- (1.) The petitioner is a society registered under the Societies Registration Act and has established as well as running an Engineering college at Kanpur in the name of Kanpur Institute of Technology. It is alleged that this institution came into existence with effect from July, 2004. Earlier the objects of the society was as under:- "To establish and to run a Baby sitting, Pre Nursery, Nursery, Primary and High School, College, Evening College, Technical Institution, Management Institutions, Audit Education, Research Centres, Commerce Education, Computer Education in Hardware and Software Industrial Training Centre."
(2.) However, the objects were amended on 6th November, 2006 as under:- "To establish and run educational institutions solely for educational purposes and not for the purposes of profit including nursery school, Primary schools, High Schools, Degree Colleges, Technical Institutions, Management Institutions, Audit Education, Research Centres, Commerce Education, Computer Education, Industrial Training Centre, Job oriented courses and Para Medical Institutions."
(3.) The petitioner applied on 2nd May, 2005 for grant of exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for the assessment year 2004-05 onwards contending that they are running an institution solely for education purposes and not for the purposes of profit and, therefore, requested for exemption. This application was processed, inquiries were made and a survey was also conducted on 13th November, 2007, based on which, a show cause notice was issued to show cause as to why the application should not be rejected on the ground that the society was diverting its income to the members of the society and, therefore, the society was not acting as a non-profitable institution. The petitioner submitted its reply denying any diversion of income. The Commissioner of Income Tax after considering all aspects of the matter issued an order dated 28th February, 2008 rejecting the application of the petitioner for grant of exemption under Section 10(23C)(vi) of the Act. The petitioner, being aggrieved, filed Writ Petition No.1667 of 2008, which was allowed and the matter was remitted to the Commissioner to decide the matter afresh after considering the reply of the petitioner. The extract of the judgment of this Court is quoted hereunder:- "though in the impugned order it is stated 'a reply dated 24.12.2007 was received which has been considered but not found satisfactory' the Income Tax Officer has not disclosed any reason in his order to show as to why reply was not found satisfactory.";