M/S NEW NOBLE EDUCATIONAL SOCIETY AND OTHERS APPELLANT(S) VERSUS THE CHIEF COMMISSIONER OF INCOME TAX AND ANR. RESPONDENT(S)

Parties Involved

Facts Summary

The subject matter of these appeals is the rejection of the appellants’ claim for registration as a fund or trust or institution or any university or other educational institution set up for the charitable purpose of education, under the Income Tax Act, 1961. The Andhra Pradesh High Court held that the appellant trusts which claimed benefit of exemption under Section 10 (23C) of the IT Act were not created ‘solely’ for the purpose of education, and that to determine that issue, the court had to consider the memorandum of association or the rules or the constitution of the concerned trust. Additionally, the appellants were denied registration on the ground that they were not registered under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 as condition precedent for grant of approval.…

Legal Issues

• 1. The correct meaning of the term ‘solely’ in Section 10 (23C) (vi) which exempts income of “university or other educational institution existing solely for educational purposes and not for purposes of profit”.
• 2. The proper manner in considering any gains, surpluses or profits, when such receipts accrue to an educational institution, i.e., their treatment for the purposes of assessment.
• 3. Whether the concerned tax authorities require satisfaction of any other conditions, such as registration of charitable institutions, under local or state laws.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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