TMI Blog1997 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 57-2359 of 1988, 3122 of 1987 and 6281 of 1986. In this batch of 18 cases, a common question of law--the scope of section 10(22) of the Income-tax Act, 1961--arises for consideration. The main case is the decision rendered by the Madras High Court in Tax Case No. 114 of 1975 (Addl. CIT v. Aditanar Educational Institution). The said decision is reported in [1979] 118 ITR 235. The assessee as well as the Revenue have filed appeals from the said decision, which covered a period of three years 1965-66, 1966-67 and 1967-68. The appeals filed by the assessee are Civil Appeals Nos. 2578-2580 of 1979 and the appeals filed by the Revenue are Civil Appeals Nos. 356, 356A and 356B of 1980. Civil Appeals Nos. 41 and 42 of 1988 as also the appeals relating to Special Leave Petitions Nos. 2357-2359 of 1988 and 3122 of 1987 relate to the same assessee. The assessees in the other cases are different. In Civil Appeals Nos. 3881-3882 of 1984 and 379-380 of 1985, the assessee is Sri Paramakalyani Education Society, Madras. In Civil Appeals Nos. 8789 of 1995, the assessee is one Sattur Hindu Nadar's Edward School Committee. In the appeal relating to Special Leave Petition No. 6281 of 1986, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case, the Tribunal was right in holding that the income of the assessee is entitled for exemption under section 10(22) of the Income-tax Act, 1961 ? " It is sufficient to state the minimal facts in the main case, T. C. No. 114 of 1975 (Civil Appeals Nos. 2578-2580 of 1979 and 356, 356A and 356B of 1980 ; the decision reported in [1979] 118 ITR 235). The assessee is a society registered under the Societies Registration Act, 1960. Its objects are to establish, run, manage or assist colleges, schools and other educational organisations existing solely for educational purposes. The assessee received donations from a trust called "Thanthi Trust" a sum of Rs. 15,71,370 during the previous year relevant to the assessment year 1965-66, a sum of Rs. 5,62,432.25 during the previous year relevant to the assessment year 1966-67 and a sum of Rs. 4,78,899.67 during the previous year relevant to the assessment year 1967-68. The assessee filed "nil" returns, for all these years. According to the assessee, its taxable income was "nil" as it was an educational institution existing solely for educational purposes. The Income-tax Officer closed the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y educational institution' would fall within the scope of section 10(22) even though it may have or may not have anything to do with the University. The categories are so different that the University cannot be the genus, and the 'other educational institution' the species thereof. Thus, the college here could come under the 'other educational institution'. " Proceeding further, the High Court held that the assessee came into existence for the purpose of establishing, running, managing or assisting colleges, schools and other educational organisations and in pursuance of its objects, the assessee has established a college. It was further held that the medium through which the assessee could effectuate its objects is the college and by employing this medium, the assessee imparts education. The High Court opined that it is not possible to accept the contention of the Revenue that the assessee is only a financing body and does not, on the facts, come within the scope of "other educational institution" occurring in section 10(22). It was found that the sole purpose for which the assessee has come into existence is education at the levels of college and school and that an educational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o establish, run, manage or assist colleges or schools or other educational institutions solely for educational purposes and in that regard to raise or collect funds, donations, gifts, etc. Colleges and schools are the media through which the assessee imparts education and effectuates its objects. In substance and reality, the sole purpose for which the assessee has come into existence is to impart education at the levels of colleges and schools and so, such an educational society should be regarded as an "educational institution" coming within section 10(22) of the Act. We hold accordingly. In our view, the judgment of the High Court does not merit interference. The plea of the Revenue to the contrary is untenable and we repel the same. All the appeals filed by the Revenue shall stand dismissed, but there shall be no order as to costs. We will now take up the appeals filed by the assessee in the main case--Civil Appeals Nos. 2578-2580 of 1979. It passes our comprehension as to why the assessee filed the appeals at all from the judgment of the High Court dated February 23, 1979, which is in its favour, When questioned, senior counsel appearing for the assessee, Mr. G. C. Sharma, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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