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2022 (2) TMI 868 - AT - Income TaxRevision u/s 263 by CIT - direction to the AO to compute income of the appellant Trust without allowing exemption u/s. 10(23C)(iiiae) - Whether in the absence of any receipt from any hospital or other institution for the reception and treatment of persons suffering from illness, the allowability of exemption u/s. 10(23C)(iiiae) of the Act is prima facie, erroneous and prejudicial to the interest of the Revenue ? - Whether 'other income' of a philanthropic entity is eligible for deduction u/s. 10(23C)(iiiae) ? - HELD THAT:- There is no requirement of provision Section 10(23C)(iiiae) of the Act that the income should be earned from such philanthropic activity, rather it is otherwise that the institution/Trust has done such an activity purely for charitable/philanthropic purposes and under such circumstances expectation of income from such activity will be against the spirit of the aforesaid statutory provision. There is no allegation that the institution is doing any activity other than the aforesaid medical dispensary. The annual income of the appellant Trust is out of the interest income from the investment has been made of surplus lying with it. However, there is no allegation that such surplus is applied for any purpose other than the charitable activity. Now, the only allegation is that the appellant Trust has applied only 12% of its receipts and accumulated 88%. We find that under the provision of Section 10(23C)(iiiae) of the Act, there is no limit prescribed for application of receipts and accumulation of receipts. Appellant Trust is within its rights to accumulate the receipts as per its requirement. It had been explained by the assessee Trust to the Ld. CIT(E) that the surplus of investment was being accumulated for spending in future years for the objects and purposes of the Trust like building of hospital, nursing home or any other similar medical institution. All the conditions as prescribed u/s.10(23C)(iiiae) of the Act, have been fulfilled by the appellant Trust and there is no allegation that the appellant Trust is involved in any other activity for profit or does not exist for philanthropic purposes. Even in this case, all the facts are on the file, therefore there was no need for any further investigation by the A.O. as alleged by the Ld. CIT(E). The action of the Ld. CIT(E) in directing the A.O. to disallow the exemption granted u/s. 10(23C)(iiiae) of the Act was not justified - Appeal of the appellant Trust stands allowed.
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