OXFORD UNIVERSITY PRESS versus COMMISSIONER OF INCOME TAX

Citation: [2001] 1 S.C.R. 574 · Decided: 24-01-2001 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
OXFORD UNIVERSITY PRESS 
v. 
COMMISSIONER OF INCOME TAX 
JANUARY 24, 200 I 
. [S.P. BHARUCHA, D.P. MOHAPATRA AND 
Y.K. SABHARWAL, JJ.] 
Income Tax : 
C 
Income Tax Act, 1961-Section 10(22)--Assessee, a part of foreign 
D 
E 
Unil-ersity, engaged in business of printing, publishing and selling books-
Entitlement for exemption-Hehl, exemption arnilable for foreign Universities 
if it carries on educational activities in lndia-Ho11·ever on facts of the case, 
assessee not entitled for exemption since it was not imparting education in 
India. 
Interpretation of Statutes: 
literal Interpretation -Held, strict literal interpretation should be 
avoided if it leads to absurdity and mischief which was not the intention of 
the legislature. 
Appellant-assessee is a part of a foreign University engaged in the 
business of printing, publishing and selling books in India. The assessee, 
treating itself to be a brancll of the foreign University, claimed exemption 
from income tax under Section 10 (22) of the Income Tax Act, 1961 for the 
F 
assessment year 1976-77. Income Tax Officer rejected the claim of exemption 
-"'· 
of the assessee and brought the income to tax. Commissioner (Appeals) and 
Tribunal held in favour of the assessee. On a reference under Sec.tion 256(1) 
of the Act, High Court held in favour of the Revenue. 
In appeal to this Court, the assessee contended.that Oxford University 
G Press is a part of the Oxford University of U.K., that the income earned b~ it 
is the income of the University and therefore, entitled to exemption from tax 
under Section 10(22) of the Act, that to qualify for the exemption, it is not 
necessary that the University should be incorporated in India or should be 
engaged in any activity relating to education or concerning the field of .. 
H education in India; that 'University' under Section 10 (22) of the Act includes 
574 
OXFORD UNIVERSITY PRESS v. C.l.T. 
575 
a foreign University; and that Parlianient had not intended to limit exemption A 
for University stated in India. 
Revenue contended that the word 'University' used in Section 10(22) 
of the Act means University as defined in University Grants Commission 
Act, 1956; that the Section applies only to Universities and educational 
institutions which existed in India or imparted education in India; that B 
Parliament never intended to forego tax revenue for the purpose of education 
people outside India; that even though the assessee is a part of the Oxford 
University, it does not qualify for exemption since the Oxford University 
does not exist solely for educational purposes in India; and that purposive 
and meaningful interpretation should be given to the Section to avoid absurd C 
position. 
Dismissing the appeals by majority, the Court 
HELO: Per D.P. Mohapatra, J. 
I. I. A University or other educational institution established or D 
incorporated outside India can be eligible for the exemption from tax under 
Section 10(22) of the Income Tax Act, 1961 provided, it exists solely for 
educational purposes and not for purposes of profit. On examination of the 
expression 'existing solely for educational purpqses and not for purposes of 
profit' in the provision, the Legislature has made it clear that it intends to E 
exempt the income of institutions established solely for educational purposes 
had not for commercial activities. Such a provision is meant to encourage 
institutions, including Universities, engaged in educational activities and it 
is not intended to benefit institutions engaged in commercial activities with 
the intention of earning profit.1582-C-01 
1.2. The assessee is nothing more than a commercial establishment/ 
business enterprise engaged in the business of printing, publishing and 
selling of books in this country. The label "University Press" is not sufficient 
to establish that it is engaged in any educational activity. The purpose of the 
existence of the assessee in this country is possibly to earn profit.1583-GI 
State of Tamil Nad11 v. Kodaikanal Motor Union. (P) Ltd. 119861 3 
SCC 91; K.f'. Varghesev. I.TO., 1198114SCC 173; lukev. lnlund Revenue 
Commissioners, ll 96c! I Sci ITR 692 (II I) and Kesln'}i Ravji & Co & Ors. \!. 
Commissioner 0/1111.:ome Tax, f 1990( 2 SCC 231, referred to. 
G 
law of'fornt1011 hy Thomas M. Cooley, (Vol. 2 Page 2431, referred to, H 
576 
Slil'REME COURT REPORTS 1200111 S.C.R. 
A 
2. If establishments/institutions, which are engaged solely in 
B 
C. 
commercial ac

Excerpt shown. Read the full judgment & AI analysis in Lexace.