O.p.jindal Global University, Sonepat v. Chief Commissioner Of Income…Respondenttax (Exemption), Panchkula

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.11.2011 CWP No.6171 of 2010 O.P.Jindal Global University, Sonepat …Petitioner Versus Chief Commissioner of Income…RespondentTax (Exemption), Panchkula CORAM:HON'BLE MR. JUSTICE HEMANT GUPTAHON'BLE MR. JUSTICE G.S.SANDHAWALIA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Mr. Ajay Vohra, and Ms. Radhika Suri, Advocates,for the petitioner. Ms. Urvashi Dhugga, Advocate,for the respondent. HEMANT GUPTA, J. Challenge in the present writ petition is to an order passedby the respondent – Chief Commissioner Income Tax (Exemption),Panchkula on 18.01.2010 (Annexure P-1) declining application filed bythe petitioner for approval under Section 10(23C) (vi) of the IncomeTax Act, 1961 (for short ‘the Act’). The Haryana Private Universities Act, 2006 ( for short “theHaryana Act”) was enacted with a view to regulate the incorporation ofprivate universities in the State. Section 6 of the Haryana Act providesfor the establishment of a private University, as may be specified in the schedule. The petitioner – University was included in the schedule on27.01.2009 vide Ordinance No.4 of 2009. Thus the petitioner is aUniversity constituted on 27.01.2009 with the objective to pursueeducational activities. The petitioner sought registration in Form No.56D underSection 10(23C)(vi) of the Act on 29.01.2009 vide Annexure P-3. TheCommissioner of Income Tax vide its report dated 20.10.2009submitted that in terms of clause (iiiad) and clause (vi) of Section 10(23C) of the Act, the income and expenditure, to prove the existence ofthe university or other educational institutions, must come fromeducational activities. The words ‘aggregate annual receipts’ appearingin clause (iiiad) implies that the annual receipts must be fromeducational activities and not out of other sources or donations. It wasthus reported that though the petitioner has received a sum ofRs.3,11,48,350/- during the financial year 2008-09, but that will notmake the University eligible for exemption either under clause (iiiad) orunder clause (vi) of Section 10(23C) of the Act. In response to the said report, vide letter dated 10.12.2009(Annexure P-4), the Petitioner inter alia asserted that any incomereceived by the University or other educational institutions which issolely for educational purposes is the only requirement of the Statute.The expression ‘aggregate annual receipts’ used in Clause (iiid) and(vi) of Section 10(23C) of the Act is to divide Universities/educationalinstitutions into two categories i.e. one requiring approval and the othernot requiring such approval though both institutions are contemplatedto exist solely for educational purposes and not for the purpose ofprofit. It was averred that the primary purpose for making such In response to the said report, vide letter dated 10.12.2009(Annexure P-4), the Petitioner inter alia asserted that any incomereceived by the University or other educational institutions which issolely for educational purposes is the only requirement of the Statute.The expression ‘aggregate annual receipts’ used in Clause (iiid) and(vi) of Section 10(23C) of the Act is to divide Universities/educationalinstitutions into two categories i.e. one requiring approval and the othernot requiring such approval though both institutions are contemplatedto exist solely for educational purposes and not for the purpose ofprofit. It was averred that the primary purpose for making such categorization is to regulate the grant of exemption toUniversity/educational institution having receipts, which is presentlyprescribed as Rs.1 Crores in terms of clause (iiiad) of Section 10(23C)of the Act. In respect of such institutions, approval is not necessarywhereas in respect of institution having more than the prescribed limit,the specific approval is required. It was also asserted that thepetitioner has received corpus donation of Rs.3 crores during thefinancial year 2008-09, which is not part of aggregate annual receipts,but an income defined in Section 2(24) of the Act, which includes allvoluntary contributions received by an institution established underclause (iiiad) and (vi) of Section 10(23C) of the Act.It was alsoasserted that the eligibility of an institution for exemption underSection 10(23C)(vi) of the Act, is determined by the objects of theinstitution and more specifically the dominant object of the institution.Once the petitioner satisfies such conditions, the petitioner is eligiblefor approval under the Act. It was also pointed out that the petitioneractually started educational activities such as Jindal Global Law Schoolin September, 2009 with its first academic year. Such Law School hasbeen granted recognition by Bar Council of India, Law SchoolAdmission Council of USA and International Society of law Schools,USA. The claim of the petitioner for approval was declined bythe Chief Commissioner Income Tax, Panchkula when it was observedas under: “5.I have considered the above facts. The following are theconditions to be satisfied before an application can be givenapproval under Section 10(23C)(vi):conditions to be satisfied before an application can be givenapproval under Section 10(23C)(vi): (1) It must be an institution existing solely for the purpose ofeducation. education. (2) If should not existing for the purpose of profit. (3) The receipts should exceed Rs.1 crore. 