IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). 9593/2013 CHIEF COMMISSIONER OF INCOME TAX, CHANDIGARH APPELLANT(S) VERSUS ST. PETER'S EDUCATIONAL SOCIETY, CHANDIGARH RESPONDENT(S) WITH C.A. No. 9594/2013, C.A. No. 9595/2013, C.A. No. 9596/2013, C.A. No. 9597/2013, C.A. No. 9598/2013, C.A. No. 9599/2013, C.A. No. 9600/2013, C.A. No. 9601/2013, C.A. No. 9602/2013, C.A. No. 9603/2013, C.A. No. 9604/2013, C.A. No. 9605/2013, C.A. No. 9606/2013, C.A. No. 9607/2013, C.A. No. 9608/2013, C.A. No. 9609/2013, C.A. No. 9610/2013, C.A. No. 9611/2013, C.A. No. 9612/2013, C.A. No. 9613/2013, C.A. No. 9614/2013, C.A. No. 9615/2013, C.A. No. 9616/2013, C.A. No. 9617/2013, C.A. No. 9618/2013, C.A. No. 9619/2013, C.A. No. 9620/2013, C.A. No. 9621/2013, C.A. No. 9622/2013, C.A. No. 9623/2013, C.A. No. 9624/2013, C.A. No. 9625/2013, C.A. No. 9626/2013, C.A. No. 9627/2013, C.A. No. 9628/2013, C.A. No. 9629/2013, C.A. No. 9630/2013, C.A. No. 9631/2013, C.A. No. 9632/2013, C.A. No. 9633/2013, C.A. No. 9634/2013, C.A. No. 9635/2013, C.A. No. 9636/2013, C.A. No. 9637/2013, C.A. No. 9638/2013, C.A. No. 9639/2013, C.A. No. 9640/2013, C.A. No. 9641/2013, C.A. No. 9642/2013, C.A. No. 5957/2014,C.A. No. 5040/2016 @ SLP(C) No. 12062/2016. O R D E R Leave granted in SLP(C) No. 12062 of 2016. It is not disputed by learned Solicitor General appearing for Income Tax Department and various counsel who have appeared for respondents/assessees in these appeals that issue involved in these appeals is squarely covered by judgment Signature Not Verified Digitally signed by ASHWANI KUMAR Date: 2016.06.07 of this Court in Queen's Educational Society vs. Commissioner of 17:13:03 IST Reason: Income Tax (2015) 8 SCC 47. matter pertains to exemption 2 to educational institutions (assessees herein) under Section 10(23C) of Income Tax Act. In said judgment, Court summarised legal position as under: 11. Thus, law common to Section 10(23C) (iiiad) and (vi) may be summed up as follows: (1) Where educational institution carries on activity of education primarily for educating persons, fact that it makes surplus does not lead to conclusion that it ceases to exist solely for educational purposes and becomes institution for purpose of making profit. (2) predominant object test must be applied purpose of education should not be submerged by profit making motive. (3) distinction must be drawn between making of surplus and institution being carried on for profit . No inference arises that merely because imparting education results in making profit, it becomes activity for profit. (4) If after meeting expenditure, surplus arises incidentally from activity carried on by educational institution, it will not be cease to be one existing solely for educational purposes. (5) ultimate test is whether on overall view of matter in concerned assessment year object is to make profit as opposed to educating persons. We may record at this stage that there was difference of opinion among various High Courts on aforesaid issue. While summarizing law, this Court approved judgments of Punjab and Haryana High Court, Delhi and Bombay High Courts and reversed view taken by Uttarakhand High Court. Insofar as judgment of Punjab and Haryana High Court is concerned, it was 3 given in case of Pinegrove International Charitable Trust v. Union of India (2010) 327 ITR 73. relevant para in