1980-VIL-07-ITAT-DEL

Equivalent Citation: TTJ 010, 481

Income Tax Appellate Tribunal DELHI

Date: 30.09.1980

INCOME TAX OFFICER.

Vs

DELHI BUREAU OF TEXT BOOKS.

BENCH

Member(s)  : Bishan Lal., Sukh Dev Bahl.

JUDGMENT

2. The assessee is a Society registered under the Societies Registration Act, 1960 vide certificate dt. 20th March, 1970. The aims and objectives of the society as embodied in the Rules and Regulations Memorandum of Association are as under:

"4. The Bureau is established for the attainment of the following aims and objectives:

(1) To aid and promote the advancement of education particularly elementary and secondary education through production of high quality text books and other instructional material such as teachers hand-books, work books etc.

(2) To arrange for printing, publishing, stocking and distribution of approved text books and other teaching, learning materials.

(3) To encourage through training or otherwise authors and writers of text books and other teaching material.

(4) To undertake evaluation and research for improvement of curricula, text books and other instructional material.

(5) To make available at subsidised cost or free of cost or in some other suitable manner text books and other learning material to the children of economically weak families and similarly to make teaching material and aid available to teachers at subsidised cost or free of cost or in other suitable manner so as to promote better teaching in Delhi Schools with the prior approval of Delhi Admn., and

(6) To obtain manuscripts of subject text books prepared by the Text Book Branch of the Directorate of Education on such terms and conditions as may be determined by the Director of Education for printing, publishing and distribution in the Union Territory of Delhi."

The Rules and Regulations of the Society contain the following provision:

"4. Without prejudice to the generality of the provisions made in the preceding article, the Bureau shall have the full authority to perform the following functions:

(1) To borrow and raise money on loan, security, mortgage or pledge or in any other suitable manner with the prior approval of the Administrator of Delhi;

(16) To assist and advise the Delhi Administration, the Director of Education, Delhi, the State Institute of Education or other appropriate authorities in sanctioning school text books for standard I to VIII submitted by private authors or publishers under a prize scheme or on the basis of purchase of sole rights; and"

"7.(1) No one shall be eligible to be a Director if he is a salaried official of the Bureau."

"17.(1) The Income of the Society which shall be derived from the Government loans or sale of books or other sources shall be applied only towards the promotion and objectives of the Society, as laid down under this "Memorandum of Association."

"20. (1) The Society shall be dissolved in accordance with the provision of Societies Act of 1960, it shall not take place without the consent of Administrator of Delhi.

(2) Upon dissolution, assets and claims shall vest in the Administrator of Delhi."

The assessee Bureau was set up with an initial loan grant of Rs. 10,00,000 from the Ministry of Education, Govt. of India, who gave it a further loan of Rs. 15,00,000 for getting on to its feet and helping it to start its useful work quickly. An institution like the Bureau was considered essential by the Government of India as well as the Delhi Administration to ensure timely supply of prescribed text books at fair prices to the school students and to improve the quality of primary and secondary school education in the Delhi Schools. The entire Board of Directors of the Society and its Chairman are ex-officio being senior full time officers in the Delhi Administration and its Education Department.

3. For the asst. yr. 1971-72 the assessee was given the benefit of accumulation of its income under s. 11(2) on the basis of Form No. 10. This form is provided under r. 17 of the IT Rules, 1962 for giving notice for accumulation of income of charitable or religious trusts. A similar concession of accumulation as well as exemption of income on account of its application for repayment of loans taken for the objects of the Society was given in the asst. yr. 1972-73. The latter type of exemption was again given for the asst. yrs. 1973-74 and 1974-75. For these two years the concession of accumulation of income and consequent exemption under s. 11(2) was also extended to the assessee by condoning the delay in furnishing the notices of accumulation in Form No. 10 at the level of the Board. The income involved for the four years earlier to the present assessment was as under:

The CIT, Delhi-IV in his letter No. JE 3(106)/71/6079 dt. 25th Feb., 1972 addressed to the Chairman, Delhi Bureau of Text Books confirmed that donations made to it would be eligible for tax relief under s. 80G in the hands of the donees.

