Expenditure for construction of hospital building for general public is expenditure incurred for charitable purposes

RELEVANT PARAGRAPH

Having heard learned counsel for the parties, we have gone through the impugned orders and given our anxious consideration to the rival submissions.

Section 2 (15) of the Act defines charitable purpose and Section 11 (1)of the Act provides exemption to the income derived by the trust applied for the charitable purposes. Section 2 (15),Section 11 (1)and Section 12-A of the Act read as follows:

Section 2 (15)”charitable purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife)and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess of fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. Section 11 (1)Subject to the provisions of sections 60 to 63,the following income shall not be included in the total income of the previous year of the person in receipt of the income- (a)income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen percent of the income from such property; (b)income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of fifteen per cent of the income from such property; (c)income derived from property held under trust-

(i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and (ii)for charitable or religious purposes, created before the 1st day of April, 1952 to the extent to which such income is applied to such purposes outside India:

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