2022 (2) TMI 500 - HC - Income Tax

Exemption u/s 11 and 12 - Whether Tribunal erred in ignoring the fact that the activities of the assessee are not the activities done for 'charitable purpose' according to the Section 2(15) of the Act, since they are of a purely commercial nature? - HELD THAT - This Court finds that the Tribunal as the last fact finding authority has held that the Revenue had failed to establish that the said activities had been undertaken by the Respondent only in the Assessment Year under consideration. In fact, the said activities have been undertaken by the respondent right from the year 2007-08. A perusal of the paper book also reveals that for the earlier and subsequent Assessment Years, exemptions have been allowed in the similar circumstances. This Court had observed that the impugned order passed by the ITAT suffers from no perversity as it abides by the principle of consistency and uniformity by following orders passed in the earlier and subsequent Assessment Years i.e. Assessment Years 2007-08, 2008-09, 2009-10, 2011-12, 2013-14 and 2014-15. However, at that stage, learned counsel for the Appellant had prayed for some time to obtain instructions and file additional documents. As Appellant states that he has filed the additional documents, however, the same are not on record. In any event, in view of the principle of consistency and uniformity, this Court is of the view that no substantial questions of law arises for consideration in the present case.

Summary

Issues:
1. Condoning delay in filing the appeal.
2. Challenge to the order of Income Tax Appellate Tribunal regarding exemption under Sections 11 and 12 of the Income Tax Act, 1961.
3. Allegation of activities not being for charitable purpose.
4. Violation of Section 11 of the Act due to transfer of management and control.
5. Previous exemptions allowed in similar circumstances.
6. Consideration of additional documents and principle of consistency and uniformity.

Analysis:

1. The judgment begins by condoning a delay of 47 days in filing the appeal, as per C.M. No. 27246/2021, based on the averments in the application.

2. The appeal, ITA No. 137/2021, challenges the order dated 28th August, 2019, by the Delhi Bench 'B' of the Income Tax Appellate Tribunal regarding the grant of exemption under Sections 11 and 12 of the Income Tax Act, 1961 for Assessment Year 2012-13.

3. The counsel for the Appellant argues that the Tribunal erred in granting the exemption under Sections 11 and 12, contending that the activities of the assessee are not for 'charitable purpose' as per Section 2(15) of the Act, as they are of a purely commercial nature.

4. It is further argued that the Tribunal overlooked the fact that the transfer of management and control of a hospital for commercial purposes violates Section 11 of the Act.

5. The judgment notes that the Tribunal, as the final fact-finding authority, found that the Revenue failed to establish that the activities were undertaken only in the Assessment Year under consideration, as they had been ongoing since 2007-08. Exemptions were allowed for earlier and subsequent Assessment Years in similar circumstances.

6. Despite the Appellant's submission of additional documents, which were not on record, the Court, considering the principle of consistency and uniformity, concludes that no substantial legal questions arise for consideration in the case. Therefore, the appeal is dismissed on the grounds of consistency and uniformity, as observed on 23rd August, 2021.

This detailed analysis covers the issues involved in the judgment, highlighting the key arguments and findings presented in the case.