TMI Blog2023 (1) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... a hospital and other medical institution. Action u/s 263 was taken by the ld. Commissioner on the ground that there was no nexus between the income and the expenditure and assessee has not shown receipt from the dispensary. We examine the facts of the present appeal, then it would reveal that the only distinction in the issue involved is that in the case of Swasthya Sewa Sanstha (supra) the assessee had claimed deduction u/s 10(23C)(iiiae) which is meant for any hospital or other institution for treatment of persons suffering from illness or mental defectiveness whereas in the present case, the exemption has been claimed u/s 10(23C)(iiiad) i.e., where an assessee is engaged in education activities. The reasoning and thought process at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case for scrutiny assessment and verified the accounts. He found that income as per the income and expenditure account is Rs.84,41,466/- and accordingly, he allowed exemption u/s 10(23C)(iiiad) of the Act. 3.1. On perusal of the records, the ld. CIT harboured a belief that assessment order is erroneous as well as prejudicial to the interest of the revenue. According to the ld. CIT, the assessee has incurred an amount of Rs. 4,59,787/- on running of schools and claimed as miscellaneous application. On the other hand, it has declared a surplus of Rs. 79,66,087/-. He further found that there is no receipt from any school and it has claimed surplus as exempt u/s 10(23C)(iiiad) of the Act. The ld. CIT was of the view that since there is no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent business organization. In order to strengthen its financial health for perpetuity, they have given certain investment and this was given long back since 1983-84. The value of those shares have increased manifold, accordingly the dividend income. The schools are being run at the level of very low strata, where income cannot be earned from educational activities. In other words, these are the activities carried out in slum areas. It is not a case of any manipulation or earning of income from donations. He pointed out that the society will build its own building for fulfilling its objects of education but meanwhile it is taking care of educational needs of slum areas. Nothing has been paid to any of the managing members on the management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edical institution. Action u/s 263 of the Act was taken by the ld. Commissioner on the ground that there was no nexus between the income and the expenditure and assessee has not shown receipt from the dispensary. The Tribunal while dealing with this aspect, recorded the following finding:- 4. We have heard the rival contentions of both the parties and gone through the record. Before proceeding further, it will be appropriate to firstly reproduce the relevant provisions of Section 10(23C)(iiiae) of the Act, which reads as under: [10. Incomes not included in total income.-In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- (23C) any inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is running a dispensary wherein the doctors from both Allopathy and Homoeopathy discipline of medicine visit the dispensary and the treatment is free of charge and even medicines are also given free of cost to patients. There is no denial of the fact that the appellant Trust is running the dispensary purely on philanthropic purposes. Since, the aforesaid medical treatment is given free of charge, hence there is no question of earning of any income from such activity. As observed above, there is no requirement of provision Section 10(23C)(iiiae) of the Act that the income should be earned from such philanthropic activity, rather it is otherwise that the institution/Trust has done such an activity purely for charitable/philanthropic purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r investigation by the AO as alleged by the ld. CIT(E). 6. In view of the above discussion, the action of the ld. CIT in directing the AO to disallow the exemption granted u/s 10(23C)(iiiae) of the Act was not justified. The impugned order of the ld. CIT(E) is, therefore quashed. 7. In the result, the appeal of the appellant Trust stands allowed. Order is pronounced in the open court on 09.02.2022. Sd/- [Rajesh Kumar] Accountant Member Sd/- [Sanjay Garg] Judicial Member 6. If, in the light of the above, we examine the facts of the present appeal, then it would reveal that the only distinction in the issue involved is that in the case of Swasthya Sewa Sanstha (supra) the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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