prescribed authority for which an application in the standardized form, in terms of the first proviso, has to be given by every applicant. If the educational institution actually exists for educational purposes alone should the prescribed authority permit it to operate (American Hotel (2008) 301 ITR 86 (SC); Pinegrove International Charitable Trust (2010) 327 ITR 73 (P&H)). 16. The objects of the petitioner, as it originally stood, included "to eradicate unemployment"; "to encourage social activities among the students" and to "help poor people of community for their study". These objects do not relate solely to education. The sense in which the word "education" has been used, in section 2(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P. (Telangana Areas) Public Societies Registration Act, 1350 Fasli. Section 8 of A. P. Act 35 of 2001 relates to amendment of the memorandum and bye-laws of a society. Under sub-section (1) thereof a society, by a special resolution, may alter the provisions of the memorandum with respect to a change of its objects. Under sub-section (3), any alteration of the memorandum of the society shall not be valid unless such alteration is registered under the Act. Under section 8(4), if any alteration of the memorandum is filed, and if they are not contrary to the provisions of the Act, the Registrar shall register the same, and certify registration of such alteration within thirty days from the date of receipt of the resolution. This certificate is conclusive evidence that all the requirements of the Act, with respect to the alteration and the certification thereof, have been complied with and, henceforth, the memorandum, as so altered, shall be the memorandum of the society. On a conjoint reading of sub-sections (3) and (4) of section 8, it is only when the amendment to the objects of the society is intimated to the Registrar and the Registrar, on being satisfied that the amendment is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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