6.Whether a university is existing for the purpose of educationwill have to be determined not with reference to its intentionsbut with reference to the actual work done in the field ofeducation. By its own admission educational activities haveyet to commence. Unless these activities commence it cannotbe held that the university is existing solely for the purposesof donation. will have to be determined not with reference to its intentionsbut with reference to the actual work done in the field ofeducation. By its own admission educational activities haveyet to commence. Unless these activities commence it cannotbe held that the university is existing solely for the purposesof donation. 7. In view of the above, the primary condition laid down in theact having not been satisfied, the application of the applicantfor approval under Section 10(23C)(vi) is not maintainableand is, therefore, rejected.”act having not been satisfied, the application of the applicantfor approval under Section 10(23C)(vi) is not maintainableand is, therefore, rejected.” In the present writ petition, challenging the said order, thepetitioner relies upon Public Notice dated 09.11.2009 published by theUniversity Grants Commission informing the general public that thePetitioner-University is competent to award degrees as specified underSection 22 of the University Grants Commission Act, 1956. 7. In view of the above, the primary condition laid down in theact having not been satisfied, the application of the applicantfor approval under Section 10(23C)(vi) is not maintainableand is, therefore, rejected.”act having not been satisfied, the application of the applicantfor approval under Section 10(23C)(vi) is not maintainableand is, therefore, rejected.” In the present writ petition, challenging the said order, thepetitioner relies upon Public Notice dated 09.11.2009 published by theUniversity Grants Commission informing the general public that thePetitioner-University is competent to award degrees as specified underSection 22 of the University Grants Commission Act, 1956. Learned counsel for the petitioner has vehemently arguedthat the fact whether the petitioner is an educational institution isrequired to be determined keeping in view the objective for which thepetitioner has been established in terms of Section 3 of the HaryanaAct. A University under the Haryana Act could be established onlywith an object of educational purposes alone. The fact, whether thepetitioner is an educational institution and/or a University, is requiredto be examined, keeping in view the main objects of the petitioner.Reliance is placed upon Additional Commissioner of Income Tax, Gujarat Vs. Surat Art Silk cloth Manufacturers Association 121 ITR 1. It is argued that there is not even a whisper that thepetitioner – University is not engaged in educational purposes. In fact,the approval has been declined for the reason that the existence of theUniversity for the purpose has to be examined with reference to actualwork done in the field of education. Since the educational activitieshave yet to commence, therefore, the primary condition is not satisfied.It is argued that such reasoning given by the authority is totallyirrelevant and unwarranted either by the express words of the statute orthe intent thereof. Reliance is placed uponCommissioner of Income-Tax, West BengalVII, Calcutta Vs. Doon Foundation 154 ITR 208and Commissioner of Income Tax Vs. Sree Narayana ChandrikaTrust 212 ITR 456to contend that in terms of analogous provisions ofSection 10(22) of the Act, the income derived at the primary stage ofthe establishment of the educational institution was held entitled toexemption. It is also pointed out that the correctness of DivisionBench judgment of Madras High Court inCommissioner of Income TaxVs. Devi Educational Institution and others 153 ITR 571has beendoubted by the later Division Bench judgment inMr. Ar. EducationalSociety Vs. Commissioner of Income Tax 253 ITR 589. Therefore, theapproval under Section 10(23C) of the Act is not in respect of aneducational institutional, which is active in imparting education, butalso to an institution, which is in the process of