In case of Ram Piyari Devi Charitable Trust Vs. Director General Of Income Tax, Delhi High Court held that in order to claim exemption u/s 10 (23C) (vi) , there should be existence of educational institution and approval of prescribed authority .Where assessee-trust, running a school , fulfilled both above mentioned conditions , its claim for exemption was to be allowed.
Facts of the case
- The assessee Trust is running a school . It filed application for grant of exemption u/s 10 (23C) (vi) and (via).
- The DG rejected the application on the ground that the said provisions relate to hospitals and medical relief and since the petitioner is running a school, the petitioner is not eligible to apply in the said category. The Director General has further held that from the documents submitted by the petitioner it was apparent that the school was meant for students whose parents belong to Higher Income Group and there was generation of surplus during the various years, which showed that the school was being run as a business.
- The assessee filed writ before HC.
Contention of Assessee
The trust is running a school and apart from that, no other activity is being carried on by the trust. It is contended that merely because there are other objects mentioned in the object clause of the Trust, does not ipso facto imply that the trust does not exist solely for educational purposes. It is contended that at the time of grant of exemption, the prescribed authority is empowered to impose conditions, failure to comply with which can result in withdrawal of approval.
HELD BY HIGH COURT
