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TMI Blog2014 (2) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 11 of the IT Act, 1961 even in absence of approval under sub-clause (vi) to the section 10(23C) of the Act. 3. The ld. CIT(A) ought to have appreciated the fact that approval under sub-clause (vi) to the section 10(23C) of the IT Act, 1961 is distinct from registration u/s 12A of the Act. 4. The ld. CIT(A) ought to have appreciated that sub-clause (vi) to section 10(23C), as inserted by the Finance Act, 1998 w.e.f. 01/04/1999, states that the university or other educational institution existing solely for education purpose, and which may be approved by the prescribed authority. The issue is explicitly dealt with by the Act itself and the intention of the legislature is quite clear from it. 5. The ld. CIT(A) ought to have appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust; (b) accumulations subject to specific conditions; (c) not to be diverted for personal gains as detailed in section 13. Thus, there are strict control mechanisms on the application front and it had satisfied all the requirements of these control mechanisms. 2.1 However, the AO had not considered the above submissions of the assessee and disallowed the claim of the assessee relying on the decisions of M/s St. Theresa Education Society for the AY 2003-04 filed u/s 260A before the Hon'ble AP High Court and the decision of the ITAT, Hyderabad in Maheswara Educational Society, Narasampet vide its order dated 16/07/2008 in MA No. 55/Hyd/2008 in ITA No. 270/Hyd/2008 and since the assessee has not obtained approval u/s 10(23C)(vi) of the IT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sec. 10(23C) mandates the exclusion from the total income of a person any income received by such person on behalf of any university or other educational institution existing solely for educational purposes and not for purposes of profit. Thus, it has to be noted that the exemption under s. 11 and s. 10(23C) is available to a person only. The only difference is that under s. 11, the exemption will be available to the extent such income is applied to charitable or religious purposes. On the other hand, under s. 10(23C), any income derived by the person on behalf of the educational institution will be exempt. Because of this difference, i.e., application of income in s. 11 and receipt of income under s. 10(23C), it is argued by the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution cannot avail exemption under s. 11. Merely because s. 10(23C) provides for exemption of the income of an educational institution, it does not follow that such institution cannot avail exemption under s. 11/12 subject to conditions being fulfilled. In fact, it is difficult to conceive the idea of availability of exemption on the ground that one is activity oriented and the other is institution oriented. How can an institution avail exemption under s. 10(23C) without carrying out any activity. If the argument of the Departmental Representative is to be accepted, then s. 12 will be rendered otiose and s. 12AA which speaks of registration of trust as well as institution will also be partly redundant. It is absolutely futile to argue tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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