DCIT (E), New Delhi V. Lahore Hospital Society, New Delhi

ITA 1632/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3942 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 20-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K KAPUR; PRADEP DINODIA
• Keywords: Benefit of exemption
• Section: 143(3); 142(1); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D NEW DELHI BEFORE SRI G.D.AGRAWAL, HON BLE PRESIDENT AND SMT. BEENA A PILLAI, JM ITA NO.163 2 /DEL/2015 A.Y. 2010 - 11 DY.CIT (E) VS. LAHORE HOSPITAL SOCIETY CIRCLE 1(1), C/O BL KAPOOR MEMORIAL HOSPITAL E 2 BLOCK PUSA ROAD, NEW DELHI PRATYAKSH KAR BHAWAN PAN: AAATL0242R DR.SHYAMA PRASAD MUKHERJEE CIVIC CENTRE NEW DE LHI 110 002 (APPELLANT) (RESPONDENT) APPELLANT BY: SRI AMIT JAIN, SR.D.R RESPONDENT BY: SH. PRADEP DINODIA & SH.R.K.KAPUR, CA ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY THE R EVENUE AGAINST ORDER DATED 19/09/14 PASSED BY LD.CIT(A) - 21 FOR ASSESSMENT YEAR 2010 - 11 ON THE FOLLOWING GROUNDS OF APPEAL: GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTIONS U /S . 11 & 12 OF THE ACT IGNORING THAT THE ACTIVITIES OF THE TRUST WERE NOT WITHIN THE PURVIEW OF THE SECTION 2(15) OF THE ACT, 1961 DURING THE YEAR. ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTIONS U/S. 11 & 12 OF THE ACT DISREGARDING THE FACT THAT AS PER VARIOUS CLAUSES OF 'MANAGEMENT AGREEMENT' IT IS ESTABLISHED THAT THE KAPUR HOSPITAL, DELHI HAS BEEN TRANSFERRED TO M/S INTEGRATED HEALTH AND HEALTH CARE SERVICES PVT. LTD. AND THE SOCIETY HAS NO CONCERN WITH THE ACTIVITIES OF THE HOSPITAL. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING.' 2. BRIEF FACTS OF THE CASE ARE AS UNDER . T HE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 15/10/10 DECLARING NIL INCOME FOR THE YEAR UNDER CONSIDERATION. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE A CT AND THE CASE WAS SELECTED FOR SCRUTINY. THE NOTICE UNDER SECTION 143(2) WAS ISSUED ALONG WITH NOTICE UNDER SECTION 142(1) OF THE A CT. IN RESPONSE TO STATUTORY NOTICES, REPRESENTATIVES OF THE ASSESSEE APPEARED AND SUBMITTED VARIOUS REQUISITE DETAILS/INFORMATION AS CALLED FOR. 2.1. DURING THE ASSESSMENT PROCEEDINGS LD.AO OBSERVED THAT A SSESSEE WAS RUNNING T W O HOSPITALS IN NEW DELHI AND LUDHIANA A ND IT HAD ENTERED INTO AN AGREEMENT ON 30/11/00 WITH I NTEGRATED H EALTH AND H EALTHCARE S ERVICES INDIA PVT. LTD. (IHHS I ) FOR BETTER MANAGEMENT OF THE HOSPITALS. LD. AO AFTER VERIFYING VARIOUS DETAILS AND DISCUSSIONS HELD THAT ASSESSEE WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 10(23C)(VIA) OF THE A CT. ACCORDINGLY LD.AO DISALLOWED EXEMPTION UNDER SECTION 11 AND 12 OF THE A CT GRANTED TO ASSESSEE AS HE WAS OF THE OPINION THAT ASSESSEE WAS CARRYING ON BUSINESS ACTIVITY. ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 3 2.2 . AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A) WHO ALLOW ED THE ENTIRE EXEMPTION CLAIMED BY ASSESSEE. 2.3. AGGRIEVED BY THE ORDER OF LD.CIT(A) THE REVENUE IS IN APPEAL BEFORE US NOW. 2.4. AT THE OUTSET LD. D R PLACED RELIANCE UPON THE ORDER OF LD. AO. 2.5. LD. A.R. SUBMITTED THAT THE ISSUE STANDS COVERED BY VARIOUS ORDERS OF THIS T RIBUNAL IN THE SUBSEQUENT AS WELL AS PRECEDING A SSESSMENT Y EARS. HE SUBMITTED THAT A SSESSING O FFICER HAD DENIED EXEMPTION UNDER SECTION 11 FOR THE FIRST TIME IN A SSESSMENT Y EAR 2003 - 04 ON IDENTICAL GROUND THAT ASSESSEE IS DOING BUSINESS CONSEQUENT UPON ITS AGREEMENT TO RUN THE HOSPITALS WITH I NTEGRATED H EALTH AND H EALTHCARE S ERVICES INDIA PVT. LTD. B UT LD.CIT(A) AND THIS T RIBUNAL ALLOWED THE CLAIM OF ASSESSEE. LD. A.R. PLACED RELIANCE UPON THE ORDER OF THIS T RIBUNAL IN ITA NO. 2841/DEL/ 2007 PASSED FOR ASSESSMENT YEAR 2003 - 04 DATED 28/03/08. LD. A.R. SUBMITTED THAT FOR ASSESSMENT YEAR 2004 - 05 A GA IN THE APPEAL OF THE ASSESSEE WAS ALLOWED BY LD. CIT (A). HE SUBMITTED THAT T RIBUNAL FOR ASSESSMENT YEAR 2004 - 05 RESTORED THE CASE TO THE LD.A O FOR FRESH ASSESSMENT V IDE ORDER DATED 21/01/09 IN ITA NO.711/DEL/2008. LD. A.R. SUBMITTED THAT ASSESSING OFFICER SUBSEQUENTLY , PASSED CONSEQUENTIAL ORDER UNDER SECTION 254 READ WITH 143 (3) OF THE A CT FOR ASSESSMENT YEAR 2004 - 05 AND THE EXEMPTION UNDER SECTION 11 W AS ALLOWED TO ASSESSEE V IDE ORDER DATED 15/06/09. ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 4 2.6 . LD. A.R. SUBMITTED THAT THEREAFTER FROM ASSESSMENT YEAR 2005 - 06 TO ASSESSMENT YEAR 2009 - 10 ASSESSING OFFICER HAS BEEN GRANTING EXEMPTION UNDER SECTION 11 & 12 OF THE A CT UNDER THE SCRUTINY ASSESSMENT MADE UNDER SECTION 143(3) OF THE A CT. HE SUBMITTED THAT THE ONLY ISSUE RAISED BY REVENUE FOR THE YEAR UNDER CONSIDERATION IS IN RESPECT OF THE EXEMPTION GRANTED BY LD.CIT(A) UNDER SECTION 11 AND 12 OF THE A CT. HE SUBMITTED THAT IT WAS ON THE SI MILAR GROUND THAT ASSESSING OFFICER HAS DENIED EXEMPTION FOR 2003 - 04 AND 2004 - 05, AS HE WAS OF THE OPINION THAT ASSESSEE WAS CONDUCTING BUSINESS CONSEQUENT TO THE AGREEMENT TO RUN THE HOSPITAL WITH I NTEGRATED H EALTHCARE S ERVICES INDIA PVT.LTD. 3. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES AND THE LIGHT OF THE RECORDS PLACED BEFORE US AND THE T RIBUNAL ORDERS IN ASSESSEE S OWN CASE FOR BERRIES ASSESSMENT YEARS FROM 2003 - 04 TO 2009 - 10 AS WELL AS THE VARIOUS ASSESSMENT ORDERS PASSED FOR THE SUBSEQUENT ASSESSMENT YEARS. 3.1. IT IS OBSERVED THAT THIS T RIBUNAL FOR THE 1 ST TIME FOR ASSESSMENT YEAR 2004 - 05 CONSIDERED THIS ISSUE OF EXEMPTION UNDER SECTION 11 AND 12 AS UNDER: 2.5 ON PERUSAL OF THIS ORDER WE FIND THAT THE TRIBUNAL HAS CONSIDERE D AB OUT THE ASSESSEE'S CLAIM OF' EXEMPTION UNDER SECTION 10(23C)(VIA) AND HELD THAT THERE IS NO REASON FOR THE ASSESSING OFFICER TO DENY EXEMPTION TO THE ASSESSEE UNDER THE AFORESAID PROVISIONS. HOWEVER, IN THE ISSUE BEFORE US THE ASSESSEE'S CLAIM OF EXEMP TION UNDER SECTION 11 & 12 IS ALSO AN ISSUE FOR CONSIDERATION. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMAND THE MATTER BACK TO THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AFTER ALLOWING THE EXEMPTION TO THE ASSESSEE UN DER SECTION ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 5 10(23C)(VIA) AND ALSO AFTER EXAMINING THE ASSESSEE'S CLAIM UNDER SECTION 11 & 12 WHICH WAS ALSO ALLOWED BY THE C IT(A PPEALS) IN EARLIER YE ARS. 3.2 . SU BSEQUENTLY ASSESSING OFFICER DECIDED THE ISSUE FOR ASSESSMENT YEAR 2004 - 05 AS UNDER: AS PER THE DIRECTION OF THE HON BLE ITAT, NOTICE U/S 143(2) OF THE IT ACT WAS ISSUED ON 22.3.2009. IN RESPONSE TO THE SAID NOTICE, SHRI BM CHATRATH, CA, APPEARED FROM TIME TO TIME AND FILED DETAILS. THE CASE WAS DISCUSSED WITH HIM. THE ASSESSEE HAS EXPLAINED T HAT THE AGREEMENT WITH IHHS HAS BEEN RETAINED TO MANAGE THE HOSPITAL AND ASSIST THE SOCIETY IN ACHIEVING ITS OBJECTIVES ON THE TERMS AND CONDITIONS AGREED UPON. IT HAS FURTHER EXPLAINED THAT ALL THE RECEIPTS HAVE BEEN APPLIED FOR THE PURPOSE OF FULFILLMEN T OF THE OBJECTS OF THE SOCIETY. 3.3 . IT IS OBSERVED THAT FOR ALL THE OTHER ASSESSMENT YEARS , ASSESSING O FFICER HAS NOT DRAWN ANY ADVERSE OPINION AND HAS GRANTED EXEMPTION UNDER SECTION 11 AND 12 OF THE A CT. 3.4. UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND A NY REASON TO DIFFER FROM THE VIEW TAKEN BY LD.CIT(A), AND THE SAME IS UPHELD. ACCORDINGLY THE GROUNDS RAISED BY REVENUE STANDS DISMISSED 4. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.01.18. SD/ - SD/ - (G.D.AGRAWAL) (BEENA A PILLAI) PRESIDENT JUDICIAL MEMBER DT. 17 TH JANUARY, 2018 *MV ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 6 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NO. 1632/DEL/2015 ASSESSMENT YEAR:2010 - 11 DCIT(E) VS. LAHOR HOSPITAL SOCIETY 7 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER