Law:

Section:

Section 10(22) of the Income-tax Act, 1961 - Educational Institutions - Assessment years 1972-73 to 1977-78 - Whether mere existence of profit will not disqualify institution for exemption under section 10(22) if sole purpose of its existence is not profit-making but is educational activities - Held, yes - Assessee was running colleges and training centres for various courses for the purposes of imparting training and/or awarding diplomas and certificates - Whether objects of functioning as a focusing centre on non-official opinion on various subjects affecting movement and for representing it in proper quarters, promoting study of problems connected with co-operation and carrying on research in same and of opening circulating libraries, publishing periodicals, books, pamphlets and literature were connected with educational purposes for which assessee was established - Held, yes - Whether subsidiary objects such as printing and publishing books and literature on relevant subjects were, ancillary and did not detract from its exclusively educational character - Held, yes - Whether therefore, assessee was existing exclusively for educational purposes and not for purpose of profit and, hence, it was entitled to exemption under section 10(22) - Held, yes FACTS The assessee-co-operative union claimed that the activities carried on by it were covered by the provisions of section 10(22) as it was an educational institution existing solely for educational purposes and was, therefore, entitled to exemption from tax. The ITO rejected the claim of the assessee. On appeal, the Commissioner (Appeals) held that the assessee was entitled to exemption under section 10(22). On further appeal, the Tribunal disallowed the claim on the ground that the objects of the assessee could not be considered to be educational in view of the meaning given to the word "education" by the Supreme Court in its decision in Sole Trustee, Loka Shikshana Trust v. CIT[1975] 101 ITR 234. On Reference : HELD On totality of the objects enumerated in bye-law 2, of the bye-laws of the assessee it was clear that the assessee was existing solely for educational purposes. It would not be open to read any of…

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