An educational society running educational institutions can be considered an educational institution for the purpose of income-tax exemption under Section 10(22) of the Income-tax Act.

Chandrashekhar, J.

1. After hearing the learned counsel we have allowed the amendment application filed by the petitioner and have permitted it to ask for an additional relief of quashing the assessment order dated March 28, 1977 (Produced as annexure I to Civil Misc. Application No. 3486 of 1977).

2. The petitioner is Katra Education Society. According to its averments, it is running an Intermediate College which is recognised under the U.P. Intermediate Education Act. The petitioner claimed exemption from income-tax under Sub-section (22) of Section 10 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and also claimed refund "of an amount of Rs. 325 alleged to have been deducted at source by a company while distributing dividends. The Income-tax Officer, by his order dated October 16, 1976, rejected the petitioner's claim for refund of income-tax on the ground that it (the petitioner) did not come within the ambit of Section 10(22) of the Act.

3. Sub-section (22) of Section 10 of the Act reads :

"(22) any income of a University or other educational institution, existing solely for educational purposes and not for purposes of profit;".

4. The Income-tax Officer has observed in the course of the impugned order that the petitioner-society is neither a university nor an educational institution, but a society running various educational institutions and hence the provision of Section 10(22) of the Act does not apply. The word "institution" has not been defined in the Act. There is no reason why an educational society cannot be regarded as an educational institution if that educational society is running educational institution or institutions. The Income-tax Officer has placed too narrow a construction on Section 10(22) of the Act and the interpretation placed by him is manifestly erroneous.

5. The impugned assessment order dated March 28, 1977 (annexure I to Civil Misc. Application No. 3486 of 1977) is also vitiated by the same error and is also clearly unsustainable.

6. In the result, we allow this petition partly and quash the order of the Income-tax Officer dated October 16, 1976 (annexure VII to the writ petition) and the assessment order made by the Income-tax Officer on March 28, 1977 for the assessment year 1974-75 (annexure I to Civil Misc. Application No. 3486 of 1977). We further direct the Income-tax Officer to consider afresh the question whether the petitioner comes within the ambit of Section 10(22) of the Act and to decide afresh the petitioner's application for refund of income-tax. If the Income-tax Officer holds that the petitioner does not come within the ambit of Section 10(22) of the Act, it will be open to him to make a fresh order of assessment against the petitioner for the year 1974-75. In the, circumstances of the case, we direct the parties to bear their own costs.