COMMISSIONER OF INCOME TAX Vs. SINDHU VIDYA MANDAL TRUST

JUDGEMENT

(1.) The question which arises in this reference is :

(2.) The assessee which is known as Sindhu Vidya Mandal Trust, Baroda, runs a primary and secondary school at Baroda. The object for which the assessee trust is established are :

(3.) The assessee derives income from there sources, namely, the primary and secondary school run by it, interest on bank deposits and donations. The assessee filed its return of income for the assessment year 1971-72, claiming that its income was exempt from payment of income-tax under s. 10(22) of the Act. The ITO, however, rejected the claim of the assessee and proceeded to compute the total income of the assessee for the assessment year 1971-72, in the light of the provisions of s. 11(1) of the Act. He held that the assessee-trust's income to extent of Rs. 8,400 which was not applied for the purpose of the trust was liable to be taxed. Feeling aggrieved by the assessment framed by the ITO, the assessee carried the matter in appeal before the AAC. The AAC reversed the finding recorded by the ITO holding that the income derived by the assessee-trust was exempt under s. 10(22) of the Act. In his view the assessee-trust was an organisation existing for promotion of education and, therefore, it was an educational institution, whose income is exempt under s. 10(22) of the Act. The Revenue carried the matter in appeal before the Income-tax Appellate Tribunal (hereinafter referred to as the "Tribunal)." After enumerating the objects of the assessee-trust, adverted to above, the Tribunal held that the assessee-trust was a body which existed solely for educational purposes and not for purpose of profit. The Tribunal referred to the Oxford Dictionary for the meaning of the word "institution" and held that having regard to the objects of the assessee-trust, it was an educational institution within the meaning of the word "institution" and held that having regard to the objects of the assessee-trust, it was an educational institution within the meaning of s. 10(22) of the Act. In the result, it upheld the view taken by the AAC. The Revenue has challenged the view taken by the Tribunal and at its instance the following questions have been referred to us for our opinion under s. 256(1) of the Act :