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TMI Blog2023 (5) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... n record, in fact, the Commissioner, while considering the application of the assessee for grant of exemption u/s 10(23C)(vi) specifically observed and held that the activity of the assessee cannot be said to be solely for imparting the education and that the assessee is indulging into the profit which was found to be 67.81% without depreciation and 44.48% with depreciation. The finding of fact recorded by the Commissioner, as such, not been upset by the High Court in the impugned judgment and order. The present Appeal succeeds. The impugned judgment and order passed by the High Court deserves to be quashed and set aside and is, accordingly, quashed and set. - CIVIL APPEAL NO. 10511 OF 2013 - - - Dated:- 26-4-2023 - HON'BLE MR. JUSTICE M.R. SHAH And HON'BLE MR. JUSTICE C.T. RAVIKUMAR For the Appellant : Mr. Balbir Singh, A.S.G. Mr. Raj Bahadur Yadav, AOR Mr. Shashank Bajpai, Adv. Mr. Rupesh Kumar, Adv. Mr. Manish Pushkarna, Adv. Mr. Samarvir Singh, Adv. Mrs. Gargi Khanna, Adv. ORDER 1. Feeling aggrieved and dissatisfied with the impugned judgment and order 20.05.2010 passed by the High Court of Punjab Haryana at Chandigarh passed in CWP No. 18251 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Queen s Educational Society (supra) and in the case of Pinegrove International Charitable Trust (supra), as such, were the subject matter of Appeals before this Court and by a judgment and order dated 16.03.2015 in Queen s Educational Society vs. Commissioner of Income Tax, reported in (2015) 8 SCC 47, this Court has set aside the order passed by the Uttarakhand High Court in the case of Queen s Educational Society (supra) and also approved the decision of the Punjab Haryana High Court in the case of Pinegrove International Charitable Trust (supra). Therefore, by the reported judgment, this Court approved the decision of the Punjab Haryana High Court in the case of Pinegrove International Charitable Trust (supra). 4. However thereafter, the decisions of this Court in the case of Queen s Educational Society (supra) again fell for consideration before this Court in the recent decision of this Court in the case of New Noble Educational Society vs. Chief Commissioner of Income Tax 1 and Another, 2022 SCC OnLine 1458 wherein a three-Judge Bench of this Court has not approved the decision of this Court in the case of Queen s Educational Society (supra). The relevant paras are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the level of fees collected and the surplus generated consistently for several years indicated that the trust was essentially engaging itself in profitable activity under the garb of imparting education. The High Court had held that the generation of profits could not be the only reason to deny exemption, and what was relevant was the predominant or main object of the society, which in that case was to impart education. The High Court also held that after granting approval, if the PA notices that the conditions in which approval had been granted were violated under the circumstances detailed in the thirteenth proviso (as it existed then), approval could be withdrawn after following the procedure prescribed. 52. This court in Queens Educational Society (supra) approved the judgement of the Punjab and Haryana High Court in Pinegrove International (supra). By the same judgement, it also approved other judgements of High Courts which had followed Pinegrove and disagreed with the Uttarakhand High Court s judgement. 55. The basic provision granting exemption, thus enjoins that the institution should exist solely for educational purposes and not for purposes of profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and not for purposes of profit loom large as compulsive mandates, necessary for exemption. The expression solely is therefore important. Thus, in the opinion of this court, a trust, university or other institution imparting education, as the case may be, should necessarily have all its objects aimed at imparting or facilitating education. Having regard to the plain and unambiguous terms of the statute and the substantive provisions which deal with exemption, there cannot be any other interpretation. 68. In the light of the above discussion, this court is of the opinion that the interpretation adopted by the judgments in American Hotel (supra) as well as Queens Education Society (supra) as to the meaning of the expression solely are erroneous. The trust or educational institution, which seeks approval or exemption, should solely be concerned with education, or education related activities. If, incidentally, while carrying on those objectives, the trust earns profits, it has to maintain separate books of account. It is only in those circumstances that business income can be permitted-provided, as stated earlier, that the activity is education, or relating to educat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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