establishment. Theexpression ‘existing solely for educational purposes’ has to beinterpreted accordingly. The said interpretation is the only interpretation keeping in view the express language of the statute andalso the intention thereof. On the other hand, learned counsel for the Revenue hasvehemently argued that in terms of the judgment of Madras High Courtin Devi Educational Institution case (supra), that taking steps forestablishment of an educational institution but not actually engaged inimparting education does not satisfy the parameters for approval underSection 10(23C) of the Act. In Devi Educational Institution case(supra), the Division Bench of Madras High Court has held that takingof preliminary or necessary steps for the establishment of aneducational institution cannot amount to actual bringing to existence ofan educational institution. interpretation keeping in view the express language of the statute andalso the intention thereof. On the other hand, learned counsel for the Revenue hasvehemently argued that in terms of the judgment of Madras High Courtin Devi Educational Institution case (supra), that taking steps forestablishment of an educational institution but not actually engaged inimparting education does not satisfy the parameters for approval underSection 10(23C) of the Act. In Devi Educational Institution case(supra), the Division Bench of Madras High Court has held that takingof preliminary or necessary steps for the establishment of aneducational institution cannot amount to actual bringing to existence ofan educational institution. Learned counsel for the Revenue has also relied upon thejudgment of Hon’ble Supreme Court reported as M/s OxfordUniversity Press Vs. Commissioner of Income Tax AIR 2001 SC 886,wherein it has been held that an assessee has to establish that he isengaged in some educational activities in India and its existence in thiscountry is not for profit only. We have heard learned counsel for the parties at somelength, but found that the impugned order is not sustainable. But beforewe consider the respective contentions, certain statutory provisionsneed to be extracted. The same are as under: “2. In this Act, unless the context otherwise requires – (iia)voluntary contributions received by a trust createdwholly or partly for charitable or religious purposes orby an institution established wholly or partly for suchpurposes or by an association or institution referred toin clause (21) or clause (23), or by a fund or trust orinstitution referred to in sub-clause (iv) or sub clause(v) or by any university or other educational institutionreferred to in sub-clause (iiiad) or sub-clause (vi) or byany hospital or other institution referred to in sub-clause (iiiae) or sub clause (via) of clause (23C) ofSection 10 or by an electoral trust. 10. In computing the total income of a previous year of any person,any income falling within any of the following clauses shall not beincluded - (23C) any income received by any person on behalf of – (iiiad) any university or other educational institution existingsolely for educational purposes and not for purposes of profitif the aggregate annual receipts of such university oreducational institution do not exceed the amount of annualreceipts as may be prescribed; or. (vi) any university or other educational institution existingsolely for educational purposes and not for purposes of profit,other than those mentioned in sub clause (iiiab) or sub clause(iiiad) and which may be approved by the prescribedauthority; or Provided that the fund or trust or institution or anyuniversity or other educational institution or any hospital orother medical institution referred to in sub clause (iv) or subclause (v) or sub clause (vi) or sub clause (via) shall make anapplication in the prescribed form and manner to theprescribed authority for the purpose of grant of theexemption, or continuance thereof, under sub clause (iv) orsub clause (v) or sub-clause (vi) or sub clause (via): Provided further that the prescribed authority, beforeapproving any fund or trust or institution or any university orother educational institution or any hospital or other medicalinstitution, under sub clause (iv) or sub clause (v) or subclause (vi) or sub clause (via), may call for such documentsincluding audited annual accounts or information from thefund or trust or institution or any university or othereducational institution or any hospital or other medicalinstitutions, as the case may be, as it thinks necessary in orderto satisfy itself about the genuineness of the activities of suchfund or trust or institution or any university or othereducational institution or any hospital or other medicalinstitution, as the case may be, and the prescribed authoritymay also make such inquiries as it deems necessary in thisbehalf:” Rule 2CA incorporates the guidelines for approval ascontemplated under sub-clauses (vi) and (via) of Section 10(23C). Therelevant guidelines are as under: 2CA.