TMI Blog1998 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... mption was claimed under section 10(22) and alternatively under section 11 of the Act. It was not allowed on the ground that the society is existing for the purposes of profit. 3. Shri P.L. Juneja, learned Counsel for the assessee appeared before us. Relevant documents and papers were filed. It was vehemently contended that the society is solely existing for the educational purposes. It complied with all the requirements which are sine qua non for availing the exemption contemplated under section 10(22) of the Act. 3.1 It was stated that in the preceding year exemption under section 10(22) was granted to the assessee. Reference was made to the case of Dhansiram Agarwalla v. CIT [1996] 217 ITR 4/[1995] 81 Taxman 1 (Gauhati), wherein it was held that neither the principles of res judicata nor the rule of estoppel is applicable to the assessment proceedings, yet the rule of consistency does apply to such proceedings. Learned Counsel argued that the accounts were not rejected. There was no change. Similar facts exist in the year under consideration also. It is, therefore, imperative on the part of revenue to maintain consistency. 3.2 The Society is not distributing profits or is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olled or run by assessee not included in its income. No amount was spent on any purpose unconnected with education. Exemption under section 10(22) of the Act was allowed. 3.7 The admission fee charged was treated as capital item. It was, therefore, taken towards the corpus of the trust fund. It was not open to the Assessing Officer to make addition on this count. It was not a revenue receipt. It was incumbent on Assessing Officer to prove that this receipt was exigible to tax. Reference was made to the decision of Udhavdas Kewalram v. CIT [1967] 66 ITR 462 (SC). 3.8 Our attention was invited on Circular F.No. 194/16-17-IT(AI). The relevant portion of the said circular is reproduced hereunder:- "The question for consideration is whether an educational institution existing solely for educational purposes but which shows some surplus at the end of the year is eligible for this exemption. If the profit of the educational institution can be diverted for the personal use of the proprietor thereof, then the income of the educational institution will be subject to tax. However, there may be cases where the educational institutions may be owned by the trusts of societies to whom the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney. Evidence of returning the money to the extent of Rs. 10,000 only was placed before the revenue authorities. 4.1 It was pointed out that veracity of the assessee's claim apropos the donations and loans could not be examined for want of the evidence. No continuation letters were filed before the revenue authorities for donations and loans. 4.2 Admittedly the donations were taken from the parents of the students. Such donations cannot be construed to be voluntary donations as these were taken for granting admission. There existed quid pro q no voluntary contribution would mean contribution other than those by beneficiaries of the services. 4.3 In regard to the admission fees, it was stated that the same was not reflected purposely as the revenue receipt. The Delhi School Education Act, 1973 (hereinafter called DSE Act, 1973) prohibits such receipts. The Act of accepting the admission fee beyond the limit prescribed is against the provision of the law. 4.4 It was submitted that the surplus was generated year after year in a systematic manner. In the name of education assessee is earning profit. The school building is being constructed by Ahluwalia Construction Pvt. Ltd. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity is to carry out the charitable purpose and not to earn profit, it would not lose its character of charitable purpose, because some profit arises from the activity. 5.2 In the case of Aditanar Educational Institution the Apex Court has held that the language of section 10(22) of the Act is plain and clear and the availability of the exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. After meeting the expenditure, if any surplus results incidentally from the activity lawfully carried by the educational institution, it will not cease to be one existing solely for educational purposes, since the object is not one to make profit. The decisive or acid test is whether, on an overall view of the matter, the object is to make profit. In evaluating or appraising the above, one should also bear in mind the distinction/difference between the corpus, the object and the powers of the concerned entity. 5.3 The word "incidental" as defined in Chambers' 20th Century Dictionary, means in an incidental way : loosely by the way, parenthetically, as a digression. It refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collect any donation through its students for the aid of teachers or for any fund for the aid of teachers. (3) Voluntary donations collected by the managing committee of an aided school shall be accounted for separately and may, at the discretion of the managing committee be utilised for meeting the managing committee's share of the expenses referred to in sub-section (2) of section 10. (4) In computing the grant-in-aid, voluntary donations collected by the managing committee of an aided school not be taken into account. 