1. The petitioner is a society registered under the Societies Registration Act, 1860, with the Registrar of Societies, U.P, vide Registration Certificate No. 375/2001-02, dated July 13, 2001, valid up to July 31, 2006. The certificate was renewed on December 19, 2006, for a period of five years, with effect from July 31, 2006. The society is running an educational institution by the name of C.P Vidya Niketan Inter College at Kaimganj, District Farrukhabad for students from class 6 to class 12 recognised by the U.P Madhyamik Shiksha Parishad, Allahabad.

2. The society is registered with the Income-tax Department as an association of persons with PAN No. AAAAC1150G and has been granted a registration certificate under section 12A of the Income-tax Act. The society is regularly assessed to “nil” income by the assessing authority from 2003-04 to 2007-08. The returns filed by the society have been accepted regularly under section 143(1) of the Act. By this writ petition the petitioner has prayed for quashing the order dated May 27, 2011, passed by the Chief Commissioner of Income-tax, Ghaziabad, rejecting the petitioner-society's application for exemption under section 10(23C)(vi) of the Act, and for a direction to the Chief Commissioner of Income-tax, Ghaziabad, to issue the approval under section 10(23C)(vi) to the petitioner in terms of its application dated May 5, 2010.

3. We have heard Shri Navin Sinha, senior advocate assisted by Shri Rahul Agarwal, learned counsel for the petitioner. Shri Dhananjay Awasthi appears for the Income-tax Department.

4. The necessity of approval of the prescribed authority arose as in the assessment year the income of the petitioner society exceeded Rs. 1 crore. The petitioner society applied claiming that the society is existing solely for educational purposes and not for profit. The society is running the institution in the name of C.P Vidya Niketan Inter College at Kaimganj, District Farrukhabad. A notice was issued to the society on May 13, 2011. It was heard on May 19, 2011, on which date it was required to produce audit report along with other relevant details, documents and accounts. The application was rejected by the Chief Commissioner of Income-tax, Ghaziabad (the prescribed authority) on May 27, 2011, on the grounds:

(a) the application for approval under section 10(23C)(vi) is available to an educational institution existing solely for the purpose of imparting education, while the application has been made by a society having many activities that appear to be other than educational such as to make appropriate efforts for upliftment of public in social and cultural field, etc., and

(b) the applicant has not filed the mandatory audit report under rule 16CC (Form 10BB). As such the application is not maintainable.

5. As the order is not appealable, the society has filed this writ petition on the grounds that the rejection of the petitioner's application for the reason that it has many other objectives, which seemingly are not related to education, is arbitrary and contrary to the decision of this court in Ewing Christian College Society v. Chief CIT, [2009] 318 ITR 160 (All). The petitioner society made categorical submissions that it is not running any other charitable activity associated with education. Its only activity was to run C.P Vidya Niketan Inter College. There was no material to apprehend that the petitioner may utilise the money received by it for the purposes other than education.

6. Shri Navin Sinha, appearing for the petitioner society, submits that for the purposes of grant of approval under section 10(23C)(vi) of the Act what is to be seen his actual activity and not the objects. The society is registered with the Societies of Registration Act, vide certificate of registration dated July 31, 2001, with the objects provided in a “Smriti Patra”, primarily include continuous development of education by establishing and running school from primary to post graduate level. The other objects set out, namely, for social, cultural, educational, artistic development, to establish library, reading rooms, hospitals, sports centres, nari niketan, shilp kala kendra, aanganbari, balwari kendra, carpet weaving centre, painting, education centres, typing short-hand study centres, computer study centres, agarbatti, candle, etc.; to run and operate the schemes and progress of capart, dabacara, sudacell, nabard, sidco, women and child development department, human resource development department, Government welfare department, and education ministry; to establish and run centres for environment development, plantation of trees, pollution control, inoculation, population control, pulse polio, AIDS control, leprosy centres; to provide copies, books, uniforms free of cost to the poor children of scheduled castes, scheduled tribes and other marginalised sections; to organize social cultural programmes and to provide help to the people suffering from natural calamities; to prepare the students including the girl students for examination and comprehensions; to establish orphanage and old age homes, etc., are incidental to the main objects of the society. Shri Sinha submits that the bye-laws have been amended on July 10, 2006. He filed certified copy of the amended bye-laws dated July 24, 2012, along with supplementary affidavit.

