COMMISSIONER OF INCOME TAX TAMIL NADU I V BIMETAL BEARINGS LIMITED Vs. PARAMAKALYANI EDUCATION SOCIETY

JUDGEMENT

(1.) SINCE all these tax cases are interconnected, they are dealt with together. As the decision in T.Cs. Nos. 405 to 407 of 1978 will mainly depend upon the decision we render in T. C. Nos. 595 and 596 of 1978, we propose to deal first with T.Cs. Nos. 595 and 596 of 1978. The assessee in T.Cs. Nos. 595 and 596 of 1978 is one Shri Paramkalayani Education Society, Madras. For the assessment years 1971-72 and 1972-73, it claimed the benefit of exemption under s. 11 of the I.T. Act, 1961, hereinafter referred to as "the Act," in respect of its income on the ground that it is a charitable institution which is not carrying on any activity for profit.

(2.) THE ITO rejected the assessee's claim on the ground that in view of s. 13(3) read with s. 13(2)(a) of the Act, the assessee cannot claim the benefit of exemption under s. 11. In the further appeal filed by the assessee to the AAC, an alternative claim was also put forward by the assessee. THE contention of the assessee was that even if is was not entitled to the benefit of exemption under s. 11 , it could clearly claim relief on the basis of s. 10(22) and s. 10(22A) of the Act as an educational institution existing solely for educational purpose and not for purposes of earning profit. THE AAC, after referring to the claim of the assessee both under s. 11 as well as under ss. 10(22) and 10(22A) , held that the assessee was not entitled to the benefit of exemption under s. 11 of the Act. However, he did not give his view on the question as to whether the assessee was entitled to the benefit of s. 10(22) and 10(22A) of the Act.

(3.) AGGRIEVED by the decision of the Tribunal holding that the assessee is entitled to the benefit of exemption under s. 10(22) and s. 10(22A) of the Act, the Revenue has sought for and obtained a reference to this court in T.Cs. Nos. 595 and 596 of 1978 on the following common question :