TMI Blog2014 (4) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... pose, other than the educational purpose, but, during the relevant assessment year, it is not the case of the revenue nor is there any material to show, that the society was running any activities other than the educational activity. There are adequate safeguards that if the activities other than educational activities are undertaken by the society, exemption granted can be withdrawn - Merely, because there exists object, which is not related to educational activities, is not sufficient to deny the exemption/benefit of Section 10(23C)(iiiad) of the Act - in the absence of any allegation or material against the society showing that they are involved in any other activities than the educational activities, it cannot be denied exemption u/s 10(23C)(iiiad) – Decided in favour of Assessee. - ITA Nos.299-300/2013 - - - Dated:- 24-2-2014 - Dilip B Bhosale, And B Manohar, JJ. For the Appellant : Sri A Shankar, Adv. For the Respondent : Sri K V Aravind, Adv. JUDGEMENT Per: Dilip B Bhosale: In these appeals, the appellant-Society has raised the following substantial questions of law for our consideration:- (i) Whether on the facts and in the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Society had not carried on any activity other than the educational activity and granted exemption under Section 10(23C) (iiiad) of the Act. The order of the Appellate Authority was then carried by the Revenue in further appeal before the Appellate Tribunal. The Appellate Tribunal by the impugned order, allowed the appeal filed by the Revenue in respect of the Assessment years holding that the Society has included certain objects, not connected with education in its memorandum of objects and, therefore, it cannot be regarded as existing solely for the purposes of education. 3. It is against this backdrop, we have heard learned counsel for the parties for some time and with their assistance, gone through all the three orders and other materials placed before us. 4. The Society is engaged in imparting education in the school run by them is not in dispute. It is also not in dispute that from the Assessment year 2008-09 onwards, the Society was granted registration under Section 12A of the Act. The objects of the Society on the basis of which, the Revenue claim that the Society during the relevant assessment year was not existing solely for education purpose, read thus:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these activities. It is against these admitted facts, we would now proceeded to consider the submissions advanced on behalf of both sides placing reliance upon the judgments of the Supreme Court and other High Courts. 8. At the outset, we would like to consider the judgment of the Supreme Court in American Hotel and Lodging Association Educational Institution v. Central Board of Direct Taxes and others [(2008) 301 ITR 86 (SC), on which, Mr. Aravind, learned counsel appearing for the Revenue placed heavy reliance to contend that mere existence of object/s in the Memorandum of Association not related to the education is sufficient to deny exemption/benefit under the provisions contained in Section 10(23C) (iiiad) of the Act. In American Hotel s case, the Supreme Court was dealing with the provisions contained in Section 10(22) of the Act and the question, for our purpose, fell for its consideration was, whether the activities of the appellant-institute came within the definition of income of educational institution . The following observations were heavily relied upon by Mr. Aravind, learned counsel for the Revenue. Under Section 10(22), one had to closely analyse the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment of India. Similarly, the prescribed authority may grant approvals on such terms and conditions as it deems fit in case where the institute applies for initial approval for the first time. The prescribed authority must give an opportunity to the applicant-institute to comply with the monitoring conditions which have been stipulated for the first time by the third proviso. Therefore, cases where earlier the applicant has obtained exemption(s), as in this case, need not be reopened on the ground that the third proviso has not been complied with. However, after grant of approval, if it is brought to the notice of the prescribed authority that conditions on which approval was given are breached or that the circumstances mentioned in the thirteenth proviso exists then the prescribed authority can withdraw the approval earlier given by following the procedure mentioned in that proviso. The view we have taken, namely, that the prescribed authority can stipulate conditions subject to which approval may be granted finds support from sub-clause (ii) (B) in the thirteenth proviso . 10. After making these observations, the Supreme Court set aside the order passed by the Central Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the High Court after referring to the judgments in C P Vidya Niketan and American Hotel. The Bombay High Court in Vanita Vishram Trust vs- Chief Commissioner of Income-Tax and another (2010) 327 ITR 121 (Bom) after considering the provision contained in Section 10(23C)(vi) of the Act observed that though the objects clause contained varied objects including the management and development of moveable and immoveable properties, the statement of fact before the Court, which was not disputed, was that the only activity carried out by the Trust ever since its inception was the conduct of educational institutions. The Institution, in that case, had a history of over 80 years during the course of which the only activity was of conducting educational institution. 13. In the present case, it is not in dispute that the society has been conducting the primary and secondary school in the State of Karnataka since 2002. Nor is there any dispute before us that save and except for conducting school, the society has carried on any other activities since then. Without expressing any opinion whether the object, as reflected in Clause 3(b) and 3(h) of the Memorandum of Association, are relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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