Case Law Details
Union of India Vs Baba Banda Singh Bahadur Education Trust (Supreme Court of India)
The dispute is with respect to the Assessment Year 2006-2007. The respondent-assessee was indulged in the activity of imparting the Therefore, the respondent-assessee claimed the exemption under Section 10(23C)(vi) of the Act by submitting an application before the Jurisdictional Commissioner. On appreciation of evidence and considering the material on record, it was found that the assessee has been earning systematic profits year after year and, in the year in question, earned profit to the extent of 67.81% without depreciation and therefore, the Commissioner was of the opinion that the activity of the respondent-assessee cannot be said to be solely for imparting the education and, therefore, not entitled to the benefit/exemption under Section 10(23C)(vi) of the Act and consequently dismissed the said application. The order passed by the Jurisdictional Commissioner denying the exemption under Section 10(23C)(vi) was the subject-matter of Writ Petition before the High Court. By the impugned judgment and order and relying upon its earlier order in the case of Shri Atmanand Jain Gurukul Educational Society (Gujranwala) vs. Chief Commissioner of Income Tax dated 15.03.2010 in CWP No. 1509 of 2010, the High Court has disposed of the Writ Petition, which has given rise to the present Appeal.
In the recent decision of Supreme Court in the case of New Noble Educational Society, it is specifically observed and held by the three-Judge Bench of this Court that for claiming the benefit/exemption under Section 10(23C)(iii)(ab) which is para materia to Section 10(23C)(vi) the activity of the assessee must be be solely for educational purposes and if ultimately it is found that the activity is for profits the assessee is not entitled to the exemption under Section 10(23C)(vi) of the Act.
Applying the law laid down by Supreme Court in the case of New Noble Educational Society (supra) referred to hereinabove to the facts of the case on hand, the impugned judgment and order passed by the High Court is unsustainable. At this stage, it is required to be noted that taking into consideration the entire material on record, in fact, the Commissioner, while considering the application of the assessee for grant of exemption under Section 10(23C)(vi) specifically observed and held that the activity of the assessee cannot be said to be solely for imparting the education and that the assessee is indulging into the profit which was found to be 67.81% without depreciation and 44.48% with depreciation. The finding of fact recorded by the Commissioner, as such, not been upset by the High Court in the impugned judgment and order.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
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