Meaning of “Educational institution”

The meaning of educational institution under section 10(22) of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of educational institution.

Meaning of educational institution defined by court

The phrase ‘educational institution’ used in section 10(22) of the Income Tax Act came up before various high courts as detailed under :

1. Hon’ble Gujarat High Court explained the meaning of ‘educational institution’ while delivering judgment in CIT vs. Sindhu Vidya Mandal Trust [1983] 142 ITR 633 (Guj.) as under :

Meaning : The term ‘educational institution’ or ‘institution’ is not defined under the act. In the oxford english dictionary, vol. V at p. 354, The word ‘institution’ is defined to mean ‘an establishment, organisation or association, instituted for the promotion of some object, especially one of public or general utility, religious, charitable, educational, etc.’.

2. Hon’ble ITAT-Bombay explained the meaning of ‘educational institution’ while delivering judgment in Shri Bhanbai Nenshi Mahila Vidyalaya vs. Sixth ITO [1986] 18 ITD 115/26 TTJ 79 (Bom. – Trib.) as under :

Meaning: The word ‘education‘ is so understood for its inclusion in the phrase ‘charitable purposes’ to get some limited or qualified relief under section 11 in the case of a trust; it would be illogical to suggest wide or extended meaning when it appears (with its grammatic variations) in section 10(22) where the relief is total.

Running a free hostel for school-going girls, helping them with free books, tuition fees, etc., May be an encouragement to indigent or deserving pupils who are interested in prosecuting education and a trust helping them can only be said to aid is purusing studies but not directly responsible in giving education which a school imparts.

Section 10(22) of Income Tax Act

(22) Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;

In this article, you can get guidance from high courts on the meaning of educational institution under section 10(22) of the Income Tax Act.

Updated up to Finance Act 2021