this behalf which also states as to how such cases are to be dealt with reads as under: 25. We approve judgments of Punjab and Haryana, Delhi and Bombay High Courts. Since we have set aside judgment of Uttarakhand High Court and since Chief CIT s orders cancelling exemption which were set aside by Punjab and Haryana High Court were passed almost solely upon law declared by Uttarakhand High Court, it is clear that these orders cannot stand. Consequently, Revenue s appeals from Punjab and Haryana High Court s judgment dated 29.1.2010 and judgments following it are dismissed. We reiterate that correct tests which have been culled out in three Supreme Court judgments stated above, namely, Surat Art Silk Cloth, Aditanar, and American Hotel and Lodging, would all apply to determine whether educational institution exists solely for educational purposes and not for purposes of profit. In addition, we hasten to add that 13th proviso to Section 10(23C) is of great importance in that assessing authorities must continuously monitor from assessment year to assessment year whether such institutions continue to apply their income and invest or deposit their funds in accordance with law laid down. Further, it is of great importance that activities of such institutions be looked at carefully. If they are not genuine, or are not being carried out in accordance with all or any of conditions subject to which approval has been given, such approval and exemption must forthwith be withdrawn. All these cases are disposed of making it clear that revenue is at liberty to pass fresh orders if such necessity is felt after taking into consideration various provisions of law contained in Section 10(23C) read with Section 11 of Income Tax Act. In all those appeals which have come from High Court of Punjab and Haryana and filed by Department of Income Tax except one from Gujarat High Court, High Court has followed its 4 aforesaid judgment in Pinegrove International Charitable Trust. Since this view stands approved, all these appeals are dismissed. We, however, make it clear that observations made in para 25, reproduced above, shall apply in these cases. One appeal is from Gujarat High Court which has also followed view taken by Punjab and Haryana High Court in Pinegrove International Charitable Trust, which also stands dismissed. We also make it clear that observations made in para 25 in Queen's Educational Society vs. Commissioner of Income Tax (2015) 8 SCC 47 shall be followed. ......................J. [A.K. SIKRI] ......................J. [R.K.AGRAWAL] NEW DELHI; MAY 10, 2016. 5 ITEM NO.34 COURT NO.12 SECTION IIIA S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS Civil Appeal No(s). 9593/2013 CHIEF COMMNR OF INCOME TAX, CHANDIGARH Appellant(s) VERSUS ST. PETER'S EDUCATIONAL SOC., CHANDGH Respondent(s) (with interim relief and office report) WITH C.A. No. 9594/2013 Office Report) C.A. No. 9595/2013 Office Report) C.A. No. 9596/2013 Office Report) C.A. No. 9597/2013 Office Report) C.A. No. 9598/2013 Office Report) C.A. No. 9599/2013 Office Report) C.A. No. 9600/2013 Office Report) C.A. No. 9601/2013 Office Report) C.A. No. 9602/2013 Office Report) C.A. No. 9603/2013 Office Report) C.A. No. 9604/2013 Office Report) C.A. No. 9605/2013 6 Office Report) C.A. No. 9606/2013 Office Report) C.A. No. 9607/2013 Office Report) C.A. No. 9608/2013 Office