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TMI Blog2018 (3) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... at all be let out for rent and that perhaps is the reason why they have not been included in the proviso, excepting cases falling under clause (a),(b) and (c) of the Section 123 of the said Act. The petitioner's case stand in a better footing on account of the exemption under the provisions of the District Municipalities Act. Petition allowed. - W.P.No.14529 of 2009 & M.P.No.1 of 2009 - - - Dated:- 7-12-2017 - T. S. Sivagnanam, J. For the Petitioner : Sr. M. B. Dominique For the Respondents : Mr. R. Sivakumar ORDER Heard Sr.M.B.Dominique, learned counsel appearing for the petitioner and Mr.R.Sivakumar, learned Standing Counsel appearing for the respondents. 2.The petitioner is a Society registered under the Societies Registration Act and also enjoys exemption under Section 12 A of the Income Tax Act. It is a charitable trust doing services of education, health care and socio-economic welfare services. In keeping with the objects of the society, the petitioner established a hospital in the year 1879 in door No.19, Ismail Rowther Street, Coimbatore to cater to the people belonging to the lower-strata of society. Free medical treatment and care was prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this writ petition. 5.As could be seen from the records placed before this Court, the subject building was exempted from payment of property tax under the provisions of the Tamil Nadu District Municipalities Act. Though, it is stated that there is no record to the said effect, the respondent-Corporation cannot deny the same since the Commissioner of the respondent-Corporation in their letter dated 13.11.1981, has in no uncertain terms stated that the petitioner was enjoying the benefit of exemption under the provisions of the Tamil Nadu District Municipalities Act. Therefore, if the area in which the petitioner's building is situated has now been re-classified to fall within the area of Corporation, then whatever benefits enjoyed by the petitioner under the provisions of the Tamil Nadu District Municipalities Act, should automatically enure in favour of the petitioner. This alone would be the correct interpretation or otherwise for no fault committed by the petitioner, they would be penalized, merely on account of the fact that the Government took a decision to re-classify the Coimbatore city as a Corporation. Thus, the benefit of exemption, which was granted to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant therein proposing to revise the earlier assessment with half year commencing from 01.10.1980, revising the annual value. The appellant referred to the exemption which was granted to them from property tax for the period from 01.10.1980 to 31.03.1982 and also referred to the grant of exemption under section 80 (g) of the Income Tax Act as well as exemption from payment of Urban Land Tax Act and a certificate from the District Collector to the effect that the hospital was run by them, was doing charitable and relief work and 40% of the outpatients cases are treated completely free of charges and even for inpatients whose income was less than ₹ 300/- were given free accommodation, bed and linen, medical and nursing care including investigations, medicines, operations and diet. Therefore, it was contended that they are justified in seeking exemption. However, no orders were passed but the respondent demanded property tax at an enhanced rate. Therefore, Writ Petition was filed challenging such demand. 17. The respondent therein resisted the Writ Petition contending that on inspection being made of the hospital, it was found that the appellant therein was collecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. With regard to the Hospital, if it is let out to others on rent, exemption is not available. In the said case, the amounts paid by the patients who use the hospital as well as the range of services provided by it, cannot be regarded as #rent# paid by them in the narrower sense. Finally, it was held that the payment made by the patients to the hospital by way of hospital charges, or stoppages or even service charges, cannot be equated to rent and denial of benefit of exemption to the appellant on that score cannot be sustained. 19. In the case of Society of Jesus, (supra), the question which arose for consideration was, what is a charitable hospital and dispensary for the purpose of Section 110(e) of the Karnataka Municipal Corporation Act, 1976. After noting that nowhere in the Karnataka Act, Charitable hospital and dispensary has been defined, the Court referred to the dictionary meaning as well as Section 2(15) of the Income Tax Act, which defines charitable purposes to include relief of the poor, education, medical relief and the advance of any object of general public utility. After discussing further on what would mean 'charitable', the Court held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till a developing country and where large sections of people are poor and not free from hunger and disease, the State alone, out of its revenue, cannot provide free medical aid to all those poor persons who are in need of it. Therefore, presumably, keeping that in view and with a view to encourage charitable attitude among the philanthropists, a provision like Section 110(e) of the Act has been made providing for exemption from payment of property tax in respect of a building and land used as charitable hospital/dispensary. There cannot be any doubt that it is only with a view to facilitate medical aid to the poor and needy and with a view to reduce financial burden of such charitable hospitals and dispensaries, such a provision has been made. The burden of running a charitable hospital and dispensary which is established and continued for the purpose of giving free/subsidised medical aid, can be reduced by various methods, (1) by granting exemption from payment of property tax in respect of the buildings solely used as charitable hospital/dispensary; (2) by raising donations from the rich and affluent; (3) by free service rendered by the doctors and other social groups in the hosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on granted under the Income Tax Act cannot brushed aside by the respondent, while considering the claim for exemption for property tax. As long as the exemption granted under 80 G of the Income Tax Act exempting the Income Tax on the donations received by the petitioner's trust remains valid it is substantial piece of evidence to prove about the activities of the petitioner trust. In the provision of the Income Tax Act, detailed procedure has been contemplated prior to the grant of such exemption. Therefore, the respondent Corporation is bound to take note of exemption granted by the Income Tax Department. It is seen that though initially, order of interim stay was granted by this Court, by subsequent order dated 10.09.2003, the interim stay has been vacated and the learned counsel for the petitioner submits that already the petitioner has paid a sum of ₹ 6,00,000/- towards the property tax. The learned counsel for the petitioner placed reliance on the decision of the Honourable Division Bench of this Court in S.N.R.Sons Chairtable Trust Vs. The Commissioner, Coimbatore City Municipal Corporation, 1993 (2) Law Weekly 100. The Honourable Division Bench considered the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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