4. For the asst. yr. 1975-76 the previous year ended on 31st March, 1975. Even though for the asst. yrs. 1971-72 to 1974-75 the assessee was treated as a charitable society entitled to the benefits of s. 11 but in this year the ITO held that the Society would not be entitled to the benefits of s. 11. The reasons for changing the position in this year are given in paragraph 4 of the assessment orders:

"4. Assessment for the years 1971-72 to 1974-75 have since been framed holding the assessee society as a charitable Society entitled to benefits of s. 11. The ITO (Internal Audit) vide his D.O. No. IAP/VI/8831 dt. 28th March, 1978 has pointed out that the assessee has been wrongly allowed the benefits of s. 11 in those years as the Society is doing a regular business of publication of text books and is not charitable society within the meaning of s. 2(15) as interpreted by the Supreme Court in the cases of Lok Shikshana Trust and Indian Chambers of Commerce. I have examined the case carefully and find that the view expressed remedial section for earlier years is being taken separately."

The ITO examined the aims and objects of the Society and denied the benefit of s. 11 to the assessee for the following reasons which have been summarised in Paragraph 3 of the order of the CIT (A):

"(i) The first two objects are clearly of non-charitable nature as they provide about production, printing, publication, stocking and distribution of approved text books etc.

(ii) The other objects No. 3 to 6 cannot be said to be non-charitable, but this would not help the assessee as the Delhi High Court in case of CIT vs. Jaipur Charitable Trust (1), and the Rajasthan High Court in Laxmi Narain Nath Temple Trust vs. CIT (2), have held that in case a charitable society has more than one object, and even if one of the objects is of non-charitable nature, and there is nothing to prevent the society to apply its income/property on any of the objects, the society will not be entitled to benefits of s. 11.

(iii) Following the ratio of the Supreme Court's decision in the Loka Shikshana Trust's (6) case, the assessee cannot be considered to be educational society and its activity comes under the fourth wing of the definition of charitable purpose contained in s. 2(15) i.e., object of general public utility.

(iv) In the present case the assessee's only activity is publication and sale of text books etc., where huge profit has been earned from year to year. There is no provision in the Rules of the Society to indicate that it will carry on its activities in a way as not to have any profit.

(v) Following the ratio of Supreme Court's decision in Indian Chamber's (3) case and Dharmodayam Company's (4) case, the assessee cannot be considered to be charitable within the meaning of s. 2(15) as its object which of general public utility involved the carrying on of an activity for profit, namely, the business of publication and sale of text books and also as there is no restraint in the Bye Laws of the Society that it would not make profits."

The ITO made the assessment on 23rd Sept., 1978 and determined the total income of the assessee at Rs. 3,51,190.

5. Similarly for the asst. yr. 1976-77 for which the previous year ended on 31st March, 1976 the ITO denied the benefit of s. 11 to the assessee and by his order dt. 7th May, 1979 determined the total income at Rs. 4,50,000. Aggrieved by these orders, the assessee filed appeals to the CIT (A).

6. The first point made before the CIT (A) was that the sole and exclusive object of the assessee fall within the term "education" appearing in s. 2(15) as accepted by the Department in all the earlier years. Proceeding from this promise and without prejudice to its case that the assessee intended to facilitate the successful fulfilment of the main object. The CIT (A) observed that this was the stand taken by the Department in earlier years and in his view that stand was sound and valid. He, therefore, did not agree with the ITO that object No. 1, viz., the production of high quality text books and other instructional material such as teacher's handbooks, work-books, etc., and object No. 2, viz., the printing, publishing, supply and sale of such text books and other teaching, learning materials could be isolated from the main object stated in object No. 5 and by considering only these two grounds the Society could be branded as non-charitable. He further observed that the activity of making the prescribed text books available to promote better teaching in Delhi schools could not be performed without first performing the activities of production of high quality text-books and printing and distribution covered by Objects 1 and 2. He also observed that it was well settled that in order to be a valid and lawful charity it need not necessarily have an eleemosynary element, i.e., that it need not provide something for nothing or at a loss or even at less than the fair market prices. He referred to cl. 17(1) of the Rules and Regulations of the Society which lays down that the income of the Society shall be applied only towards the promotion and objects of the Society, as laid down under the Memorandum of Association. He thus held that the first two reasons given by the ITO to justify the denial of benefit under s. 11 to the assessee were not, therefore, sustainable.

