SHAH, J. ( 1 ) ON being moved under Section 256 (1) of the Income-tax Act, 1961, the Income-tax tribunal has referred the following question of law for our opinion :"whether, on the facts, and in the circumstances of the case, the Income-tax appellate Tribunal was right in law in holding that the income of the assessee is entitled to exemption under sub-Section (22) of Section 10 of the Income-tax Act, 1961 ?"in order to answer the aforesaid question, it is necessary to set-out relevant facts herein : (I) The assessee is an association of persons, which is a public trust registered under the provisions of Bombay Public Trusts Act, 1950. The relevant assessment year is 1972- 73. The institute came into existence by a covenant, dated 13-9-1933 with the object of imparting technical education to the boys belonging to Zoroastrian society. Initially, the institute was running under the name and style of "surat PARSI TECHNICAL and industrial INSTITUTE, SURAT". On 8- 10-1943, Shirinbai and Dhabbai Sorabji Paruck, two sisters donated a sum of Rs. 4 lacs to this institute with certain terms and conditions, one of them being to name the institute as "sorabji NASEERWANJI PARUCK PARSI polytechnic INSTITUTE" in order to perpetuate the memory of the parents of the donor-sisters. In the course of time, due to paucity of funds the trustees of the institute found it impossible to carry on the institution. An attempt was, therefore, made to enter into an agreement with the then Bombay government to take over the institute. However, before the agreement could be entered into, one R. K. Kanga of Bombay moved the Surat court with a plea that instead of handing over the institute to the Government, it would be beneficial to the interest of the boys of Parsi community to see that the institute is shifted to Bombay. While the proceeding, were pending before the court, the trustees of Sheth Manekji cooper Trust, Bombay moved the court with a request to permit them to run the institute at Bombay under their control. The request was granted. The court permitted Manekji cooper Trust to sell off the immovable properties and equipments to the government realising about Rs. 6,08,000/ -. While the proceeding, were pending before the court, the trustees of Sheth Manekji cooper Trust, Bombay moved the court with a request to permit them to run the institute at Bombay under their control. The request was granted. The court permitted Manekji cooper Trust to sell off the immovable properties and equipments to the government realising about Rs. 6,08,000/ -. Subsequent thereto Sheth Manekji Cooper Trust also found it difficult to run the institute with the result that a request was, once again, made to the court to vacate the scheme approved by the court earlier and to relieve Manekji Cooper trust from its responsibility under the scheme. The said request was granted by the court and the Manekji Cooper Trust was relieved of the obligation to run the institute. The said trust handed over the amount realised from the sale of immovable properties with all accumulation to the Surat Parsi Panchayat Trust. The Bombay parsi Panchayat and Surat Parsi Panchyat at this stage entered into an agreement under which Surat Parsi Panchayat handed over the aforesaid amounts to Bombay Parsi Panchayat with the stipulation that Bombay Parsi panchayat will accommodate certain number of students nominated by Surat Parsi Panchayat in the Gamadia Technical Institute at Bombay, rural Home for Boys at Golwad run by the bombay Parsi Panchayat for training in technical subjects. This agreement was submitted to the court for its sanction, but the proceedings for sanction of the court are staled to be still pending. Since the agreement between the Bombay Parsi Panchayat and Surat Parsi panchyat could not be worked out in the absence of sanction from the court, the Surat parsi Panchyat started utilising the income of the Trust to grant scholarships to deserving students standing in various branches of technical Education such as Aeronautics, wireless, Telegraphy, Mechanical Engineering diplomas, etc. (II) It may be stated that when the return of income together with statement of audit accounts was filed before the Income-tax officer on 3-4-72, the Income-tax Officer noticed the following note of the Chartered accountant of the institute :"the Institute was Educational one. Until it was closed down in January 1956 as per schedule approved by the Court. After that the Institution granted scholarships, etc. Until it was closed down in January 1956 as per schedule approved by the Court. After that the Institution granted scholarships, etc. from the income of Endowment Fund which from the letter of the Charily Commissioner, Baroda letter No. 11-12-58, dated 21-1-58 is exempted under rule 32 (1) of the Bombay Public Trusts act, 1950. " (III) From the aforesaid note it becomes clear that the Income-lax Officer has noted lhat since january 1956 onwards the institution has not continued to be an educational insliiulion inasmuch as il slopped carrying on educational activities, and starled merely granting scholarships to Parsi students. He was, therefore, of the opinion that the institution could not be termed as educational institution within the meaning of Section 10 (22) of the act. He also found that the instilulion was established for "charitable purposes" within the meaning of Section 2 (15) of the Act, and hence, the income was exempied under Seclion 11 (1) of the Act to the extent of its application on the objecls. He, accordingly, disallowed the claim of the assessee to exempt it fully under section 10 (22) of the Act, and held that its income is exempted under Section 11 (1) of the Act to the exttnt of its applicalion on the objects. (IV) and (v) xxx xxx xxx ( 2 ) BEFORE we proceed to set out and discuss the relevant provisions of law by reference to which we arc required to answer the question under reference, it would be necessary to set out the objects for which the Trust was established. It may be noted that the original trust Deed is in vernacular language (Gujarati language) and the English translation of the same is supplied to us and as per the said translation the very objects for which the Trust is established are as under : (I) To start an Art and Industrial School at Surat under auspices of your Surat Parsi panchayat at your convenience during a period of two years from this day and to give benefit of the said school to the inmates of your Surat parsi Orphanage and other Zoroastrian Boys of outside of any place and the interest of my said amount be utilised towards its expenses. (ii) Till the school as referred to above is founded, from the amount of interest that may be available after deducting the ccnlage charges of both the Panchayats, be accumulated and securities be purchased from time to time and be added to the corpus. When the school for imparting education as stated above is started the interest of the entire amount be utilised towards its expenses. (iii) I have delivered this amount to you with the aim of giving benefit of the new institution of Zoroastrian day-scholars of any outside place over and above the inmates of the orphanages because you may collect the share of expenditure from the funds of the orphanage as per its trust deed for the inmates of the said orphanage who may get benefit of this institution, however, it is absolutely at your discretion whether to collect such a share and if to collect at what rate and for what reason, taking into consideration the condition from time to time of this funds. You are given full power to act in this direction at your entire discretion. (iv) If the Zoroastrian boys of Surat or of any place other than Surat desire to lake advantage of the proposed new institution it may be given to them. If it is found essential to make boarding and lodging arrangements for such boys who may be from outside Surat such arrangements be made by you and if you do so you are at liberty to make use of the interest of any amount towards the expenses of the same. " ( 3 ) XXX xxx xxx ( 4 ) IN order, now, to appreciate the controversy it would be necessary to set out herein the provisions of Section 10 (22) and section 11 (1) along with definition of "charitable or religious purposes" as given under section 2 (15) of the Act. ( 5 ) SECTION 2 (15) of the Act of 1961 defines "charitable Purposes" to include relief of the poor, education, medical relief and the advancement of any other object of general public utility not involving the carrying on of any activity for profit. By reason of this definition, income derived from a business which is carried on for the advancement of an object of general public utility has to be included in the assessees total income, if it involves carrying on of any activity for profit. By reason of this definition, income derived from a business which is carried on for the advancement of an object of general public utility has to be included in the assessees total income, if it involves carrying on of any activity for profit. In other words, as put by Justice Krishna Iyer in following words in the case of Indian chamber of Commerce v. Commissioner of income-tax reported in 101 I. T. R. 805 :"section 2 (15) excludes from exemption the carrying on of any activities for profit even if they are linked with the objectives of general public utility, because the statute interdicts, for purposes of tax relief, the advancement of such objects by involvement in the carrying on of activities for profit. " ( 6 ) THE provision as it existed under the act of 1922 was that once the purpose of the trust was relief of the poor, education, medical or advancement of any other object of general public utility, the trust was considered to be for a charitable purpose. As a result of the addition of the words "not involving the carrying on of any activity for profit at the end of the definition in Section 2 (15) of the act even if the purpose of trust is "advancement of any other object of general public utility", it would not be considered to be "charitable purpose" unless it is shown that the above purpose does not involve the carrying on of any activity for profit. The result, thus, of the change in the definition is that in order to bring a case within the fourth category of charitable purpose, it would be necessary to show that: (I) the purpose of the trust is advancement of object of general public utility; and (II) the above purpose does not involve the carrying on of any activity for profit. Both the above conditions must be satisfied before the purpose of the trust can be held to be charitable