* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 01.02.2011
% Date of decision : 10.02.2011
+ ITA No. 93 / 1999
DEPUTY DIRECTOR OF INCOME TAX... ... ... ... APPELLANT
Through : Mr.Sanjeev Sabharwal, Advocate
-VERSUS-
SHANTI DEVI PROGRESSIVE EDUCATION SOCIETY
... ... ... ... ... ... ... ... RESPONDENT
Through : Mr.Anoop Sharma and Mr.Manu K.Giri,
Advocates.
CORAM :
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER
1. Whether the Reporters of local papers
may be allowed to see the judgment? YES
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
SANJAY KISHAN KAUL, J.
1. The denial of exemption to the respondent/assessee
under Section 10(22) of the Income Tax Act, 1961 („IT
Act‟ for short) for the Assessment Year 1993-94 has
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 1 of 21
given rise to the present proceedings where the order of
the Assessing Authority and Commissioner of Income Tax
(Appeals) {„CIT(A)‟ for short} went against the
respondent/assessee while the majority view of the
Income Tax Appellate Tribunal („ITAT‟ for short)
members favoured the respondent/assessee. The
question of law framed by this Court vide order dated
11.05.2000 is as under:
“Whether the claim of the respondent for
exemption under Section 10(22) of the
Income Tax Act, 1961 was allowable?”
ASSESSMENT ORDER
2. It appears that when the assessment proceedings were
going on in respect of the Assessment Year 1993-94, a
question came to be raised in the Parliament regarding
taking money from parents of wards of the school on one
pretext or the other which in turn led to an investigation
in the case relating to the assessment year. This is
apparent from the assessment order for the relevant
year dated 29.03.1996.
3. There were three components which were closely
scrutinized by the Assessing Officer:
i) Admission Fee of Rs.7,12,000/-.
ii) Corpus Fund of Rs.17,24,085/-.
iii) Loan from parents amounting to Rs.10,85,000/-.
4. The assessment order dated 29.03.1996 records that
the Society had shown school fees, bus fees, magazine
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 2 of 21
income and other income in the Income & Expenditure
Account, but the admission fee of Rs.7,12,000/- was
taken to the balance sheet and it had not been explained
as to why this amount was being treated differently from
other amounts. The Corpus Fund had come from
students and there was no confirmation from the
assessee as to who were the donors regarding this fund
and thus a conclusion was reached that this could also
not be taken to the balance sheet. This Corpus Fund in
turn had two parts. One part is as received from parents
while the other part was stated to be collected by the
staff members by issuance of coupons amounting to
Rs.2,55,000/-. The loan amount is also stated to have
been taken from the parents on interest. The
confirmation was filed only from the parents to whom
money was refunded in the subsequent period
amounting to Rs.90,000/- and thus the remaining amount
of Rs.9,95,000/- remained unconfirmed which was
treated as income of the assessee. The assessment
order makes strong observations about the factum of the
Society no doubt carrying on education activity, but
public good being lost sight of on account of funds being
raised making it a „money making machinery rather than
a charitable institution‟.
ORDER OF CIT(A)
5. The respondent/assessee, faced with this assessment
order, preferred an appeal to the CIT(A). This appeal has
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 3 of 21
been dismissed vide order dated 30.09.1996 qua the
finding that the respondent/assessee was not entitled to
exemption under Section 10(22) of the said Act. The
CIT(A) took note of the funds having been collected at
the time of fresh admissions during the period
04.03.1993 to 16.03.1993 and the loans were taken
during the period December, 1992 to 31.03.1993. It was
found that both the Corpus Fund and the Loan Amount
were received from parents when admitting their children
and were thus forced on the parents in the name of
education. This was stated to be despite the fact that
there were funds available with the respondent/assessee
as it had fixed deposits with the banks amounting to
Rs.17,38,048/- as on 31.03.1993 apart from the bank
balance of Rs.3,05,520/-, loan and advances of
Rs.38,802/- and cash balance of Rs.15,483/- totaling to
Rs.20,50,000/-. A further fact taken note of by the CIT(A)
is the analysis of the plea of the assessee that loans and
donations were taken to make an additional structure.
