Law:

Section:

Section 10(22) of the Income-tax Act, 1961-Exemption-Income of university or educational institutions-Assessee-trust's claim of exemption for its income from its educational institutions rejected by ITO on the grounds that income of educational institutions only was exempt under section 10(22) and that assessee-trust was not such an institution as it had, inter alia, non-educational though charitable objects-Tribunal eventually upheld ITO's order observing that since assessee could apply its income to non-educational purposes, it was not an educational institution existing solely for education-Whether exemption rightly denied to assessee-Held, on facts, no Facts For the assessment year 1972-73, the assessee-trust claimed exemption under section 10(22) in respect of the income received from its two educational institutions. The ITO rejected the claim on the ground that the said section exempted the income of educational institutions, while in the present case, the trust was the owner of the income, though the educational institutions concerned were the source of that income. The ITO further observed that the trust did not exist solely for educational purposes but also for other charitable/religious purposes. The AAC, on appeal, reversed the ITO's orders observing that the trust was entitled to exemption in respect of the impugned income, since it was not necessarily the educational institution by itself that was entitled to such exemption. On further appeal, the Tribunal relied on the fact that the owner or recipient of the income was neither a university nor an educational institution but a trust and that the trust deed permitted application of the trust money, inter alia, to non-educational objects. The Tribunal, accordingly, was of the opinion that the schools did not exist solely for educational purposes but also for profit-making and that, therefore, the assessee was not entitled to the exemption claimed. On reference : Held From the language and the context in which the expression "any income of a university or educational institution" has been used in section 10(22), it is clear that the income may be the income of any person, but the source of this…

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