TMI Blog2008 (2) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. R.M. Mehta, for the respondent. JUDGMENT The judgment of the court was delivered by MADAN B. LOKUR, J. - The Revenue is aggrieved by an order dated 20 th February, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench A, in ITA No.1059/Del/2002 relevant for the Assessment Year 1997-98. 2. The assessee is a trust imparting education through four educational institutions in Orissa and Rajasthan. It is registered under Section 12A(a) of the Income Tax Act, 1961 ("the Act") since 1985. Upto and including the Assessment Year 1996-97, the assessee was allowed exemption under Section 10(22) of the Act but for the Assessment Year 1997-98, the Assessing Officer departed from the past stand despite the contention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this regard also, we are of the opinion that the amount is far too insignificant for consideration and learned counsel for the Revenue merely mentioned it without actually raising any contentions in this regard. (iii) The main ground on which submissions were made by learned counsel for the Revenue was the conclusion of the Assessing Officer that the assessee had invested its funds with a non-governmental body. The Assessing Officer, therefore, held that the assessee had diverted funds for non-educational activities. 4. The assessee contested this view of the Assessing Officer and the Commissioner of Income Tax (Appeals) [CIT (A)] accepted the contention of the assessee and came to the conclusion that there was no material to sugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational institution which exists solely for educational purposes and not for purposes of profit, then that income would be entitled to exemption and further the income should be directly relatable to educational activity." 7. In Governing Body of Rangaraya Medical College v. Income Tax Officer, [1979] 117 ITR 284, the Andhra Pradesh High Court observed as follows (page 290) :- "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." 8. As observed by the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solely for educational purposes and not for purposes of profit, is exempt from tax. 2. The Board have received representations from various institutions which fulfil the conditions laid down under section 10(22) of the Act, but are denied exemption because their funds are not invested in accordance with the provisions of section 11(5) of the Act. It is hereby clarified that since section 10(22) does not impose any restriction regarding mode of investment of funds, such institutions are not required to invest their funds in the modes specified under section 11(5) of the Income-tax Act. This clarification will not apply to the institutions seeking exemption under section 11 of the Act. Sd- /………….. H.K. Choudhary Under Secreta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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