AR EDUCATIONAL SOCIETY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) COUNSEL for the revenue contends that no referable question of law arises, as in his submission, the findings recorded by the Tribunal and the authorities below are findings of fact, and a binding decision of this court has already answered the question sought to be raised.

(2.) THE question sought to be raised is regarding the true construction of section 10(22) of the Income Tax Act, 1961. That clause refers to "any income of a university or other educational institution, existing solely for educational purposes and not for purposes of profit".

(3.) THE judgment of this court in the case of Devi Educational Institution , [1985]153ITR571(Mad) laid emphasis on the word "existing" in section 10(22) of the Act, and concluded that the institution must have been functional in the relevant previous year. THE 'word "existing" is not the same thing as being functional. THEre is no doubt at all that the educational institution exists in the sense that the society has been formed, the society is a legal entity, its objects are clearly intended to bring into existence educational institution, for which preliminary steps have been taken, and the object of the institution is not profit. We are of the prima facie view that the width of the provision is not required to be cut down by insisting that the educational activity must have been carried on in the relevant previous year, even though there is no doubt whatsoever, that the society was engaged in taking the steps required to make the educational activity operative, the steps so taken being the construction of the buildings and other facilities in which the task of imparting the education was to be carried out.