Appeal details
Counselvise Citation
[2012] 140 COUNSELVISE.COM (IT) 65868 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-11-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
F
Next Hearing Date
01-11-2012
Assessment Year
2008-2009
Appeal Filed On
03-05-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENC H BEFORE SHRI U.B.S. BEDI , JM & SHRI A.N. PAHUJA, AM ITA NO.2096/DEL/2012 ASSESSMENT YEAR: 2008-09 ASSISTANT DIRECTOR OF I.T. (E),TC-II, NEW DELHI V/S . R.B. SETH JESSA RAM & BROS. CHARITABLE HOSPITAL TRUST, W.E.A. KAROL BAGH, NEW DELHI [PAN : AAATR 0291 G ] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI N.L. GANDHI, AR REVENUE BY MS. PRISILLA SINGCIT,DR DATE OF HEARING 01-11-2012 DATE SOF PRONOUNCEMENT 23-11-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 03.05.2012 BY THE REVENUE AGA INST AN ORDER DATED 01.02.2012 OF THE LD. CIT(A)-XXI, NEW DELHI, RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECI ATING THE FACT THAT THE HOSPITAL IS BEING RUN ON COMMERCI AL LINES WHEREIN AS PER THE AGREEMENT, TRUST SHALL PAY MANAGEMENT FEES TO FORTIS @35% OF GROSS BILLING TO HOSPITAL AND IN CASE OF LOSS, REDUCTION TO THAT EXT ENT. THERE IS NO ELEMENT OF CHARITY IN THE WHOLE TRANSACTION. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. ITA NO.2096/DEL./2012 2 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING DEFICIT OF ` ` 1,55,80,379/- FILED ON 30 TH SEPTEMBER, 2008 BY THE ASSESSEE, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT), WAS SELECTED FOR SCRUTINY WITH THE S ERVICE OF A NOTICE U/S 143(2) OF THE ACT, ISSUED ON 18.09.2009. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE REFERRING TO A COPY OF THE AGREEMENT DESIGNAT ED AS OPERATION AND MAINTENANCE AGREEMENT WITH FORTIS HEALTHCARE LIMIT ED, ENTERED ON 29.10.2003 AND RELYING UPON HIS FINDINGS IN THE AYS 2003-04 TO 2007-08, THE ASSESSING OFFICER[AO IN SHORT] DENIED THE CLAIM FOR EXEMPTION U/S 11 OF THE ACT, THEREBEING NO SCOPE FOR PROVIDING HEALTHCARE SERVICES TO GENER AL PUBLIC IN TERMS OF THE AFORESAID AGREEMENT. 3. ON APPEAL, THE LD. CIT(A) FOLLOWING HIS OWN DE CISION IN THE AY 2003-04 AND DECISION OF THE ITAT IN THE AY 2004-05, ALLOWED THE CLAIM OF THE ASSESSEE IN THE FOLLOWING TERMS:- 4.1 FURTHERMORE, VIDE LETTER DATED 4.7.2011 IT HA S BEEN SUBMITTED THAT THIS CASE HAS BEEN COVERED VIDE ORDER OF HONBLE ITAT AND CIT(A) FOR VARIOUS ASSESSMENT Y EARS AND COPIES OF ORDER HAVE BEEN SUBMITTED ON RECORD. IN THIS REGARD IT IS FOUND THAT HONBLE ITAT HAS PASSED ORD ER FOR ASSESSMENT YEAR 2004-05 AS UNDER:- THIS HAS REFERENCE TO THE CAPTIONED APPEAL AND SUB SEQUENT HEARING GRANTED TO THE APPELLANT ON 14.6.2011. DURI NG THE COURSE OF LAST HEARING, YOUR HONOUR HAVE ASKED TO PROVIDE A COPY OF THE OPERATION AND MAINTENANCE AGREEMENT DATED 29.10.2 003 EXECUTED BETWEEN THE ASSESSEE AND M/S FORTIS HEALTH CARE LIMITED. A COPY OF THE SAID AGREEMENT IS ENCLOSED FOR YOUR R EADY REFERENCE AS PER ANNEXURE 1-10 TO THIS LETTER. FURTHER SUBMITTED THAT AS REGARDS THE ACTION OF THE ASSESSING OFFICER IN NOT GRANTING EXEMPTION U/S 11 OF THE INC OME-TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) CLAI MED BY THE APPELLANT, THIS ISSUE HAS BEEN CONSIDERED AND DECID ED IN FAVOUR OF THE ASSESSEE BY YOUR LEARNED PREDECESSOR(S) IN THE PRECEDING ITA NO.2096/DEL./2012 3 ASSESSMENT YEARS THEREBY DIRECTING THE ASSESSING OF FICER TO ALLOW THE EXEMPTION U/S 11 OF THE ACT VIDE APPELLATE ORDE RS PASSED RIGHT FROM THE ASSESSMENT YEAR 2003-04 ONWARDS. COPIES OF THE APPELLATE ORDERS PASSED FOR THE ASSES SMENT YEARS 2004-05 TO 2006-07 IN APPEAL NOS. 52/07-08, 243/07- 08 AND 148/08-09 RESPECTIVELY ARE ENCLOSED FOR YOUR KIND R EFERENCE AS PER ANNEXURES 11-18 TO THIS LETTER. YOUR KIND ATTENTIO N IS ALSO INVITED TO ANNEXURES 1-3 ANNEXED WITH OUR LETTER DATED 8.6. 2011 CONTAINING COPY OF APPELLATE ORDER PASSED BY YOUR G OOD SELF IN APPELLANTS OWN CASE FOR THE IMMEDIATELY PRECEDING YOUR RELEVANT TO ASSESSMENT YEAR 2007-08. PERTINENT TO MENTION THAT HONBLE INCOME TAX APPELL ATE TRIBUNAL, NEW DELHI HAS ALSO DISMISSED DEPARTMENTAL APPEAL VI DE ITS ORDER DATED 31.7.2009 IN I.T.A. NO.1721/D/08 FOR THE ASSE SSMENT YEAR 2004-05. A COPY OF THE APPELLATE ORDER IS ENCLOSED FOR YOUR KIND REFERENCE AS PER ANNEXURES 19-22 TO THIS LETTER. 