(1)The prescribed authority under sub-clauses (vi) and (via) ofclause (23C) of Section 10 shall be the Chief Commissioner orDirector General, to whom the application shall be made as providedin sub-rule (2). xxxxxxxxx (3) The approval of the Central Board of Direct Taxes or ChiefCommissioner or Director General, as the case may be, grantedbefore the 1[st] day of December, 2006 shall at any one time have effectfor a period not exceeding three assessment years. {Sub-Rule (3) Prior to its substitution by the Income Tax (FourteenthAmendment) Rules, 2006 w.e.f. 24.11.2006, reads as under: (3) The approval of the Central Board of Direct Taxes or ChiefCommissioner or Director General, as the case may be, shall at anyone time have effect for a period not exceeding three assessmentyears.} InSurat Art Silk Cloth Manufacturers Association case (supra), it has been held to the following effect: “But even if such a contention were permissible, we do not thinkthere is any substance in it. The law is well settled that if there areseveral objects of a trust or institution, some of which are charitableand some non-charitable and the trustees or the managers in theirdiscretion are to apply the income or property to any of those objects,the trust or institution would not be liable to be regarded as charitableand no part of its income would be exempt from tax. In other words,where the main or primary objects are distributive, each and everyone of the objects must be charitable in order that the trust orinstitution might be upheld as a valid charity; vide Mohd. Ibrahim v.CIT (1930) 57 IA 260 and East India Industries (Madras) P. Ltd. v.CIT (1967) 65 ITR 611 (SC). But if the primary or dominant purposeof a trust or institution is charitable, another object which by itselfmay not be charitable but which is merely ancillary or incidental tothe primary or dominant purpose would not prevent the trust orinstitution from being a valid charity; vide CIT v. Andhra Chamberof Commerce (1965) 55 ITR 722 (SC). The test which has, therefore,to be applied is whether the object which is said to be non-charitableis a main or primary object of the trust or institution or it is ancillaryor incidental to the dominant or primary object which is charitable.” In view of the said judgment, the main and primary objectsof a Trust or institution are relevant to determine the nature of suchtrust or institution. The petitioner is a University created under astatute, when the schedule in terms of Section 3 of the Haryana Act wasamended so as to incorporate the petitioner - University as one of theUniversity established under the Act. Such University has to satisfy theobjective as delineated in Section 3 of the Haryana Act, which areundisputedly for the educational purposes. The said aspect has notbeen controverted by the authority in the order impugned or by thelearned counsel for the Revenue during the course of arguments beforethis Court. Therefore, we have no hesitation to hold that the petitioneris a University established solely for educational purposes and not forthe purposes of profit. But having found so, still the question; whether thepetitioner has to actually work in the field of education before itsrequest under Section 10(23C) (vi) considered, is required to beexamined. The entire stress of the arguments of learned counsel forthe Revenue is on the expression ‘existing’ appearing in Section 10(23C) of the Act. The argument is that unless an institution is active inthe field of education, mere fact that it is in the process of establishingitself would not make such institution as eligible for approval. In fact,it is argued that unless educational activities commence, it cannot besaid that the University is existing solely for the purposes of education. But having found so, still the question; whether thepetitioner has to actually work in the field of education before itsrequest under Section 10(23C) (vi) considered, is required to beexamined. The entire stress of the arguments of learned counsel forthe Revenue is on the expression ‘existing’ appearing in Section 10(23C) of the Act. The argument is that unless an institution is active inthe field of education, mere fact that it is in the process of establishingitself would not make such institution as eligible for approval. In fact,it is argued that unless educational activities commence, it cannot besaid that the University is existing solely for the purposes of education. The main stress of learned counsel for the Revenue was onthe judgment ofDevi Educational Institution case (supra), wherein, ithas been observed as under: “…The Tribunal has merely proceeded on the basis that since theassessee-society