Exemption under s 10(23C)(vi)

The assessee, a registered-society providing education to children upto 12, has been running a school named Little Angels High School. The assessee filed an application seeking an exemption under s 10(23C)(vi) for the AY 2007–2008. Exemptions were granted to the assessee under s 10(20), which stood omitted by the Finance Act (No. 2), 1998 w.e.f. 1 April 1999 and was replaced by s 10(23C), which contains exemption provisions for educational institutions. The Chief CIT rejected the assessee’s application for an exemption under s 10(23C)(vi) on the ground that the assessee-society does not exist solely for educational purposes and two objects, ie to manage/maintain a library and a reading room, and conduct classes in stitching, embroidery, weaving, function as a centre for adult education and provide education in the filed of entertainment arts, etc, and to make necessary arrangements for the overall development and growth of children when required, are non-educational in nature and the society can apply its income to any of the objects mentioned in the memorandum in its discretion. Being aggrieved, the assessee has filed the present writ petition.

The issue is whether the educational society can be denied an exemption under s 10(23C) on the ground that it has introduced the object to manage/maintain a library and a reading room, and conduct classes of stitching, embroidery, weaving, function as a centre for adult education and provide education in the field of entertainment arts, etc, and the same was not for educational purposes.

In the instructions issued by the Board of Secondary Education in regard to practical examinations for home science, stitching, embroidery and weaving subjects have been mentioned. Adult education is also a part of education. If an educational society introduced the aforesaid object, it cannot be said that the object of the petitioner society was not of educational purposes. The other object of the society to manage/maintain a library and a reading room is a necessary arrangement for the complete development of the children and it is in consonance with the modern concept of education because education is not only to impart education through book reading, it also includes sports activities and other recreational activities, dance, theatre, and even through having an education tour within the country and abroad so the children can develop their overall talent. It cannot be said that the object is not for educational purposes.

An educational institution cannot be denied exemption under s 10(23C) on the ground that it has introduces the object to manage/maintain a library, reading room, and conduct classes of stitching, embroidery, weaving, function as a centre for adult education and education in the field of entertainment arts, etc, and same was not for educational purposes — as held by MPHC in Little Angels Shiksha Samiti v UOI — In favour of: The Assessee ; Writ Petition No. 1733 of 2008

Decided on: 30 March 2011