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2011 (2) TMI 725 - HC - Income TaxExemption under Section 10(22) - What is pertinent to be taken note of is that there is no finding or allegation of any diversion of these funds for the purpose other than carrying on educational activity. There is no diversion of funds to the individual members or taking away of profits for some other activity. The opinion is completely based on surmises and conjectures as it seems to suggest that merely because funds were in a private bank, there may have been divergence of funds to the members of the Society. Similarly, the factum of construction being carried out by Ahluwalia Construction Co.(Pvt.) Ltd, stated to be a family concern of the President, was not material as there was no allegation of any inflated cost of construction or unreasonable profits being derived from the same by third parties as a mode of divergence of funds. It is not in dispute that the Society was duly registered under Section 12A of the said Act on the basis of its Memorandum of Association - There has been no change in the Memorandum of Association - The Society continues to run the schools which is the object with which the Society was set up - The exemption under Section 10(22) of the IT Act has been available to the respondent/assessee for a number of years prior to the assessment years in question and even for the subsequent years as stated by learned counsel for the assessee - It is in these circumstances that the legal position set out on the principle of consistency would come into play as observed in Commissioner of Income Tax v. Lagan Kala Upvan [2002 -TMI - 12203 - DELHI High Court] - Decided in favour of assessee.
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