TMI Blog2015 (9) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... earn profit. The perusal of objects of the society/trust would make it clear that predominant object of the trust/society is to impart education besides other charitable purposes. Inclusion of other consequential charitable purposes as mentioned in the trust deed would not lead to the conclusion that institution was established to earn profit.In view of the above, order impugned does not sustain in the eyes of law and is hereby quashed. Consequently, present petition succeeds and is hereby allowed. The Chief Commissioner of Income Tax, Dehradun is directed to decide the application moved by the petitioner afresh in the light of observations made hereinbefore preferably within 90 days from today. - Decided in favour of assessee. - Writ P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Mr. Vivek Pathak, learned counsel appearing for the petitioner and Mr. V.R. Garg, learned counsel for the respondent no. 2 and 3 and have carefully perused the record. Judgment of this Court in the case of M/s Queen's Educational Society, relied upon by the Chief Commissioner of Income Tax in the impugned order was subject matter of Civil Appeal No. 5167 of 2008 before the Hon'ble Apex Court and the same was set aside by the Hon'ble Apex Court vide judgment dated 16.03.2015. Hon'ble Apex Court in the case of M/S Queen's Educational Society (Supra) has held as under: We reiterate that the correct tests which have been culled out in the three Supreme Court judgments namely Surat Art Silk Cloth, Aditanar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e object of making profit or not it is the duty of the prescribed authority to ascertain whether the balance of income is applied wholly and exclusively to the objects for which the applicant is established. Hon'ble Apex Court in the case of Aditanar Educational Institution v. Additional Commissioner of Income Tax, (1997) 224 ITR 310 , has held as under: The High Court has made an observation that any income which has a direct relation or incidental to the running of the institution as such would qualify for exemption. We may state 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional purpose [judgment of this Court in Aditanar Educational Institution v. Asstt. CIT MANU/SC/2122/1997 [1997] 139 CTR (SC) 7: [1997] 224 ITR 310 (SC)] . The test is the nature of activity. If the activity like running a printing press takes place it is not educational. But whether the income/profit has been applied for non-educational purpose has to be decided only at the end of the financial year. 44. Having analysed the provisos to section 10(23C)(vi) one finds that there is a difference between stipulation of conditions and compliance thereof. 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 standardize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the PA, if it deems fit, to stipulate that certain percentage of accounting income would be utilized for impartation of education in India. Therefore, in our view, it is always open to the PA to impose such terms and conditions as it deems fit. The interpretation we have given is based on harmonious construction of the provisos inserted in section 10(23C)(vi) by the Finance Act, 1998. Lastly, we may reiterate that there is a difference between stipulation by the PA of such terms and conditions, as it deems fit under the provisos, and the compliance of those conditions by the appellant. The compliance of the terms and conditions stipulated by the PA would be a matter of decision at the time of assessment as availability of exemption has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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