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2021 (4) TMI 250 - AT - Income TaxGrant of approval u/s 10(23C)(vi) denied - assessee is a society running a school, namely Rainbow World School - as difficult to verify the activities of the applicant society and arrived at the conclusion whether it existed solely for education? - HELD THAT:- For the purpose of granting approval the prescribed authority is to satisfy himself about the objects and activities of the applicant university/institution, whether its income qualifies for exemption as such under the said provision. In the present case undoubtedly the Ld.CIT(E) has considered the aims and objects of the applicant society and has found no anomaly in the same vis a vis it existing solely for the purpose of education. The reason for the Ld.CIT(E) arriving at the conclusion that it was difficult to verify the activities of the society and come to the conclusion it existed solely for education, was the inadmissible claim of exemption by the applicant assessee in the preceding two years. We are unable to concur with the Ld. CIT(E) on this score. The claim of exemption in the preceding two years is admittedly inadmissible for the reason that it was in contravention of the provisions of section 10 (23C)(iiad) which grant exemption to similar entities without approval subject to receipt of income upto limit prescribed therein The claim being inadmissible in the preceding years on account of receipts exceeding a specified limit, surely does not impinge upon its character of an institution existing solely for the purpose of education. The findings of the Ld.CIT(E) that the same impinges on the extent and quality of surplus being generated by the applicant society is a very general and farfetched observation/finding with no factual basis at all and, therefore, is of no relevance, in our view. Applicant society is not eligible for approval u/s 10 (23C)(vi) on account of the decision of Pinegrove International Charitable Trust [2010 (1) TMI 49 - HIGH COURT OF PUNJAB AND HARYANA AT] which addressed the issue whether the societies registered as such qualified as institutions for the purpose of grant of exemption u/s 10 (23C)(vi) - We find that the Ld. CIT(E) has clearly misread and misapplied the said decision as rightly pointed out by the Ld. Counsel for the assessee. The Hon’ble High Court in the said decision had clearly held the societies also as eligible educational institutions for exemption u/s 10 (23C)(vi) of the Act as is evident from the relevant portion of the order reproduced in the order of the Ld. CIT(E) also. The assessee, admittedly being registered as a society, it qualified for exemption u/s 10 (23C)(vi) of the Act, as per the said decision. In view of the same, the findings of the Ld.CIT(E) on this account also, we find is incorrect. We hold that there was no basis at all for denial of approval u/s 10 (23C)(vi) - Decided in favour of assessee.
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