Today's case
Branch of non-resident educational institution - exemption u/s 10(23) - CBDT cannot reject application if it exists for education & also cannot enforce monitoring conditions at threshold level but is at liberty to prescribe any conditions: Supreme Court
THE issue before the Apex Court was related to the grant of exemption u/s 10( 23C )( vi) to the branch of a non-resident educational institution. And the prescribed authority (PA) in this case was the Central Board of Direct Taxes itself which had rejected the application on the ground that the applicant had remitted certain amount to its Head Office (HO) in America and it did not exist solely for the purposes of education. What also prompted the Board to do so was its understanding that the suplus generated by any educational body should be spent 'in India ' for educational purpose. However, the Apex Court has now held that the monitoring conditions attached to the relevant Section cannot be enforced right at the stage of grant of exemption. If an institution exists solely for education and meets the primary condition of Sec 10(23), the PA is at liberty to lay down any conditions, including application of certain percentage of accounting money in India, but cannot insist on compliance with the conditions which would arise only in future after the stage of grant of exemption.
We bring you this judgement today.