In Brief
Visvesvaraya Technological University sought exemption from income tax under Section 10(23C)(iiiab) of the Income Tax Act for Assessment Years 2004-2010. While the Court held that the University satisfied the first requirement (existing solely for educational purposes, despite accumulating a substantial surplus ploughed back into infrastructure), it failed the second requirement. The Court held that 'wholly or substantially financed by the Government' means direct government grants—not fees collected under statute. With direct grants constituting less than 1% of total receipts and land value adding only 4-5%, the University was neither directly nor substantially government-financed. The appeals were dismissed.
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