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2022 (8) TMI 1069 - AT - Income TaxExemption u/s 11 - refusal of registration u/s 10(23C)(vi) Assessee-Society/Trust in its bylaws, contains various objects including education, whereas it was being maintained that the other objects, which are non-educational or ancillary - whether the mere existence of non-educational objects in the Deed of Declaration, despite the undisputed factum of no activity having been carried out in pursuance of such non-educational objects, would render the applicant ineligible for grant of approval for exemption under section 10(23C)(vi)? - HELD THAT:- In ‘CIT vs. Geetha Bhawan Trust’ [1994 (11) TMI 71 - KERALA HIGH COURT] it has been held that ‘exist’ means ‘to be in presence, force, activity or effect at a given time. CIT (E) has not shown as to how the Applicant Trust was, at the relevant time, in force, activity or effect qua the non-educational objects of the Trust. Per contra, the applicant has given the details of Schools/Institutions run by it - These details, undisputedly were filed before the ld. CIT (E). Such details clearly evince that these are the Institutions pertaining to education only and regarding no other objects, non-educational in nature. Even the initial submissions filed before the CIT (E) by the Applicant, support the argument of the assessee that the assessee did not carry out any activity other than education, which is apparent from the fact that in the Income & Expenditure Account placed only source of income is fee and other receipts from the students, along with interest from bank account and there is no other source of income, which proves the nature of the activity. Erstwhile section 10 (22), which now forms part of section 10(23C)(vi), speaks of a University or other Educational Institution existing solely for educational purposes, and not for the purposes of profit; and that what is relevant under this section, is the source of the income derived from an Educational Institution existing solely for educational purposes. Hence, this objection of the CIT (E) has no legs to stand on and the same is hereby disagreed with. Although the ld. CIT (E) has said so, it nowhere stands proved that the funds/income of the Applicant are being utilised for other objects too, i.e., the objects, which are not educational objects in nature, or that the Applicant is part of an Institution which is engaged for the purpose of profit. Likewise, there is nothing on record to show that the surplus of the Applicant has been diverted for any use or purpose other than educational purposes. This being so, no violation of the Third Proviso to section 10(23C)(vi) stands proved. Finding the grievance of the Applicant-Appellant, by way of the Grounds of Appeal, the same is accepted. The order under appeal is reversed - CIT (E) is directed to forthwith grant approval to the Applicant for exemption under section 10(23C)(vi). Appeal of assessee allowed.
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