TMI Blog2022 (8) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... these are the Institutions pertaining to education only and regarding no other objects, non-educational in nature. Even the initial submissions filed before the CIT (E) by the Applicant, support the argument of the assessee that the assessee did not carry out any activity other than education, which is apparent from the fact that in the Income Expenditure Account placed only source of income is fee and other receipts from the students, along with interest from bank account and there is no other source of income, which proves the nature of the activity. Erstwhile section 10 (22), which now forms part of section 10(23C)(vi), speaks of a University or other Educational Institution existing solely for educational purposes, and not for the purposes of profit; and that what is relevant under this section, is the source of the income derived from an Educational Institution existing solely for educational purposes. Hence, this objection of the CIT (E) has no legs to stand on and the same is hereby disagreed with. Although the ld. CIT (E) has said so, it nowhere stands proved that the funds/income of the Applicant are being utilised for other objects too, i.e., the objects, which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Supreme Court, vide order dated 27.4.2021 has restored their order dated 23.3.202, directing that the period (s) of limitation, as prescribed under any general or other laws in respect of judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders; that it has further been clarified that the period from 14.3.2021, till further orders, shall also stand excluded in computing the period (s) of limitation for instituting the proceedings; and that therefore, there was sufficient cause for delay in filing of the appeal, which delay be condoned. 3. It is seen that the order under appeal is dated 31.3.2021. It is stated to have been received by the assessee on 5.4.2021. The due date for filing the appeal was 4.6.2021. However, the appeal was filed on 10.9.2021, thereby incurring a delay of 81 days. The Hon'ble Supreme Court, vide order dated 27.4.2021 (copy placed on record), has restored their order dated 23.3.202, directing that the period (s) of limitation, as prescribed under any general or other laws in respect of judicial or quasijudicial proceedings, whether condonable or not, shall stand extended till further orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est is the genuineness of the purpose tested by the obligation created to spend money exclusively for education; that if that obligation is there, the income becomes entitled to exemption; and that as per Clause 7(b) of the assessee s Deed of Declaration dated 19.2.2008, for the furtherance of the objects of the Trust, the Trustees shall have the following powers: For the furtherance of the Trust, the Trustees to apply the whole or any part of the income of the trust, or the trust fund or accumulations thereto, any one or more of the objects of the trust, as the trustees may, in their discretion, deem fit from time to time; that this signifies that the Trust is not solely for educational purposes, as its funds/income are being utilized for other objects also, which objects are not for educational purposes, or incidental to educational purposes; that the Society has failed to establish that it is a part of Institution which is engaged solely for educational purposes and not for the purpose of profit; that the Society has also failed to establish that the income in respect of which exemption is claimed, is a part of income of the Institution; that the Society earned income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iad) and which may be approved by the prescribed authority; or Provided also that the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or subclause (v) or sub-clause (vi) or sub-clause (via)- (a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; and (b) does not invest or deposit its funds, other than- (i) any assets held by the fund, trust or institution or any university or other educational institution or any hospital or other medical institution where such assets form part of the corpus of the fund, trust or institution or any university or other educational institution or any hospital or other medical institution as on the 1st day of June, 1973; (ia) any asset, being e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the previous year otherwise than in any one or more of the forms or modes specified in section 11(5). 12. The expression existing solely for educational purposes and not for the purposes of profit , as contained in the main section 10(23C)(vi) of the I.T. Act, is the operative expression. In other words, in order to be able to avail the exclusion provided for under the section, the University or other Educational Institutions concerned must be existing solely for educational purposes, and not for purposes of profit. The necessary concomitant is compliance of the Third Proviso, as above, by way of application of income, or accumulation thereof, as per the mandate of the proviso, besides investment or deposit of the funds. 13. In the present case, the ld. CIT (E) rejected the assessee s request for grant of approval for exemption under section 10(23C)(vi) of the I.T. Act , holding that (1) the objects of the applicant included non-educational objects also, which objects are not ancillary or incidental to the dominant object, i.e., education; (2) that Clause (vii)(b) of the Deed of Declaration executed on 19.2.2008 states that for the furtherance of the objects of the Trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort and/or aid or help in the setting up and/or maintaining and/or running by monetary gifts or otherwise, centers, stadium, play grounds and parks for public use, sports and games and other social welfare works and/or activities. j) To open, found, establish, promote, set-up, run, maintain, assist, finance, support and/or aid or help in the setting up and/or maintaining and/or running institutions, centers, auditoriums and the like for the running of welfare and other services to the public and to provide meeting room for socially useful activities and functions. k) To open, found, establish, promote, set-up, run, maintain, assist, finance, support and/or aid or help in the setting up establishment, maintenance and/or running Dharamsalas. l) To promote, organize, administer, support, maintain, and/or grant aid to any person, institution, or society or organization what so ever having for its objects of charitable purposes and to incur expenditure in connection therewith. n) To help in the preservation of useful animals. 15. In its written submissions filed before us, the Applicant Trust has stated that the activities of the Trust has been solely confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 10(23C)(vi) on the specious basis that there exist, in the applicant s Deed of Declaration, objects which are not educational in nature and which are not ancillary to the educational objects of the applicant. 17. The ld. CIT (E), it is seen, has not contrverted the existence of the object principles (b), (e) to (h) and (j), as reproduced hereinabove, in para 13, as being the objects pertaining to education. The only objection of the ld. CIT (E) is that for the existence of the non-educational objects of the Applicant Trust, the applicant Trust cannot be said to be existing solely for educational purposes, within the meaning of section 10(23C)(vi). The ld. CIT (E), however, has not pointed out any particular activity being carried out by the Applicant Trust in pursuance of its non-educational objects. 18. Now, the question is as to whether the mere existence of non-educational objects in the Deed of Declaration, despite the undisputed factum of no activity having been carried out in pursuance of such non-educational objects, would render the applicant ineligible for grant of approval for exemption under section 10(23C)(vi). 19. In CIT vs. Geetha Bhawan Trust , ..... X X X X Extracts X X X X X X X X Extracts X X X X
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