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TMI Blog2011 (10) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No.4155 of 2011 are being adverted to. The petitioners are aggrieved by the order dated 29.9.2010 whereby respondent dismissed their applications in Form 56-D for grant of exemption under Section 10(23C) (vi) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the assessment year 2009-10. The petitioner-assessee filed an application dated 27.9.2009 in Form 56-D seeking grant of exemption/approval under Section 10(23C) (vi) of the Act on the ground that it was a society registered on 16.9.1992 under the Society Registration Act, 1860 and for the last 18 years engaged in the activity of providing education and relied upon aims and objects mentioned in the Memorandum of Association to press forth the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. As far as the issue of surplus of the society and profit, explanation was given in the reply that percentage of surplus had been miscalculated by not excluding depreciation and adding capital expenditure incurred for the purpose of benefit of the society. This explanation was further elaborated in a representation dated 28.9.2010 and stress was laid down on Section 2(15) of the Act that education itself is a charitable purpose and the term is wide and extensive. Reliance was also placed on various judgments including given the one by the Division Bench of this Court on 29.1.2010 in Pinegrove International Charitable Trust Vs. Union of India (UOI) and others (2010) 327 ITR 73 (P&H) and also the judgment of the same Division Bench dated 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally, the educational institutions namely "S.D. Modern Public School & S.D. Modern Shishu Public School" do not satisfy the basic condition of existing solely for educational and not for profit as per section 10(23C)(vi) of I.T.Act, 1961, The approval sought cannot be granted and the application is dismissed." The petitioner is, thus, aggrieved by the said order of the respondent whereby its application for exemption has been rejected and whereas the respondent has sought to distinguish the Division Bench judgement in Pinegrove International Charitable Trust's case (supra) on the ground that the Division Bench judgment had not taken note of observations of the Hon'ble Supreme Court regarding profiteering in P.A.Inamdar and others V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egorical conclusion after relying upon the judgment of Hon'ble Supreme Court in C IT (Addl.) v. Surat Art Silk Cloth Manufacturers Association, [1980] 121 ITR 1(SC) and Aditanar Educational Institution v.Additional Commissioner of Income-tax, [ 1997] 224 ITR 310 that the test of pre-dominant object of the activity is to be seen whether an institution exists solely for education and not to earn profit and would not only be difficult of practical realisation but would also reflect unsound principle of management. If no profit arises from the activity, it is not possible to carry on educational activity in such a way that the expenditure exactly balances the income and there is no resultant profit. In the present case, the petitioner had earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's society are reproduced below:- "1) Arrangement for education and moral educational for young and Kinder Garten girls and boys. 2) Arrangement for imparting education to the students based upon Indian Culture and Philosophy. 3) Arranging for appropriate programmes for physical, mental, spiritual and moral education to the students. 4) Arrangement of schools, hostels, library, auditoriums and playgrounds for the students. Running a school in the name of S.D.Modern Public Secondary School at Hansi from Class 6th to Class Plus 2 for achieving objects at 1 to 4 mentioned aforesaid. 5) Purchase of land for running the school, raising building thereon and for promoting land in the premises of Sanatan Dhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bles of the society shall be passed on to a society who has similar aims and objects or would be passed on to central Govt. or Haryana State Govt. 13) As per Section 2 of the Societies Registration Act, 1860 (as amended by the Punjab Act, 1957), the working the society has been entrusted to the following founder members of the society whose names addresses, profession and designation are given hereunder. ........." A perusal of the above aims and objects goes to show that the society which was running two schools from class VI to +2 was devoted solely for the purpose of education and development work of the said society and as per clause (6) it was further provided that land shall not be sold off nor used for residential pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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