Dps Society v. UOI

Delhi HC12 Feb 2026W.P.(C)/9848/2009

Case brief

AI extract

What is this about?

Section 10(23C)(vi) exemption; Income Tax Act, 1961; educational institution exemption withdrawal quashed; DPS Society v. UOI; franchise fees incidental activity not business income; orders dated 26.02.2009 of respondent no.5; AY 2005-06 to 2007-2008 (W.P.(C) 9847/2009) and AY 2002-03 to 2004-05 (W.P.(C) 9848/2009); prior order dated 30.04.2008 for AY 2008-09; reliance on DIT (Exemption) v. Delhi Public Society, 2018 (403) ITR 49 Delhi, judgment dated 03.04.2018; SLP rejected by Supreme Court; writ petitions allowed; consequential directions to respondents.

What did the court decide?

Both writ petitions allowed; impugned orders dated 26.02.2009 passed by respondent no.5 quashed and set aside; respondents directed to do the needful consequent to the quashment and pass consequential orders in accordance with law. ¶¶17

Dps Society Vs UOI — Income Tax | Delhi HC (2026)

What the court decided

AI extract

Outcome

¶¶17

Issue for consideration

Whether the orders dated 26.02.2009 passed by respondent no.5 withdrawing exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 for the assessment years covered by the two writ petitions were liable to be quashed, given this Court's earlier ruling in DIT (Exemption) v. Delhi Public Society.

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Court's answer

Proceeding on this Court's earlier finding in DIT (Exemption) v. Delhi Public Society (judgment dated 03.04.2018) that charging of franchise fees by schools run under the aegis of the society was only incidental activity and not business income, and noting that all facts were identical and the respondent's counsel was not in a position to dispute that position of fact and law, the writ petitions were allowed and the impugned orders dated 26.02.2009 passed by respondent no.5 were quashed and set aside.

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Ratio / Principle

The respondents were directed to do the needful consequent to the quashment of the order dated 26.02.2009 and to pass consequential orders in accordance with law.

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Detailed headnote1 paragraphs

High Court of Delhi (Dinesh Mehta & Vinod Kumar, JJ.), order dated 12.02.2026 in W.P.(C) 9847/2009 and W.P.(C) 9848/2009 (DPS Society v. UOI): orders dated 26.02.2009 passed by respondent no.5 withdrawing exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 (AY 2005-06 to 2007-2008 and AY 2002-03 to 2004-05, following the order dated 30.04.2008 for AY 2008-09) were quashed and set aside. The petitions rested on this Court's earlier judgment dated 03.04.2018 in DIT (Exemption) v. Delhi Public Society, 2018 (403) ITR 49 Delhi, wherein charging of franchise fees by schools under the society's aegis was held to be only incidental activity and not business income; all facts were identical, the respondent's Senior Standing Counsel did not dispute the position, and the SLP against the 2018 judgment stood rejected by the Hon'ble Supreme Court. Respondents directed to pass consequential orders in accordance with law.

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$~2 & 3

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 9847/2009

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- W.P.(C) 9848/2009 DPS SOCIETY

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.....Petitioner

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Through: Mr. Satyen Sethi & Mr. Arta Trana Panda, Advocates. versus

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UOI

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.....Respondent Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh, JSC.

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CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

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O R D E R % 12.02.2026

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These writ petitions have been filed against order(s) dated 26.02.2009 passed by respondent no.5, whereby the exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 (hereinafter referred to as “The Act of 1961”) for assessment year 2005-06 to 2007-2008 in W.P.(C) 9847/2009 and AY 2002-03 to 2004-05 in W.P.(C) 9848/2009 has been withdrawn following the order dated 30.04.2008 passed by the respondent no. 5 himself for the AY 2008-09.

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Learned counsel for the petitioner at the outset submitted that against the said order dated 13.04.2008, the petitioner had preferred a writ petition, which was allowed by this Court in the case of DIT (Exemption) v. Delhi Public Society decided on 03.04.2018 reported in 2018 (403) ITR 49 Delhi.

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/02/2026 at 13:23:44

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and, SLP thereagainst has been rejected by Hon’ble the Supreme Court. 3. He submitted that vide its judgment dated 03.04.2018, this Court has categorically recorded a finding that the charging of franchise fees for various schools being run under the aegis of the society was only incidental activity and for this reason the society cannot be said to be business income. 4. Learned counsel submitted that all the facts are identical and therefore, these writ petitions also deserve to be allowed.

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Mr. Gaurav Gupta, learned Senior Standing Counsel, was not in a position to dispute the aforesaid position of fact and law.

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In view of what we have noticed hereinabove, the writ petitions are allowed and the impugned order(s) dated 26.02.2009 passed by the respondent no.5 are hereby quashed and set aside.

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The respondents are directed to do the needful consequent to quashment of the order dated 26.02.2009 and pass consequential order in accordance with law.

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DINESH MEHTA, J.

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VINOD KUMAR, J.

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FEBRUARY 12, 2026/ nk

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/02/2026 at 13:23:44

Dps Society v. UOI

Case brief

What is this about?

What did the court decide?

Dps Society v. UOI

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

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Dps Society Vs UOI