purpose. ( 7 ) IN the above context, it shall have to be seen as to what meaning should be given to the word "education" which occurs in section 2 (15) of the Act. Both the above conditions must be satisfied before the purpose of the trust can be held to be charitable purpose. ( 7 ) IN the above context, it shall have to be seen as to what meaning should be given to the word "education" which occurs in section 2 (15) of the Act. In the case of Sole trustee, Lok Shikshana Trust v. Commissioner of Income-tax, Mysore reported in 101 I. T. R. 234 in the context of institution carrying on activities to educate the people of India in general, and of Karnataka in particular, the supreme Court has an occasion to deal with the definition of "charitable Purposes" to ascertain the meaning and scope of word "education" as it occurs in Section-2 (15) of the Act. It was in this context, the Supreme court observed as under :"the sense in which the word "education" had been used in Section 2 (15) in the systematic instruction, schooling or training given to the young is in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word "education" has not been used in that wide and extended sense according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word "education" is used in clause (15) of Section 2. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word "education" is used in clause (15) of Section 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling. " ( 8 ) FROM the aforesaid observations, it becomes clear that what the word "education" connotes is the process of training and developing the knowledge, skill, mind and character of students by normal schooling. ( 9 ) AT this stage, we may also refer to the provisions of Section 10 (22) which reads as under:"10. In computing total income of a previous year of any person, any income falling within any of the following clauses shall not be included. . . . . . . (22) any income of university or other educational institution, existing solely for educational purposes and not for purposes of profit. " ( 10 ) IT becomes clear from the aforesaid provision that in order to be eligible to gain total exemption under Section 10 (22) of the act, it is necessary that there must exist educational institution. Secondly, such institution must solely exist for educational purpose, and thirdly, the institution should not exist for the purpose of profit. It is not disputed before us that the assessee is an institution which was existing at the relevant time. It is not necessary therefore for us to undertake the exercise of ascertaining the meaning of the word "institution" and to find out as to whether the assessee is an institution or not. The revenue has, however, seriously urged before us that the assessee was not an educational institution and was therefore not entitled to the total exemption U/section 10 (22) of the act. ( 11 ) AT this stage, we may also refer to section 11 (1) (a) of the Act, which grants exemption to income from the property held for charitable or religious purposes. ( 11 ) AT this stage, we may also refer to section 11 (1) (a) of the Act, which grants exemption to income from the property held for charitable or religious purposes. It may be noted that it is not at all disputed before us by the Revenue that to the extent the assessee- trust has applied for exemption of its income for the purposes of educational activities of the said institution, its income would be exempted under Section 11 (1) (a) of the said act. Section 11 (1) (a) in so far as it is material is reproduced herein :"income from property held for charitable or religious purposes : 11 (1) Subject to the provisions of Sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income. . . (a) income derived from property held under trust wholly for charitable purposes, to the extent to which such income is applied to such purposes in India, and, where any such income is accumulated or set apart for application to such purposes in India to the extent to which the income so accumulated or set apart is not in excess of twenty-five per cent of the income from such property. " ( 12 ) MRS. Ketty A. Mehta, learned Advocate for the assessee has, on the other hand, submitted that the tribunal was right in holding that the assessee is an educational institution established solely for educational purposes within the meaning of Section 10 (22) of the act. She submitted that it is not disputed that the assessee is an institution. It is also not disputed that it is an existing institution. She further submitted that the institution was established with specific objectives and it has continued to exist forthe very objectives. To impart technical education to the students of parsi community was the primary object and according to her with the very object the institution has continued to exist. She further submitted that since it was not possible for the assessee to establish and run the school or college to impart technical education to the students of Parsi Community, despite best efforts made by the institution, the institution had started giving scholarships to the students of Parsi Community to help them in continuing their studies. She further submitted that since it was not possible for the assessee to establish and run the school or college