10(23C)(vi) Exemption Wrongly Denied; Surplus Development Fund Not Proof of Profit Motive

Vaish Model Primary School Education Society Vs AO (Exemptions) (ITAT Delhi) Assessee, a long-established educational society in Haryana, applied for approval u/s 10(23C)(vi) for AY 2009-10 onwards. Its application, filed in 2009, faced repeated rejections by CCIT/CIT(E) in 2010, 2012 and 2024, mainly on two grounds: (i) surplus transferred to the School Development Fund, and (ii) society allegedly “generating substantial surplus year after year.” Each rejection was challenged; Punjab & Haryana High Court twice (2011 & 2018) set aside the rejection and directed fresh consideration ...