2013 (9) TMI 1192

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ral public regardless of caste, colour, religion or creed. It is not the case of the Revenue that patients were/are being charged exorbitant amounts and free treatment was not provided to poor and needy. The allegations do not show that the hospital in question was run or managed by the respondent society with a profit motive or intention. (Specific contention of the Revenue relating to pharmacy on the said issue have been examined below.) Having said, we will now examine the factual findings on the basis of which registration under Section 12A was rejected by the Director of Income Tax (Exemption), but the findings were not accepted by the Tribunal. (i) The respondent society had made contribution of Rs. 22,500/- in all, to eight churche .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 1, wherein it has been observed as under:- The other interpretation is to see whether the purpose of the trust or institution in fact involves the carrying on of an activity for profit or in other words whether an activity for profit is actually carried on as an integral part of the purpose or to use the words of Chandrachud J., as he then was, in Dharmodawan?s case [1977] 109 ITR 527 (SC), ?as a matter of advancement of the purpose?. There must be an activity for profit and it must be involved in carrying out the purpose of the trust or institution or to put it differently, it must be carried on in order to advance the purpose or in the course of carrying out the purpose of the trust or institution.  The profit of the assessee co .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the total income declared in respect of earlier years. It has been observed that this did not amount to non-charitable activity as the said fund was for the benefit of retired or ex-employees. (v) Director of Income Tax (Exemption) has objected to the manufacture of medicines. Tribunal in this regard has observed that the respondent society had a pharmacy where compounding, mixing and diluting the medicines was done. This was required to reduce the strength of medicine and make it cost effective when smaller dosages were required. Drug Control Department had granted permission to sell, stock and run the pharmacy. The respondent?s hospital had been in existence for past 125 years and the Drug Controller had conducted regular inspections. T .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X