156. Collection of fees or donation with the approval of the Director- (1) The managing committee of an aided school may, with the previous approval of the Director, also invite voluntary contributions from the parents or guardians of the construction of any building for the school or its hostel or for the extension of any such building or hotel. (2) No appeal for any such contribution as is referred to in sub-rule (1) shall be made at the time when admissions are made to (he concerned school or when results are declared by the school." 5.6 Coming now to the loans taken from the parents, we find that the assessee did not furnish confirmations. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to the exemption. In order to be entitled to an exemption, an assessee must strictly come within the terms of the provisions under which such exemption is being claimed. In a fiscal provision, if benefit of exemption is to be considered, it should be construed strictly. It must be seen that tax concessions are not abused. 5.12 In the case of Safdarjung Enclave Education Society, it was held that merely because education is imparted in the school, that by itself, cannot be regarded as a charitable object. An element of public benefit or philanthropy has to be present. Today education has acquired a wider meaning. If education is imparted with a profit, motive, to hold, in such a case, as charitable purpose, will not be correct. It was further held that a voluntary contribution cannot amount to a compulsive donation. If the donor, in order to gain an advantage or benefit, if he apprehends that but for the contribution some adverse consequence would follow, makes a donation certainly it ceases to be voluntary. It was laid down that merely because the society is not distributing profits or is applying the profits is not enough for it to claim exemption. 5.13 In charity, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee needs to be tested on the touchstone of section 11. This was not done. We, therefore, set aside the impugned order on this count and restore the matter to the file of CIT (Appeals) with direction to decide the issue de novo after providing adequate opportunity to the assessee of being heard. 7. In the result, appeal of the assessee stands partly allowed. Per R.M. Mehta, Vice President - I have read at length the order of my learned brother, the Judicial Member, but in spite of much self persuasion, I have not been able to concur with the view expressed by him to deny the benefit of section 10(22) to the appellant. 2. At the outset, I must state that the facts of the case and the arguments of the parties are ably set out by my colleague, the Judicial Member, in paras 2 to 4.6 of his order and with which I can have no quarrel. In para 5 of his order, the ld. Judicial Member has categorically observed that a surplus may result in running an educational institution and "it cannot be said that the institution.... was so run for the purposes of profit so long as no person or individual was entitled to any portion of the said profit and the said profit was utilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following observations at page 312 of the report:- "The language of section 10(22) of the Act is plain and clear and the availability of the exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. After meeting the expenditure, if any surplus results incidentally from the activity lawfully carried on by the educational institution, it will not cease to be one existing solely for educational purposes, since the object is not one to make profit. The decisive or acid test is whether, on an overall view of the matter, the object is 'to make profit'. In evaluating or appraising the above, one should also bear in mind the distinction/ difference between the corpus, the objects and the powers of the concerned entity." 7. He has thereafter discussed the term "incidental" to ultimately hold that it is something appurtaining to or depending upon the primary or main purpose. According to him, the moment it appears that the surplus resulted "on a calculated basis", the entitlement of section 10(22) would vanish. 8. A reference to pages 311 and 312 of the report shows t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other similar body running an educational institution solely for educational purposes and not for the purposes of profit could be regarded as 'other educational institution' coming within section 10(22) of the Act." 9. It is quite apparent that their Lordships have not disapproved the practice of collecting funds through donations, gifts, etc., as long as these were ploughed back into the system itself, i.e., of imparting education. According to the judgment, the decisive or acid test is whether on an overall view the object is one of making profit. No distinction was drawn between donations which were voluntary or otherwise as has been done by the ld. Judicial Member in his order relying upon the decision of the Hon'ble Supreme Court in the case of Safdarjang Enclave Education Society which pertained to the levy of Property Tax. In my opinion the aforesaid decision cannot be applied to the facts of the present case since it was delivered in the context of a different enactment and observations would strictly govern only the said Act. It would be more appropriate to seek guidance from the decisions rendered with reference to the provisions of section 10(22) including those of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus is on the assessee to prove its claim from year to year but departure should be on good grounds. If there be no change in facts or the position of law, then the rule of consistency should be kept in mind. 12. My ld. colleague has adverted to certain provisions of the DSE Act, 1973. In para 5.4 of his order, there is a reference to section 146 pertaining to collection of admission fee by "aided schools". In the present case, nobody has recorded a finding of fact whether the appellant comes under the category of an "aided" or "unaided" institution. The accepted fact is that the Schools run by the appellant are "recognised" by the Delhi Administration and a perusal of the audited accounts does not show to any amount received as aid from the Delhi Administration. As regards admission fee, the ld. Counsel stated before the Tribunal that this was a one time receipt always taken directly to the balance-sheet. 