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DDIT (E) -II (1) , Mumbai Versus Jaslok Hospital And Research Centre

2015 (10) TMI 241 - ITAT MUMBAI

Rectification of mistake - whether there had occurred a mistake apparent from record in the tribunal's order in-as-much as the tribunal had assumed that exemption u/s.10(21) was not an issue before the ld. CIT(A)? - denial of exemption u/s.10(21) and 10(23C) - benefit of exemption u/s.11 - Held that:- The assessee has brought on record the approval u/s. 35(1)(ii) dated 27.06.2008 w.e.f. 01.04.2002, and which is a prerequisite for the applicability of s. 10(21). The same is subject to certain add .....

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, and which is definitely not the case. The Revenue, on its part, has brought on record the copy of the order u/s.10(23C)(via) dated 31.12.2008 (for A.Ys. 1999-2000 to 2007-08) by the prescribed authority, refusing the approval there-under to the assessee, claiming it to have a bearing in the matter. The same, we observe, contains findings on the aspect of the surcharge @ 20% on the bills issued to the indoor patients, and transferring the same, as also 25% of the fees paid to the doctors, to th .....

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> In view of the foregoing, we, under the circumstances, consider it only fit and proper to restore the matter back to the file of the A.O. to consider and determine the issue of exemption u/s. 10(21) on the income of the assessee's research centre afresh. This is a subsisting issue in the assessee's case. The A.O. shall consider the matter in all its aspects, and decide the same in accordance with the law per a speaking order, taking into account all the material deemed relevant for the purpos .....

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.09.2008, allowing the Assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2005-06 vide order dated 31.12.2007. 2.1 This is the second round before the Tribunal. It shall be relevant to recount the background facts of the case. The assessee, a public trust, under the Public Trust Act, 1950, is registered as a charitable institution u/s.12A(a) of the Act. It functions through its two Wings, namely, a .....

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income of its Research Wing. The exemption u/s.11 was also denied, assessing the income of the assessee-trust (AOP) from both the wings as business income. In appeal, the assessee's claim was upheld by the first appellate authority; the assessee being consistently held by both the first appellate authority as well as by the Tribunal, the second appellate authority, to be working with the dominant object to run a hospital. The approval u/s. 35(1)(ii) had also been since received. The assessee .....

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2008-09. Accordingly, it denied exemption u/s.10(21) and 10(23C), even as it confirmed the exemption u/s.11, following its order for A.Y. 2001-02, which is a combined order for A.Ys. 1995-96 and 2001-02 (in ITA No. 3514/Mum/1999 and 2607/Mum/2005 respectively dated 03.07.2007) vide order dated 20.03.2013, which is again a combined order for A.Ys. 2005-06 and 2008-09 (copy on record). 2.2 The assessee subsequently moved an Application u/s.254(2) of the Act, contending that there had occurred a mi .....

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assessee's claims. Accordingly, vide order u/s.254(2) dated 16.01.2015 (in MA No. 381/Mum/2014/copy on record), it recalled its order (for the current year) for the limited purpose of deciding the issue of assessee's entitlement to exemption u/s.10(21) of the Act; the relevant part of its order reading as under, and hence this appeal: '3. We have heard the rival submissions and perused the material before us. We find that the assessee had raised the issue before the FAA with regard .....

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/s.10(21) of the Act.' 3. Before us, the assessee placed reliance on the decision by the tribunal in its own case for A.Ys. 1995-96 and 2001-02 (supra), stating the issue of grant of exemption u/s. 10(21) of the Act to be covered thereby in-as-much as the assessee had received the approval u/s.35(1)(ii) for the period 01.04.2002 onwards on 27.06.2008 (copy on record). The Revenue, on the other hand, would submit that the said issue is at large since the compliance of the conditions of approv .....

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profit and, accordingly, denied approval there-under vide the said order. 4. We have heard the parties, and perused the material on record. Our mandate, being derived from the order u/s.254(2), which has attained finality, recalling the assessee's appeal for the limited purpose, is for deciding on the maintainability or otherwise in law of the exemption u/s.10(21) of the Act in the facts and circumstances of the case. We find that the ld. CIT(A) has allowed the assessee relief for the curren .....

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and in law, the learned CIT(Appeals) erred in stating that the exemption under section 10(21) is already allowed to the Research Centre without appreciating the fact that it is the power of the Assessing Officer to allow such exemption if the conditions are fulfilled by the assessee. 2) On the facts, and in the circumstances of the case, and in law, the learned CIT (Appeals) erred in stating that there are separate auditors for Jaslok Hospital and Jaslok Research Centre and separate audit is do .....

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a reasonable opportunity to the Assessing Officer as provided in Rule 46A of the Income-Tax Rules, 1962.' The same stood accepted by the tribunal; the relevant part of its order dated 03.07.2007 reading as under: '17. We heard both sides in detail and considered the matter. The grounds no. 1, 2 & 3 raised by the Revenue in this appeal are not in fact arising even out of the assessment order. Even though the Assessing Officer has stated his reasons to bring the assessee out of the am .....

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so. In fact, the tribunal per the said order also allows exemption u/s.10(22A) of the Act, which provision stands omitted by Finance (No.2) Act, 1998 w.e.f. 01.04.1999, so that the said allowance would be of no consequence for the years subsequent to A.Y. 1998-99, and would therefore not apply to the year under consideration. The only aspect that therefore survives is the benefit of exemption u/s.11, the satisfaction of which provision is to be considered by the A.O. at the time of assessment. T .....

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ed before him. It was thus incumbent on the ld. CIT(A) to have caused so after admitting the said Approval by way of additional evidence under rule 46A. Not only does he not do so, he also does not issue any finding qua the satisfaction or otherwise of those conditions, and proceeds, as afore-stated, on the basis of the matter being covered by the tribunal's order for the earlier years, and which is definitely not the case. The Revenue, on its part, has brought on record the copy of the orde .....

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