9911796707
TMI Blog2017 (2) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue has raised following two grounds in assessment year 2010-11: - "1. Whether on the facts and circumstances of the case and in law, CIT(A), Mumbai has erred in allowing the exemption u/s 11 of the I. T Act, that the assessee trust while calculating 2% of the Gross Billing has excluded the doctor's fees of As. 10,46,10,192/- and the some has resulted in shortfall of As. 20,92,218/- in the transfer to the Indigent Patient Fund (IPF Account) "2. Whether of the facts and circumstances of the case and in law the Ld. CIT (A), Mumbai has erred in allowing the exemption u/s 11 of the I. T. Act and allowed the appeal of assessee by not considering the fact that, the assessee has violated the directions given by the Bombay High Court, in regard to create a IPF account and transferred the amount to IPF Account for the betterment of poor and Indigent patients." 3. Briefly stated facts are that the assessee is a registrar trust with DIT (E), Mumbai, u/s 12A and 80G of the Act. The assessee trust is also registered with Charity Commissioner, Mumbai. The assessee while calculating the amount of gross billing has excluded the doctor's fee despite the fact that as per the scheme framed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been granted to it by the Competent Authority of the IT department." 3.5 It could thus be concluded that the scheme formulated by the Bombay High court does not directly address or affect the provisions of the Income Tax Act. Further, the question 'whether a charitable hospital has to deduct 2% of the amount of doctor's fees also, which is included in its bills and credit to the same to the IPF" is apparently not to be answered by the IT Authorities and it is only the Charity Commissioner who has to take a view on this issue. Hence, it cannot be said that by not deducting 2% from the doctor's fees, the appellant has violated the scheme formulated by the Bombay High Court, unless an adverse view in this regard has been taken by the Charity Commissioner. The intention of the Scheme in this regard is contained in paragraphs 10 and 11 of the Scheme which has to be interpreted by Charity Commissioner. Further. paragraph 10 of the Scheme provides that "if doctor's forego their charges, then the same shall not be included in the final bill of the weaker section patients". The Charity Commissioner shall therefore be liable to take a decision in this regard, keeping in view paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce available on record which is uncontested that the objects of the society are charitable in nature and a finding to the said effect has been given in the impugned order itself. Regarding the shortfall in the requisite no. of students belonging to the EWS category students in the facts as they stand no evidence of non-compliance has been brought to our notice either in the arguments or in the impugned order. The reasons consistently advanced for the situation in regard to locational aspect in the face of the evidence to the contrary have to be accepted as where there is no alleged violation of any of the requirements either of the Urban Ministry or of the Directorate of Education the authorities under the income- tax Act cannot be said to presume to sit over in judgment for the implementation of the public policy on the judgment of the authorities empowered to implement them. The D1T(E) in the facts of the peculiar case cannot cancel Registration in the facts of the present case for the reasons set out in the impugned order as the same amounts to usurping the Role of an authority constituted to implement the government policy. Only when there is any instance of violation of terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 11 by looking into the objects of the Association and holding the same as non- charitable in nature. 3.10 Similar decision has been given by Ahmadabad Tribunal in the case of Stock Exchange, Ahmadabad Vs. ACIT (supra) cited by the appellant. Hence, in my view the AO was unjustified in denying the grant of exemption under section 11 to the appellant. The AO is directed to grant exemption under section 11 accordingly." Aggrieved against the order of CIT(A) for both the years, Revenue came in second appeal for both the years before Tribunal. 4. At the outset, learned Counsel for the assessee stated that the issue is squarely covered in favour of assessee and against Revenue by the decisions of co-ordinate Bench of this Tribunal of ITAT Pune Bench in the case of ITO v. Noble Medical Foundation & Research Centre (2015) 68 SOT 343 (Pune-Trib), wherein the Tribunal has decided the issue vide Para 23 as under: "23. Another aspect of the denial of deduction under section 11 of the Act to the assessee was that the assessee had failed to provide concessional treatment to indigent / poor patients. Admittedly, this was the first year of operation of the hospital and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no dispute about these facts. Hon'ble Bombay High Court on 17-08-2006 notified a scheme applicable to public charitable trusts registered under Bombay Public Trust 1950 which are running charitable hospitals including nursing home, maternity home, dispensaries or any other centre for medical relief whose annual income exceeds Rs. 5 lakhs. This scheme stipulates to provide compulsory free and concessional medical treatment to the indigent and weaker patients. As per the scheme Trust has to credit 2% of the gross billing to the Indigent Patient Fund every year and this fund should be utilized for providing medical treatment to the poor patients. 7. We find that Para no. 18 of the scheme framed by Hon'ble High Court of Indigent Patient Fund reads as follows: 18. ln case of the breach of the Scheme and/or the terms and conditions of section 4IAA by any Charitable Hospitals, besides the penal action as is provided under section 66 of the B.P.T. Act, the Charity Commissioner shall make report to the State Government recommending withdrawal of the exemption granted to the concerned hospitals during the next preceding year in payment of contribution towards P.T.A Fund and the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 on the other hand, stipulates the fundamental requirement for a charitable organization to avail the exemption in respect of the surplus earned by it from its charitable activities. This requirement being appropriating or rather utilizing more than 85% of its earnings towards charitable purpose. The Assessee has duly adhered to this condition by utilizing almost 88% of its total earnings towards its charitable objectives. The AO has denied exemption u/s 11 of the Act contending violation of a Scheme drawn by Hon'ble Bombay High Court. But we are of the view that section 11 does not stipulate adherence by an Assessee to the said Scheme rather the Assessee has complied with and not violated the conditions stipulated by the Scheme. Accordingly, we are of the view that the AO has usurped the power of the Charity Commissioner and the State Government; by making the decision that the assessee has breached the provisions of the Scheme. This is clearly contrary to Clause 18 of the Scheme as discussed in Para no. 7 above. According to us, the charity commissioner who has been entrusted with the responsibility of verifying the genuineness of the activities of the trust or institution b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us consequences are visited on the school which is not a fact in the present case." 10. Similar to the above, even in the case of the assessee, non-compliance of one of the statutory stipulations should not nullify its efforts made towards achieving its charitable objectives. The same can be observed from the fact that it has appropriated 88% of its Income towards achieving the objectives of the trust. Further, the assessee has not altogether shrugged off its responsibility towards the Indigent and Weaker Section Patients. There is a difference of opinion w.r.t the amount of funds to be transferred to the Indigent Patient's Fund (IPF). It is noteworthy, that the assessee has not simply waited for the clarification and stalled the appropriation of funds to the IPF and its utilization towards the requisite purpose. Rather, until clarification on such matter, the assessee has chosen to transfer 2% of the total hospital billing net of doctor's' fees to the IPF and has utilized the same towards the medical treatment of the Indigent and Weaker Section Patients. There is no single evidence which would suggest otherwise. The rationale behind the same being that the doctor's fees i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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