13. After this, there is a reference to section 155 of the DSE Act, 1973 pertaining to "donations" and the stipulation in the section is that these should not be "levied compulsorily". Here once again the reference is to an "aided" institution and I have already noted ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the CIT(A) also seems to have been carried away by suspicion and doubt and in the process evidence and facts have been given a go bye. Comments on the persons constituting the Management Committee are not called for and those are expunged. Taking up other comments in para 9 of the order of the CIT(A): (i) There is no material on record which would show that the building contract to Ahluwalia Construction Co. (P.) Ltd. is at rates above the market rate or there is an undue diversion of funds to the said Company stated to be a "family concern" of the Ahluwalias. The comments are based on suspicion without conducting any enquiry. That apart, the school building was under construction since the earlier years and as per the Schedule of fixed assets for the period ended31-3-1993the opening balance as on1-4-1992was Rs. 1,03,80,293. (ii) Another allegation is that funds collected were deposited with a non-nationalised bank and "possibility of the members of the executive body getting direct or indirect benefit ..... cannot be ruled out". All that I would like to say is that decisions cannot be based on possibilities. These have to be tested on the touch-stone of facts and evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent leaves the school before the date of maturity. The parents are given the receipt of the said loans, with the understanding for payment of interest on making refund on maturity, which have been accordingly paid. A specimen copy of the same is submitted for kind consideration." The learned D.R. on behalf of the revenue has not countered these submissions. It may also be relevant to reproduce paras 8, 9 and 10 of statement of facts before the CIT(A) as under:- "8. The Admission Fees of Rs. 7,12,000 have been shown directly as an addition to the Capital fund while other fees had been taken as income because Admission Fees is in the nature of Capital Receipt whereas the other fees referred to in the order are in the nature of revenue Income. Admission fee is taken only once at the time of admission and the benefit accrues to the school over several years till the child continues studies in the school and therefore, it had been treated as a Capital Receipt and not as income of the year and given a different treatment. Whereas all other fees such as school fees, bus fees, Magazine and other income taken to the income and expenditure a/c are all received on annual basis and pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is not disputed by either side that donations and loans were taken by the appellant. Would such confirmations improve the assessee's case in the eyes of the Assessing Officer and the CIT(A)? In my opinion, this was an irrelevant factor for examining the claim under section 10(22). 17. We had asked the learned Counsel to file with us the particulars of the Members of the Managing Committee and which was done. This shows that there are nominees of the Education Directorate of Delhi Government on the Committee as also representatives of parents, teachers and educationists, etc., as stated in the submissions. The stand taken by the learned Counsel and rightly so is to the effect that decisions are taken collectively by the Managing Committee whether these be for collection of donations or seeking loans or for any other matter connected with the running of the schools. 18. A few words at this stage about the CBDT Circular F.No. 194/16-17-IT(AI) which is extracted in para 3.8 of the order of the ld. Judicial Member. As already noted by me there is no evidence on record to show the diversion of funds for personal use of any one much less the "Ahluwalias" who have been adversely c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f from such observations. 21. Before I part with the appeal, I would like to state that we are a part of a global educational thought and process and are moving towards a quality centred society. It is education which holds the key to the development of a system which would make young people capable of enriching the Nation through their technical and professional skills. 