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2022 (8) TMI 853 - AT - Income TaxExemption u/s 10(23C) (vi) - denial of benefit was actually withdrawal of the exemption which was provided to the assessee with its former name - appellant is an institution established by the Government of India, Ministry of Road Transport and Highway and was previously known by the name National Institute for Training of Highway Engineers (NITHE) - As argued assessee Appellant society is an extended arm of the Government, formed and running with an object to give the technical training and necessary professional grounding in the field of Highway engineering including bridges to ensure an efficient, safe, reliable and economic highway system as in integral part of nation's economy, and without considering these facts on record, the CIT (Exemption) has arbitrarily rejected the application by wrongly inferring that the Appellant Society is not doing any charity and is running on commercial lines only because it has surplus - HELD THAT:- Broadening of objectives did not in any way change the nature of objectives of the institution or its functionality. It continued to be an institution to give technical training and necessary professional grounding in the field of highway engineers including bridges to ensure an efficient, safe, reliable and economic highway system as an integral part of nation’s economy. Tax Authority has questioned the charitable objectives of the appellant. An important aspect that is over looked by the Ld. Tax Authority is that appellant is an autonomous institution of a Ministry of Road Transport and Highway, Government of India. The initial funding was from this administrative ministry and even the land for building has been purchased in name of President of India. The Bench is of view that there cannot be a more sacrosanct purpose of an institution like the present appellant which is giving formal training to professionals like highway engineers, who otherwise would not have any training or continued learning, from ordinary academic institutions or Universities. A self sustaining autonomous institution is rather expected to be generating receipts for its subsistence rather then being dependent on the Government for aid. So, merely collection of fee for training programs cannot make an autonomous institution to be commercial, as observed by the Ld. Tax Authority. It is actually imperative for the Tax Authorities examining applications under section 10(23C)(vi) of the Act, to reflect in their orders that matter has been examined on basis of tests recognized by the Hon’ble Apex Court in Queens Educational Society Case [2015 (3) TMI 619 - SUPREME COURT] to determine whether an educational institution exists solely for educational purposes and not for purposes of profit and which has not been done in present case by the Ld. Tax Authority. The impugned order is not sustainable and same is set aside. CIT(E) is directed to issue the exemption certificate to 10(23C)(vi) of the Act for the relevant assessment years. Decided in favour of assessee.
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