COMMISSIONER OF INCOME TAX Vs. OXFORD UNIVERSITY PRESS

JUDGEMENT

(1.) BY this reference under S. 256(1) of the IT Act, 1961 made at the instance of the Revenue, the Tribunal, Bombay Bench, Bombay has referred the following question of law to this Court for opinion :

(2.) THE assessee is Oxford University Press, Bombay ("Press"). This reference pertains to asst. yr. 1976 77. The assessee filed its return under the IT Act, 1961 ("Act") for the said assessment year showing an income of Rs. 19.94 lakhs. As in the past, the above return was signed by the General Manager of the Indian Branch of the assessee Press. It was, however, later revised and a fresh return signed by the "Delegate and Chairman of the Finance Committee of the Oxford University Press" was filed. In the past, at the assessee's own request, it had been assessed to income tax in respect of its income in the status of a company as per the notification issued by the Central Board of Revenue. However, in course of the hearing for assessment before the ITO, for the above assessment year the authorised representative of the assessee Press claimed that the Press was a branch of the Oxford University and hence, its income would be exempt from income tax by virtue of S. 10(22) of the Act. The ITO rejected the above contention. While doing so, the ITO took note of the fact that the assessee was being assessed to income tax under the IT Act right from the asst. year 1952 53 as a company. He also noted the submission made on behalf of the assessee, the Oxford University Press, that it was a branch of the Oxford University, London, constituted under a charter of the British Government and that there was a stipulation in its constitution that the earnings from its activities would be used wholly and solely for the educational purposes. The ITO, however, found that the assessee Press was not only distributing the books published by it but it was also carrying on the business of selling books of other publishers e.g., Faber & Faber Ltd., George G. Harrap & Co. Ltd., and Ginn & Co. Ltd. This was evident from the catalogue of the books sold by it. He, therefore, held that the assessee was not entitled to exemption under S. 10(22) of the Act. Against the above order of the ITO, the assessee appealed to the CIT(A). Before the CIT (A), the claim for exemption under S. 10(22) was reiterated by the assessee mainly on the ground that though the assessee was a press and acted as such in India, being a part of the Oxford University, it was a university for the purposes of exemption of its income under S. 10(22) of the Act. This contention of the assessee found favour with the CIT(A). He held that the assessee Press was a part of the Oxford University and hence, entitled to exemption in respect of its income under s. 10(22) of the Act. The CIT(A), therefore, held that the income of the assessee Press in the year under consideration was exempt under S. 10(22) of the Act and it was not liable to pay any income tax in respect thereof. He did not attribute any relevance to the fact that in the past the assessee had itself offered its income from the business of printing, publishing and selling books in India to be assessed in the status of a company. According to the CIT(A), it was not a material consideration in deciding the question whether the assessee Press, known as the "Oxford University Press", could be treated as a university for the purposes of exemption of its income under cl. (22) of S. 10 of the Act.

(3.) MR . T.U. Khatri, learned counsel for the Revenue, submits that the assessee Oxford University Press is neither a "university" nor an "educational institution" within the meaning of S. 10(22) of the Act. Our attention was drawn by Mr. Khatri to the fact that the assessee in this case is "Oxford University Press" and not the Oxford University. It was pointed out that the assessee Press cannot, by any stretch of imagination, justifiably claim itself to be a university for the purposes of S. 10(22) of the Act. It was submitted by the learned counsel that if the assessee Press claims itself to be Oxford University, as a part of it, in that event, the assessee should have been the "Oxford University" and not the "Oxford University Press". According to the learned counsel, even if the assessee Press is a part of the Oxford University it being engaged in carrying on the business of printing, publishing and selling books and in no other activity, its income from such business cannot be regarded as the income of a university existing in India within the meaning of S. 10(22) of the Act. In other words, the submission of the learned counsel is that, in any event, in order to get exemption under S. 10(22) the assessee has to establish that the income claimed to be exempt from income tax bears the character of the income of a university which the assessee has miserably failed to do in the instant case. Counsel for the Revenue further submits that the Oxford University does not exist in India as a university solely for educational purposes. What is existing in India is the Oxford University Press which, even if held to be a part of the said university, cannot be regarded as a university or an educational institution existing solely for the educational purposes and not for purposes of profit and hence, its income cannot qualify for exemption under s. 10(22) of the Act. In support of this contention, reliance is placed on the decision of the Gujarat High Court in CIT vs. Sorabji Nusserwanji Parekh (1992) 107 CTR (Guj) 72 : (1993) 201 ITR 939 (Guj) : TC 32R.899 and the decision of the Supreme Court in Sole Trustee, Loka Shikshana Trust vs. CIT 1975 CTR (SC) 281 : (1975) 101 ITR 234 (SC) : TC 23R.161.