6. In para (9), CIT(A) has somehow given a number of
findings, which in our considered view are not based on
evidence, relating to the person who was running the
school being Mr.R.S.Lugani, the then Principal of DPS,
who was a member of the managing committee and was
allegedly „a member who was known for making money
through educational institutions‟. The school building was
constructed by Ahluwalia Construction Co.(Pvt.) Ltd which
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 4 of 21
was stated to be a family concern of Ahluwalia who was
the President and a Member in the Society. No tenders
had been called for construction of the building. The third
aspect considered was that while the loans had been
taken from nationalized banks, deposits were maintained
with Nainital Bank, which is not a nationalized bank and
thus there was a possibility of members of the Executive
Body getting direct or indirect benefit from investment in
the private bank (the possibility of this „cannot be ruled
out‟). The educational institute was thus stated to be
running for profit motive and thus not entitled to
exemption under Section 10(22) of the IT Act.
7. The result was that Admission Fee of Rs.7,12,000/-,
Corpus Fund of Rs.17,24,005/- and loan raised of
Rs.9,95,000/- were treated as income of the
respondent/assessee.
ITAT PROCEEDINGS
8. The respondent/assessee thereafter filed an appeal
before the ITAT under Section 253 of the IT Act. This
gave rise to divergence of views between the Judicial
Member and the Accounting Member of the ITAT. The
opinion of the Judicial Member is dated 29.08.1997
holding that the Society existed for profit and thus the
case of the assessee was beyond the ambit of Section
10(22) of the said Act while the opinion of the Accounting
Member dated 25.03.1998 was to the contrary. On the
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 5 of 21
difference of opinion between the members, the
following point was referred to the President of the ITAT
under Section 255(4) of the IT Act.
“Whether, on the facts of the case and in
accordance with the provisions of law, the
assessee‟s claim for exemption under Section
10(22) of the I.T.Act, 1961 was tenable as
held by the Vice President or the claim under
the said section as not allowable as per the
view of the Judicial Member?”
9. The President concurred with the opinion of the
Accounting Member and thus the respondent/assessee
succeeded.
10. The appellant/Department has filed the present
appeal under Section 260(A) of the IT Act arising from the
order dated 30.11.1998 passed in favour of the assessee
as per the majority opinion and the question of law, as
noticed above, was framed to be answered by this Court
vide order dated 11.05.2000.
11. It would be appropriate to first reproduce the
relevant provision under Section 10(22) of the IT Act as it
stood for the relevant Assessment Year in question:
“SECTION 10 INCOMES WHICH DO NOT
FORM PART OF TOTAL INCOME
.. .. .. .. ..
(22) Any income of a university or other
educational institution, existing solely for
educational purposes and not for purposes of
profit;”
OPINION OF JUDICIAL MEMBER ITAT/DEPT. STAND
12. Learned counsel for the appellant/Department
sought to adopt the opinion of the Judicial Member as his
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 6 of 21
submissions. Learned counsel for the appellant could not
dispute that exemption was granted under Section
10(22) of the IT Act to the respondent/assessee for the
preceding years and learned counsel for the
respondent/assessee submitted that it was so even for
the subsequent years, but sought to contend that neither
the principle of res judicata nor the rule of estoppel is
applicable to the assessment proceedings in view of the
observations in Dhansiram Agarwalla v. Commissioner of
Income-Tax; 217 ITR 4 (Gauhati). It was, however, held
that the rule of consistency does apply to the
proceedings. The basic principle advanced was that the
tax concessions afforded to the Institutions like the
respondent/assessee involved sacrifice of public revenue
and thus the concessions should not be abused. If the
donations received by the respondent/assessee are not
voluntary, the dominant intent is to earn profit and
merely non distribution of profits to members or applying
the profits to the educational activity would not be
sufficient to claim exemption by relying upon the
observations in Safdarjung Enclave Education Society v.
Municipal Corporation of Delhi; AIR 1992 SC 1456. It was
not disputed by learned counsel that if certain surplus
results on the working of the Society, it cannot be said
that the institution run by it is for the purpose of profit so
long as no person or individual was entitled to any
portion of the said profit and the said profit was utilized
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 7 of 21
for the promotion of the objects of the institution.
