TMI Blog2006 (7) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... ects related to education. For the year under consideration, the assessee filed return declaring nil income. The Assessing Officer held that the assessee is not entitled to exemption under section 10(22) as the assessee is not running any educational institution. Alternate claim for exemption under sections 11 and 12 was denied due to infringement under section 13(1)( c ) of the Income-tax Act. The learned CIT(A) held that scholarship given by the assessee is to a relative of the trustee Smt. R. Bhartiya. Thus, the assessee is falling within the mischief of section 13(1)( c ) read with section 13(3) and hence not entitled to exemption under sections 11 and 12 of the Act. As regards exemption under section 10(22) in para 5.6, he held as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, even though the school may not have actually started, it could be said to have pursued its educational objects since a school could not be expected to be built and run within a financial year over and above, the foundation was engaged in granting scholarship to needy and meritorious students with the express purpose of pursuing their studies. Again taking support from the above cited cases, it has to be taken that such grant of scholarship for the purpose of pursuing education was also an activity of education nature. In view of this position, it cannot be said that during the year under consideration the appellant was pursuing objects that were not solely for the purpose of education and hence denial of exemption under section 10(22) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not automatic particularly when there is change in the circumstances. For this proposition, he relied upon decision of Hon ble Supreme Court in the case of Aditanar Educational Institution v. Addl. CIT [1997] 224 ITR 310 . He also relied upon following decisions for the proposition that since there is no educational activities, the exemption under section 10(22) is not allowable : (1) Gujarat State Co-operative Union v. CIT [1992] 195 ITR 279 (Guj.) (2) CIT v. Devi Educational Institution [1985] 153 ITR 571 (Mad.) (3) CIT v. Saraswath Poor Students Fund [1984] 150 ITR 142 (Kar.) (4) CIT v. Sorabji Nusserwanji Parekh [1993] 201 ITR 939 (Guj.) 5. Learned counsel for the assessee, on the other hand, strongly rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other educational institution. The pre-requisite is that the assessee should be an educational institution by itself. A charitable trust or a society pursuing charitable objects including education is not sufficient for claiming exemption under section 10(22) of the Act. The assessee can be said to be an educational institution provided it is imparting education in any form or manner. In the present case, it is seen that the assessee was not imparting education during the year under consideration. The eligibility of exemption under section 10(22) for earlier year cannot be a ground to allow the same for the year in view of the fact that no education has been imparted during the year. As observed by Hon ble Supreme Court in Aditnar Educa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes as provided under section 11. In order to be entitled to exemption under section 10(22), the assessee must prove that it is an educational institution existing solely for educational purposes. ** ** ** The primary object of the assessee was to extend financial help to the students and not to establish any educational institution to impart education to students. It was not, therefore, an educational institution and was not entitled to exemption." The Hon ble Gujarat High Court in the case of Sorabji Nusserwanji Parekh ( supra ) held as under : "In order to earn total exemption under section 10(22) of the Income-tax Act, 1961, an assessee should be an educational institution or an establishment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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