The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has said that the tax relief cannot be denied to a society for the reason that there are other objects other than education.
A division bench of the Tribunal was considering an appeal by the Kenchappa Samajika Shikshana Foundation.
The sole grievance of the assessee society was that the AO denied the tax exemptions to the assessee by observing that the society was established not only for the sole purpose of education but also for other objects such as improving the economic standard of the poor people, promote good health for the people through health and nutrition programme etc. he was, therefore, of the opinion that the assessee did not fulfil the conditions laid down u/s exemption u/s 10(23C) (iiiad) of the Income Tax Act.
As the assessee failed to get relief from the first appellate authority, the matter travelled to the Tribunal.
The Tribunal held that “It is undisputed that the assessee was formed as a society. As far as the income in question is concerned, it is undisputed that the income arose solely from the activity of assessee running the educational institution. The exemption u/s. 10(23C)(iiiad) is qua the institution and not qua the assessee. Therefore, the fact that there are other objects other than education, cannot be the basis to deny the claim of the assessee for exemption. As already stated, it is undisputed that the income claimed as exempt arose from the institution providing education. That institution existed solely for the purpose of education and not for the purpose of profit during the relevant previous year. Therefore, the basis for rejecting the claim of the assessee for the exemption that its purpose was not solely for education cannot be sustained,” the Tribunal said.
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