to impart technical education to the students of Parsi Community, despite best efforts made by the institution, the institution had started giving scholarships to the students of Parsi Community to help them in continuing their studies. She, therefore, submitted that the activity which the trust was carrying on in the relevant assessment year was in the broader sense of term "educational activity", and therefore, all the requirements for earning total exemption under Section 10 (22) of the Act were satisfied. Mrs. Ketty Mehta has also further submitted that the word "education" would not necessarily mean actual imparting of education to the students, but any activity which would facilitate the imparting of education would also fall within the wide sweep of "educational activities". ( 13 ) THE aforesaid rival contentions of the parties shall have now to be examined in the light of the statutory provisions set out hereinabove, and the judicial pronouncements on the subject. In case of Additional commissioner of Income-tax, Madras-1 v. Victoria Tehnical Institute reported in 120 I. T. R. 358 the Division Bench of Madras High court was called upon to decide the question in partially similar situation. Before the Madras high Court the assessee-institute was a society registered under the Societies Registration Act, and was established to impart or to assist in imparting instructions to persons of either sex in scientific or artistic principles which underline the commercial and industrial occupations of the people as well as instructions in manual and other practice involved in the application of such principles and to assist persons of either sex who are engaged in artistic, industrial or commercial occupations. The claim of the assessee before the court was that the objects of the institute fall within the concept of "education" on the ground that the primary object of the assessee was to impart instructions in the handicrafts and the institute was a charitable trust, and hence, income realised by sale of products made by indigeneous craftsmen and skilled artisans was exempt under section 11 (1) (a) of the Act. The said claim of the institute was negatived by the Income- tax Officer because no training or educational institution was run by the assessee. The said claim of the institute was negatived by the Income- tax Officer because no training or educational institution was run by the assessee. The Income- tax Officer also took the view that the said trust also cannot be said to be for charitable purpose and the object involved was that of carrying on of an activity for profit. The appellate Assistant Commissioner confirmed the view of the Income-tax Officer. The tribunal, however, accepted the case of the assessee that the main object of the assessee fell within the ambit of the word "education" as running educational institution like school or college was not the only way to impart education and there were other ways also by which education can be imparted by awarding scholarships, etc. and the persons connected with the institute go to various places where handicraft articles were made by artisans and advise them on improving production method, finish of articles, etc. It was in this fact-situation the Division Bench of the High Court found after reference to the decision of the Supreme court in the case of Lok Shikshan Trust (supra) that the word "education" has been used in the sense of systematic instruction, schooling or training given to young in preparation for the work of life. It is, in fact, a process of training and development of knowledge, skill, mind and character of students by normal schooling. The Division Bench also found that the assessee was not running any educational institution like school or college. The activity of the assessee in granting scholarships to students studying in school of Arts and Crafts and sending them to various other places would fall under the head of "advancement of any other object of general public utility" as used in Section 2 (15) of the Act. Such an activity, according to Division Bench, would not fall within the scope of educational activity to be carried on by educational institution established solely for educational purposes as understood under Section 10 (22) of the said Act. The division Bench of the Court, therefore, found that not only that there must exist an institution, but it must be an educational institution to impart education to the students. It must be very close to normal schooling. The division Bench of the Court, therefore, found that not only that there must exist an institution, but it must be an educational institution to impart education to the students. It must be very close to normal schooling. Therefore, when the activity of the institution is that of only giving scholarships to a class of beneficiaries for the purpose of enabling them to pursue their educational activity elsewhere, the institute cannot be said to be carrying on educational activity for educational purposes as stipulated by Section 10 (22) of the said Act. ( 14 ) MR. B. J. Shelat, learned Counsel for revenue has invited our attention to the decision of the Division Bench of Karnatka high Court in the case of Commissioner of income-tax v. Saraswath Poor Students Fund reported in 150 I. T. R. 142. The