Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, the Tribunal has referred to this court the following question ; "Whether, on the facts and in the circumstances of the case, and on the correct legal scope of Section 10(22) of the Income-tax Act, 1961, the Tribunal was justified in holding that the assessee was not entitled to exemption under Section 10(22) in respect of the income from Mahadevi Birla Girls' High School and Mahadevi Birla Sishu Vihar ?"
(2.) The assessment year involved is 1972-73. The assessee is a trust which had been recognised as such under Section 11 for the purpose of exemption by the ITO. We shall presently refer to the relevant provisions of the trust deed. In Part IV of the return, the assessee had claimed exemption under Section 10(22) in respect of the income from Mahadevi Birla Girls' High School and Mahadevi Birla Sishu Vihar. The ITO rejected this claim on the ground that the section applied only to educational institutions. It would be proper in view of the controversy that we have to decide in this case to refer to the relevant portion of the order of the ITO. He observed, inter alia, as follows : "In Part IV of the return the assessee has claimed exemption under Section 10(22) in respect of the income of Rs. 17,374 from Mahadevi Birla Girls' High School and Mahadevi Birla Sishu Vihar. Section 10(22) exempts ' any income of a University or other educational institution, existing solely for educational purposes and not for purposes of profit'. The assessee is neither a University nor an educational institution. The assessee, being a trust, cannot avail of the exemption, since the section applies to an educational institution and not to a trust. The section exempts any 'income of' an educational institution and not any income from an educational institution. This shows that an educational institution must be the owner of the income. But, in the present case, the trust is the owner of the income and the educational institutions (schools) are the sources of the income in question. Another condition is that the institution must exist solely for educational purposes. But, in the instant case, the trust exists for other charitable/religious purposes also. For the aforesaid reasons, the claim for exemption under Section 10(22) cannot be allowed."
(3.) Thereafter, the ITO in his computation stated as follows : Amount of income applied for charitable or religious purposes comes to as under : JUDGEMENT_445_ITR136_1982Html1.htm;