However, the test which was stated to apply was whether
the predominant object of the activity involved is to
subserve the charitable purpose or to earn profit by
referring to the judgment in the case of Additional
Commissioner of Income Tax, Gujarat v. Surat Art Silk
Cloth Manufacturers Association; (1980) 121 ITR 1 (SC).
As contra to this, where the profit making is the
predominant object of the activity, the purpose though
an object of general public utility, would cease to be a
charitable purpose. Thus, the pre-dominant object of the
activity is the key factor as canvassed by the learned
counsel. Similarly, reliance placed on Aditnar
Educational Institution v. Additional Commissioner of
Income Tax; 224 ITR 310 (SC) was for canvassing an
interpretation of Section 10(22) of the IT Act that the
availability of the exemption should be evaluated each
year to find out whether the institution existed during the
relevant year solely for educational purpose and not for
the purpose of profit. Any incidental surplus would, of
course, not make it a profit making object, but the acid
test is whether on overall view of the matter, the object
is to make the profit. In such an appraisal, the distinction
between the corpus, the object and the powers of the
concerned entity have to be borne in mind. The minority
view has strongly relied upon the provisions of Sections
146 and 155 of the Delhi School Education Act, 1973
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 8 of 21
{„DSC Act‟ for short) which prohibit charging or collection
of any admission fee or compulsory donations. It is not in
dispute that these provisions apply to an aided institution
and the respondent/assessee is an unaided institution.
However, learned counsel emphasized that the Judicial
Member took a cue from the provisions relating to aided
institutions for applying to the respondent/assessee.
Another distinction which is sought to be made by the
minority view is between carrying on an education
activity and carrying on the said activity with a charitable
object. Thus, every educational activity is not with a
charitable object as observed in Safdarjung Enclave
Education Society v. Municipal Corporation of Delhi‟s
case (supra). Thus, if there is apprehension that but for
the contribution some adverse consequence would
follow, it ceases to be a voluntary act.
13. The minority view thereafter proceeds on the
premise that non distribution of profits or applying the
profits to education is not enough to claim exemption
and a charitable purpose is necessary with absence of
quid pro quo. The surplus was stated not to be arising
incidentally, but on a calculated basis.
14. The aforesaid is the sum and substance of the
pleas advanced on behalf of the appellant/Department.
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 9 of 21
OPINION OF THE ACCOUNTING MEMBER/STAND OF
ASSESSEE
15. On the other hand, learned counsel for the
respondent/assessee inter alia sought to rely upon the
opinion of the Accounting Member and the opinion of the
President both of which went in its favour. The Society
was stated to be existing solely for educational purpose,
as was apparent from its objects, and not for profit
making. Reliance was also placed on the Circular
F.No.194/16-17-IT (AI) issued in respect of the
educational institutions which show some surplus. If the
educational institutions are owned by the trusts of
societies and such surplus is used for educational
purposes only, it could be held that the institution is
existing for educational purpose and not for the purpose
as observed in the circular. The profit motive would
come into the picture if the surplus can be used for non
educational purpose.
16. The Accounting Member referred to the view of
the Supreme Court in Aditnar Educational Institution v.
Additional Commissioner of Income Tax‟s case (supra) to
come to the conclusion that the Supreme Court had not
disapproved the proactive approach of collecting funds
through donations, gifts, etc. so long as they were
ploughed back into the system itself i.e. for imparting
education. Thus, if the overall object is not to make
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 10 of 21
profit, the benefit under Section 10(22) of the IT Act
should be available to the assessee.
17. An important aspect taken note of is that there
was nothing on record to show any calculated move on
the part of the assessee to earn profit or surplus since
audited accounts of the previous assessment year 1992-
93 reflected a surplus as was the position in the
assessment year 1993-94 and the surplus has resulted
only from the educational activities. The facts existing in
the assessment year 1993-94 were also present in the
assessment year 1992-93 and thus there was no change
in the facts so as to take a different view breaching the
rule of consistency. The provisions of DSC Act have been
observed to be not applicable as they pertain to an aided
institution while the respondent/assessee undisputedly
was an unaided institution. The opinion of the Assessing
Officer and the CIT(A) has been observed to be based
more on suspicion and doubt with absence of hard facts
and evidence. Observations have been made about
comments on the persons constituting the Managing
Committee which were expunged as there was no
material. There was no material placed to show that
Ahluwalia Construction Co.(Pvt.) Ltd had carried out
construction at rates above the market rates or there had
been any diversion of funds to the said Company.