7. Before the CIT (A) the ITO had taken the stand that the dominant and primary objects of the assessee would fall under the fourth category of s. 10(22). Two conditions necessary for claiming exemption under s. 10(22), (1) it must be an educational institution existing solely for education purposes and (2) it must not exist for purposes of profit. He observed that the condition No. 2 was also fulfilled because the society did not exist for purposes of profit. In this respect he referred to the judgment in Secondary Board of Education Orissa vs. ITO, Ward "E", Cuttack (5). He thus held that the Society was entitled to the exemption under s. 10(22). For all these reasons the CIT (A) reduced the assessed income in both the years to Nil. The Revenue is aggrieved by these orders of the CIT (A).

8. The following common ground of appeal has been raised in both the years:

"In the facts and in the circumstances of the case, the CIT (A) is not justified in granting exemption from tax of the income of the assessee under s. 10(22) and also under s. 11 r/w s. 2(15) of the IT Act."

The ld. Deptl. Rep. referred to the judgment in Sole Trustee, Loka Shikshana Trust vs. CIT, Mysore (6) and also the objects of the Society and pleaded that the object of the Society was not "education" within the meaning of s. 2(15) but the object of the assessee was "the advancement of any other object of general public utility". He submitted that the word "education" as defined in the aforesaid judgment connotes the process of training and developing the knowledge, skill, mind and character of students by normal schooling, and has not been used in the wide sense according to which every acquisition of further knowledge constitutes education. According to the ld. Deptl. Rep. like any other publishing house of books, the object of the assessee was to publish books. He further submitted that since the activity of the assessee of publishing books and distributing them was an activity for profit, the assessee was not covered by the definition of 'charitable purposes' contained in s. 2(15). He also referred to the judgments in Lakshmi Narain Nath Temple Trust vs. CIT (2) and CIT, New Delhi vs. Jaipur Charitable Trust (1) and pleaded that even if the assessee's one of the objects was of a non-charitable nature, the assessee would still not be entitled to the benefit under s. 11 r/w s. 2(15). According to him, the first and second objects of the Society pertaining to production, printing, publishing and distribution of approved text books and other teaching materials were of non-charitable nature. He submitted that the giving of money by the Government, the Board of Directors comprising the officers of the Delhi Administration and the fact that upon dissolution of the Society, the assets and claims shall vest in the Administrator of Delhi, were not relevant for purposes of determining whether the assessee was entitled to exemption under s. 11 r/w s. 2(15). He referred to paragraph 14 of the order of the CIT (A) for the asst. yr. 1975-76 and pleaded that the CIT (A) was in error in holding that the assessee was entitled to the exemption under s. 10(22). According to him, it was never the assessee's claim before the ITO that it was exempt under s. 10(22). He also submitted that the rule of res-judicata did not apply to the income-tax proceedings and, therefore, the fact that in the asst. yrs. 1971-72 to 1974-75 the assessee was treated as a charitable society entitled to the benefits of s. 11, would not stand in the way of the Department in holding that the aims and objects of the Society were not covered by the term "charitable purposes" used in s. 2(15). He also referred to the judgment in Addl. CIT, Gujarat vs. Surat Art Silk Cloth Manufacturers Association (7) and submitted that the judgment was not directly relevant. He, therefore, submitted that the orders of the CIT (A) should be reversed and those of the ITO for both the years should be restored.

