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2007] 294 ITR 76 [2007] 164 TAXMAN 266 (DELHI) HIGH COURT OF DELHI Director of Income-tax (Exemption)* v. Raunaq Education Foundation MADAN B. LOKUR AND V.B. GUPTA, JJ. IT APPEAL NO. 1317 OF 2006 APRIL 30, 2007 Section 10(22) of the Income-tax Act, 1961 - Educational institutions - Assessment year 1988-89 - Assessee, who was entitled to exemption under section 10(22), can claim benefit thereof for purpose of income deemed to be chargeable to tax under section 68 - Held, yes CASES REFERRED TO Orissa State Warehousing Corpn. v. CIT [1999] 237 ITR 589/ 103 Taxman 623 (SC) [Para 5] and P.R. Prabhakar v.CIT [2006] 284 ITR 548/ 154 Taxman 503 (SC) [Para 7]. Ms. P.L. Bansal for the Appellant. Anoop Sharma and Manu Giri for the Respondent. JUDGMENT Madan B. Lokur, J. - The revenue is aggrieved by an order dated 6-1-2006 passed by the Income-tax Appellate Tribunal, Delhi Bench 'A' in ITA No. 2590/Delhi/2002 relevant for the assessment year 1987-88 and ITA No. 2591/Delhi/2002 relevant for the assessment year 1998-99. 2. The sole question that has arisen in this appeal is whether the assessee who is entitled to exemption under section 10(22) of the Income-tax Act, 1961 can claim the benefit thereof for the purpose of income deemed to be chargeable to tax under section 68 of the Act. 3. According to the Assessing Officer, the undisclosed income could not be exempted under section 10(22) of the Act and the Commissioner of Income-tax (Appeals) upheld the view taken by the Assessing Officer. 4. On further appeal, the Tribunal considered the provisions of sections 4 and 5 of the Act read with sections 2(24) and 2(45) as well as section 10(22) of the Act and came to the conclusion that the use of the word 'income' in sub-section (22) of section 10 of the Act is wide enough to include deemed income under section 68 of the Act. 5. Learned counsel for the assessee has drawn our attention to Orissa State Warehousing Corpn. v. CIT [1999] 237 ITR 5891 wherein the Supreme Court has interpreted section 10(29) of the Act which uses the expression 'derived from' which expression is…

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