assessee before the Karnataka High Court was a society registered under the Societies Registration Act with main object to extend financial assistance to poor and deserving students belonging to saraswath community by way of loans, scholarships and assistance for purchase of books and other education requisites. Unlike the case before us even the objects of the trust before the Karnataka High Court did not stipulate establishment of educational institution to impart education to the students. The primary object of the assessee was to extend financial help to the students. The question before the Division Bench was as to whether such an institution can be described to be an educational institution solely for the purpose of education as stipulated by Section 10 (22) of the Act so that it can avail of exemption available to it under Section 11 (1) (a) of the said Act to the extent it utilised its income for charitable purposes. The division Bench of the Karnataka High Court speaking through Jagannatha Shetty, J (as His lordship then was) firstly noticed that the scope of exemption under Section 10 (22) of the Act is wider than that granted under section 11. The exemption under Section 10 (22) is in respect of whole of income of the assessee and not restricted to such income applied or exempted for charitable purposes as provided under Section 11. In order to be entitled to exemption under Section 10 (22) the assessee must prove that it is an educational institution existing solely for educational purposes. The exemption under Section 10 (22) is in respect of whole of income of the assessee and not restricted to such income applied or exempted for charitable purposes as provided under Section 11. In order to be entitled to exemption under Section 10 (22) the assessee must prove that it is an educational institution existing solely for educational purposes. By reference to the objects for which the institution was established the court took the view that in order to qualify to be an educational institution the institution must be one in which education should be imparted to the students. It must teach the students and must have teachers for such purpose of teaching. By referring to the decision of the supreme Court in the case of Azeez Basha v. Union of India reported in AIR 1968 SC 667 the court examined the possibility of giving to the words "educational institution" same meaning as was given to it under Article 30 (1) of the Constitution of India. The court also made reference to its earlier decision in the case of Commissioner of Income-tax v. Academy of General Education reported in 150 ITR 135 and relied upon the following observations, which in our opinion, arc relevant for the purpose of deciding the controversy before us :". . . . We may state at the outset that the assessee in order to claim the benefits of Section 10 (22) need not necessarily be a school or college, where education is imparted. Nor should such school or college be different from the assessee who claims the benefit of Section 10 (22 ). That would be clear if we peruse the provisions of various sub-sections of Section 10, viz. Sections 10 (3), 10 (4), 10 (4 A), 10 (20a), 10 (22), 10 (22a) and 10 (23 ). It will be therefore obvious that the income of the assessee is exempt under Section 10 (22) if the assessee is an educational institution or an establishment which primarily engages itself in educational activities. The institution, however, may incidentally take other activities for the benefit of the students or in furtherance of their education. It may invest its funds in any manner, but the income generated therefrom must be utilised exclusively for educational activities. If these requirements arc complied with, the assessces income shall be exempt under Section 10 (22) of the Act. The institution, however, may incidentally take other activities for the benefit of the students or in furtherance of their education. It may invest its funds in any manner, but the income generated therefrom must be utilised exclusively for educational activities. If these requirements arc complied with, the assessces income shall be exempt under Section 10 (22) of the Act. " ( 15 ) FROM the aforesaid observations it becomes clear that in order to earn total exemption under Section 10 (22) of the Act, an assessee should be an educational institution or an establishment which primarily engages itself in educational activities. Though the words "educational activities" arc the words of very wide amplitude, we would like to add that the element of imparting education to the students or clement of normal schooling where there are teachers and taught must be present so as to fall within the sweep of Section 10 (22) of the Act. We would, at the same time, like to add that such an institution may, incidentally, take other activities for the benefit of students or in furtherance of their education. It may invest its funds in any manner it likes or it may provide scholarships or other financial assistance which may be helpful to the students in pursuing their studies. However, such incidental activities alone in the absence of actual activity of imparting education by normal schooling or normal conducting of classes would not be sufficient for the purpose of qualifying the institution to earn the