has already taken steps to set up an educationalinstitution, it should be taken to come within the scope of Section 10(22). As already stated, we feel that the mere taking of thepreliminary or necessary steps for the establishment of an educationalinstitution cannot amount to actual bringing into existence of aneducational institution. Since Section 10(22) uses the expression“existing solely for educational purposes”, the actual existence of theeducational institution is a precondition for the application of Section10(22) and the mere taking of steps for the establishment of theeducational institution may not be sufficient to attract the exemptionunder Section 10(22)…..” The correctness of the said view has been doubted by thelatter Division Bench inMr. Ar. Educational Society’s case (supra).The Bench has allowed the petition under Section 256(2) of the Act by observing that the said judgment requires reconsideration. It wasobserved as under: “The judgment of this Court in the case of Devi EducationalInstitution case (supra) laid emphasis on the word “existing” inSection 10(22) of the Act, and concluded that the institution musthave been functional in the relevant previous year. The word“existing” is not the same thing as being functional. There is nodoubt at all that the educational institution exists in the sense that thesociety has been formed, the society is a legal entity, its objects areclearly intended to bring into existence educational institution, forwhich preliminary steps have been taken, and the object of theinstitution is not profit. We are of the prima facie view that the widthof the provision is not required to be cut down by insisting that theeducational activity must have been carried on in the relevantprevious year, even though there is no doubt whatsoever that thesociety was engaged in taking the steps required to make theeducational activity operative, the steps so taken being theconstruction of the buildings and other facilities in which the task ofimparting the education was to be carried out. Having regard to these facts, and in the light of our prima facie viewthat the earlier judgment of this court reuires reconsideration. Wedirect the Tribunal to refer the following question of law:” InM/s Oxford University Press case (supra), the assessee was a non-resident company. The assessee claimed its income asexempt from payment of income tax by virtue of provisions of Section10(22) of the Act. The High Court answered the question against theassessee by holding that the assessee was Oxford University Press andnot the University of Oxford nor it did carry on activities in India. Theonly activity carried on by the Oxford University Press in India was theactivity of printing and publishing books and selling and supplying thesame as well as books published by other publishers for the purpose ofprofit. The assessee did not carry on its activities as a University or InM/s Oxford University Press case (supra), the assessee was a non-resident company. The assessee claimed its income asexempt from payment of income tax by virtue of provisions of Section10(22) of the Act. The High Court answered the question against theassessee by holding that the assessee was Oxford University Press andnot the University of Oxford nor it did carry on activities in India. Theonly activity carried on by the Oxford University Press in India was theactivity of printing and publishing books and selling and supplying thesame as well as books published by other publishers for the purpose ofprofit. The assessee did not carry on its activities as a University or educational institution in India. Therefore, it could not be regarded asUniversity or educational institution existing solely for educationalpurposes and hence income derived by it from any other activity wouldnot qualify for exemption under Section 10(22) of the Act. It is the saidreasoning, which was accepted by the Hon’ble Supreme Court, when itwas held to the following effect: “36. Giving a purposeful interpretation of the provision it will bereasonable to hold that in order to be eligible to claim exemptionfrom tax under Section 10(22) of the Act, the assessee has toestablish that it is engaged in some educational activity in India andits existence in this country is not for profit only. This interpretationof Section 10(22) neither causes violence to the language of theprovision nor does it amount to re-writing the same. On the otherhand, it only gives a harmonious construction of the provision whichsubserves the object and purpose for which the provision is intendedto serve.” The Hon’ble Supreme Court considered the fact that M/sOxford University Press is part of Oxford University in U.K. Whileconsidering the analogous provisions of Section 10(22) of the Act, themajority view (Hon’ble Mr. Justice