Commissioner Of Income Tax & Another v. M/S Rishikesh Public Schools

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Income Tax Appeal No. 159 of 2007 Commissioner of Income Tax & another. ………. Appellants Versus M/s Rishikesh Public Schools. ..………. Respondent & Income Tax Appeal No. 160 of 2007 Commissioner of Income Tax & another. ………. Appellants Versus M/s Rishikesh Public Schools. ..………. Respondent Mr. H.M. Bhatia, Advocate for the appellants. JUDGMENT Coram: Hon’ble Barin Ghosh, C.J. Hon’ble U.C. Dhyani, J. BARIN GHOSH, C. J. (Oral) These appeals pertain to the Assessment Years 1995-1996 and 1996-1997. The appeals are against a common judgment of the Tribunal. Prior to the Assessment Years, the assessee was getting recognition under Section 10(22) of the Income Tax Act, 1961 and, accordingly, was exempted from payment of income tax. During the Assessment Years, the Assessing Officer noticed that certain expenses have been incurred by the assessee. Because those expenses were incurred by the assessee, the Assessing Officer felt that the assessee, an educational institution, is not existing solely for the purpose of education. The Assessing Officer, however, could not link any of those expenditure in respect of any deemed income or in respect of any anticipated income or in respect of any actual income. The Tribunal has noticed, while dealing with each of those expenditure, that each of those expenditure was incurred by the assessee, educational institution, to maintain its existence solely for the purpose of education. Having thus concluded, the Tribunal has held that there was no just reason for the Assessing Officer and the Commissioner of Appeals to deny the benefits of Section 10(22) of the Act to the assessee. We have also independently considered each of those expenditure and found that none of them could be linked to any attempt to earn any income therefrom, making the existence of the assessee not solely for the purpose of education. 2. The next contention was that there was a difference in the valuation of the building, as reported by the Departmental Valuation Officer, and the cost of construction shown by the assessee. The difference was treated as income by the Assessing Officer. This treatment was made because the Assessing Officer proceeded on the basis that the assessee is not entitled to the benefit of Section 10(22) of the Act. The Commissioner of Appeals granted relief to the assessee on that score, relying upon the judgment of the Hon’ble Supreme Court, rendered in the case of Smt. Amiya Bala Paul vs. Commissioner of Income Taxreported in (2003) 182 CTR (SC) 489, but we think that the Tribunal has granted relief on that score correctly to the assessee by holding that, if the assessee is entitled to the benefit of Section 10(22) of the Act, its income from whatever source would be exempted. 3. We, accordingly, find no reason to interfere. The appeals fail and the same are dismissed. G (U.C. Dhyani, J.) (Barin Ghosh, C. J.) 03.12.2012 03.12.2012