Case Note & Summary
The petitioner, Vanita Vishram Trust, is a public charitable trust registered under the Bombay Public Trusts Act, 1950. It has been conducting primary and secondary schools and colleges in Arts, Science, Commerce, and Technical Courses in Mumbai since 1929 and in Surat since 1940. Over 2500 students pursue education at these institutions. The trust also runs a hostel at Surat for outstation students. The main object of the trust is the education of women, as stated in Clause III(b) of its Memorandum of Association, which includes establishing ashrams, schools, libraries, and recreational facilities for Gujarati Hindu women. The trust applied for approval under Section 10(23C)(vi) of the Income Tax Act, 1961, which provides exemption for income of any university or other educational institution existing solely for educational purposes and not for purposes of profit. The Chief Commissioner of Income Tax, Mumbai, declined the approval, reasoning that the trust's objects were not solely educational but also included other charitable purposes such as providing ashrams, libraries, and recreational facilities. The trust challenged this order by filing writ petitions in the Bombay High Court. The court examined the objects of the trust and found that the primary and dominant object is the education of women. The other objects, such as establishing ashrams and libraries, are ancillary and incidental to the main educational purpose. The court held that the trust is an educational institution existing solely for educational purposes and is entitled to approval under Section 10(23C)(vi). The court set aside the order of the Chief Commissioner and directed him to grant approval to the trust under Section 10(23C)(vi) of the Income Tax Act, 1961.
Headnote
A) Income Tax - Exemption under Section 10(23C)(vi) - Educational Institution - The petitioner, a public charitable trust registered under the Bombay Public Trusts Act, 1950, conducting primary and secondary schools and colleges for women since 1929, sought approval under Section 10(23C)(vi) of the Income Tax Act, 1961. The Chief Commissioner declined approval on the ground that the trust's objects were not solely educational but also included other charitable purposes. The court held that the trust's main object is education of women and the other objects are ancillary to the main educational purpose. The court directed the Chief Commissioner to grant approval under Section 10(23C)(vi) of the Income Tax Act, 1961. (Paras 1-5)
Issue of Consideration
Whether the Chief Commissioner of Income Tax was justified in declining approval under Section 10(23C)(vi) of the Income Tax Act, 1961 to the petitioner trust which conducts educational institutions primarily for the education of women.
Final Decision
The court allowed the writ petitions, set aside the order of the Chief Commissioner of Income Tax, and directed the Chief Commissioner to grant approval to the petitioner under Section 10(23C)(vi) of the Income Tax Act, 1961.
Law Points
- Section 10(23C)(vi) of Income Tax Act
- 1961
- approval for exemption
- educational institution
- public charitable trust
- object of education of women
- Bombay Public Trusts Act
- 1950
