Case Law Details
Sushila Birla Memorial Institute Vs ITO (ITAT Kolkata)
There is no dispute of the fact that the assessee Trust exists solely for philanthropic purposes and not for the purpose of profit. There is also no dispute of the fact that the annual receipts of the assessee do not exceed the amount prescribed. The only issue is whether the mobile medical vans run by the assessee fall within the ken of any hospital or other institutions, for the reception and treatment of persons suffering from the illness or mental defectiveness etc. Factually there is no dispute that the assessee is running a number of mobile medical vans which are equipped with surgical equipments, x-ray machines, medicines and that they are staffed by qualified doctors, nurses and that these mobile medical units are providing reception and treatment of persons suffering from illness, mental defectiveness at remote rural areas. The term “hospital” has not been defined under this statute. In the Cambridge Dictionary the term “hospital” is defined as “a place where people who are ill or injured are treated and taken care of by doctors and nurses”. In the Collins Dictionary the term “hospital” is defined as “a hospital is a place where people who are ill are looked after by nurses and doctors”. There is no requirement for a hospital to be located in an immovable property. Meagre payments to doctors etc. cannot also be a reason to conclude that the assessee is not running any institution or hospital to cure the sick.
In the case on hand, admittedly the expenditure is incurred by the assessee for the purpose of payment to doctors, nurses and other medical staffs as well as for medicine etc. The mobile medical vans are owned, equipped, maintained, run and controlled totally by the assessee. If any organization has incurred expenditure on behalf of the assessee, they claim reimbursement of such expenses from the assessee. The term “reimbursement” means that the expenditure is that of the assessee and has been incurred on behalf of the assessee.
We now consider the case laws relied upon by the parties. The Revenue relied on the judgement of the jurisdictional High Court in the case of CIT vs. Apeejay Medical Research & Welfare Association (P) Ltd. (2016) 383 ITR 0079 (Cal.). In this case the claim of the assessee made u/s 10(22A) of the Act. The Hon’ble High Court held that the assessee had not undertaken any of the five activities mentioned u/s 10(22A) of the Act. The factual finding was given that the income in question for that assessee arose from interest and the predominant objectives of that assessee was not to carry out any act of charity or benevolence. On the contrary, the objective was to earn interest and the income had no nexus with any of the activities mentioned in the Section. Only in such factual circumstances the claim of the assessee was rejected. This is not the fact in the case on hand. There is not dispute in this case that the assessee’s predominant objective is charity and the assessee is rendering medical services through mobile medical vans. Thus this case law does not apply.
This judgement interpreting that the term “other institutions” appearing in Section 10(22) of the Act, helps the case of the assessee.
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Author Bio
Kapil ji it is a very good judgment. I have a query in this regard An educational Institution running Nurshing college and schools also runs a hospital for training of nurshing staff and treatment of illness. whether it will be covered u/s10(23C)(iiiad) if aggregate receipts from education and from hospital does not exceed Rs. 5 Crore.