TMI Blog2015 (1) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... o the objects of the society. Applicability of third proviso - Held that:- The requirement mentioned in the third proviso can only be tested after the end of the previous year when income is ascertained and thereafter applied. - The threshold conditions are actual existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application in the standardized form in terms of the first proviso - If the prerequisite conditions of actual existence of the educational institution is fulfilled then the question of compliance with the requirements as spelt out in the other provisos would arise - the facts were not analyzed by the authorities below in a proper manner - the documents which were produced, it appears prima facie contradictory facts, which need further investigation – thus, the order is set aside and the matter is remitted back to the CCIT and direction made to reconsider the application de-novo for exemption u/s 10(23C) (vi) for the AY 2008-09 and onwards strictly on merit – Decided in favour of assessee. - Writ Tax No. - 2053 of 2009 - - - Dated:- 6-1-2015 - Hon'ble Tarun Agarwala And Hon'ble Dr. Satish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary documents were submitted, but CCIT has refused the exemption for the Assessment Year 2008-09 and onwards though, the registration was granted under Section 12AA vide letter dated 25.09.2008 w.e.f. 1.4.2007. The learned counsel further submits that the Registration Form for the Assessment Year 2008-09 was filed in the name of the Society, where it was claimed that the activities being carried out by the Society in the name of YMCA Centenary School and the same are wholly for education purpose. The lease was granted for 99 years in the year 1910 and the building on the said lease land was erected long back as per lease-deed. In the balance-sheet the value of the building after depreciation reduced to nil. He also submits that it is wrong to say that the Society is not running an educational institution. According to the learned counsel, the Society is providing education and the same is not for profit. To support his argument, he relied upon the ratio laid down in the following cases :- 1. American Hotel and Lodging Association Educational Institute vs. CBDT (2008) 301 ITR 86 (SC); 2.City Montesari School (Regd.) vs. Union (2009) 315 ITR 48 (Alld.); 3. Evening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd what these expressions legally convey, one can merely enumerate its various aspects and characteristics as they have been recognized by the laws of a particular country. For construing the words 'education or charitable purposes', it is necessary to investigate the meaning of these words in the particular system of jurisprudence that may be followed by the assessee. In Mayne's Hindu Law and Usage, 11th Edition, at page 911, purta or charitable acts are referred to as acts of construction of tanks, wells with flights of steps, temples, planting of groves, the gift of good, dharmasalas (rest houses) and places for supplying drinking water, the relief of the sick, the establishment of processions for the honour of deities and so on. Gifts for the promotion of education and knowledge were also considered charitable activities specially what is based on meritorious. In the facts and circumstances on the case specially by nomenclature of the assessee, it appears prima-facie that it is engaged for educational activities . From the impugned order, it appears that for denying the exemption, various reasons have been given. For example it was stated that the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions are the actual existence of an educational institution and approval of the prescribed authority. It is only if the pre-conditions of the actual existence of an educational institution is fulfilled that the question of compliance with the stipulations set out in the provisos would arise. The Supreme Court held:- We shall now consider the effect of insertion of provisos to Section 10(23C)(vi) vide Finance Act, 1998. Section 10(23C)(vi) is analogous to Section 10(22). To that extent, the judgments of this Court as applicable to Section 10(22) would equally apply to Section 10(23C)(vi). The problem arises with the insertion of the provisos to Section 10(23C)(vi). With the insertion of the provisos to Section 10(23C)(vi) the applicant who seeks approval has not only to show that it is an institution existing solely for educational purposes [which was also the requirement under Section 10 (22)] but it has now to obtain initial approval from the prescribed authority, in terms of Section 10(23C)(vi) by making an application in the standardized form as mentioned in the first proviso to that section. That condition of obtaining approval from the prescribed authority came to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited its funds in accordance with the third proviso or that the activities of such fund or institution or trust etc. are not genuine or that its activities are not being carried out in accordance with the conditions subject to which approval is granted then the prescribed authority is empowered to withdraw the approval earlier granted after complying with the procedure mentioned therein. In the instant case, it is not disputed that the petitioner society is running an educational institution. Merely because there are other objects of the society does not mean that the educational institution is not existing solely for educational purpose. The emphasis of the word solely is in relation to the educational institution, which is running not for the purpose of making profit and is not in relation to the objects of the society. In American Hotel Lodging Association (supra) the authority is required to consider the nature and genuineness of the activities. The third proviso only sets out the conditions, which must be adhered to by the institution and compliance therewith is not to be tested at the stage of approval since they require considerations of facts and findings, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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