D.P.Mohapatra) was expressed asfollows: “25 ….On a closer examination of the provision it becomes clearthat in using the expression ‘existing solely for educational purposesand not for purpose of profit’ the legislature has made it clear that itintends to exempt the income of institutions established solely for theeducational purposes and not for commercial activities. Such aprovision is meant to encourage institutions (including University)engaged in educational activities and it is not intended to benefitinstitutions engaged in commercial activities with the intention ofearning profit. In my view this interpretation will not only serve theintent and purpose of the statutory provision, but will also help inavoiding the criticism of want of rationale in granting the exemption. 26. On examination of the different provisions in Section 10 dealingwith exemption from the tax it would be clear that each one of the said provisions is intended to serve a definite public purpose and ismeant to achieve a special object. 32. I am of the view that the expression ‘existing solely for theeducational purpose and not for the purpose of profit’ qualified a‘University or other educational institution’. In a case where adispute is raised whether the claim of exemption from the tax by theassessee is admissible or not it is necessary for the assessee toestablish that it is a part of a University which is engaged solely or atleast primarily for educational purposes and not for purposes of profitand the income in respect of which the exemption is claimed is a partof the Income of the University…..” In the judgment, it is further observed (Hon’ble Mr. JusticeY.K.Sabharwal), as under: said provisions is intended to serve a definite public purpose and ismeant to achieve a special object. 32. I am of the view that the expression ‘existing solely for theeducational purpose and not for the purpose of profit’ qualified a‘University or other educational institution’. In a case where adispute is raised whether the claim of exemption from the tax by theassessee is admissible or not it is necessary for the assessee toestablish that it is a part of a University which is engaged solely or atleast primarily for educational purposes and not for purposes of profitand the income in respect of which the exemption is claimed is a partof the Income of the University…..” In the judgment, it is further observed (Hon’ble Mr. JusticeY.K.Sabharwal), as under: “64. …..It is not the case of the assessee nor is there any such findingthat the assessee is imparting any education or has any educationalactivity in India. In this view the assessee is not entitled to claimexemption. Any other interpretation would be absurd and manifestlyunjust. The absence of word ‘India’ in this provision isinconsequential. It has to be read into Section 10(22). The literalconstruction would lead to manifestly unreasonable and absurdconsequences as indicated above.” A Division Bench of Calcutta High Court in DoonFoundation case (supra), was examining the question of exemption ofan income of the University or other educational institution existingsolely for educational purposes and not for profit. In the aforesaid case,the assessee had just begun its activity and during the year underconsideration had started preparation of regular classes for teaching ofHindi and purchase some books and periodicals for laboratory. It washeld to the following effect: “….The condition precedent for claiming exemption under Section10(22) is, whether the educational institution exists solely foreducational purposes and not for purposes of profit. There is no dispute nor can it be disputed that the assessee-society exists solelyfor educational purposes. The assessee has commenced activitiesconnected with the imparting of education. For the purpose ofholding regular classes for teaching of Hindi, the assessee has takenall preliminary steps including purchase of boos and periodicals.Such activities are the steps towards running of a full-fledgedteaching course. We are, therefore, unable to accept the contentionof the Revenue that the assessee did not start running any educationalinstitution during the previous year in question….” Later, inSree Narayana Chandrika Trust case (supra), a Division Bench of Kerala High Court, held that the assessee laid downthe foundation for a hospital run by the Trust in the year 1973 thoughhospital was opened in the year 1978. The Trust has became partner inthree firms. The Tribunal has returned a finding that the Trust joinedthe firms as partner only to raise income for the purposes of running ofhospital. The question, which arose was whether the income of theassessee, prior to hospital becoming functional, is exempt. It was heldthat income derived at the primary stage is entitled to exemption. Itobserved as under: Later, inSree