TMI Blog2002 (12) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax (Appeals) has rightly allowed the claim of the assessee under section 10(22) of the Act even in respect of the society's independent income and when there are infringements under section 13 of the Income-tax Act, 1961?" - the question of eligibility of exemption under the said section has to be determined with reference to the objects of the assessee (society) and the exemption cannot be denied merely because while the working of the society some surplus results. Similarly, in the context of exemption under section 10(22), the conditions as stipulated in either section 11 or 13 of the Act are irrelevant. - - - - - Dated:- 5-12-2002 - Judge(s) : D. K. JAIN., MAHMOOD ALI KHAN. JUDGMENT The judgment of the court was delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its operations. Accordingly, he denied exemption to the assessee under section 10(22) of the Act. Aggrieved, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals) (in short "the CIT (A)"). The Commissioner of Income-tax (Appeals) while allowing the assessee's appeal and directing the Assessing Officer to allow exemption under section 10(22) of the Act, took into consideration the following factors: (i) no loan was given to said Shri Lagan during the relevant assessment year and the loan taken earlier was refunded to the society; (ii) the interest-free loan given to Shri Bharat Bhushan in his capacity as the Vice-Principal of one of the schools run by the assessee was also received back; (iii) the portion of the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi v. Children Book Trust [1992] 63 Taxman 385 is applicable? 3. Whether the Income-tax Appellate Tribunal was right in holding that the Commissioner of Income-tax (Appeals) has rightly allowed the claim of the assessee under section 10(22) of the Act even in respect of the society's independent income and when there are infringements under section 13 of the Income-tax Act, 1961?" We have heard learned counsel for the parties. It is submitted by Mr. R.D. Jolly, learned senior standing counsel for the Revenue, that the view taken by the Tribunal is vitiated because the Tribunal as also the Commissioner of Income-tax (Appeals) has failed to take into consideration a very vital fact that had the assessee not given the interest-free loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue are without any substance. In fact, the main ground, viz., violation of section 13 of the Act, on which the exemption was denied by, the Assessing Officer, has no bearing on the question whether the assessee exists solely for educational purposes and not for purposes of profits, so as to fall within the ambit of section 10(22) of the Act. The test to determine when an institution would qualify for exemption under section 10(22) of the Act has been laid down by the apex court in Aditanar Educational Institution v. Addl. CIT [1997] 224 ITR 310, as follows: "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 insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee in respect of those assessment years. We are in agreement with both the appellate authorities that the claim of depreciation in respect of certain assets of the assessee does not per se show the business/profit motive of the assessee, disentitling it from exemption under section 10(22) of the Act. Having perused the order of the Tribunal carefully, we are not persuaded to agree with learned counsel for the Revenue that the Tribunal has failed to record any reason for coming to the conclusion that the assessee was entitled to exemption under section 10(22) of the Act. The Tribunal has endorsed the view of the Commissioner of Income-tax (Appeals) on the basis of the aforenoted circumstances noticed by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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