HIGH COURT OF GAUHATI
Commissioner
of Income-tax
v.
Assam State
Book Production & Publication Corp. Ltd.
P.G. AGARWAL
AND M.B.K. SINGH, JJ.
IT APPEAL NOS.
88 OF 2003, 7 TO 10, 12, 15 TO 21,
23 AND 24 OF
2004
November 13,
2006
Section 10(22) of the Income-tax Act, 1961 - Educational
institutions - Assessment years 1981-82 to 1988-89 and 1990-91 to 1996-97 -
Assessee-company was doing activities of preparing, printing, production,
publication, sale, supply of text books, supplementary books, etc. - In view of
said activities, assessee contended that it was an educational institution
existing solely for educational purposes and, hence, claimed exemption under
section 10(22) - However, assessee had not done anything relating to teaching,
training or imparting education either by itself or through any school in any
of relevant assessment year - Whether, activities of assessee, by any stretch
of imagination, could not be considered as that of an educational institution
within meaning of section 10(22) and, consequently, assessee was not entitled
to deduction claimed - Held, yes
FACTS
The assessee company was incorporated with the main objects, inter
alia, to prepare, print, publish, sale, supply or otherwise deal in text
books, supplementary books and literature for primary, secondary and teachers’
education and to deal in any magazines, pamphlets, leaflets posters, journals,
etc. In view of the said activities, the assessee contended that it was an
educational institution existing solely for educational purposes and, hence,
claimed exemption from the payment of income-tax under section 10(22). The Assessing Officer disallowed the claim of
the assessee. On appeal, the
Commissioner (Appeals) upheld the said disallowance. On further appeal, the Tribunal held that the
assessee was an educational institution existing solely for educational
purposes and, thus, eligible for exemption under section 10(22).
On revenue’s
appeal :
HELD
On a careful examination of the main objects and the objects incidental
or ancillary to the main objects of the assessee, it was clear that the
assessee had been doing the activities of production, printing and publication
and sale of books and other commercial activities which were not the activities
of an educational institution established solely for educational purposes
within the meaning of section 10(22).
The main objects of the assessee were neither to run any educational
institution nor to impart training, teaching through any colleges, etc. In fact, the assessee did not involve in any
activities of teaching, imparting training by itself. The intention of the Legislature is to give
exemption only to the University or educational institution which are existing
solely for educational purposes and not for the purposes of profit. [
The activities of the assessee by any stretch of imagination could not be
considered as that of an educational institution established for imparting
teaching, training, etc. If the assessee
was to be taken as an educational institution within the meaning of section
10(22) for doing the activities of production, printing, sale of text books to
the primary and secondary schools, etc., it would open the flood gates to
others whose activities were to supply approved note books, school dresses,
etc., for claiming exemption of income-tax under section 10(22). [
The assessee had not done anything relating to teaching, training or
education either by itself or through any school in any relevant assessment
year except to print, publish, sale of text books at the subsidized rate. Therefore, it could not be held that the
assessee was an educational institution within the meaning of section 10(22). [
In the result, the orders of the Tribunal were to be quashed and the
appeal was to be allowed. [
CASE
REVIEW
Aditanar Educational Institution v. Addl
CIT [1997] 224 ITR 310 /90 Taxman 528 distinguished on facts;
Oxford University Press v. CIT
[2001] 247 ITR 658/115 Taxman 69 followed.