TMI Blog2023 (8) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ed rates, it is necessary for the assessee to engage trained staff and medical practitioners, for which the professionals or other persons, who rendered services, have to be paid honorarium. There is nothing wrong if the bonus is paid to the members of the staff, as the staff and other members as well as medical practitioners are not expected to work with the assessee on a charitable basis if a decent hospital is to be maintained and good facilities are to be provided for the patients. It is not the case of the Revenue that the surplus which is generated was diverted to any non-charitable activity. The Hon ble High Court, however, found that there are certain aspects which require further examination and accordingly remitted the matter for fresh consideration of the application for registration filed by the assessee under section 10(23C)(via). Thus CIT(E) did not analyse all the submissions made by the assessee in light of the various aspects highlighted by the Hon ble High Court. It is pertinent to note that the matter was restored for the consideration of assessee s application for registration u/s 10(23C)(via) and the Hon ble High Court directed the assessee to furnish the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and surgical amenities. The assessee has also been registered under section 12A of the Act since 28/12/1988, as well as section 80G of the Act, which registration is continuing to be in force. As per the assessee, it is running a hospital providing medical facilities at subsidised rates. The assessee enjoyed the benefit under section 10(22A) of the Act and in the past, applications made by the assessee under section 10(23C) of the Act were also accepted. The assessee filed an application for registration under section 10(23C)(via) of the Act, which was rejected vide order dated 30/03/2011, holding that the assessee does not satisfy the conditions laid down under section 10(23C)(via) of the Act of existing solely for philanthropic purposes and not for the purposes of profit, as surplus year after year are generated out of the systematic activity of profit-making and therefore the assessee is running the hospital for the purpose of profit. 5. Being aggrieved, the assessee filed a writ petition, being W.P. No. 949 of 2011, before the Hon ble jurisdictional High Court challenging the order dated 30/03/2011, rejecting assessee s application filed under section 10(23C)(via) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aker societies was on an average only 0.93% of the total receipts for the last 4 years. In our view, this by itself is not sufficient to hold that the character of activities carried out by the petitioner indicates that thte object was to earn profit. In fact it was necessary for the first respondent to look into the entire record for ascertaining the income received by the petitioner from the beds/rooms provided in the hospital. to have It was necessary for the first respondent ascertained as to how many patients, treatment was rendered either free of cost or at a concessional rate. One of the factors which ought to have to be considered is as to how many non- members were given treatment at a concessional rate. 18. The learned counsel appearing for the petitioner submitted that any non-member before taking treatment from the hospital is entitled to become a member. If there are cases where such non- members treatment have at become members and concessional rate, have received it will be a a factor to be considered in favour of the petitioner. Merely going by percentage of receipts spent on giving medical treatment to economically weaker section patients may not be a full pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the doctor. The same is the case in respect of surgeon fees also. The hospital has no control over such fees charged by the doctors. There is no cap prescribed by the hospital over the fees charged by the doctors. It is also an admitted fact that a percentage of fees is retained by the hospital from the doctors as affiliation charges. Where patients are compelled to negotiate with the doctors independently and the doctors are free to charge any amount as fees on which the hospital has no control and rather a percentage of such fees is received back by the hospital the trust cannot be said to be existing solely for the philanthropic purposes in a scenario where profits are systematic and continuous. 21. Firstly, we may note it is not the case of the petitioner that the room charges or bed charges are negotiable. What is set out by the petitioner in the said letter is that in case of non-member patients admitted to rooms, the consultants or doctors are permitted to negotiate with the patients for fixing the procedure / surgery charges. In paragraph 2 of the letter, the specific case of the petitioner was that liberty is granted to the doctors to negotiate with the patients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is providing medical treatment or facilities at a nominal charge or free of any charge to a patient belonging to an economically weaker section visiting the hospital. Thus, the adverse inference drawn by the Revenue on the basis that there is no system prevailing of reserving beds for poor or indigent persons was held to be not correct at all. (b) It is necessary for the Revenue to look into the entire record for ascertaining the income received by the assessee from beds/rooms provided in the hospitals. Further, it is to be examined as to how many non-members were given treatment at a concessional rate. (c) As regards the 10% of the negotiated charges retained by the assessee from the payment made by the non-member patients admitted to the rooms, wherein the consultants or doctors are permitted to negotiate the procedure/surgery charges, the Hon ble High Court held that if in a given year only a few such cases are entertained by the assessee, it will not militate against the character of the activities of the assessee. 7. Since on the aforesaid issues, inter-alia, neither the assessee has filed details on record nor the Revenue had called upon the assessee to produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(E), again rejecting the application filed by the assessee under section 10(23C)(via) of the Act, held that the assessee is not existing solely for philanthropic purposes and even if only the profit of the assessee is not taken as the sole criteria for deciding the applicability of the provisions of section 10(23C)(via) of the Act, it is not a fit case for granting registration under section 10(23C)(via) of the Act. 10. Upon perusal of the impugned order passed by the learned CIT(E), we find that the learned CIT(E) did not analyse all the submissions made by the assessee in light of the various aspects highlighted by the Hon ble High Court. It is pertinent to note that the matter was restored for the consideration of assessee s application for registration under section 10(23C)(via) of the Act and the Hon ble High Court directed the assessee to furnish the information/details regarding the aspects as highlighted in para 17-22 of its judgment. However, the learned CIT(E) without examining all these aspects, as directed by the Hon ble High Court, has reiterated its findings regarding the non-earmarking of any beds for indigent and weaker sections, which as noted above was held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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