The Tax Publishers2020 TaxPub(DT) 0089 (Mad-HC)

INCOME TAX ACT, 1961

Section 10(23C)

Where Bench had specifically noted the distinction between satisfaction in regard to prima facie conditions required for the grant of approval and the monitoring conditions relating to application/accumulation/deployment of income as well as other compliances and Grant of approval would only require a satisfaction of Officer in regard to existence of University and the avowed objects, therefore, appeal of assessee was allowed.

Exemption under section 10(23) - Educational institution - Rejection of the applications filed seeking approval in terms of section 10(23C)(vi) - Eligibility

Assessee had set up and manages several Universities, Schools and Educational campuses in different parts of the Country and sought an approval for exemption in terms of section 10(23C)(vi) for the income earned therefrom. Application came to be rejected by CIT(R3) who noted in the narration that a survey under section 133A had been conducted in assessee's premises during which various incriminating documents had been found. The reason for rejection of exemption claimed was that one of the objects contained in MOA was, according to R3, of the nature of 'general public utility' and not 'education'. This, he states, is contrary to the stipulation of section 10(23C) which requires that the entity seeking exemption exists solely for educational purposes. Held: The scope of enquiry when granting approval in terms of section 10(23C)(vi) was considered by Supreme Court in Queen's Education Society V. Commissioner of Income Tax ((2015) 372 ITR 699 (SC) : 2015 TaxPub(DT) 1436 (SC)). The Bench had specifically noted the distinction between satisfaction in regard to prima facie conditions required for the grant of approval and the monitoring conditions relating to application/accumulation/deployment of income as well as other compliances. Grant of approval would only require a satisfaction of Officer in regard to existence of University and the avowed objects. Therefore appeal of assessee was allowed.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



IN THE MADRAS HIGH COURT

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