Report) C.A. No. 9609/2013 Office Report) C.A. No. 9610/2013 Office Report) C.A. No. 9611/2013 Office Report) C.A. No. 9612/2013 Office Report) C.A. No. 9613/2013 Office Report) C.A. No. 9614/2013 Office Report) C.A. No. 9615/2013 Office Report) C.A. No. 9616/2013 Office Report) C.A. No. 9617/2013 Office Report) C.A. No. 9618/2013 Office Report) C.A. No. 9619/2013 Office Report) C.A. No. 9620/2013 Office Report) C.A. No. 9621/2013 Interim Relief and Office Report) C.A. No. 9622/2013 Office Report) 7 C.A. No. 9623/2013 Office Report) C.A. No. 9624/2013 Interim Relief and Office Report) C.A. No. 9625/2013 Office Report) C.A. No. 9626/2013 Office Report) C.A. No. 9627/2013 Office Report) C.A. No. 9628/2013 Office Report) C.A. No. 9629/2013 Office Report) C.A. No. 9630/2013 Office Report) C.A. No. 9631/2013 Office Report) C.A. No. 9632/2013 Office Report) C.A. No. 9633/2013 Office Report) C.A. No. 9634/2013 Office Report) C.A. No. 9635/2013 Office Report) C.A. No. 9636/2013 Office Report) C.A. No. 9637/2013 Office Report) C.A. No. 9638/2013 Office Report) C.A. No. 9639/2013 Office Report) C.A. No. 9640/2013 Office Report) 8 C.A. No. 9641/2013 Office Report) C.A. No. 9642/2013 Office Report) C.A. No. 5957/2014 Office Report) SLP(C) No. 12062/2016 Office Report) Date : 10/05/2016 These matters were called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE R.K. AGRAWAL For Appellant(s) Mr. K. Radha Krishnan, Sr. Adv. Ms. Anita Sahani, Adv. Mr. Arjit Prasad, Adv. Ms. Purnima Bhatt, Adv. Mrs. Anil Katiyar,Adv. Mr. B. V. Balaram Das,Adv. For Respondent(s) Ms. Sujata Kurdukar,Adv. Mr. Satyen Sethi, Adv. Mr.Arta Trana Panda, Adv. Mr. Rohit Kaura, Adv. Mr. Rajiv Sharma, Adv. Mr. Arna Das, Adv. Mr. Rameshwar Prasad Goyal,Adv. Mr. Pankaj Jain, Sr. Adv. Mr. Gaurav Mittal, Adv. Mr. Deepanshu Jain, Adv. Ms. Namita Choudhary,Adv. Mr. Mayank Nagi, Adv. Ms. Mahua Kalra,Adv. Ms. Husnal Syali, Adv. Mr. Subramonium Prasad,Adv. Mr. Nikhil Goel,Adv. Ms. Naveen Goel, Adv. Mr. Ashuthosh, Adv. Dr. Rakesh Gupta, Adv. 9 Mr.Somil Agarwal, Adv. Mr. Ambhoj Kumar Sinha,Adv. Ms. Monika Ghai, Adv. Mr. Arun Kumar Beriwal,Adv. Ms. Jyoti Mendiratta,Adv. Mr. Pawanshree Agrawal,Adv. Mr. Akarsh Garg, Adv. Mr. Prabhat Kaushik, Adv. Mr. Pankaj Kumar, Adv. Mr. Rakesh Kumar,Adv. For M/s. K.G. Bangal & Co. Mr. Ashok K. Mahajan,Adv. Mr. Vipin Gogia, Adv. Mr. shish Agarwal, Adv. Ms. Jaspreet Gogia,Adv. Mr. Bhagabati Prasad Padhy,Adv. Mr. Satyendra Kumar,Adv. Ms. Shirin Khajuria,Adv. Mr. S. K. Sabharwal,Adv. Mr. Purvish Jitendra Malkan,Adv. Mr. Vimal Chandra S. Dave,Adv. Mr. Ajay Vohra, Sr. Adv. Ms. Kavita Jha,Adv. Mr. Kamal Mohan Gupta,Adv. Mr. Aftab Ali Khan,Adv. Mr. M.Z. Chaudhary, Adv. Mr. Ali Safeer Faroozi, Adv. Mr. Syed Imtiyaz Ali, Adv. Ms. Garima Prashad,Adv. Mr. T. Mahipal,Adv. Mr. Amit Yadav, Adv. Mr. Rohit Kaura, Adv. Mr. Rajiv Sharma, Adv. 10 Ms. Sujata Kurdukar, Adv. Mr. Shishir Deshpande,Adv. Mr. Bharvava V. Desai, Adv. Mr. Rahul Gupta, Adv. UPON hearing counsel Court made following O R D E R Leave granted in SLP(C) No. 12062 of 2016. Civil Appeals are dismissed in terms of signed order. Interlocutory application(s)pending, if any, shall stand disposed of accordingly. (Ashwani Thakur) (Tapan Kr. Chakraborty) COURT MASTER COURT MASTER (Signed order is placed on file) Chief Commissioner of Income-tax, Chandigarh v. St. Peter's Educational Society