benefit of Section 10 (22) of the said Act. ( 16 ) XXX XXX xxx ( 17 ) IT will not be out of place at this stage to mention that Mrs. Ketty A. Mehta, learned counsel for assessee has sought reliance on the decision of the Division Bench of Karnataka high Court in the case of Commissioner of income-tax v. Academy of General Education (supra) which decision as stated hcreinabove is dislinguishcd in the subsequent decision in the case of Saraswath Poor Students (supra ). It may be noted that in the case of Academy of General Educalion the assessee was a sociely with the object to make available technical and commercial education in as many as 47 subjects with number of other ancillary objectives. The academy was, in fact, running nine educational institutions. It may be noted that in the case of Academy of General Educalion the assessee was a sociely with the object to make available technical and commercial education in as many as 47 subjects with number of other ancillary objectives. The academy was, in fact, running nine educational institutions. Prior to assessment year 1970-71 the incorne of the assessee was treated as exempted under Section 10 (22) of the Act. However, for the relevant assessment year the claim of the assessee under Section 10 (22) was disallowed which ultimately resulted into reference of question of law to the High court and the High Court found that the primary object of the institute was to establish, support, manage or conduct schools, colleges and such other educational institutions. The society has income of its own. ( 18 ) THE society out of its income has given outright grant to some of the schools. It has not spent its income for any purpose unconnected with education. It was, therefore, an educational institution existing purely for educational purposes and not for profit. The court, therefore, held that the assessee in order to claim the benefit of Section 10 (22) need not necessarily be a school or college where education is imparted. Nor such school or college should be different from the assessee who claims the benefit of Section 10 (22 ). It will be, therefore, obvious that the income of the assessee is exempt under Section 10 (22) if the assessee is an educational institution or an establishment which primarily engages itself in educational activities. The institution, however, may incidentally take other activities for the benefit of the students or in furtherance of their education. It may invest its funds in any manner, but the income derived therefrom must be utilised exclusively for educational activities. ( 19 ) IN our opinion, the aforesaid decision does not help the assessee in the facts and circumstances of the present case. True it is, that it is not necessary for the institution to run the educational institution itself. The educational institution may be run by someone, but the income of the institution should be utilised for the activity of imparting education. There should be activity of normal schooling or actual imparting of education by the institution or by some other institution to which the assessee-institution is attached. The educational institution may be run by someone, but the income of the institution should be utilised for the activity of imparting education. There should be activity of normal schooling or actual imparting of education by the institution or by some other institution to which the assessee-institution is attached. Simply by giving scholarships or grants to the students to enable them to pursue their educational activities without any control whatsoever on such students an institution cannot be. said to be educational institution. It is, thus, clear that the decision of the Division Bench of Karnalaka high Court-in Academy of General Education (supra) cannot be pressed into service to the fact situation prevailing before us, and in fact, the said decision is distinguished subsequently in the case of Saraswath Poor Students Fund (supra), and we are in full agreement with the reasoning which has found favour with the division Bench in the case of Saraswath Poor students Fund (supra ). ( 20 ) NOW adverting to the case before us it is clear that the trust in question though primarily found to establish school or college for imparting education to Zoroastrian students it has not been successful in establishing any school or college. Admittedly, since 1956 no educational activity in the sense of normal schooling or actual imparting of knowledge or learning to the students is carried on by the trust. Admittedly, since 1956 the institute was simply giving scholarships to the needy parsi students for technical education without keeping any control over such students or without actually imparting any knowledge to the said students. Therefore, it cannot be said that the trust was carrying on educational activities or that it was an educational institution established for educational purposes. Therefore, the said trust was not entitled to total exemption under Section 10 (22) of the Act. Therefore, the tribunal was not right in holding that the trust was entitled to total exemption. . ( 21 ) IN the result, we answer the question referred to us in the negative, i. e. in favour of revenue and against the assessee. No costs. Question referred to the court answered in the negative. .