7. It is submitted by Shri Sinha that the Commissioner of Income-tax started the hearing on the same day, when the petitioner was required to produce audit report under rule 16CC (Form 10BB). The petitioner sought time to produce the report and was orally directed to furnish the same within next three days. In view of the fact that hearing took place on May 27, 2011, which was Friday, the report could be produced by Monday. However, on May 27, 2011, itself the Commissioner of Income-tax passed orders without providing adequate opportunity to produce the audit report.

8. Shri Navin Sinha has relied upon Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemptions), [2009] 185 Taxman 255 (Delhi); [2010] 329 ITR 459 (Delhi); Vanita Vishram Trust v. Chief CIT, [2010] 327 ITR 121 (Bom); City Montessory School (Regd.) v. Union of India, [2009] 315 ITR 48 (All) and American Hotel and Lodging Association Educational Institute v. CBDT, [2008] 301 ITR 86 (SC) in support of his submissions.

9. In City Montessory School (Regd.) (supra), the petitioner society was a registered society running a school. Initially the income was not taxable, hence no returns were filed. When notice under section 142(1) was issued, a return was filed for the assessment year 1991-92, with the claim for exemption under section 10(22). The Tribunal allowed the petition holding that the petitioner was purely an educational institution and not existing for the purposes of profit. The exemption was allowed under section 12A and a certificate under section 80G. With the aggregate annual receipts of more than Rs. 1 crore from April 1, 1999, all educational institutions were required to seek approval under section 10(23C)(vi). The Additional Commissioner on the application of the school society recommended for exemption. The Commissioner also recommended to exemption to the Chief Commissioner. The Director General of Income-tax, however, passed an order under section 127(2). The order was quashed by the High Court and the search on the premise and residence of the petitioner was held illegal. The application under section 10(23C)(vi) was rejected on the ground that the petitioner did not produce the books of account in pursuance of the letter given to the petitioner. The High Court allowed the writ petition with the findings that the petitioner was engaged in educational activities, which fell under the charitable purposes. Though the principles of res judicata are not applicable to income-tax matters, but a finding in respect of earlier years regarding the activity of the petitioner society was relevant consideration. It was not open to the Chief Commissioner, which was summoned by the court in contempt proceedings, when he had rejected the application for exemption, to go into the validity of the registration of the society, the Chief Commissioner has thus directed to grant approval under section 10(23C)(vi).

10. In Digember Jain Society for Child Welfare v. Director General of Income-tax (Exemption), [2010] 329 ITR 459 (Delhi) the Delhi High Court relied upon the judgment of the Supreme Court in American Hotel and Lodging Association Educational Institute v. CBDT, [2008] 301 ITR 86 (SC) and held that the petitioner society was formed mainly with the object of carrying out educational activities. There was no purpose of profit. Its activity as on the day was only for education, namely, running various schools and no other activity. There was no allegation that the petitioner had deviated from the object. The society was granted exemption up to the assessment year 2001-02 and the assessment up to the year 2007-08 were pending. The respondents had denied exemption merely on the suspicion that it may deviate from the object in future. The society was assessed to income for the previous assessment years for the total income at nil and in the circumstances the order rejecting the application under section 10(23C)(vi) was quashed. A writ of mandamus was issued to the respondents to give exemption, however, while doing so, the respondent was made free to incorporate stipulation and condition in terms of the third proviso, subject to the undertaking given by the petitioner that the petitioner society will not breach any of these conditions and that any surplus fund shall be utilised only for educational purposes and will not be diverted to other non-educational objects.

