New Noble Education Society v The Chief Commissioner of Income Tax (2011) 334 ITR 303
New Noble Education Society and The Chief Commissioner of Income Tax, where a trust claimed exemption under section 10(23C) as an educational institution but was rejected for not meeting certain criteria. The Supreme Court ruling emphasized the requirement for trusts to be solely created for education and to be registered under state law in order to qualify for exemption under section 10(23C) of the Act.
The main key points from the context are:
• A trust, which was an educational institution, claimed exemption under section 10(23C) of the Income Tax Act.
• The trust had other charitable objects apart from education, but it was rejected for exemption because it was not created "solely" for the purpose of education and was not registered under the State Law.
• The Hon. Supreme Court directed that all activities "connected" to impart education will only be treated as "incidental" activity, and no other activities are permitted even if profit generated from such activities other than educational activities are used for the main or predominant object of imparting education.
• Generation of profit or surplus from carrying out incidental activity is not prohibited, but such profit or surplus should be incidentally generated from educational activity only.
• Registration under State Law, wherever applicable, is mandatory to obtain approval under section 10(23C) of the Act.
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