ITR: HC (MAD) : Exemption- Educational Institution- .Favor of revenue.

Thursday, August 5, 2010

HC (MAD) : Exemption- Educational Institution- .Favor of revenue.

Income Tax - 2010 TMI - 76915 - MADRAS HIGH COURT - P. S. Govindasamy Naidu and Sons versus Assistant Commissioner of Income-tax

Exemption- Educational Institution- The assessee was a public charitable trust running several educational institutions. While considering the assessment for the assessment year 1995-96, the Assessing Officer brought to tax the amount received from students admitted to the college but credited towards the corpus of the trust u/s 2(24)(iia) of the Income Tax Act, 1961, taking the view that these "donation" were not voluntary, but were received as capitation fee for admission into the college. Consequently the Assessing Officer rejected the plea for exemption u/s 10(22). This order is upheld by the Tribunal. Held that- going by the statement recorded from parents, the Tribunal rightly came to conclusion that these amount were in fact paid only by way of capitation fee and not towards corpus account of the assessee trust. The assessee was not entitled to exemption under section 10(22).