11. In Vanita Vishram Trust v. Chief CIT (supra), the Bombay High Court held that though the memorandum of association contains varied objects, so long as the record demonstrates that the assessee only conducts educational institutions, it must be regarded as existing solely for the purpose of education. The surplus may incidentally arise from the activities of the trust, after meeting the expenditure incurred for conducting educational activities but that would not disentitle the trust of the benefit of the provisions of section 10(23C). The third proviso to section 10(23C) would establish that Parliament did not regard the accumulation of income by a university or educational institution governed by sub-clause (vi) as a disabling factor, so long as the purpose of accumulation is the application of the income wholly and exclusively to the objects for which the institution has been established. Parliament has, however, prescribed that where more than fifteen per cent, of the income is accumulated after April 1, 2002, the amount exceeding fifteen per cent, shall not be accumulated for a period in excess of five years. In this case, the society had objects such as to set up ashrams and homes for Gujarati Hindu women and girls particularly widows and orphan girls either as free or as paying inmates, for imparting religious, secular and industrial education and training in fine arts as far as possible through the instrumentality of women, the inmates of the ashrams and other women and girls. The object also included establishing libraries, reading rooms within reach of the inmates of the ashrams and other Gujarati Hindu women and girls; to provide gymnasiums, playgrounds, and places of recreation, and physical culture and to furnish and maintain the same and to permit the same to be used by the inmates thereof and their friends, either gratuitously or upon such terms and conditions as may be agreed upon; to publish books, periodicals and pamphlets and deliver lectures and to give pecuniary or other help to poor Gujarati Hindu women and girls (studying in the institution). The Bombay High Court held in paragraphs 9 and 10 as follows (page 127 of 327 ITR):

“Section 10(23C) defines certain categories of income which shall not be included in computing the total income of any person for a previous year. Qause (vi) deals with income received by any person on behalf of any university or other educational institution existing solely for educational purposes and not for purposes of profit (other than those mentioned in sub-clause (iiiab) or (iiiad)) and which may be approved by the prescribed authority. Sub-clause (iiiab) speaks of a university or other educational institution existing solely for educational purposes and not for purposes of profit and which are wholly or substantially financed by the Government. Sub-clause (iiiad) speaks of a university or educational institution existing solely for educational purposes and not for profit if the aggregate annual receipts do not exceed an amount prescribed. Where the aggregate receipts exceed the amount prescribed, then the approval of the prescribed authority is mandated in order to enable the institution to obtain the benefit of the exemption contained in sub-clause (vi). The provisos which have been enacted by Parliament regulate the manner in which applications are to be made, the grounds of an application and verification of compliance with the provision. Under the first proviso, an application under sub-clause (vi) has to be made in the prescribed form to the prescribed authority for the grant or continuance of an exemption. The prescribed authority, before approving an institution, university or educational institution is entitled to call for documents including audited annual accounts or information in order to satisfy itself about the genuineness of the activities carried on. The prescribed authority is empowered to make such enquiries as it deems necessary. The third proviso stipulates, inter alia, that where a university or other educational institution referred to in sub-clause (vi) applies its income or accumulates it for application wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent, of its income is accumulated on or after April 1, 2002, the period of the accumulation of the amount exceeding fifteen per cent., of its income shall in no case exceed five years. For the purpose of these proceedings, it would not be necessary to advert every one of the provisos in further detail save and except to note that where a university or educational institution referred to in sub-clause (vi) has been approved by the prescribed authority and subsequently, the authority is satisfied that the institution/university had not applied its income in accordance with the stipulation contained in the third proviso or that the activities are not genuine or are not carried out in accordance with the conditions subject to which the approval was granted, the approval can be withdrawn after furnishing to the institution/university an opportunity of being heard.

Now, it is not in dispute before the court that the petitioner has been conducting primary and secondary schools and colleges for arts, science, commerce and technical courses in Mumbai since 1929 and in Surat since 1940. Nor is there any dispute before the court that save and except for conducting these educational institutions, the petitioner has not carried on any other activities right since 1929. In this background, it would be necessary to advert to the objects set out in the memorandum of association. Clause 111(b) spells out as the object, amelioration of the condition of Gujarati Hindu women of the then Bombay Presidency and other places and alleviation of their social status by educating to them in subjects tending to their material, moral and spiritual advancement, opening out for them proper and suitable fields of work, lawfulness and influence in the Hindu society. From this object, it is abundantly clear that the amelioration of the condition of Gujarati speaking Hindu women was sought to be improved, when the trust was founded in March, 1928, by providing for the education of this class of women. The means by which this object is sought to be achieved is by conducting Ashrams or homes for women and girls, particularly for widows and orphaned girls either as free or as paying inmates and by conducting schools for imparting religious, secular and industrial education and training in fine arts. A number of ancillary objects have been adverted therein including provision of libraries and gymnasiums, publication of books and by means of pecuniary and other help to students of the institution. A holistic reading of the object clause would establish beyond doubt that the sole purpose for the establishment of the petitioner was to further the cause of education amongst women belonging to a particular class, as stated therein. Though the objects clause contained varied objects including the management and development of movable and immovable properties, the statement of fact before the court which is not disputed is that the only activity which has been carried out by the trust ever since its inception is the conduct of educational institutions. The court, it must be emphasized, is not dealing with an institution which has sought approval for the first time or which has been set up in the proximate past. The trust has a history of over eighty years during the course of which the only activity is of conducting educational institutions.”

