2010 (1) TMI 3 - HC - Income Tax

Benefit under section 11 and 12 application of income for employees or relatives of employees - The sole grievance of the Revenue before the Tribunal was that the Commissioner of Income Tax (Appeals) had erred in directing the Assessing Officer to allow the benefits of Sections 11 and 12 of the Income Tax Act, 1961 to the assessee held that - In a charitable activity incident of profit can be there but that would not goad any quasi judicial authority to say that society ceases to be a charitable society. The AO fail to point out any defects in the objects of society or in the means of achieving those objects. His only area of grievance is that income is resulting to the society by carrying out such activity. But again he fail to take into consideration that such income was only applied for the purpose of charity. The AO also pointed out that assessee has entered into contracts with the doctors in such a way that the hospital should not suffer any loss. Benefit u/s 11 and 12 allowed

Summary

Issues:
1. Appeal against Tribunal's order regarding Sections 11 and 12 benefits for the assessment year 2002-2003.

Analysis:
The High Court of Delhi heard an appeal by the Revenue against the Tribunal's order concerning the assessment year 2002-2003. The Revenue contested the direction of the Commissioner of Income Tax (Appeals) to grant the benefits of Sections 11 and 12 of the Income Tax Act, 1961 to the assessee. The Tribunal, after considering the arguments, found that the assessee, a society established in 1990, was entitled to the benefits. The Tribunal noted that the charges by the society were in line with other hospitals enjoying similar benefits. It also observed that the provision of free and subsidized services to patients did not disqualify the society from being considered charitable. The Tribunal concluded that no error existed in the order of the First Appellate Authority, emphasizing that these were factual findings, and no substantial question of law arose for consideration.

The judges, Justice Badar Durrez Ahmed and Justice Siddharth Mridul, dismissed the appeal on January 11, 2010, affirming the Tribunal's decision. They concurred that the Tribunal's findings were based on facts and did not warrant interference on legal grounds.