9911796707
TMI Blog1975 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner, a society registered under the Societies Registration Act, as an association of persons, overruling its claim of being exempt from taxation by virtue of cl. (22) of s. 10 of the Act. It was held that the petitioner-society is founded on April 16,1964, to manage the Rangaraya Medical College which was started by another society, namely, the Medical Education Society, Kakinada, six years earlier and that the college and the managing society are two different entities. It was further pointed out that there is no registered document transferring the buildings to the petitioner-society, that a compulsory contribution of Rs. 12,000 per seat is being collected by the society and that the bank accounts and deposits are maintained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that the mere fact that the petitioner-society filed an appeal against the impugned order or that a stay was granted under certain conditions is no bar to this court to issue a writ of certiorari. He submitted that the petitioner is an educational institution existing solely for educational purposes and not for earning any profit and that any surplus arising from its operations is used exclusively for the purposes of the said educational institution only and that it is not a case where the profit accruing from its operations is being distributed among the members of the society or the members of the governing body. He relied upon the decision in Mayor c. of Manchester v. McAdam [1896] 3 TC 491 (HL) in support of his proposition. On beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to organise and maintain hospitals, clinics, laboratories, etc., for clinical teaching and research and training of the students and generally to do all other things as may be necessary, incidental or auxiliary for a proper management of the said college and to establish institutions ancillary to the college. The management of the college and its ancillary institutions and their assets, properties and funds were entrusted to the petitioner. With respect to the objection of the ITO that there is no registered document transferring the immovable properties of the college in favour of the petitioner-society, it is submitted by the petitioner that since the said transfer involves a huge amount of charges towards stamp and registration, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. It has been further held: "Analogous to colleges and schools are institutions, the object of which is the diffusion of knowledge of a particular type, as the Zoological Society, the Geographical Society, the Royal Literary Society, the Royal Society and the Royal Choral Society. Institutions the objects of which are the promotion and encouragement of the study and practice of various arts and branches of science, as for example surgery and civil engineering, are established for charitable purposes under this head of advancement of education....... provided that they do not also have the object of promoting the interests of individuals. The fact that individual members of the institution may derive incidental benefit from their members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular case, the facts found were that the school was originally founded by a limited company, the capital of which was divided into 40,000 preference shares and 100 new shares. While the preference shareholders were entitled to a dividend of 4% per annum free of income-tax, the new shareholders were not entitled to any dividend. However, the school was managed by a governing body consisting of 24 persons of whom 1/3rd were nominated by the local education authority and the remaining were appointed by the council of trust to which the said school was handed over. The governing body was entitled to charge fees from the students and was largely maintained by public monies granted by the Board of Education, which grants were to be denied b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit to any individuals. Merely because certain surplus arises from its operations, it cannot be held that the institution is being run for the purpose of profit so long as no person or individual is entitled to any portion of the said profit and the said profit is used for the purposes and for the promotion of the objects of the institution. The decision reported in Mayor c. of Manchester v. McAdam [1896] 3 TC 491 (HL) was a case where an exemption from income-tax was claimed in respect of the buildings owned by the municipal borough of Manchester on the ground that the said buildings were being used as public libraries. Under the Income Tax Act, exemption was available in respect of the property of any literary or scientific institution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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