The need to apply the correct tests to determine whether an educational institution exists solely for educational purposes and not for purposes of profit.

K.M. Joseph, J.

Heard Mr. H.M. Bhatia, learned counsel for the appellant and Mr. Mohit Maulkehi, learned counsel for the respondent writ petitioner on the Application for condonation of delay.

2. There is delay of 31 days in filing the present Special Appeal.

3. Having heard the learned counsel for the parties, we are of the view that the Application for condoantion of delay must be allowed. Accordingly, the Application for condonation of delay will stand allowed and the delay of 31 days will stand condoned.

4. Respondent in the writ petition is the appellant. Reliefs sought in the writ petition are as follows:

“1. A writ, order or direction in the nature of certiorari quashing the impugned order dated 20.09.2013 (Annexure No. -01) passed by the respondent.

2. A writ, order or direction in the nature of mandamus directing the respondent for de-novo consideration of the application dated 20.09.2013 on full and correct facts and to grant to exemption u/s 10923C)(vi) of the I.T. Act, 1961 to the petitioner society.”

5. Briefly put, the case of the petitioner is as follows:

Petitioner is a registered Society, duly registered under the Societies Registration Act, 1860. The purpose and aim objects, as stated in the Memorandum of Association of the society clearly states that the petitioner Society exists for educational purpose amongst other ancillary objects. It is involved in running of an educational institution in the name of J.B. Memorial Manas Academy, Pithoragarh for students of nursery upto Class XII, which is affiliated to the CBSC and except for the said institution, there is no other source of receipts for the petitioner society. Petitioner is not running any other educational institution or pursuing any other activity except the one mentioned hereinbefore and as such is existing solely for the educational purpose and not for the purpose of profit. The petitioner Society applied for grant of exemption under Section 10(23C) (vi) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for the Financial Year 2011-12 by filing Annexure-4 Application. Documents relating to the income/receipts were verified. Inspector of Income Tax submitted his report. According to the petitioner, although the petitioner is covered under Section 10(23C), by the order dated 20.09.2013 (Annexure-1), the appellant rejected the Application for grant of exemption. It is, inter alia, in fact stated that the petitioner obtained a copy of the Certificate of Registration under Section 12AA of the Act (Annexure-5).

6. Pleadings were exchanged.

7. The learned Single Judge reasoned that by the impugned order, the claim for exemption was rejected, inter alia, on the ground that the Society had disproportionate fee structure which was devised to earn maximum money for the purpose of expansion of the institution and the expansion of institution may not fall into the ambit of charitable activity. Thereafter, the learned Single Judge referred to the judgment of the Hon’ble Apex Court in the case of American Hotel & Lodging Association Educational Institute v. CBDT reported in (2008) 10 SCC 509 and, still further the judgment of the Hon’ble Apex Court in the case of Queen’s Educational Society vs. Commissioner of Income Tax reported in (2015) 8 SCC 47. The learned Single Judge further referred to the judgments of the Bombay High Court in the case of Vanita Vishram Trust vs. Chief Commissioner of I.T. reported in 2010(327) ITR 121 and the Division Bench of the Allahabad High Court in the case of Neeraj Janhitkari Gramin Sewa Sansthan vs. CCIT reported in (2013) 36 Taxmann.com 105 (Allahabad). Thereafter, in Paragraph 7, the learned Single Judge proceeded to allow the writ petition and he quashed the impugned order and finally directed the appellant to grant exemption for the relevant assessment year.

8. We heard Mr. H.M. Bhatia, learned counsel for the appellant and also Mr. Mohit Maulekhi, learned counsel for the respondent/writ petitioner.

9. The conten