Undisputedly, the school building was under construction
since earlier years. Similarly, observations on deposits
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 11 of 21
being made with a non-nationalized bank resulting in
possibility of diversion of funds were based on whims and
fancies of the tax authorities. The loans and deposits
taken from the parents were mainly for liquidating
liabilities of the bank loans, creditors and refurbishing
funds of the school as at the beginning of the year, the
Society had over Rs.21.41 lakhs as bank loans resulting
in interest burden. The loans were thus availed of from
the parents on interest at the rate of 8 per cent per
annum for three years or earlier if the student leaves the
school before the date of maturity.
18. The opinion of the Accounting Member takes
note of the nominees of the Education Directorate of the
Delhi Government being on the Managing Committee as
also representatives of the parents, teachers and
educationists, etc.
19. In the end, it was emphasized that an
educational institution which wants to give upgraded
facilities for education, sports, auditorium, swimming
pool etc. should not be compelled to reduce the
standards of education by preventing funds being raised
for such upgradation of infrastructure and facilities.
OPINION OF THE SR. VICE PRESIDENT, ITAT/STAND OF
ASSESSEE
20. Now coming to the opinion of the Senior Vice
President of the ITAT to whom the reference was made
by the President in view of divergence of views between
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 12 of 21
the members, the same proceeds on the premise that
exemption under Section 10(22) of the IT Act has to be
calculated each year to find out whether the institution
existed during the relevant assessment year solely for
educational purpose and not for the purpose of profit
making. The acid test laid down and adopted is stated to
be whether in an overall view of the matter, the object of
the institution is to make profit and for the said purpose,
the distinction between the corpus, the object and
powers of the concerned entity has to be maintained.
The Memorandum of Association of the
respondent/assessee set out the objects, scope and
powers of the Society; it is in view of these objects, which
are charitable in character, that the respondent/assessee
claimed and was permitted registration under Section
12A of the IT Act and was allowed exemption under
Section 10(22) of the IT Act till the immediate preceding
year i.e. the assessment year 1992-93. There had been
no change in the Memorandum of Association and rules
and regulations during the relevant year and thus the
conclusion was reached that there was no change in the
predominant object of the activity, which is solely for
educational purposes, or that the Society had started
running for profit motive. The Governing Body of the
Society had been authorized to raise funds for promotion
of objects of the Society and the monies collected
towards admission fees, donations and loans were within
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 13 of 21
the power given under the Memorandum of Association.
The Sr.Vice President agreed with the view of the
Accounting Member that the provisions of the DSC Act
could not apply as the provisions themselves stated that
they would be applicable to aided institutions and the
DSC Act clearly carved out a distinction between the
aided and unaided institutions (the respondent/assessee
being an unaided institution)
21. It was found that the respondent/assessee had
incurred expenses for infrastructure, for establishing and
maintaining schools and was intending to open new
branches over and above the existing two schools
applying these funds for the said purpose and thus it was
found that the assesssee could not be stated to have
collected funds beyond its legitimate needs. Merely
because there was accumulation of funds, no part of the
profit/income had been diverted for the purposes other
than the educational purpose. The provisions of Section
10(22) of the IT Act require that there should be no profit
motive which is a narrower distinction than saying that
there should be a charitable purpose.
ADDITOINAL CASE LAW REFERRED TO ON BEHALF OF
THE ASSESSEE
22. Learned counsel for the respondent/assessee
strongly emphasized on the principle of consistency
which was said to be breached by the Assessing
Authority for the relevant assessment year and referred
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 14 of 21
to certain judgments in respect of the educational
institutions. The Division Bench of this Court in
Commissioner of Income Tax v. Lagan Kala Upvan; 259
ITR 489 (Delhi) emphasized that the conditions laid down
in Sections 11 and 13 of the IT Act were not relevant for
purposes of Section 10(22) of the IT Act and where an
educational institution was running for the last number of
years and the assessee was being granted exemption in
prior years, the assessee was entitled to exemption for
the relevant year.