22. In an educational institution, there are a number of items of expenditure which go into the running of such an institution and to mention a few, salaries and other allowances of the teachers, property tax, cost of land from the DDA and the cost of building as also the maintenance, etc. To this, one can add the inflationary trends from time to time. 23. The right of an individual to a school or to reject, is clear but so is the right of the educational institution to charge for the services provided by it and which it intends to provide in fature. In most of the Public Schools, there is the provision of coaches for various games, ground facilities for sports, auditorium, swimming pool, computers, etc. Would it be possible to provide all these in case the institution does not charge a reasonable amount from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents are an equal party to it. The ld. Judicial Member in para 5.14 of his order has observed as under:- "5.14 ... We do not think that a school would be prevented from being a charity because the boys who received its benefit paid for their education a moderate sura proportionate to their means." What is a "moderate sum" has to be examined in the light of my Aforesaid observations and even if a payment has to be made for obtaining education which is disproportionate to the means of a parent, it would not lead to the conclusion that the object of an educational institution was not so or that it had been set up with a view to make profit or collect a surplus on a calculated basis. 27. In the result, the appeal of the assessee in allowed. ORDER UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961 On a difference of opinion between the Members constituting the Division Bench, the following point is referred to the Hon'ble President under section 255(4) of the Income-tax Act, 1961:- Whether, on the facts of the case and in accordance with the provisions of law, the assessee's claim for exemption under section 10(22) of the Income-tax Act, 1961 was tenable as held by the Vice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(22) of the Act. It was argued that the assessee continues to run the Institutions on the same basis as in the earlier years and on similar facts, there is no reasonable ground for denying exemption allowed in the past. Relying on the decision in the case of Dhansiram Agarwalla, it was submitted that neither the principle of res judicata nor the rule of estoppel is applicable to the assessment proceedings, yet the rule of consistency does apply to such proceedings where there was no change. The learned counsel further submitted that the Society was not distributing profits nor applying the profits for the benefit of any members of the Managing Committee. The Trustees were empowered to carry on the business. If, however, there is a dissolution, even then the assets will not be distributed to the Members and, therefore, the assessee continues to be running the Society on the basis of its predominant object, i.e., to run the Schools and not to earn profit. Mere existence of profit will not deprive the Trust the exemption as held in the following cases: 1. Andhra Pradesh State RoadTransport Corpn. 2. EducationalInstituteofAmericanHotel Motel Association. 3. Governing Body of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would not lose its character of charitable purpose because some profit arises from the activity. The learned Judicial Member also considered the claim in the light of the decision of the Hon'ble Supreme Court in the case of Aditanar Educational Institution where it was held that the language of section 10(22) of the Act is plain and clear and the availability of the exemption should be evaluated each year to find out whether the institution existed during the relevant year- solely for educational purpose and not for purpose of profit. After meeting the expenditure, if any surplus results incidentally from the activity lawfully carried by the educational institutions, it will not cease to be one existing solely for educational purposes, since the object is not to make profit. The decisive or acid test is whether, on an overall view of the matter, the object is to make profit. In evaluating or appraising the above, one should also bear in mind the distinction/difference between the corpus, the object and the powers of the concerned entity. The learned Judicial Member elaborated the word "incidental" used by the Hon'ble Supreme Court and it was his view that the prescription of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22) of the Act, it was his view that the predominant object to be considered is whether it was for imparting of education or just a device for profit making. With regard to the decision of the Hon'ble Supreme Court in the case of Aditanar Educational Institution, it was his view that the said decision has not been correctly applied by the learned Judicial Member in that the decision in the case of Safdarjung Enclave Education Society was interpolated. According to him it will not be proper to pick up a word or sentence from the various judgments and decide the issue by ignoring a decision which is direct on the point. With regard to the term "incidental" on which great stress has been laid by the learned Judicial Member, it was his view that the mere existence of surplus by itself will not deprive the assessee of the benefit of exemption unless such profit was utilised for a purpose other than the main purpose. Since the assessee has not misused or diverted the funds collected by it in the form of admission fee, donation and loans, it was his view that the assessee cannot be denied the benefit of exemption granted earlier. With regard to the observations of the learned Judicial Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so submitted that the case of the assessee is covered by the decision