Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961 – s. 10(23C)(vi) – ”solely” – s. 10(23C)(vi) exempts income of “university or other educational institution existing solely for educational purposes and not for purposes of profit” – Meaning of “solely” – Held: The requirement of the charitable institution, society or trust etc., to ‘solely’ engage itself in education or educational activities, and not engage in any activity of profit, means that such institutions cannot have objects which are unrelated to education – Thus, all objects of the society, trust etc., must relate to imparting education or be in relation to educational activities– Where the objective of the institution appears to be profit-oriented, such institutions would not be entitled to approval u/s. 10(23C) – At the same time, where surplus accrues in a given year or set of years per se, it is not a bar, provided such surplus is generated in the course of providing education or educational activities – The reference to ‘business’ and ‘profits’ in the seventh proviso to s. 10(23C) and s. 11(4A) merely means the profits of business which is ‘incidental’ to educational activity i.e., relating to education such as sale of text books, providing school bus facilities, hostel facilities, etc. – Reasoning and conclusions in American Hotel and Queen’s Education Society case so far as they pertain to the interpretation of expression ‘solely’ are disapproved and the judgments are overruled to that extent – The law declared in the present judgment shall operate prospectively– Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987.Income Tax Act, 1961 – s. 10(23C) – Held: While considering applications for approval u/s. 10(23C), the Commissioner or the concerned authority as the case may be under the second proviso is not bound to examine only the objects of the institution – To ascertain the genuineness of the institution and the manner of its functioning, the Commissioner or other authority is free to call for the audited accounts or other such documents for recording satisfaction where the society, trust or institution genuinely seeks to achieve the objects which it professes – The Commissioner or other authority is not in any manner constrained from examining accounts and other related documents to see the pattern of income and expenditure.Income Tax Act, 1961 – s. 10(23C)– Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 – Held:Wherever registration of trust or charities is obligatory under state or local laws, the concerned trust, society, other institution etc. seeking approval u/s. 10(23C) should also comply with provisions of such state laws – This would enable the Commissioner or concerned authority to ascertain the genuineness of the trust, society etc. Interpretation of Statutes – Proviso – Scope and object of – Discussed. Words & Phrases – ”solely” – Discussed. |
Judge | Hon'ble Mr. Justice S. Ravindra Bhat |
Neutral Citation | 2022 INSC 1111 |
Petitioner | M/s New Noble Educational Society |
Respondent | The Chief Commissioner Of Income Tax 1 And Anr. |
SCR | [2022] 18 S.C.R. 1082 |
Judgement Date | 2022-10-19 |
Case Number | 3795 |
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