| COURT: | Supreme Court |
| CORAM: | Prafulla C. Pant J, Ranjan Gogoi J |
| SECTION(S): | 10(23C)(iiiab) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | not involving the carrying of any activity of profit, profit motive |
| COUNSEL: | - |
| DATE: | April 22, 2016 (Date of pronouncement) |
| DATE: | April 25, 2016 (Date of publication) |
| AY: | 2004-05 to 2009-10 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 10(23C): Meaning of expression "existing solely for the purpose of education and without any profit motive" explained. Mere fact that there is huge surplus (in excess of 6 to 15%) and minimal expenditure does not imply profit motive if the surplus is ploughed back into educational activities. Fees collected from students, though as per statute, is not a funding by the Government | |
In the present case, we find that during a short period of a decade i.e. from the year 1999 to 2010 the University had generated a surplus of about Rs.500 crores. There is no doubt that the huge surplus has been collected/accumulated by realizing fees under different heads in consonance with the powers vested in the University under Section 23 of the VTU Act. The difference between the fees collected and the actual expenditure incurred for the purposes for which fees were collected is significant. In fact the expenditure incurred represents only a minuscule part of the fees collected. No remission, rebate or concession in the amount of fees charged under the different heads for the next Academic Year(s) had been granted to the students. The surplus generated is far in excess of what has been held by this Court to be permissible (6 to 15%)
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