12. In American Hotel and Lodging Association Educational Institute (supra), the Supreme Court analysed the provisos to section 10(23C)(vi), vide Finance (No. 2) Act, 1998, and observed that section 10(23C) is analogous to section 10(22), and to that extent the judgments of the Supreme Court as applicable to section 10(22) would equally apply to section 10(23C). The proviso, however, inserted in section 10(23C)(vi) requires the applicant to seek approval not only to show that it is an institution existing solely for educational purposes but to obtain initial approval from the prescribed authority. Since there was no monitoring mechanism to check the abuse of the exemption proviso, the prescribed authority was required to vet the application stipulated by the second proviso, by calling for such documents including annual accounts or information from the applicant to check the genuineness of the activities of the applicant institution. The Supreme Court, thereafter, held in paragraphs 32 and 33 as follows (page 107 of 301 ITR):

“Having analysed the provisos to section 10(23C)(vi) one finds that there is a difference between stipulation of conditions and compliance thereof. The threshold conditions are actual existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application in the standardized form in terms of the first proviso. It is only if the pre-requisite condition of actual existence of the educational institution is fulfilled that the question of compliance with requirements in the provisos would arise. We find merit in the contention advanced on behalf of the appellant that the third proviso contains monitoring conditions/requirements like application, accumulation, deployment of income in specified assets whose compliance depends on events that have not taken place on the date of the application for initial approval.

To make the section with the proviso workable we are of the view that the monitoring conditions in the third proviso like application/utilization of income, pattern of investments to be made, etc., could be stipulated as conditions by the prescribed authority subject to which approval could be granted. For example, in marginal cases like the present case, where appellant-institute was given exemption up to financial year ending March 31, 1998 (assessment year 1998-99) and where an application is made on April 7, 1999, within seven days of the new dispensation coming into force, the prescribed authority can grant approval subject to such terms and conditions as it deems fit provided they are not in conflict with the provisions of the 1961 Act (including the abovementioned monitoring conditions). While imposing stipulations subject to which approval is granted, the prescribed authority may insist on certain percentage of accounting income to be utilized/applied for imparting education in India. While making such stipulations, the prescribed authority has to examine the activities in India which the applicant has undertaken in its constitution, memorandum of understandings and agreement with Government of India/National Council. In this case, broadly the activities undertaken by the appellant are conducting classical education by providing course materials, designing courses, conducting exams, granting diplomas, supervising exams, all under the terms of an agreement entered into with institutions of the Government of India. Similarly, the prescribed authority may grant approvals on such terms and conditions as it deems fit in case where the institute applies for initial approval for the first time. The prescribed authority must give an opportunity to the applicant-institute to comply with the monitoring conditions which have been stipulated for the first time by the third proviso. Therefore, cases where earlier the applicant has obtained exemption(s), as in this case, need not be reopened on the ground that the third proviso has not been complied with. However, after grant of approval, if it is brought to the notice of the prescribed authority that conditions on which approval was given are breached or that circumstances mentioned in the thirteenth proviso exists then the prescribed authority can withdraw the approval earlier given by following the procedure mentioned in that proviso. The view we have taken, namely, that the prescribed authority can stipulate conditions subject to which approval may be granted finds support from sub-clause (ii)(B) in the thirteenth proviso.”

13. Shri Dhananjay Awasthi, appearing for the Revenue, states that the society has changed its memorandum, vide executive body meeting dated July 10, 2006, which does not stand to reason. When a society was created solely for educational purposes, then it should not have changed the memorandum to the extent it goes outside the purview of the conditions given in section 10(23C)(vi).

14. It is submitted that on the one hand it is stated by the counsel that he had filed the audit report under section 44AB in Form 3CB along with the other relevant details/documents while in paragraph 19 it is stated that he did not have the opportunity to produce the audit report under rule 16CC (Form 10BB). In spite of opportunity given by the Chief Commissioner, the petitioner did not submit the requisite documents. The availability of the audit report with the petitioner thus appears to be a mere afterthought, as during the whole proceedings the petitioner has not submitted the audit report under rule 16CC (Form 10BB).

