TMI Blog2021 (3) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... any Institution or Trust being profits and gains of business, unless such income is incidental to the attainment of the objective of the trust and maintenance of separate books of accounts by such Trust or Institution in respect of such business. From perusal of the order passed by the Tribunal, it is evident that the Tribunal has not recorded any reasons whether or not the assessee has complied with the twin conditions mentioned in sub-section 4A of Section 11. The order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind. Therefore, the finding of the Tribunal insofar as it pertains to the first substantial question of law cannot be sustained. Accordingly, the order of the Tribunal dated 13.07.2016 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertains to Assessment Year 2011-12. The appeal was admitted by a Bench of this Court vide order dated 25.10.2017 on the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case the Tribunal is right in law in treating the 'Pharmacy' income as income of charitable trust inspite the same is rightly considered as business income as the assessee does not maintain separate books of accounts and even when the Tribunal has not given finding about medicine sold to public is negligible or not? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in calculating 15% for accumulation on gross receipts instead of net receipts by relying on the decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue in 'COMMISSIONER OF INCOME-TAX Vs. RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION' (2018) 402 ITR 441 (SC) Iand another decision of Supreme Court in 'COMMISSIONER OF INCOME-TAX Vs. PROGRAMME FOR COMMUNITY ORGANISATION' (2001) 248 ITR 1 (SC) . The aforesaid submission could not be disputed by the learned counsel for the revenue. 4. From perusal of the record, we find that the substantial question of law No.2 is covered by the aforesaid decisions of the Supreme Court. Therefore, the same is answered against the revenue and in favour of the assessee. 5. However, the first substantial question of law survives for consideration in this appeal. Learned counsel for the revenue, with regard to the substantial quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cidental to running medical college and hospital. It is further submitted that the question of maintaining separate books of accounts does not arise as the pharmacy does not belong to a separate entity. It is further submitted that trading accounts were produced before the Tribunal and against the decision of the Chennai Bench of the Tribunal, the revenue did not prefer any appeal before the High Court and therefore, the aforesaid decision has attained finality and is binding on the revenue. 7. We have considered the submissions made on both sides and have perused the record. Before proceeding further, it is apposite to take note of Section 11(4A) of the Act which reads as under: Section 11(4A) Sub-section (1) or sub-section (2) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertinent to note that a dispensary/pharmacy is inevitable and indispensable facility for the hospital. The necessity of the pharmacy cannot be ruled out as there are regular emergency situation requiring immediate medicines and other supply of pharmacy for emergency treatment as well as operation/surgery purposes. The Chennai Benches of the Tribunal in case of Franciscan Sisters of St. Joseph Society (supra) has held in paras 7 t0 15 as under: xxxxxxxxx In view of the above discussion as well as the decision of the Chennai Benches of the Tribunal (supra), we decide this issue in favour of the assessee. Thus, from perusal of the order passed by the Tribunal, it is evident that the Tribunal has not recorded any reasons whet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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