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2016 (2) TMI 380 - ITAT DELHIExemption u/s 11& 12 - Held that:- As decided in ITPO V. DG IT (Exemptions) (2015 (1) TMI 928 - DELHI HIGH COURT ) is relevant in this particular case. The said judgment held that “the expression “charitable purpose” is not to be construed in a vacuum but in the specific context of Section 10(23C)(iv) which specifically deals with income received by any person on behalf of, inter ala, an institution established for charitable purposes. Therefore, the meaning of the expression “charitable purposes” has to be examined in the context of Section 10(23C)(iv). The expression has a reference to income. Because it is only when such an institution has an income that the question of not including that income in its total income would arise. Therefore, merely because an institution, which otherwise is established for a charitable purpose, receives income that would not make it any less a charitable institution.” In the present case the Assessing Officer as well as the CIT(A) has ignored this aspect that the assessee’s main activity of providing medical facility at the subsidies rate does amount to charitable purpose. It is admitted that the assessee has violated the provisions of Section 13(1)(d) r/w/s Section 13(3) and Section 11(5) of the Income Tax Act, 1961 and added income of ₹ 2,22,000/- has to be taxed at the maximum marginal rate of tax as per the provision of Section 164(2) of the Income Tax Act, 1961 as per the various case laws submitted separately, which have also held that the denial of exemption should only be to the extent of income which was violative of Section 13(1) (d) and not the total denial of exemption u/s. 11.
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