23. Explaining the principles of res judicata, which
were not strictly applicable, it was observed that where a
fundamental aspect continuing during the different
assessment years has been found as a fact one way or
the other and the parties have allowed that position to be
sustained by not challenging the order, it would not at all
be appropriate to allow the position to be changed in the
subsequent years. A similar view has been taken in
Director of Income Tax v. Lovely Bal Shiksha Parishad;
266 ITR 349 (Delhi), Director of Income Tax (Exemption)
v. Moti Bagh Mutual Aid Education; 298 ITR 190 (Delhi)
and Director of Income Tax (Exemption) v. Manav Bharti
Institute of Child Education; 163 Taxman 50 (Delhi).
24. Learned counsel for the respondent/assessee
also strongly relied upon the judgment of the Division
Bench of this Court in Director of Income Tax (Exemption)
v. Raunaq Education Foundation; 294 ITR 76 (Delhi)
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 15 of 21
wherein It was held that the word „income‟ occurring in
Section 10(22) of the IT Act cannot be given a restrictive
meaning as the words „derived from‟ do not occur in
Section 10(22) of the IT Act and thus the word „income‟
must be given its natural meaning or the meaning
ascribed to it in Section 2(24) of the said Act.
25. In Commissioner of Income Tax v. Delhi Kannada
Education Society; 246 ITR 731 (Delhi), it was held that
the condition precedent for exemption for an educational
institution under Section 10(22) of the IT Act requires
that the income to be used for educational purpose and
not for profit. Merely because there is surplus, it could
not be said that the educational institution existed for
profit making. The entity may have income from different
sources, but if a particular income is from educational
institution which existed solely for educational purpose
and not for the purpose of profit, then the income would
be entitled to exemption and the income should be
directly relatable to educational activity. If profit is made
and such profit is applied only for spread of education, it
was entitled to exemption under Section 10(22) of the IT
Act. In Director of Income Tax v. Sir Shri Ram Education
Foundation;262 ITR 164 (Delhi), it was held that the
exemption under Section 10(22) of the said Act could not
be denied only on the ground that it was merely
providing financial assistance to the educational
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 16 of 21
institutions, but was not running those institutions by
itself.
CONCLUSION
26. We have considered all these opinions as well as the
submissions made by learned counsel for the parties.
We must at the inception itself note that the three
components scrutinized by the Assessing Officer are the
Admission Fee, Corpus Fund and the Loans taken from
parents. Thus it really can‟t be disputed that even the
source of funds is relatable to the activity of education.
It may be noticed that there are factual findings on the
loans having been availed of by the assessee from a
nationalized bank for the purpose of creating additional
infrastructure/schools and the three sets of amounts
have been addressed only towards the object of creating
additional infrastructure and easing the liability of the
assessee towards the interest burden of loan repayment.
What is pertinent to be taken note of is that there is no
finding or allegation of any diversion of these funds for
the purpose other than carrying on educational activity.
There is no diversion of funds to the individual members
or taking away of profits for some other activity. It does
appear to us that the Assessing Authority appears to
have been weighed down by the factum of some
questions being raised in the Parliament about the
manner of collection of funds by the institutions. That
alone, would not suffice to deny the exemption under
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 17 of 21
Section 10(22) of the IT Act. There is in fact no material
to show or a complaint that there has even been any
coercive process to recover these amounts.
