By the Court.—The petitioner is society registered under the Socieities Registration Act with the Registrar of Societies, U.P. vide Registration Certificate No. 375/2001-02 dated 13.7.2001 valid upto 31.7.2006. The certificate was renewed on 19.12.2006 for a period of 5 years w.e.f. 31.7.2006. The society is running an educational institution by the name of C.P. Vidya Niketan Inter College at Kaimganj, Distt. Farrukhabad for students from Class-6 to Class-12 recognised by the U.P. Madhyamik Shiksha Parishad, Allahabad.

2. The society is registered with Income Tax Department as an association of persons with PAN No. AAAAC1150G and has been granted a registration certificate under Section 12A of the Income Tax Act. The society is regularly assessed to ‘Nil’ income by the Assessing Authority from 2003-04 to 2007-08. The returns filed by the society have been accepted regularly under Section 143 (1) of the Act.

3. By this writ petition the petitioner has prayed for quashing the order dated 27.5.2011 passed by the Chief Commissioner of Income Tax, Ghaziabad rejecting the petitioner-society’s application for exemption under Section 10 (23C) (vi) of the Act, and for a direction to the Chief Commissioner of Income Tax, Ghaziabad to issue the approval under Section 10 (23C) (vi) to the petitioner in terms of its application dated 5.5.2010.

4. We have heard Shri Navin Sinha, Sr. Advocate assisted by Shri Rahul Agarwal, learned counsel for the petitioner. Shri Dhananjay Awasthi appears for the income tax department.

5. The necessity of approval of the prescribed authority arose as in the assessment year the income of the petitioner society exceeded Rs. 1 crore. The petitioner society applied claiming that the society is existing solely for educational purposes and not for profit. The society is running the institution in the name of C.P. Vidya Niketan Inter College at Kaimganj, Distt. Farrukhabad. A notice was issued to the society on 13.5.2011. It was heard on 19.5.2011 on which date it was required to produce audit report alongwith other relevant details, documents and accounts. The application was rejected by the Chief Commissioner of Income Tax, Ghaziabad (the Prescribed Authority) on 27.5.2011 on the grounds;

(a) the application for approval under Section 10 (23C) (vi) is available to an educational institution existing solely for the purpose of imparting education, while the application has been made by a society having many activities that appear to be other than educational such as to make appropriate efforts for upliftment of public in social and cultural field etc., and

(b) the applicant has not filed the mandatory audit report under Rule 16CC (Form 10BB). As such the application is not maintainable.

6. As the order is not appellable, the society has filed this writ petition on the grounds that the rejection of petitioner’s application for the reason that it has many other objectives, which seemingly are not related to education, is arbitrary and contrary to the decision of this Court in Ewing Christian College Society v. CCIT, 318 ITR 160 (All). The petitioner society made categorical submissions that it is not running any other charitable activity associated with education. Its only activity was to run C.P. Vidya Niketan Inter College. There was no material to apprehend that the petitioner may utilise the money received by it for the purposes other than education.

7. Shri Navin Sinha appearing for the petitioner society submits that for the purposes of grant of approval under Section 10 (23C) (vi) of the Act what is to be seen his actual activity and not the objects. The society is registered with the Societies of Registration vide Certificate of Registration dated 31.7.2001 with the objects provided in a ‘Smriti Patra’, primarily include continuous development of education by establishing and running school from primary to post graduate level. The other objects set out namely for social, cultural, educational, artis