of the Tribunal in the case of Indian Register of Shippings. Asstt. Director of Income-tax (Exemption) [1998] 66 ITD 219 (Mum.) where following the decision of the Supreme Court in the case of Continental Construction Ltd. v. CIT [1992] 195 ITR 81/60 Taxman 429, the Bench held that once the prescribed authority gave its approval it will not be open to the Assessing Officer to question the approval granted by the Competent Authority. Since the assessee has been registered under section 12A of the I.T. Act, it is submitted that the exemption cannot be denied unless the order of the Commissioner stands overruled or set aside by the appropriate authority. Shri P.L. Juneja further submitted that the Revenue authorities and the learned Judicial Member went wrong in holding that the main purpose of the assessee was for earning profit and not for running educational institutions as contemplated under section 10(22) of the Act. According to him, the revenue authorities and the learned Judicial Member were duly influenced by the surpluses on account of admission fee, donations and loans taken by the assessee. However, thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be per incurium on the reasoning that the cases cited before the Bench were not properly considered in his judgment and extracts of the decisions placed on the record were not taken into account by him. It is, therefore, submitted that there is no reasonable ground for denying the exemption under section 10(22) of the Act. On the other hand Shri DD Goyal, the learned Sr. DR vehemently supported the order of the learned CIT(A) and the Hon'ble Judicial Member. According to him the assessee was not allowed exemption under section 10(22) of the Act on the ground that the Society was not found existing solely for educational purposes. This finding was on the basis of the fact that the assessee was collecting admission fees, donations and loans from the parents over and above the regular receipts of school/bus fees and donations and loans were forced on the parents at the time of admission of their wards. Though the loans were claimed refundable bearing interest @9%, no evidence was led before the Assessing Officer that the loans were actually refunded to the parents. These donations and loans were taken in spite of enough funds available with the assessee. The leaned Sr. DR drew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Institution also, it was held that after meeting the expenditure, if any surplus results incidentally from the activity lawfully carried out by the educational institution, it will not cease to be one existing solely for educational purposes since the object is not one to make profit. The decisive or acid test is whether on an overall view of the matter, the object is to make profit. Since in this case, the cash surplus of 33.10% generated during the year by the assessee Society cannot be treated as incidental by any stretch of imagination, it is submitted that the decision of the learned Judicial Member is in line with the view taken by theApex Courtand is liable to be upheld. Even considering the Circular of the Board referred to and relied upon by the assessee, it is submitted that the huge surplus generated by the assessee cannot be in terms of some surplus which can be treated as incidental and germane to the main purpose. Relying further on the decision in the case of Safdarjung Enclave Education Society, it is submitted that the assessee cannot be given the benefit of exemption under section 10(22) of the Act. The Sr. DR also relied on the provisions of the Delhi School Educ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following point: "(a) In para 3, the Hon'ble Member has held that the decisions of Hon'ble Supreme Court in the case of Addl. CIT v. Surat Arts Cloth Mfrs. Association (121 ITR 1) is not applicable in the case of assessee since the requirements of section 11 and section 10(22) are different. Even though the said decision of theApex Courtis on the provision of section 11, the ratio laid down therein in respect of what is charitable, is relevant and the case of assessee has to be examined on the tests laid down by theApex Court. (b) In paras 6-9, the Hon'ble Accountant Member has quoted certain observations of the Hon'ble Supreme Court in the case of Aditnar Educational Institution (224 ITR 310) to hold that educational institutions are not debarred from collecting funds through donations, gifts, etc. There cannot be any dispute to the aforesaid proposition. The Delhi Schools Education Act, by which the assessee is governed, also permits this practice but with a condition that funds can be raised as per the real needs of the educational institutions and should be utilised only for the purpose/object for which the same were raised. It should not be collected year after year as a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain provisions of DSE Act discussed by the Hon'ble Judicial Member are applicable to the "Aided Schools", the intention and object of such provisions are also applicable to other schools. The assessee society has also violated various other provisions of DSE Act applicable to all schools, whether aided or not, as mentioned supra. (f) In paras 18-20, the Hon'ble Accountant Member has held that in view of Board's Circular No. 194/16-17-IT(AI), since the funds have not been diverted for purposes other than educational, the exemption is allowable to the assessee society. The reading of Hon'ble Accountant Member of the said Board