15. Shri Dhananjay Awasthi has relied upon the judgment in Sole Trustee, Sole Trustee, Lok Shikshana Trust v. Cit, Mysore, [1975] 101 ITR 234 (SC) and the Rajasthan High Court in CIT v. Maharaja Sawai Mansinghji Museum Trust, [1988] 169 ITR 379 (Raj). He submits that in both the cases the meaning of “education” under section 10(23C)(vi) is explained, wherein it is mentioned that approval of the exemption under section 10(23C)(vi) is available to only those institutions, which exist solely for education. He submits that solely means exclusively and not primarily.

16. We have considered the respective submissions; the opinions of the different High Courts and the Supreme Court, both on the grounds as to whether in view of the objects, and without taking into account the amendment made to the objects clause of the petitioner society, it can be said to exist solely for the purposes of education as provided under section 10(23C) and whether the petitioner society was given adequate opportunity to establish in the enquiry held by the Chief Commissioner to satisfy him about the activities of the society to qualify for exemption.

17. Section 10(23C) falls in Chapter III, which provides for incomes, which do not form part of total income. It exempts the income of various funds, societies and trusts, which are set up for charitable purposes and which includes the Prime Minister's National Relief Fund; the Prime Minister's Fund (Promotion of Folk Act); the Prime Minister Aid to Student Fund; or the National Foundation of Communal Harmony; university or other educational institutions existing solely for educational purposes and not for profit, and which is wholly or substantially financed by the Government or hospitals, universities with receipts which do not exceed the amounts of annual receipts prescribed, section 10(23C)(vi) provides:

“any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority;”

18. The first proviso provides for such fund or trust or institution or any university or other educational institution or any hospital or medical institutions to make an application in the prescribed form and manner to the prescribed authority for the purposes of grant of exemption or continuance thereof. The second proviso requires an enquiry to be made by the prescribed authority before approving the applicant and which authorises him to call for such documents (including audited annual accounts) or information of the applicant from the fund or trust or institution or any as it thinks necessary in order to satisfy itself about the genuineness and the activities of the applicant. The prescribed authority may also make such enquiry as it may deems necessary in that behalf. The third proviso restricts the applicant to apply its income or the accumulated income wholly or exclusively to the objects for which it is established and a case, where more than 15 per cent, of its income is accumulated on or after April 1, 2002, period of accumulation and the amount exceeding 15 per cent, of its income shall in no case exceed five years. Sub-clause (b) of the third proviso provides for conditions of investment and deposits of the funds.

19. The Supreme Court in American Hotel and Lodging Association Educational Institute (supra) put a note of caution on this process and observed that it is important to note that the second proviso also indicates the powers and duties of the prescribed authority. The prescribed authority is empowered to be given the approval to call for such document enclosing annual accounts or information from the applicant to check the genuineness of the activities of the applicant institution and under the third proviso the prescribed authority has to ascertain while judging the genuineness of the activities of the applicant institution, as to whether the applicant applies its income wholly or exclusively to the object for which it is constituted/established. The Supreme Court further observed that under the twelfth proviso, the prescribed authority is required to examine the case where an applicant does not apply its income during the year of receipt and accumulates it but makes payment therefrom to any trust or institution registered under section 12AA or to any fund or trust or institution or university or other educational institution and to that extent the proviso states that such payment shall not be treated as application of income to the objects for which such trust or fund or educational institution is established. The twelfth proviso is the matter of detail. Under the thirteenth proviso, circumstances are given under which the prescribed authority is empowered to withdraw the approval earlier granted.

20. In Sole Trustee, Sole Trustee, Lok Shikshana Trust v. Cit, Mysore, [1975] 101 ITR 234 (SC), it was held that word “education” in section 2(15) of the Act connotes the process of training and developing the knowledge, skill, mind and character of students by normal schooling, and has not been used in the wide and extensive sense according to which every acquisition of further knowledge constitutes education. It further held that ordinarily, profit motive is a normal incident of business activity and if the activity of a trust consists of the carrying on of a business and there are no restrictions on its making profit, the court would be well justified in assuming, in the absence of some indication to the contrary, that the object of the trust involves the carrying on of an activity for profit.

