Assessing Officer Can't Act As Prosecutor, Judge And Executor At The Same Time: Himachal Pradesh High Court

The Himachal Pradesh High Court has provided clarity on the conditions for claiming income tax exemption as a not-for-profit educational institution. The court, while hearing a case involving a private university, emphasized that to qualify for exemption under Section 10(23C) of the Income Tax Act, an institution's primary object must be education, and it should not be operating for the purpose of profit. The court stated that the institution must demonstrate that its income is being applied solely for its educational objectives. Any surplus generated must be reinvested in the institution's activities and not diverted for the personal benefit of its founders or trustees. The ruling underscores that while educational institutions can have a surplus, their existence must be genuinely for a non-profit purpose to avail the tax benefits provided under the law.