Thursday, May 28, 2015

No denial of sec. 11 relief to hospital just because it didn't provide concessional treatment to poor patients


Section 11 exemption could not be denied to a hospital on the ground that it didn’t provide concessional treatment to poor patients as there is no provision under Income-tax Act which would disentitle assessee to claim exemption on this ground.

Facts:


a)Assessee-trust, running a multi-specialty hospital, claimed exemption of income under section 11 of the Income-tax Act (‘Act’).

b)Assessing Officer (AO) denied exemption on ground that assessee was earning profit from its activity and it had failed to provide concessional treatment to poor patients.

c)On appeal, the CIT(A) reversed the findings of the AO and allowed exemption to the assessee. Aggrieved by the order of CIT(A), the AO filed the instant appeal before the Tribunal.

The Tribunal held in favour of assessee as under:

1)The CBDT in its Circular No. 11, dated 19-12-2008 had clarified that where the purpose of trust or institution is relief to the poor, education or medical relief, it would constitute charitable purpose, even if it incidentally involves carrying on the commercial activities

2)In the instant case, assessee was engaged in carrying on objects of providing medical relief to people at large which has been recognised as charitable activity under the Act. Therefore, exemption under section 11 could not be denied merely because surplus was generated from such activities

3)Further, there is no provision under the Act which would disentitle assessee to claim exemption on the ground that it did not provide concession to poor patients and, therefore, this could not be a ground to disallow exemption under section 11 - ITO V. NOBLE MEDICAL FOUNDATION & RESEARCH CENTRE [2015] 57 taxmann.com 333 (Pune - Trib.)
Post a Comment