Meaning of “Existing”

The meaning of existing 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 existing.

meaning of existing

Meaning of existing defined by court

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

1. Hon’ble Kerala high court explained the meaning of ‘existing’ while delivering judgment in CIT Vs. Geetha Bhavan Trust [1995] 78 taxman 290/213 ITR 296 (Ker.) as under :

Meaning : Section 10(22) speaks of a university or other educational institution existing only for educational purposes, and not for purposes of profit. What is relevant under this section is the source of the income derived from an educational institution existing solely for educational purpose. ‘Exist’ means ‘to be in present force, activity or effect at a given time’.

2. Hon’ble Bombay high court explained the meaning of ‘existing’ while delivering judgment in CIT v. Oxford University Press [1996] 89 taxman 353/221 ITR 77 (Bom.) as under :

Meaning : The expression ‘existing solely for educational purposes and not for purposes of profit’ appearing in section 10(22) is a condition precedent for exemption under section 10(22). In the context and setting of this clause, the expression ‘existing’ obviously means and refers to the existence of such university or institution solely for educational purposes in India.

3. Hon’ble Madras high court explained the meaning of ‘existing’ while delivering judgment in Mr. Ar. Educational Society Vs. CIT [2002] 121 taxman 610/253 ITR 589 (Mad.) as under :

Meaning : The word “existing” is not the same thing as being functional. There is no doubt at all that an educational institution exists in the sense that the society has been formed, the society is legal entity, its objects are clearly intended to bring into existence educational institution, for which preliminary steps have been taken, and the object of the institution is not profit.

The width of the provisions is not required to be cut down by insisting that the educational activity must have been carried on in the relevant previous year, even though there is no doubt whatsoever that the society was engaged in taking the steps required to make the educational activity operative, the steps so taken being the construction of the building and other facilities in which the task of imparting education was to be carried out.

Section 10(22) of Income Tax Act

Incomes not included in total income.

10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included—


(22B) any income of such news agency set up in India solely for collection and distribution of news as the Central Government may, by notification in the Official Gazette, specify in this behalf:

Provided that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members:

Provided further that any notification issued by the Central Government under this clause shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification:

Provided also that where the news agency has been specified, by notification, by the Central Government and subsequently that Government is satisfied that such news agency has not applied or accumulated or distributed its income in accordance with the provisions contained in the first proviso, it may, at any time after giving a reasonable opportunity of showing cause, rescind the notification and forward a copy of the order rescinding the notification to such agency and to the Assessing Officer;

(23) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

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

Updated up to Finance Act 2021

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