27. It cannot be lost sight of that if an institution has to
expand, additional infrastructure has to be created,
quality education has to be imparted, all these activities
require funds. There may be an original corpus of the
Society but thereafter the corpus for such activity can be
created only through voluntary donations either from any
philanthropist or through collection of funds in the
process of admission. We are not concerned with the
morality of the issue while deciding whether exemption
has to be granted under Section 10(22) of the IT Act as
all that is required is the absence of profit motive. There
is nothing brought on record to show such a profit
motive. The opinion of the CIT(A) seems to have
traversed a completely divergent path which had no co-
relation with the issue of exemption under Section 10(22)
of the IT Act. Personal prejudices seem to have stepped
in when allegations were made without any material
against certain members (which have rightly been struck
off by the majority opinion of ITAT) alleging that these
members were well known for making profit through
educational institutions. We also fail to appreciate the
doubts cast or the possibilities expressed about there
being something more to it in view of the funds being
deposited in private banks. The opinion is completely
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 18 of 21
based on surmises and conjectures as it seems to
suggest that merely because funds were in a private
bank, there may have been divergence of funds to the
members of the Society. Similarly, the factum of
construction being carried out by Ahluwalia Construction
Co.(Pvt.) Ltd, stated to be a family concern of the
President, was not material as there was no allegation of
any inflated cost of construction or unreasonable profits
being derived from the same by third parties as a mode
of divergence of funds.
28. The reliance on the provisions of DSC Act is
clearly misplaced. A bare reading of the Sections relied
upon show that Sections 146 and 155 of the DSC Act are
applicable only to aided institutions. Thus prohibition
against taking donations etc. is clearly applicable to
these aided institutions where Government is giving
finances for running of the institutions. They have no
application to the unaided institutions. The majority view
consisting of the Accounting Member of the ITAT and the
Senior Vice President, in our considered view, correctly
appreciates the legal position and applies it to the facts
of the present case. The institution/Society is existing
only for educational purpose and not for the purpose of
profit making.
29. The legal position in this behalf has been
succinctly culled out in a number of judgments both of
this Court and the Supreme Court. In this behalf,
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 19 of 21
guidance can be taken from the expression of opinion by
the Supreme Court in Aditnar Educational Institution v.
Additional CIT‟s case (supra). It is clear that any
incidental surplus could not convert the object to profit
making. Similarly, observations in Safdarjung Enclave
Education Society v. Municipal Corporation of Delhi‟s
case (supra)‟s case (supra) also emphasize that so long
as the profits are utilized for promotion of objects of the
institution, the benefit of exemption would be available.
It certainly can‟t be said that the object has turned into
profit motive in the present case. A number of
judgments referred to in support of this line of reasoning
have been discussed aforesaid as cited by the assessee
including Safdarjung Enclave Education Society v.
Municipal Corporation of Delhi‟s case (supra), Additional
Commissioner of Income Tax, Gujarat v. Surat Art Silk
Cloth Manufacturers Association‟s case (supra),
Commissioner of Income Tax v. Delhi Kannada Education
Society‟s case (supra) & Director of Income Tax v. Sir Shri
Ram Education Foundation‟s case (supra). All that is
necessary to state is that a common thread runs through
them and consequently, in our opinion, Section 10(22) of
the IT Act should not be given a restrictive meaning and
so long as the income is used for fulfilling educational
purpose, the exemption should be available. The
educational institutions should exist solely for
educational purpose and not for making profit.
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 20 of 21
30. There is also a second aspect to the present
case arising from the principles of consistency. It is not in
dispute that the Society was duly registered under
Section 12A of the said Act on the basis of its
Memorandum of Association. There has been no change
in the Memorandum of Association. The Society
continues to run the schools which is the object with
which the Society was set up. The exemption under
Section 10(22) of the IT Act has been available to the
respondent/assessee for a number of years prior to the
assessment years in question and even for the
subsequent years as stated by learned counsel for the
assessee. It is in these circumstances that the legal
position set out on the principle of consistency would
come into play as observed in Commissioner of Income
Tax v. Lagan Kala Upvan‟s case (supra) and Director of
Income Tax v. Lovely Bal Shiksha Parishad‟s case (supra).
31. We are thus of the unequivocal view that the
respondent/assessee is entitled to exemption under
Section 10(22) of the IT Act as per the majority opinion of
the ITAT and thus answer the question in favour of the
respondent/assessee and accordingly dismiss the appeal
of the appellant/Department.
SANJAY KISHAN KAUL, J.
FEBRUARY 10, 2011 RAJIV SHAKDHER, J. dm
_____________________________________________________________________________________________
ITA No. 93 of 1999 Page 21 of 21