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2018 (4) TMI 96 - HC - Income TaxGrant of exemption u/s 10(23C)(vi) denied - Society has moved the Application and not the Institution - proof of charitable activities - Held that:- The appellant has not thought it fit to reject the Application on the ground that the Application has not been moved by the Institution. True it is that the proviso to Section 10(23C)(6), inter alia, contemplated that the Application is to be made by the Institution. It is, accordingly, that the Officer has also, in this context, found that in order to qualify for grant of exemption under Sub-Section (23C), the Institution should exist only for educational purpose, which is not the case of the writ petitioner Society. Objects of the Society include objects such as eradication of untouchability, dealing with environmental pollution, plantation, AIDS Education, achievement of communal harmony, over all local development, promotion of fruit bearing trees and plantation in the hill areas. Here, we must notice that there is a definite case for the respondent / writ petitioner that the respondent/ writ petitioner is only running one Institution and there is no other Institution, which is being run by it and, in fact, even it has a case that there is no other activity. As under the Memorandum of objects, there are various objects, other than education. What Section 10(23C)(6) of the Act actually does contemplate is that income received by any person on behalf of the Institution, which is an educational institution and that Institution should exist solely for educational purpose and not for the purpose of profit, other than those mentioned in Clauses (iiiab) & (iiiad). It is also to be approved by the Prescribed Authority. Therefore, the requirement of law must be that the educational institution is to exist solely for educational purpose and it should not exist for the purpose of profit. Underlying object appears to be that the words ‘existing solely’ are to be understood in the context of the words ‘not for the purpose of profit’. In the light of this, we would think that the Appeal must be partly allowed and the portion of the judgment directing exemption to be granted must be set aside, and instead a direction must be issued to the appellant to re-consider the matter in the light of the judgment of the Hon’ble Apex Court in the case of American Hotel & Lodging Association Educational Institute v. CBDT reported in (2008 (5) TMI 17 - SUPREME COURT OF INDIA and also Queen’s Educational Society vs. Commissioner of Income Tax (2015 (3) TMI 619 - SUPREME COURT).
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