TMI Blog2019 (4) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... ives, but, carried on only educational activities, then, the assessing authorities can allow the benefit. In the given case, facts are very clear that during the relevant AY, the assessee has carried on only educational activities and has not carried on any other activities. U/s 10(23)(iiiad), it is not a case of registration and the allowability of the claim thereafter without verification of facts. Every year, when the claim is made, AO is required to verify whether for that PY, the assessee existed solely for educational activities. Therefore, assessee is eligible to claim exemption u/s 10(23)(iiiad) for the relevant AY before us. Accordingly, the addition made by the AO is hereby deleted and the grounds raised by the assessee on this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 10(23C)(iii) of the Act as it is running educational institution and its gross receipts were below ₹ 1 crore. However, AO completed the assessment and treated income of ₹ 17,56,053/- as taxable income of the assessee. 3. Aggrieved with the above order, the assessee preferred an appeal before the CIT(A) and filed its submissions. After considering the submissions of the assessee and verification of the objectives of the society, CIT(A) dismissed the appeal of the assessee by observing as under: 6. I have considered the submissions of the appellant and also findings of the AO carefully. On perusal of the objectives of the Society, listed in para 4.1, it is seen that appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: 1. The order of the Hon'ble CIT(A) is erroneous in law as well as facts of the case. 2. The Hon'ble CIT(A) in the facts and circumstances of the case ought to have directed the assessing officer to allow the claim u/s.10(23C)(iiiad) of the IT Act 3. The Hon'ble CIT(A) ought to have observed that the main object of the society was imparting of education and other objectives mentioned were only incidental to the main objective and hence the claim of the assessee u/s.l0(23C)(iiiad) would not get effected because of those other objectives. 4. The Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Geetha Bhavan Trust(supra), whereas the case is relevant to section 10(22). Thus, according to him, the case is not relevant to the case of assessee. 7. In the rejoinder, the ld. AR submitted that earlier section 10(22) and 10(22A) are now replaced by section 10(23), therefore, the case law relied upon by the assessee is very much relevant to the facts of the case. 8. Considered the rival submissions and perused the material on record. We notice that assessee is an educational society and is constituted with multiple objectives to carry on its operations. The objective clause of the society is as under: a. To establish primary, upper primary, High School and Colleges. b. To esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se had come up for consideration before the Hon ble Kerala High Court in the case of Geetha Bhanu Trust (supra) wherein the Hon ble High Court has held as under: 5. What section 10(22) speaks of is income of a university or other educational institutions existing only for educational purposes, and not for purpose of profit. Here is a trust running two educational institutions. The income which is sought to be subjected to assessment is that derived from these educational institutions. It is an admitted fact that the surplus was used only for the purposes of the educational institutions. The profits of the trust are not distributed. It is not a profit-making organisation and the surplus earned from the schools is ploughed ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity. Therefore, in our considered view, the decision of the Hon ble Kerala High Court is very much relevant for this case. We find that the CIT(A) has rejected the contention of the assessee on the ground that the assessee has multiple objectives other than solely educational activities in the object clause. The tax authorities should apply the provisions of the Act as the Legislature intended to develop the educational activities and promote those institutions, which have functions solely for education and not for profit. In case, an assessee has multiple objectives, but, carried on only educational activities, then, the assessing authorities can allow the benefit. In the given case, facts are very clear that during the relevant AY, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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