Thursday, January 16, 2014

ITAT mistook child birth as an act of god; HC allows sec. 10(23C) relief to maternity hospital

The High Court held in favour of assessee as under:

1)  The expression 'medical attention' in section 10(23C)(iiiae) cannot be read to be confined to medical treatment of persons who are only suffering from an illness or a mental disability;
2)  A hospital which provides for maternity care will fulfill the description of a hospital for the reception and treatment of persons requiring medical attention;
3)  The Tribunal has dealt with at length its own view of the process of child birth. The Tribunal regards child birth as an act of God and a natural process and has proceeded to refer to the fact that in the olden days, deliveries were performed by midwives at individual households;
4)  According to the Tribunal it was only because of the anxiety of people in modern times to be relieved of discomfort or pain during labour, that patients choose hospitals. This was not a correct assessment either of modern science or of statutory interpretation;
5)  It is a matter of common experience that a hospital providing for maternity care has to deal with emergencies and on occasions, such hospitals have to provide emergent care which was often necessary to save the lives of the mother and the child.
6)  The views of Tribunal couldn’t be accepted as there was considerable reduction of maternal mortality due to availability of expert medical care. Therefore, maternity hospitals which exist solely for philanthropic purposes and not for profit are entitled to tax exemption under section 10(23C)  - Nehru Prasutika Aspatal Samiti v. CIT [2014] 41 283 (Allahabad)