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 Asstt. Commissioner of Income Tax, Central Circle-9, New Delhi Room No. 357, ARA Centre, E-2 vs. M/s Moets Bar-B-Cue,50, Defence Colony Market, New Delhi 110 024 PAN/GIR NO. : AAAFM7936M | |
| | ADIT, Cir. 1(1), (Intl. Taxation), 204, Drum Shape Building, IP Estate, New Delhi 110 002 vs. Ms. Meena Chopra, P-13, Ground Floor,Malviya Nagar, New Delhi | | CIT vs. Awadh Hotels (P) Ltd (Allahabad High Court) | | BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER | | BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER | | Mehsana Circle Vs Mehsana M/s.Shree Riddhi Corporation 32, Amikunj Society Near Technical School, Kalol | | ITO, Ward 40(3), Room No. 307, Mayur Bhavan, vs. Sh. Mohan Lal Walia, Through L/H Mrs. Prem Walia, G-251, Palam Vihar, Gurgaon, | | M/s. All Cargo Global Logistics Ltd.5th Floor, Diamond Square, C.S.T. Road, Kalina, Santacruz (E),Mumbai – 400 098. | | Dy. Commissioner of Income Tax, Circle 6(1), Room No. 413, CR Building, New Delhi vs. Maharani Paints India Pvt. Ltd., TA-3/146-C, Tuglakabad Extn.,New Delhi | | Income Tax Officer, Ward 38(2), Room No. 234A, 2nd floor, CR Bldg., IP Estate, New Delhi vs. Sh. Naresh Kumar Through Legal Heir Sh. Naveen Kumar, 9307, Gaushala Marg, Kishan Ganj Delhi – 110 006 | | Mehru Electrical & Engg. (P) Ltd vs. CIT (Rajasthan High Court) |
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| « Govt raises tax litigation bar for officials... | In courts, CBDT hikes limits for filing cases against... » |
Use of contributions to promote education entitled to Income - Tax benefits: HC |
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| February, 14th 2011 |
The Delhi high court has ruled that the use of contributions by educational institutions to promote the cause of education without any profit motive would enable them to claim the benefit of deduction under the provision of the Income Tax Act.
In our opinion, section 10 (22) of the IT Act should not be given a restrictive meaning and so long as the income is used for fulfilling educational purpose, the exemption should be available, ruled a high court bench. The court rejected the plea of the Revenue Department which had said that if the donations received by the educational institutes are not voluntary, then the dominant intent is to earn the profit.
Merely, non-distribution of such contributions to the members of the institutes or use of such amount for the educational activities would not be sufficient to claim exemption under section 10 (22) of the Act of 1961, the department had said.
The court, however, said: It cannot be lost sight of that if an institution has to expand, additional infrastructure has to be created, quality education has to be imparted, all these activities require funds. There may be an original corpus of the society but thereafter the corpus for such activity can be created only through voluntary donations either from any philanthropist or through collection of funds in the process of admission.
The court said: We are not concerned with the morality of the issue while deciding whether exemption has to be granted under section 10 (22) of the IT Act as all that is required is the absence of profit motive. The department had denied the exemption claimed by the assessee, Shanti Devi Progressive Educational Society for assessment year of 1993-94.
The assessing officer had zeroed in on three components of the school the admission fee of Rs 7, 12, 000, the corpus fund of Rs 17,24,085 and the loan from the parents of the students amounting to Rs 10,85,000. It were treated by the department as the income of the assessee. Aggrieved, the school had approached the CIT (A).
It dismissed the appeal. The assessee then filed appeal before the Income Tax Appellate Tribunal (ITAT). There were difference of opinion among the two members of the quasi-judicial body. Then the matter was referred to the third member of the ITAT. The tribunal then in its majority order had ruled in favour of the assessee. Aggrieved, the Revenue Department had came to the high court.
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