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TMI Blog2024 (9) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Income Tax Appellate Tribunal (ITAT), Raipur Bench, Raipur in ITA No.171/RPR/2023 affirming the order dated 15-3-2023 passed by the Commissioner of Income Tax, Exemption, Bhopal. 2. This tax case was admitted for hearing on 30-8-2024 by framing the following substantial question of law: - Whether both the Commissioner of Income Tax, Exemption, Bhopal and the Income Tax Appellate Tribunal, Raipur Bench, Raipur are justified in rejecting the application preferred by the appellant herein under Section 10(23C)(vi) of the Income Tax Act, 1961 by recording a finding perverse to the record and further justified in rejecting the application without recording a finding that the appellant University is not existing solely for educationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le expenses and TDS thereon, if any, for the financial year 2021-22; (iii) details of examination expenses and TDS thereon for the financial year 2021-22; and (iv) nature and details of Corpus Fund, Endowment Fund and RUSA fund shown directly in balance sheets, for which a show cause notice was issued to the appellant on 1-3-2023. The appellant replied the show cause notice, but ultimately, the Commissioner of Income Tax, Exemption not finding the reply satisfactory, rejected the application against which the assessee preferred an appeal before the ITAT which was also dismissed holding that the appellant was unable to furnish necessary information / details before the CIT(E) which was well within the jurisdiction of the CIT(E) to call for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in total income.-In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- * * * (23C) any income received by any person on behalf of- * * * (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the Principal Commissioner or Commissioner; or * * * Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,- (i) where the application is made under clause (i) of the said proviso, pass an order in wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in New Noble Educational Society (supra) and summarised the conclusions with regard to Section 10(23C) of the IT Act holding that the Commissioner or the authority concerned, while considering an application for approval and the further material called for (including audited statements), should confine the inquiry ordinarily to the nature of the income earned and whether it is for education or education related objects of the society (or trust). It has been observed in paragraphs 82 & 83 of the report as under: - "82. The conclusions of this Court are summarised as follows: 82.1. It is held that the requirement of the charitable institution, society or trust, etc. to "solely" engage itself in education or educational act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cational Society Queen's Educational Society v. CIT, (2015) 8 SCC 47 : 7 SCEC 307 so far as they pertain to the interpretation of expression "solely" are hereby disapproved. The judgments are accordingly overruled to that extent. 82.6. While considering applications for approval under Section 10(23-C), the Commissioner or the authority concerned as the case may be under the second proviso is not bound to examine only the objects of the institution. To ascertain the genuineness of the institution and the manner of its functioning, the Commissioner or other authority is free to call for the audited accounts or other such documents for recording satisfaction where the society, trust or institution genuinely seeks to achieve the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e most authoritative pronouncements of this Court in T.M.A. Pai Foundation T.M.A. Pai Foundation v. State of Karnataka, (2002) 8 SCC 481 : 2 SCEC 1. The interpretation of education being the "sole" object of every trust or organisation which seeks to propagate it, through this decision, accords with the constitutional understanding and, what is more, maintains its pristine and unsullied nature." 9. Reverting to the facts of the present case in light of the principles of law laid down by their Lordships of the Supreme Court in New Noble Educational Society (supra) and catalogued in paragraph 82 of the judgment, it would appear that both the authorities have failed to record a specific finding that the appellant University is not existing s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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