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2022 (9) TMI 938 - Indian Laws
Exemption from the levy of property tax - Puducherry Municipality Act, 1973 - Applicability of Section 124 of the Act providing for general exemptions - demand notice issued for the period 2010-11 to 2016-17 dated 26.10.2018 - educational or medical institutions - HELD THAT:- As far as the provisions of Section 124(c) are concerned, any building used for educational purposes that is attached to an educational institution, must qualify for the exemption as per a plain reading of the provision. As expressed by the Division Bench in the case of SRIRAM EDUCATIONAL TRUST VERSUS THE PRESIDENT [2008 (1) TMI 996 - MADRAS HIGH COURT] there is no necessity to strain the language of the Act as the language is clear and does not admit of any ambiguity. The question is whether the hospital is in fact, being used 'for educational purposes'. To determine this, the authority considering the claim of exemption, would have to look into the activities of the institute/hospital, bearing note of the use to which they are being put.
As to the argument that a hospital ancillary to a Medical College assumes a special status as a teaching hospital, also and equally engaged in the dissemination of medical education, such an argument bears looking into, including specifically whether the hospital is being run along commercial lines, how the income earned is being utilized as well as other relevant factors in arriving at a considered decision in regard to the claim of the petitioner. The impugned order is entirely silent on all these aspects.
Claim under Section 124(e) - HELD THAT:- There is to be a detailed verification as to whether the petitioner satisfies the requirement of 'charitable institution'. The mere fact that it has obtained an exemption under Section 12(A) and 11 of the Income tax Act, 1961 would not come to its rescue and the officer must undertake a detailed verification of its financials, including the deployment of its funds and record his satisfaction that receipts/income are being ploughed back into the charitable activity.
The matter remanded to the file of the authority for denovo adjudication - Petition allowed by way of remand.