10. The ld. counsel for the assessee supported the orders of the CIT (A). He first referred to s. 11(1) and submitted that the income of the Society was derived from property held under trust. He submitted that this fact was not in dispute. He then referred to the sub-cl. (4) of s. 11 which lays down that for the purposes of this section "property held under trust" includes a business undertaking so held. The point that he made was that the property of the Society was held under trust and the Society could run business for the purpose of carrying out a dominant object. He submitted that the production of high quality text books and other teaching materials and printing, publishing and distribution thereof were undertaken to promote the dominant object of the Society which was to aid and promote the advancement of education particularly elementary and secondary education through production of like high quality text books and other instructional material, such as, teachers hand-books, work-books etc. He then referred to s. 12A, and pointed out that Society was registered under s. 12A as charitable with the CIT vide Registration No. DLI (c)(1-10) 1793-74. A reference to the certificate was made in a letter dt. 7th Jan., 1979 addressed to the CIT (A). He pointed out that the pre-requisite for claiming the exemption under s. 12A was that provisions of ss. 11 and 12 were satisfied. He referred to the Certificate No. JE-3(106)/71/6079 dt. 25th Feb., 1972 granted by the CIT to the effect that donations made to the assessee will be eligible for tax relief under s. 80G. He then referred to the provisions of s. 2(15) and pleaded that the words "the carrying on of any activity for profit" were relevant for the fourth limb of the definition of 'charitable purposes' viz., the advancement of any other object of general public utility. He referred to the judgment in Addl. CIT, Gujarat vs. Surat Art Silk Cloth Manufacturers Association (7) and pointed out that the judgment in Indian Chamber of Commerce vs. CIT (3) had been overruled. He submitted that the real object of the Society was "education" but even if it was held that the object of the assessee was the advancement of any other object of general public utility, the real test to be applied was whether the predominant object of the activity involved in carrying out the object of general public utility was to sub serve the charitable purpose or to earn profit. He submitted that the main object of advancement of education was the predominant object and the printing and publishing of books was only an ancillary activity to carry out the main activity. He submitted that from whatsoever angle the activities of the assessee were looked at, it would be seen that the assessee was carrying on activities for charitable purposes. He then referred to s. 10(22) and pointed out that even before the ITO it was pointed out that the Tamil Nadu Text Book Society, which was carrying on activities as that of the assessee Society had been granted exemption and, therefore, the assessee should also be granted similar exemption. This fact, it was submitted, was not taken note by the ITO but it was specifically brought to the notice of the CIT (A) by way of ground No. 12 for the asst. yr. 1975-76. He also referred to the judgment in Secondary Board of Education, Orissa vs. ITO, Ward "E", Cuttack (5), wherein the Secondary Board of Education had been granted exemption under s. 10(22). He also further referred to the judgment in Katra Education Society vs. ITO, "A" Ward, Allahabad(8), wherein it was held that if an educational society was running educational institutions, there was no reason why it cannot be regarded as an educational institution under s. 10(22). He further referred to the judgment in Governing Body of Rangaraya Medical College vs. ITO, A-ward, Circle-I, Kakinada (9), wherein exemption under s. 10(22) was allowed to the society even though certain surplus assets arose from the operations, surplus was utilised for the purpose and for the promotion of the institution. He also referred to the judgment in 47 Tax Cases 321, 329 for making the point that when the use of law reports was for purposes of education it would be a logical corollary that the utilisation of text books was for advancement of education. He referred to the judgment in Addl. CIT, Mysore vs. A.L.N. Rao Charitable Trust (10), wherein the trustees could carry on business for the objects of the trust, namely, relief of the poor, provision of education and medical relief and exemption under s. 11 was granted to the assessee. He then submitted that it was only under s. 13 that the exemption under s. 11 could be denied. He referred to the assessment order for the asst. yr. 1973-74 wherein it is noted that the income would be accumulated and utilised for the charitable purposes. He pointed out that the earlier to the establishment of the Society the activities that the assessee was carrying on, used to be carried on by the Directorate of Education, Delhi Administration. He referred to cl. 3 of the Rules and Regulations which states that the assessee registered under the Societies Act, 1860 shall be having perpetual succession. He referred to cl. 17(1) of the Rules and Regulations which lays down that the income of the Society shall be applied only towards the promotion and objectives of the Society as laid down under this "Memorandum of Association". He submitted that the definition of the term "education" in the judgment in Sole Trustee, Loka Shikshana Trust vs. CIT, Mysore (6) will be of no hindrance in holding that the activities of the assessee were covered by the term "education" used in s. 2(15). He relied on the judgment in Addl. CIT, Gujarat vs. Surat Art Silk Cloth Manufacturers Association (7) and pleaded that profit making was not the real object of the assessee and the assessee was, therefore, entitled to the exemption claimed. He submitted that in Dharmadeepti vs. CIT, Kerala (1978) 114 ITR 454 (SC) also the income from Kuries was intended to be applied to the purpose of giving charity or promotion of the education and such income was held to be exempt under s. 11. For all these reasons he pledged that the orders of the CIT (A) should be confirmed.

