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1 - 10 of 19 (0.52 seconds)The Income Tax Act, 1961
Section 12A in The Income Tax Act, 1961 [Entire Act]
Venu Charitable Society And Anr. vs Director General Of Income Tax on 8 March, 2017
This was also mentioned
in Venu Charitable Society and Ors (supra) as follows:
Section 10 in The Income Tax Act, 1961 [Entire Act]
Aditanar Educational Institution vs Additional Commissioner Ofincome-Tax on 5 February, 1997
The determining test to qualify for exemption under section 10(23C)(vi),
hence, lies in the final motivation on which the institution functions,
regardless of what extraneous profit it may accrue in the pursuit of the
same. This was amply highlighted in Aditanar Educational Institution
(supra) as follows:
American Hotel And Lodging Association ... vs The Central Board Of Direct Taxes, ... on 24 November, 2006
25. This critical test therefore has a conspicuous qualitative value; the
of the objectives of the organization are to be determined not merely by
the memorandum of objectives of the institution, but, also from the
design of how the profits are being directed and utilized and if such
application of profits uphold the "charitable purpose" of the organization
(as postulated in section 2(15) of the Act) or if the objectives are marred
by a profit making motive that emerges more as a business activity rather
than an educational purpose. Section 10(23C)(vi) of the Act while
guiding the manner of this determination also, provides a certain amount
of discretion to the authority assessing the compliance to these conditions
for ascertaining whether the requirements of the provision are met with.
Such scrutiny is to be carried out every year, irrespective of any
preceding pattern in the assessment of the previous years. This point was
highlighted in American Hotel and Lodging Assn. Educational Institute
(supra) as follows:
The Addl. Commissioner Ofincome Tax & ... vs The A.L.N. Rao Charitable Trust on 13 October, 1995
31. The authorities in the form of case law referred to above also
reiterate that a mere incurrence of (surplus) profit does not automatically
presuppose a business activity that invalidates the exemption under
section 10(23C)(vi); the same has to be tested on whether such profits are
being utilized within the meaning of the larger charitable purpose as
defined in section 2(15) of the Act or not. On scrutiny, it can be observed
that the accounts marked the heading "Secretary's Account", detail the
heads of income and expenditure that cater to the various requirements of
running and maintaining the satellite schools. Thus, arguendo if it were
held that the objected activity were indeed commercial in nature,
nevertheless, the realization of profit by the assessee is through an
activity incidental to the dominant educational purpose that its
memorandum of association sets out, and is in turn being channeled back
into the maintenance and management of the same schools, thus,
fulfilling the objectives the Assessee has set out in its memorandum of
objectives.