In Brief
The Supreme Court dismissed multiple appeals by the Income Tax Department challenging exemptions granted to educational institutions under Section 10(23-C) of the Income Tax Act. The Court held that an educational institution does not lose tax exemption merely by making a surplus, provided its predominant purpose remains education rather than profit. The Court established that assessing authorities must continuously monitor such institutions year-to-year to ensure they comply with exemption conditions. If an institution is not genuine or fails to meet any conditions, the exemption must be withdrawn immediately. The decision unified conflicting High Court opinions on this issue.
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