4.2 FURTHERMORE, VIDE LETTER DATED 17.11.2011 IT HAS BEEN SUBMITTED THAT VIDE HEARING DATED 29.4.2011 HONBLE DELHI HIGH COURT HAS DISMISSED THE DEPARTMENTAL APPEAL AGAINST THE ORDER OF HONBLE ITAT FOR ASSESSMENT YEAR 2004-05. AS FACTS AND CIRCUMSTANCES REMAIN THE SAME AS WELL AS IN PARA 6 OF THE ORDER OF THE HONBLE ITAT, IT HAS BEEN MENTIONED THAT ORDER OF MY PREDECESSOR CIT(A) WAS ACCEPTED BY .THE DEPARTMENT FOR ASSESSMENT YEAR 2003-04 AND FOR ASSESSMENT YEAR 200 4-05 APPEAL OF THE DEPARTMENT HAS BEEN DISMISSED, IT IS FOUND T HAT CASE IS COVERED BY THE DECISION OF HONBLE ITAT AS DISCUSSE D ABOVE. IN VIEWS OF THE ABOVE DISCUSSION GROUNDS NO.2 & 3 OF T HE APPELLANT ARE ALLOWED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR SUPPORTED TH E FINDINGS OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT ISS UE IS COVERED BY THE DECISION DATED 31 ST JULY, 2009 OF THE ITAT IN THE ASSESSEES OWN CASE FOR THE AY 2004-05 IN I.T.A. NO.1721/DEL./2008. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE. INDISPUTABLY, THE AO RELIED UPON HIS OWN FIN DINGS IN THE ASSESSMENT ORDER FOR THE AYS 2003-04 TO 2007-08 AND DENIED THE CLAIM OF EXEMPTION U/S 11 OF THE ITA NO.2096/DEL./2012 4 ACT WHILE THE LD. CIT(A) FOLLOWED HIS OWN DECISION IN THE AY 2003-04 AND AFORESAID DECISION OF THE ITAT IN I.T.A. NO.1721/DE L./2008 FOR THE AY 2004-05 AND ALLOWED THE RELIEF. WE FIND THAT THE ITAT VIDE THEIR AFORESAID ORDER DATED 31.07.2009 IN THE ASSESSEES OWN CASE FOR THR AY 20 04-05 CONCLUDED AS UNDER:- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH TH E PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABL E ON RECORD. FROM THE ABOVE FACTS, IT IS CLEAR THAT THE DECISION OF CIT(A) FOR ASSESSMENT YEAR 2003-04 HAS BEEN ACCEPTED BY THE DE PARTMENT AS NO APPEAL AGAINST THE SAME WAS FILED. BEFORE US REVENUE HAS NOT POINTED OUT ANY FACT INDICATING THE MISUSE OF F UNDS BY THE MANAGEMENT OR THE ACTIVITIES WERE NOT CARRIED OUT F OR THE OBJECTS OF THE SUCH TRUST. THE ASSESSEE AS HELD BY LEARNED CI T(A) CONTINUE TO PROVIDE MEDICAL FACILITY TO THE PUBLIC. THE EXPENDI TURE HAS EXCEEDED THE REVENUE. THE OVERALL MANAGEMENT OF TH E TRUST CONTINUES TO REMAIN WITH THE TRUSTEES AND ALL THE D ECISIONS TAKEN BY FORTIS HEALTHCARE LTD. ARE SUBJECT TO APPROVAL AND CONSENT OF THE TRUSTEES. NO MATERIAL HAS BEEN BROUGHT ON RECORD B Y THE ASSESSING OFFICER FOR THE YEAR UNDER CONSIDERATION SO AS TO S UGGEST THAT PROVISIONS OF SECTION 11 AND 13 HAVE BEEN VIOLATED. IN THE ABSENCE OF ANY SUCH MATERIAL, IN OUR CONSIDERED VIEW, EXEMP TION U/S 11 OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. WE, ACCO RDINGLY, DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LEARNED C IT(A) DIRECTING THE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 11 OF THE ACT. 6. THE APPEAL OF THE REVENUE AGAINST THE AFORESAI D FINDINGS OF THE ITAT HAS BEEN DISMISSED BY THE HONBLE HIGH COURT V IDE THEIR ORDER DATED 29.4.2011 IN ITA NO. 208/2011 DUE TO LOW TAX EFFECT . IN THE LIGHT OF VIEW TAKEN BY A CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE AY 2004-05 WHILE THE REVENUE DID NOT DISPUTE THE FINDINGS OF THE LD. CIT (A) IN THE AY 2003-04 IN FURTHER APPEAL AS ALSO DUE TO THE FACT THAT THE LD. DR DID NOT PLACE BEFORE US ANY MATERIAL, CONTROVERTING THE AFORESAID FINDINGS OF T HE LD. CIT(A) SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 7. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, THIS GROUND IS DISMISSED. ITA NO.2096/DEL./2012 5 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9. IN THE RESULT, APPEAL IS DISMISSED. SD/- SD/- (U.B.S. BEDI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2 ASSISTANT DIRECTOR OF I.T. (E),TC-II,NEW DELHI 3. CIT CONCERNED. 4. CIT(A)-XXI, NEW DELHI 5. DR, ITAT, F BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, NEW DELHI ORDER PRONOUNCED IN OPEN COURT
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