TMI Blog2017 (1) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in the case of Visvesvaraya Technological University vs. Assistant Commissioner of Income Tax [2016 (4) TMI 874 - SUPREME COURT], in para 6 has held as under: The relevant principles of law which will govern the first issue i.e. whether an educational institution or a university, as may be, exists only for educational purpose and not for profit are no longer res integra, having been dealt with by a long line of decisions of this Court which have been elaborately noticed and extracted in a recent pronouncement i.e. Queen's Educational Society v. Commissioner of Income Tax [2015 (3) TMI 619 - SUPREME COURT ] wherein held as Where an educational institution carries on the activity of education primarily for educating persons, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te books of a/c have been maintained for such activities. The society is not at all bothered to take into a/c its sound financial position and charging fees from the students in mind less gradually increasing way. The society has invested 2,26,97,760/- in FDRs and bank a/cs and it is earning huge interest of ₹ 18,11,753/- out of such investment. This income is in no way connected with the working of school or purposes of education. 4. In exercise of powers conferred by the sub-clause (vi) of the Clause (23C) of Section 10 of the Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes vide order dated 23.3.2007 hereby approves that an income received by any person on behalf of M/s. Model Public School Society, Opp Ashi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinue to be exist solely for educational purpose. g) The institute will get its accounts audited by an accountant as defined in Explanation below sub section (2) of section 288 and furnish along with the return of Income. The report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. 2. This order is applicable only to the recipients of income on behalf of the institution and not to any other receipt or income of such recipients. Taxability or, otherwise of the income of the Institution would be separately considered as per the provisions of the Income tax Act,1961. 3. This order is applicable for Assessment Year 1999-2000 and onwards. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of education should not be submerged by a profit making motive. 3. A distinction must be drawn between the making of a surplus and an institution being carried on for profit . No inference arises that merely because imparting education results in making a profit, it becomes an activity for profit. 4. If after meeting 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. 6. In that view of the matter, all issues are answered in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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