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2019 (2) TMI 815 - HC - Income TaxCharitable activity - exemption claimed under Section 10(22) denied - whether the assessee can exclude the income that is derived from the educational institutions claiming the benefit under Section 10(22) and show the income derived otherwise than from the educational institutions alone for the purpose of taxation? - Held that:- The majority view was that the “non-profit” motive has to be tested against Indian activities and since the assessee therein was carrying on only commercial activity of selling printed books and materials, within India, it cannot claim the exemption under section 10(22). This aspect has application in the instant case because here too the profit motive was discernible from the purchase of land in favour of the personnel in management. In Queen's Educational Society [2015 (3) TMI 619 - SUPREME COURT] it was reiterated that if the activities are primarily for educating persons, the fact that institutions make surplus profit incidentally from such activities does not make the institution a profit making institution. What is relevant is that the purpose of education should not get submerged under the profit making motive. The ultimate test is whether on an overall view of the issue in the assessment year concerned, the object is to make profit as opposed to imparting education. Applying the ratio to the case in hand, even though it is true that the assessee is running an educational institution, it cannot be said that the society exists solely for educational purposes and not for profit. The Tribunal rightly concluded that the acquisition of property in the name of individuals is indicative of the fact that the profits of the institution was being used for self aggrandizement; which is the explicit motive. The explanation that the property was inadvertently purchased in the name of individuals by an innocuous mistake, can only be taken with a pinch of salt. We also find that the assessee is a society, formed with many objectives, one of which is imparting education. Hence, the assessee cannot be found to be an institution established and existing solely for educational purposes. The assessee also has declared income from cultural activities, which again reinforces the finding that the object is not solely education. - Decided against the assessee
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