Exemption U/s. 11 and 12 cannot be denied just because of profits from imparting of education

Ld. Counsel for the assessee, at the very outset stated that on the similar issues, the appeals of the assessee were allowed by the ITAT vide Order dated 27.5.2016 passed in ITA No. 2657/Del/2013 for the assessment year 2009-10 wherein it has been held that “invocation of proviso to section 2(15) of the Act to deny claim of exemption under section 11 and 12 of the Act is not justified. Accordingly, grounds of appeal are allowed.”

Punjab & Haryana High Court in the case of Pinegrove International Charitable Trust v. UOI 327 ITR 73  held that merely because profits have resulted from the activities of imparting education, it would not result in change of character of the education that it was solely for educational purpose.

Thus, respectfully following the aforesaid judgments, we hold that the invocation of proviso to section 2(15) of the Act to deny claim of exemption under section 11 and 12 of the Act is not justified. Accordingly, grounds of appeal are allowed.

Relevant Extract of the Judgment

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