21. In CIT v. Maharaja Sawai Mansinghji Museum Trust (supra) the Rajasthan High Court expressed the opinion that section 2(15) speaks about charitable purpose and the definition therein includes education. The word “education” has not been used in a sense in which it connotes systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction, which a person has received. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling and which will not include the establishment of museum in a portion of City Palace of Jaipur for the benefit of public. The activity of establishment and running of museum would not fall within the definition of section 10(22), defining income of university or other educational institutions, existing solely for education purposes and not for purposes of profit.

22. In the present case, the petitioner society is registered charitable society with the Registrar of Societies and is also registered under section 12A with its objects of establishing, running and maintaining educational institutions. It has a school by the name of C.P Vidya Niketan Inter College. At present the society does not have any activity other than running and maintaining educational institutions. The other objects and purposes in the “Smriti Patra” may, if such objects are undertaken, may constitute such purpose, to be other than educational purpose, but at present it cannot be said nor there is any allegation or material either brought before the Chief Commissioner of Income-tax, Ghaziabad, or referred to in the counter-affidavit, which may be other than education. There are adequate safeguards, that if the activities other than educational activities are undertaken, the exemption may be withdrawn but in the absence of any such allegation it cannot be said merely on the enumeration of the activities, which are all primarily connected with education and charity that the society does not exist solely for the purpose of imparting education. The case in hand is quite similar to that of Vanita Vishram Trust v. Chief CIT (supra), and satisfies the tests laid down in American Hotel and Lodging Association Educational Institute (supra) as well as the view taken by this court in Ewing Christian College Society (supra) in which it was held that where it is not disputed that the society runs an educational institution and is not for the purposes of making profit, merely because the object of the society is also to serve the church and the nation would not mean that the educational institution not existing solely for educational purpose.

23. In the facts and circumstances, we are of the opinion that as of now the petitioner society running educational institution by the name of C.P Vidya Niketan Inter College at Kaimganj, District Farrukhabad imparts education to students from class VI to class XII, in the absence of any allegation or material, the object clause providing for other charitable activities, would not disentitle the society from approval under section 10(23C)(vi) of exemption. The proviso added to section 10(23C)(vi), specially provisos 2, 3, 12 and 13, give sufficient powers to check the abuse of the exemption. The mere possibility, therefore, that the society may in future pursue activities, which are not charitable, or closely connected with education for making profit, would not constitute the grounds to reject the approval under section 10(23C)(vi).

24. On the question of satisfaction of the prescribed authority of the conditions of the second proviso to section 10(23C)(vi), we are of the view that the Chief Commissioner of Income-tax did not give sufficient opportunity to the petitioner to place documents relevant to the enquiry before rejecting the application. The contents of paragraph 9 of the writ petition that the hearing proceeded on the same day on May 27, 2011, when the petitioner was required to produce the audit report under rule 16CC in Form 10BB, and the petitioner was granted time to furnish the same within three days, has not been specifically denied in the counter-affidavit. The reply is rather argumentative. We also find that there was no hurry to close the enquiry inasmuch as the rejection of the application will visit serious consequence on the petitioner inasmuch as having exceeded the aggregate receipts over and above rupees one crore, the income of the society in the absence of the exemption under section 10(23C)(vi) would not qualify for exemption. In the rejoinder-affidavit it is stated in paragraph 8 that the audit report was submitted in Form 3CB prior to the hearing on May 27, 2011. The petitioner-society was never informed that the audit report in Form 10BB was required to be submitted by it, and as such the petitioner could not submit the audit report in Form 10BB. The request for time to produce Form 10BB was allowed on May 27, 2011, orally but that before the time allowed could expire the order was passed. The enquiry under the second proviso to section 10(23C) was not complete and thus the opinion of the Chief Commissioner of Income-tax, Ghaziabad, as the prescribed authority was not formed on the examination of the relevant records, which he had directed to be produced.

25. In the facts and circumstances of the case, we allow the writ petition and while setting aside the order dated May 27, 2011, passed by the Chief Commissioner of Income-tax, Ghaziabad, direct him to decide the application again confined to the enquiry on the second proviso to section 10(23C) of the Act to satisfy himself of the conditions of grant of approval. A fresh notice will be given to the petitioner to submit the requisite documents on which a fresh order will be passed by the Chief Commissioner of Income-tax, Ghaziabad.