“Section 32(4)”
The decision most relied on for Section 32(4) is American Hotel and Lodging Association Educational Institute v. CBDT (301 ITR 86), cited in 111 judgments on BharatTax.
Leading authorities on Section 32(4)
An educational institution is eligible for exemption under Section 10(23C)(vi) if it exists solely for educational purposes, even if it generates incidental profits. The mere existence of profit does not disqualify an institution from exemption.
Educational institutions are not commercial activities, and collecting fees for betterment and growth does not automatically disqualify them from being considered educational. Fees collected for value-added courses, training, or hostel facilities can be eligible for exemption under Section 11 if applied towards the institution's infrastructure.
An assessee is entitled to claim the balance 10% of additional depreciation in the succeeding assessment year if the new plant and machinery were put to use for less than 180 days in the previous year.
The definition of 'business' is of wide import, encompassing any trade, commerce, manufacture, or adventure in the nature of trade. Even a single and isolated transaction can constitute an 'adventure in the nature of trade' if it bears the clear indicia of trade, and no fixed formula can be evolved to determine the character of such isolated transactions.
Education encompasses a broad range of activities beyond formal schooling, including systematic training designed to impart knowledge and skills, reflecting the acceptance of new ideas and the development of means to reach recipients. The definition of education should not be confined to a narrow or pedantic sense.
An entity qualifies as an 'educational institution' under Section 10(22) of the Income-tax Act only if it is primarily engaged in imparting education, rather than merely assisting educational bodies or providing scholarships and grants. The focus must be on active educational activities.
Section 44AB (tax audit) does not apply where the assessee is not engaged in a business or profession and consequently has no income under the head 'profits and gains from business or profession'.
An institution systematically teaching music or arts qualifies as an 'educational institution' and is eligible for exemption under Section 10(23C)(vi), even if it is not recognized by any university or Board and does not award its own degrees or certificates.
