Globally, institutional institution imparting education are largely kept outside tax net. In India, Section 10(23C) of the Income-tax Act, 1961 extents such exemption inter alia to institutions ‘solely’ engaged in educational activities. The Section also exempts the profits derived by such institution from businesses incidental to the ‘sole’ activity of education. A three-judge Bench of the Supreme Court has recently (in New Noble Education Society v. CIT, Civil Appeal No 6418 of 2014) overruled two division Bench judgments to hold that, to be eligible for exemption u/s 10(23C) of the Act, the educational institution should not venture into any activity in the nature of business, even if such activities are incidental to its object. The Supreme Court in a detailed judgment has examined the history of exemption granted to such institutions, the other provisions granting similar exemptions, and has provided detailed guidelines for deciding eligibility of exemption to such institutions.
Given the wide ramification the judgment is bound to have, the Supreme Court itself has expressly stated that the judgment would have effect prospectively only.
Lakshmikumaran & Sridharan Attorneys (L&S) is organizing a webinar on 9 November 2022 (Wednesday) between 3:00 PM - 4:00 PM, for an in-depth understanding of the principle laid down by the judgment, the implications on trusts currently enjoying the exemption, the precautions to be taken, etc.
The webinar would cover:
- Legislative history of exemption granted to educational institutions
- In-depth analysis of the judgment of the Supreme Court in New Noble Educational Society
- Meaning of prospective applicability of the judgment, and
- Precautions to be taken by educational institutions so as to continue to enjoy the exemption.
Implications of the judgment on other tax laws (GST and Customs)
Speakers:
- S Sriram, Partner, L&S
- Neha Sharma, Principal Associate, L&S