Narayana Chandrika Trust case (supra), a Division Bench of Kerala High Court, held that the assessee laid downthe foundation for a hospital run by the Trust in the year 1973 thoughhospital was opened in the year 1978. The Trust has became partner inthree firms. The Tribunal has returned a finding that the Trust joinedthe firms as partner only to raise income for the purposes of running ofhospital. The question, which arose was whether the income of theassessee, prior to hospital becoming functional, is exempt. It was heldthat income derived at the primary stage is entitled to exemption. Itobserved as under: “… The question, therefore, arises whether the income of theassessee-trust during these years is exempt, as there was no hospitalas such in existence during that period. Counsel for the assesseereferred to the decisions in Doon Foundations’s case (1985) 154 ITR208 (Cal.) and Secondary Board of Education Vs. ITO (1972) 86 ITR408 (Orissa). In both these cases, the income derived at thepreliminary stages of the establishment of the educational institutionsconcerned was held entitled to the exemption. In Doon Foundation’scase (1985) 154 ITR 208 (Cal), the assessee had only taken thepreliminary steps towards the running of a teaching course; and theincome derived during this period was held to be that of aneducational institution. In the other case, Secondary Board ofEducation’s case (1972) 86 ITR 408 (Orissa) had a fund constitutedunder the Orissa Secondary Education Act, 1953. One of the sourcesof the income of the Board was the profit from compilation,publication and printing and sale of text books. The income was tobe utilized towards development and expansion of educational purposes and the surplus, if any, was to form part of a sinking fund tobe devoted to the cause of education as and when necessary. Theincome derived from the activities mentioned above was treated asthat of an educational institution and exempted.” The income of Rs.3,11,48,350/- during the assessmentyear 2008-09 consist of endowment of Rs.3 crores received by thepetitioner in terms of the provisions of the Haryana Act and theremaining amount is interest income from the said endowment. Thepetitioner has applied for approval on 29.01.2009 soon after thepetitioner was included in the schedule on 27.01.2009. The petitionerhas delineated steps taken by the petitioner for setting up of theUniversity and has categorically averred that a Global Law College hasstarted in September, 2009. Thus, in a period of 8 months, thepetitioner was able to obtain recognition from the Bar Council of India;University Grants Commission and has also set up infrastructure forstarting law courses. Therefore, in view of the judgments referred toabove, the petitioner is existing educational institute. The expression‘existing’ has to be interpreted keeping in view the social goal andobjective of public interest to give incentives to an institution engagedin education. The expression ‘existing’ is not a narrow pedantic word,but will include the institutions, which were in existence prior toinsertion of Section 10(23C) and also the institutes established afterinsertion of such clause. It is the said interpretation alone, which willadvance the purpose and object of the said provisions. The argument raised by Ms. Dhugga that the petitioner canbe considered to be an existing educational institution in the nextassessment year is wholly unwarranted. The approval under Section 10(23C) (vi) of the Act is a onetime approval. The approval is not The argument raised by Ms. Dhugga that the petitioner canbe considered to be an existing educational institution in the nextassessment year is wholly unwarranted. The approval under Section 10(23C) (vi) of the Act is a onetime approval. The approval is not required to be obtained every year though prior to amendment of sub-Rule (3) of guideline 2C, reproduced above, the approval granted hadthe effect for a period not exceeding three assessment years. But afterits amendment w.e.f. 24.11.2006, the approval is onetime event.Therefore, the approval under Section 10(23C)(vi) is not for anyassessment year specific. The approval is required to examine theobjective of establishing an educational institute or University and thefact that it intends to achieve such objectives. Neither the authority northe learned counsel for the Revenue could dispute the object and theintention of the petitioner in setting up an educational institution. In view of the above, we find that order Annexure P-1passed by the Chief Commissioner of Income Tax, Panchkula is notlegal and sustainable, consequently, the same is set aside. The ChiefCommissioner of Income Tax, Panchkula is directed to pass an order interms of the observations made above. (HEMANT GUPTA) JUDGE 11.11.2011 Vimal (G.S.SANDHAWALIA) JUDGE JUDGE