circular is incomplete. The Circular also held that the raising of funds should not be done every year on a calculated basis or in a systematic manner. It may result only in "some surplus" and not in substantial surplus. Surplus should be incidental and must not be germane to the profit making activities. The Hon'ble Accountant Member further held that the existence of an educational institution is sufficient to become eligible for exemption under section 10(22) of the Act. With due respect, the Hon'ble Member has failed to consider the ratio of the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jects of the Society. (3) To strive for the all around development of the personality of the students so that they may become better citizens of the Society as a whole." Article IV of the Memorandum of Association sets out the scope and power as follows: "IV. Scope and Power. All the incomes, earnings, movable or immovable properties of the Society shall be solely utilized and applied towards the promotion of aims and objects only as set forth in this Memorandum of Association and no portion thereof shall be paid or transferred, directly or indirectly by way of dividends, bonus, profit or in any other manner whatsoever, to the present or past Members of the Society or to any other persons claiming through anyone or more of the present or past Members of the Society. No Member of the Society shall have any personal claim on any movable and/or immovable properties of the Society or make any profit, whatsoever, by virtue of his membership." Article 6 of the Rules and Regulations provides for the formation of Governing Body and Article 7 sets out the powers to be exercised by the Governing Body for carrying out the objects of the Society. The Governing Body is given pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee could be siphoned off for the benefits of the Members. Before the Tribunal reference was made to the various decisions of the High Courts and the Supreme Court including the decision in the cases of Safdarjung Enclave Education Society and Aditanar Educational Institution. The provisions of the Delhi School Educational Act, 1973 were cited contending that the assessee violated the said provisions. The learned Judicial Member, therefore, upheld the view taken by the revenue authorities for the reasons elaborated in the earlier part of this order. As pointed out earlier, the claim of the assessee is to be considered and examined in the light of the ratio laid down by the Hon'ble Supreme Court in the case of Aditanar Educational Institution. The assessee formed the Society on the basis of the Memorandum of Association and the Rules Regulations framed in this regard. The Society was registered by the Registrar of Societies and the CIT also accorded registration under section 12A of the Income-tax Act, 1961. Till the immediate preceding assessment year, the Assessing Officer also allowed the claim of the assessee for exemption under section 10(22) of the Act. There is no change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant sections cited before the Tribunal, namely, sections 146, 155 and 156 of the DSE Act, 1973 extracted by the learned Judicial Member at paras 5.4 and 5.5 of his order clearly shows that these provisions are relevant only for aided schools and, therefore, the same will not apply to the case of the assessee. Since the collection of admission tees, donations and loans are within the power of the Governing Body and the prohibitions in the DSE Act, 1973 being not applicable to the case of the assessee, the objection of the revenue authorities in this regard is not tenable and is to be rejected. With regard to the claim of the revenue that the collection of the fund was beyond the legitimate needs of the assessee, it is seen that this objection was raised by the revenue without going into the details and reasons for which these collections were made by the assessee. The assessee in this case submitted before the revenue authorities that the collections were made to pay off the loans taken earlier for the construction of the building. Even otherwise the Governing Body is given power to mobilise the resources for the promotion of the objects and to facilitate attainment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon to consider the provisions of section 115 of the Delhi Municipal Corpn. Act and the question is whether lands and buildings used for educational purposes were for charitable purpose. It is also admitted that the Hon'ble Supreme Court held that education per se is not charitable unless element of public benefit or philanthropy is present. This ruling however is not relevant as section 10(22) of the act does not prescribe charitableness for exemption and the only condition is that it should exist solely for educational purpose and not for purposes of profit. The decision is clearly distinguishable. The Hon'ble Supreme Court itself observed that the rulings arising out of Income-tax Act may not be of great help as in the Income-tax Act "charitable purpose" includes the relief of the poor, education, medical relief and the advancement of any other object of general public utility. The advancement of any other object of general public utility is not found under the Delhi Municipal Corpn. Act. In other words, the decision is narrower in scope., Having regard to this it is to be seen that even if charitable purpose is a precondition for enjoying exemption under section 10(22) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
