Income of institution established for development of Khadi and Village Industries [Section 10(23B)] :
(i) The exemption will be available to institutions constituted as public charitable trusts or registered under the Societies Registration Act, 1860 or under any law corresponding to that Act in force in any part of India existing solely for development of khadi and village industries.
(ii) Income derived by such institutions from the production, sale or marketing of Khadi products or village industries would be exempt from income-tax.
(iii) The conditions for availing exemption are:
(1) The institution has to apply its income or accumulate it for application, solely for the development of village industries.
(2) They should be approved by the Khadi and Village Industries Commission.
(3) Such approval is granted for a period of 3 years at a time.
(iv) However, approval once granted may be withdrawn if at any time the Government is satisfied that –
(1) the institution has not applied or accumulated its income in accordance with the provisions of the section;
(2) the activities of the institution are not being carried out in accordance with the conditions imposed on the basis of which the approval was granted.
(v) Such withdrawal shall be made after giving reasonable opportunity to the assessee. A copy of the order shall be sent to the Assessing Officer as well as the assessee.