Case Law Details
DCIT Vs Birla Nagar Jan Sewa Trust (ITAT Agra)
Conclusion: AO was not justified in denying the exemption under section 11 on the ground of excessive payment of salary and professional fees to Doctors as the services rendered by doctors who had passed out with the same degree in Cardiology (DM) could not be compared with experience doctor working in the field for the last ten years.
Held: Assessee-charitable trust was running medical institution (hospital) and also in the imparting of education. Assesses trust besides having registered u/s 12AA was also approved u/s 10(23C)(via). Assessee had filed return of income declaring the NIL income for the AY 2012-13. However, the assessment was completed by the AO by assessing the income of the assessee to the tune of 7,34,12,020/- by not allowing the exemption u/s 10(23C) (viia) viz-a-viz Section 11. AO contended that assessee had been making the payment to Doctors by way of salary and professional fees which was in excess of what may be reasonably paid for such services by the comparable doctors in the Gwalior and for that purposes AO had brought on record the comparable instances of Doctors working in Gajraja Chikitsa Mahavidyalaya and Chirayu Medical College. In the present case, AO had brought on record the comparable instances of the Gajraja Chikitsa Mahavidyalaya and Chirayu Medical College on record but failed to bring on record expertise, qualification any other factors like seniority competence ,experience, qualification etc. AO had further failed to bring on record the revenue collected by these hospital or a period of three years and what was a salary paid to these doctors. Further AO failed to bring on record whether salary paid to these doctors as mentioned in order were in which proportion to revenue collected by the hospital or not. The Government medical college or salary paid to the government hospital could not be compared with the salary paid by the private hospital to the private doctors. In the absence of necessary information with respect to that establishment of the hospital, the revenue collected by the hospital, the competence, experience and their ability to give result, it would not be safe use these as comparable instances with that of the assessee. Thus, doctors who had passed out with the same degree in cardiology DM could not be compared with experience doctor working in the field for the last ten years. Also, in the earlier financial year 2010-11, the services rendered by the same set of doctors and payment made to them had not been disputed by AO and same had been accepted by AO. Thus, the consistency was required to be maintained not only by assessee but also by Revenue. Hence, exemption was allowable.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the Revenue against the order dated 22.02.20 17 passed by the ld. CIT(A), Gwalior for the assessment year 2012-13. The sole ground raised in this appeal is as under:
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