TMI Blog2015 (9) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... post grant of approval and not as a condition precedent to grant of approval. Further, merely because some profit is generated does not ipso facto imply that the educational institution is existing for profit motive. We are of the view that the impugned order cannot be sustained inasmuch as the Competent Authority went to the stage post grant of approval for considering whether approval can be granted in the first instance or not. It is an admitted fact in the present case that the only activity of the petitioner is that of running of a school and the petitioner is not indulging in any activity for the purposes of profit and these are the only requirements for grant of approval and, therefore, in the same manner as in the case of Diga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 12A of the said Act vide order dated 25.08.1998 for the Assessment Year 2010-11 onwards. The Trust is running a school in the name of Delhi Public School at New Town, Kolkata. 3. With regard to the application filed by the petitioner seeking exemption under Section 10(23C)(via) of the Act, the application has been rejected on the ground that the said provisions relate to hospitals and medical relief and since the petitioner is running a school, the petitioner is not eligible to apply in the said category. 4. With regard to the claim of exemption under Section 10(23C)(vi), the application has been rejected on the ground that in the Statement of Objects of the Trust, there are various activities mentioned and, as such, it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a business and not as a charity. It has further been held that the trust in no way can be said to be existing solely for educational purposes and not for the purposes of profit. 6. The learned counsel for the petitioner has contended that for considering an application for grant of exemption under section 10(23C)(vi), what is relevant to be considered is the activity that the trust is indulging in. It is contended that admittedly, the trust is running a school and apart from that, no other activity is being carried on by the trust. It is contended that merely because there are other objects mentioned in the object clause of the Trust, does not ipso facto imply that the trust does not exist solely for educational purposes. It is conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are analogous to Section 10(22). It has also been laid down by the Division Bench that when an application for exemption is moved by a Trust, fund, university or other educational institution, the threshold conditions which are to be examined at the stage of grant or rejection of exemptions are: (i) actual existence of an educational institute, (ii) approval of the prescribed authority for the purposes of grant of exemption for which the applicant has to move an application in the standardized form in terms of the first proviso to Section 10(23C) (vi). The Division Bench has also clarified after interpreting the Supreme Court‟s decision in American Hotel Lodging Association (supra) that insofar as the third proviso is concerned, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng expenditure, a surplus arises incidentally from the activity carried on by the educational institution, it will not be cease to be one existing solely for educational purposes. (5) The ultimate test is whether on an overall view of the matter in the concerned assessment year the object is to make profit as opposed to educating persons. 10. It is not denied by the revenue that the only activity that the petitioner is indulging in is education namely running of a school and no other activity. 11. The requirements of Section 10(23C) (vi) as laid down by the Supreme Court are: (i) existence of an educational institution and (ii) approval of the prescribed authority for the purposes of grant of exemption for which an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the concerned authority would be free to incorporate stipulations and conditions in terms of the third proviso. We find that it is an admitted fact in the present case that the only activity of the petitioner is that of running of a school and the petitioner is not indulging in any activity for the purposes of profit and these are the only requirements for grant of approval and, therefore, in the same manner as in the case of Digambar Jain Society (supra), we issue a writ of mandamus directing the respondents to grant approval to the petitioner under Section 10(23C) (vi) of the said Act for the Assessment Years 2011-12 onwards. However, we are making it clear that the assessing authority can go into the question as to whether the cond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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