2006 (7) TMI 104

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..... atters. The respondent-assessee is a hospital run by a charitable trust. In response to notice under section 148, dated July 19, 1991, the assessee filed its return for the assessment year 1989-90 on September 20, 1991, declaring nil income. Return was posted for evidence. The assessee claimed that it is a charitable hospital solely existing for philanthropic purposes and not for the purpose of profit and as such is fully exempt from tax under section 10(22A) of the Income-tax Act, 1961. Reliance was also placed on the decision of this court in CIT v. Pulikkal Medical Foundation P. Ltd. [1994] 210 ITR 299. The assessing authority noticed that the facts in Pulikkal Medical Foundation P. Ltd.'s case [1994] 210 ITR 299 and the .....

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..... bmitted that the decision of this court in Pulikkal Medical Foundation P. Ltd.'s case [1994] 210 ITR 299 would not apply to the facts of this case. 4 Sri K. M. V. Pandalai, appearing for the assessee on the other hand contended that the mere fact that hospital runs on commercial lines does not mean that the object of the trust is not charitable. Counsel also submitted that the income and expenditure statement would indicate that the excess of income over expenditure comes to Rs. 1,21,101 for the year 1989-90 and income for the purpose of income-tax was computed at Rs. 1,58,368 and the assessee is entitled to exemption under section 11 and also under section 10(22A) of the Income-tax Act. Counsel submitted that the Commissioner as we .....

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..... he Income-tax Officer came to the conclusion that the hospital is being run on commercial lines. True, the Commissioner (Appeals) has taken a different view. In our view, there is no factual foundation for establishing such a claim before the assessing authority. Under such circumstance the assessing authority came to the conclusion that the assessee is not entitled to exemption under section 10(22A) of the Act. 6 In the facts and circumstances of this case, we feel it would be appropriate that the matter be remitted back to the assessing authority for fresh consideration. It is open to the assessee to furnish all materials before the assessing authority to establish that the institution is entitled to get exemption under section 10(22A .....

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