11. The ld. Deptl. Rep. in reply submitted that judgment in 47 Tax Cases 321, 329, was countered by the judgment in Sole Trustee, Loka Shikshana Trust vs. CIT, Mysore.(6) He submitted that as there was no systematic schooling undertaken by the Society, it could not, according to him, be considered to be carrying on any activity for purpose of education. He submitted that the certificate granted by the CIT under s. 12A may not be taken as conclusive of the matter. He submitted that in Addl. CIT, Mysore vs. A.L.N. Rao Charitable Trust(10), the activity of charitable nature was not doubted and that judgment also did not help the assessee. Similarly in Karta Education Society vs. ITO, "A" Ward, Allahabad (8), the Society was running educational institutions whereas in the present case the assessee was not running any educational institution and that judgment also did not help the assessee. In Governing Body of Rangaraya Medical College vs. ITO, A-ward, Circle-I Kakinada (9) the object of the Society was to run a medical college and other ancillary institutions and that judgment also was not helpful to the assessee. He submitted that the fact that the assessee had supplied text books at subsidised rates was not established. He also pleaded that the fact that the accumulations of the Society would ultimately go towards the promotion and objectives of the Society would not establish that the activity of the assessee was carried for charitable purposes. He again reiterated that the orders of the ITO should be restored.

12. We have carefully considered the rival submissions. The controversy in this case is whether the aims and objects of the assessee are such that they should be covered by the definition "charitable purposes" given in s. 2(15). If it is held that the activities of the assessee are for the charitable purposes mentioned in s. 2(15), the assessee would be entitled to exemption under s. 11. The main object of the Society is to aid and promote the advancement of education and for this purpose the assessee had undertaken to produce, print, publish and distribute high quality text-books, work-books etc. It was also the object of the assessee to make available at subsidised cost or even at free of cost text books to children of economically weaker families and similarly to make teaching material available to teachers at subsidised cost or even free of cost so as to promote better teaching in Delhi schools. The submission made on behalf of the assessee is that the activities of the assessee are covered by the term "education" used in s. 2(15). This submission has found favour of the CIT (A). The submission of the Revenue, on the other hand, is that like any other publishing house, the assessee is printing and publishing books and this object could at best be considered the advancement of any other activity of general public utility but since the carrying on of this activity is for profit the assessee is not entitled to the exemption under s. 11. The term "education" has not been defined in the IT Act. This term came for consideration in the case of Sole Trustee, Loka Shikshana Trust vs. CIT, Mysore (6). In that case the objects of the trust were as under:

"2. The object of the trust shall be to educate the people of India in general and of Karnataka in particular by—

(a) establishing, conducting and helping directly or indirectly institutions calculated to educate the people by spread of knowledge on all matters of general interest and welfare;

(b) founding and running reading rooms and libraries and keeping and conducting printing houses and publishing or aiding the publication of books, booklets, leaflets, pamphlets, magazines, etc. in Kannada and other languages, all these activities being started, conducted and carried on with the object of educating the people;

(c) supplying the Kannada speaking people with an organ or organs of educated public opinion and conducting journals in Kannada and other language for the dissemination of useful news and information and for the ventilation of public opinion on matters of general public utility; and

(d) helping directly or indirectly societies and institutions which have all or any of the aforesaid objects in view."

The Supreme Court held that the object of the trust was not 'education' within the meaning of s. 2(15) but an object of general public utility. At page 241 of the Report the discussion on the word "education" is as under:

"The sense in which the word "education" has been used in s. 2(15) is the systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word "education" has not been used in that wide and extended sense according to which every acquisition of further knowledge, constitutes education. According to this wide and extended sense travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word "education" is used in cl. (15) of s. 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students of normal schooling."

