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2009 (8) TMI 83

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..... Chaudhary, Advocates, for the Respondent. JUDGMENT A.K. SIKRI, J. - The petitioner is a registered society under the Societies Registration Act, 1860. It is running an institute known as Jaypee Institute of Information Technology (hereinafter referred to as the Institute ). According to the petitioner, the object with which the petitioner Institute was registered is to impart formal education and the institution exists only for the said educational purpose and there is no element of profit involved, as envisaged under the Income Tax Act, 1961 (hereinafter referred to as the Act ). It is also declared as a Deemed University by the University Grants Commission (UGC) vide Notification dated 1.11.2004 issued under Section 3 of the University Grants Commission Act, 1956. It is registered under Section 12A as well as Section 80G of the Act. However, its application for registration under Section 10(23C)(vi) of the Act has been rejected by the respondent vide its order dated 26.3.2008. The main reason given by the respondent is that education is not the only objective of the petitioner Institute inasmuch as the objective clause in the Memorandum of Association (for short, MOA) of the pet .....

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..... oposals for declaring an institute as a Deemed University under Section 3 of the UGC Act. These guidelines are annexed with the writ petition as Annexure-A. Para 3 of these guidelines provides that to qualify for recognition of status as a University, the institution should have, among its primary objectives, post-graduate instruction and training in such branches of learning as it may deem fit, and research for the advancement and dissemination of knowledge. Para 4(a)(i), which is relevant for this case, stipulates as under :- 4(a) For the purpose of recognition as a university as institution should generally be: (i) Engaged in teaching programmes and research in chosen fields of specialization which are innovative and of very high academic standards at the Master s (or equivalent) and/or research levels. It should also have a greater interface with society through extra mural, extension and field action related programmes. It, thus, specifically provides that in order to get recognition as a University, an institute should have a greater interface with society through extra mural, extension and field action related programmes. Along with these guidelines, model constitution of MO .....

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..... form. However, notwithstanding this, the respondent has rejected the application for grant of exemption under Section 10(23C)(vi) of the Act for the assessment year 2007-08 holding that the Institute does not exist solely for educational purposes as the purpose/objective of greater interface with society through extra mural, extension and field action related programmes is also stipulated in the MOA. According to the respondent, the aforesaid objective does not relate to formal education. The Institute is having model objectives, of which education is only one of them. Each objective is independent of the other and, therefore, it cannot be said that one of them is the primary objective and the others are ancillary to it. The mental process of the respondent can be gazed in the following discussion contained in the impugned order :- 9. I have considered the case of the applicant in the light of the above provisions of the Act, and the judgments of the Hon ble Supreme Court and the High Court of Gujarat. The sub-clause (iii) of clause 3 of the MOA of the applicant society does not relate to formal education as defined by the Hon ble Supreme Court and High Court of Gujarat in the cas .....

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..... ondent as well in the impugned order. It reads as under :- The sense in which the word education has been used in Section 2(15) is the systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word education has not been used in that wide and extended sense according to which every acquisition of further knowledge constitutes education - What education connotes in that clause is the process of training and developing the knowledge, skill mind and character of students by normal schooling. 10. We also take note of the judgment of the Gujarat High Court in the case of Saurashtra Education Foundation v. Commissioner of Income Tax, (2005) 273 ITR 139 (GUJ), which has been relied upon by the respondent in the impugned order wherein the Gujarat High Court discussed the term other educational institutions as appearing in Section 10(22) of the Act in the following manner :- …white a trust holding property for the charitable purpose of education, as defined in Section 2(15) of the Income Tax Act, 1961, may also be an education institution existing solely f .....

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..... ovision are so different that the university cannot be the genus and other educational institution the species thereof. Once a college is established by an institution, that would come within the expression other educational institution . {See - Addl. Commissioner of Income Tax v. Aditanar Educational Institution, 224 ITR 310 (SC); Addl. CIT v. M/s. Hamdard Dawakhana (Wakf), 157 ITR 639 (Del); CIT v. M/s. Venkatasubbiah Reddiar (K.S.), 221 ITR 18 (Mad)}. In the present case, as mentioned above, the activity would clearly fall within the expression University itself as the petitioner is a Deemed University and, thus, has got the status of a university. 13. We have to remind ourselves that the main reason given by the respondent in rejecting the application of the petitioners was that the petitioner Institute is having multiple objectives, of which education is only one of them. In coming to this conclusion, the respondent has been swayed by the so-called other objectives, namely greater interface with society through extra mural, extension and field action related programmes stipulated in the MOA. What is perceived by the respondent is that these objectives are independent of each o .....

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..... nt a will and facility of learning; it should produce not learned but learning people . Any Rand highlights the following purpose of education :- The only purpose of education is to teach a student how to live his life by developing his mind and equipping him to deal with reality. The training he needs is theoretical, i.e. conceptual. He has to be taught to think, to understand, to integrate, to prove. He has to be taught the essentials of the knowledge discovered in the past and he has to be equipped to acquire further knowledge by his own effort. Webster defines education as the process of educating or teaching. Educate is further defined as to develop the knowledge, sill or character of… . Thus, from these definitions, we might assume that the purpose of education is to develop the knowledge, skill or character of students. Unfortunately, this definition offers little unless we further define words such as develop, knowledge and character. Similar purpose is emphasized by Bill Beattie. Therefore, formal education through schooling/university even would be incomplete if student is not taught how to think, to understand, to integrate and to prove. 16. The petitioner Institute, adm .....

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