The CIT (A) had gone into these observations very carefully, and has held that though the word "education" has not been given a wide meaning but it has not been confined to bare objects of teaching by teachers and learning by students in the class-room of a school, a college or university. In the opinion of the CIT (A), the assessee's objects undoubtedly cover the "the process of training and developing the knowledge, skill, mind and character of students by normal schooling," which according, to the Supreme Court, is meant by the word "education" used in s. 2(15). In our opinion, the CIT (A) has taken a very reasonable view. Though the assessee is not running any educational institution as such but all the same its aims and objects are to provide high quality text books and other instructional material such as teachers handbooks, work books etc. either at subsidised rates or even free of cost to the children of economically weaker sections of society and even similarly placed teachers. The activity of the assessee is directly connected with the education, because without the right type of text books provided by the Society, the imparting of education in the schools would not only become difficult but impossible. In the process of training and developing the knowledge, skill and character of students, the provisions of right type of text books forms an important part. We, therefore, find no reason why the Department should contend that by providing high quality text books to the students and instrumental material such as handbooks, workbooks to the teachers, the assessee should not be considered to be carrying on the activity for advancement of education. It is not disputed before us that the property of the assessee is held under trust. Since the property of the assessee is held under trust and since the assessee is carrying on the activity of education as provided under s. 2(15). We have no doubt in our mind that the assessee has been rightly granted exemption under s. 11 r/w s. 2(15).

13. We may also consider whether the question that if the activities of the assessee are not covered by the term "education" whether these activities are covered by the terms "the advancement of any other object of general public utility". The Revenue's case in fact is that the activities of the assessee are towards the advancement of any other object of general public utility. Even if we assume that the contention of the Revenue is correct, then also we are of the opinion that the assessee is still entitled to exemption under s. 11 r/w s. 2(15) because the object of the assessee is not to make any profits. The making of profits is incidental to the carrying on of the activities and the making of profit is not the predominant object of the assessee. The Supreme Court in Addl. CIT, Gujarat vs. Surat Art Silk Cloth Manufacturers Association (7) has held that the words "not involving the carrying on of any activity for profit" quality or govern only the last head of charitable purpose, namely, the advancement of any other object of general public utility. The true meaning of the words "not involving the carrying on of any activity for profit" is that when the purpose of trust or institution is the advancement of an object of general public utility, it is that object of general public utility and not its accomplishment or carrying which must not involve the carrying on of any activity for. So long as the purpose does not involve the carrying on of any activity for profit, the requirement of the definition would be met and it is immaterial how the monies for achieving or implementing such purpose are found, whether by carrying on an activity for profit or not. The test which has to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to subserve the charitable purpose or to earn profit. Where 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. But where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose merely because some profit arises from the activity. This judgment of the Supreme Court fully applies to the facts of this case, and even if we hold that the activities of the assessee are towards the advancement of any other object of general public utility, the assessee will still be entitled to exemption under s. 11 r/w s. 2(15) because the making of profit is only incidental to the carrying on the main objects and the making of profit is not the predominant object of the activity. In this judgment the Supreme Court has considered its earlier judgment and it is, therefore, not necessary to refer to the other judgments cited on behalf of the parties.

14. The next question that is required for consideration is whether the assessee is entitled to the exemption under s. 10(22). After considering the two conditions which are required to be fulfilled for claiming exemption under s. 10(22) and which are referred in paragraph 14 of the CIT (A) order, he has held that both the conditions are fulfilled and, therefore, the assessee is entitled to the exemption under s. 10(22). The CIT (A) has rightly relied on the judgment in Secondary Board of Education, Orissa vs. CIT, Ward "E" Cuttack (5). This judgment supports the assessee's case. We were also told that in the case of Tamil Nadu Text Book Society exemption has been granted to that society under s. 10(22). The letter F.No. 184/26/75-ITA-I dt. 19th Aug., 1975 of the Central Board of Direct Taxes reads as under:

"On a careful consideration of the facts involved, the Board is of the opinion that the Tamil Nadu Text Book Society would be an educational institution existing solely for the purpose of education within the meaning of s. 10(22) of the IT Act."

We are told that the assessee has also applied for a similar exemption to the Central Board of Direct Taxes but the application is pending. Be that as it may, since similar society in Tamil Nadu has been granted exemption under s. 10(22) we see no reason why the benefit of exemption should be denied to the assessee. We thus hold that the CIT (A) has rightly held that the assessee was entitled to exemption under s. 10(22). For the aforesaid reasons, we hold that the society is entitled to exemption under s. 11 r/w s. 2(15) and is also entitled to exemption under s. 10(22). We thus confirm the orders of CIT (A) and dismiss the Departmental appeals.

15. In the result, both the appeals are dismissed.

 

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