Divya Yog Mandir Trust, Haridwar V. JCIT, Haridwar

ITA 387/DEL/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4744 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SUDHA KUMARI
• Assessee Lawyers: AJAY VOHRA ROHIT JAIN
• Keywords: Capital asset; Business income; Depreciation; Rectification of order; Charitable institution; Principle of natural justice; Rule of consistency; Additional evidence; Non-deduction of tax; Capital receipt; Revenue expenditure; Capital expenditure
• Section: 143(3); 244A; 133(6); 12A; 194C; 10; 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER A ND SHRI J. S. REDDY, ACCUNTANT MEMBER ITA NO. 387/ DEL/ 2013 (ASSESSMENT YEAR 2009-10) DIVYA YOG MANDIR TRUST, VS. JCIT, HARDWAR RANGE, KRIPALU BAGH, KANKHAL, HARDWAR HARDWAR PAN : AAATD1114E (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRI AJAY VOH RA, ROHIT JAIN, ADV. AND DEEPASHREE RAO, CA REVENUE BY: DR. SUDHA KUMARI, CIT DR ORDER PER I. C. SUDHIR, JUDICIAL MEMBER : THE ASSESSEE HAS QUESTIONED THE FIRST A PPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. THAT THE COMMISSIONER OF INCOME-TA X (APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN DENYING EXEMPTION UNDER SECTIO NS 11/12 OF THE INCOME TAX ACT. 1961 ('THE ACT') AFTER HOLDING THAT THE APPELLANT'S ACTIVITIES ARE NOT CHA RITABLE IN NATURE. 2. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE OBJECTS OF THE APPELLANT DID NOT FALL WITHIN THE PURVIEW OF PROVID ING' MEDICAL RELIEF, 'IMPARTING EDUCATION' OR 'RELIEF TO THE POOR'. BUT WAS IN THE NATURE OF 'OBJECT OF GENERAL PUBLIC UTILITY' AS CONTAINED IN THE DEFINITION OF 'CHARITA BLE PURPOSE' UNDER SECTION 2(15) OF THE ACT. 3. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THAT T HE REVENUE AUTHORITIES HAVE. IN THE PAST YEARS, ITA NO. 387/DEL/2013 2 CONSISTENTLY ACCEPTED THAT THE OBJECTS OF THE APPEL LANT ARE IN THE NATURE OF PROVIDING 'MEDICAL RELIEF, INT ER ALIA, BY TREATING PATIENTS THROUGH AYURVEDA, YOGA. NATUROPATHY. ACUPRESSURE, ETC. 3.1 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THAT PROPAGATION OF YOGA DOES NOT QUALIFY AS PROVIDING 'MEDICAL RELIEF. ON T HE GROUND THAT YOGA UNLIKE OTHER MEDICAL SYSTEMS IS NO T A CURATIVE SYSTEM FOR ALLEVIATING DISEASES. BUT IS ON LY A SPIRITUAL S) STEM HAVING INDIRECT SALUTARY BENEFITS ON THE HEALTH OF AN INDIVIDUAL. 3.2 THAT THE COMMISSIONER OF INCOME-TA X (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THAT YOGA AS A SYSTE M. FALLS IN THE RESIDUARY CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' CONTAINED I N SECTION 2(15) OF THE ACT. 3.3 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THAT Y OGA IS NOT ONLY A TRADITIONAL SYSTEM OF PHYSICAL EXERCISE AND MEDITATION FOR ATTAINING PHYSICAL WELLBEING OR SPIR ITUAL UPLIFTMENT, BUT IS A 'RECOGNIZCD SYSTEM OF MEDICINE ' PROVIDING MEDICAL RELIEF TO VARIOUS AILMENTS, AS PROVIDED IN THE CLINICAL ESTABLISHMENTS (REGISTRATI ON AND REGULATION) ACT. 2010. 4 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON FACTS AND IN LAW IN FURTHER FAILING TO APPRECIAT E THAT IMPARTING OF YOGA TRAINING THROUGH WELL STRUCTURED YOGA SHIVIRS/ CAMPS ALSO FALLS UNDER THE CATEGORY O F IMPARTING 'EDUCATION', ONE OF THE CHARITABLE OBJECT S DEFINED UNDER SECTION 2( 15) OF THE ACT. 5 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT H AD NOT INCURRED ANY EXPENDITURE FOR PURSUING ITS OBJECTIVES OF PROVIDING MEDICAL RELIEF. 5.1 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE APPELLANT ACTUALLY PROVIDED MEDICAL RELIEF TO LACS OF PEOPLE, INTER ALIA, THROUGH YOGA TREATMENT, PATANJA LI ITA NO. 387/DEL/2013 3 AYURVEDIC HOSPITAL, PATANJALI CHIKITSALAYA. ETC, AL L OVER INDIA. 5.2 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN DISREGARDING THE FACT THAT T HE APPELLANT HAD, DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, PROVIDED MEDICAL SERVICES/TREATMENT TO MORE THAN 2,39,000 PATIENTS. THROUGH ITS' DEPARTMEN T OF MEDICAL SERVICES & FACILITIES', WHICH HAS NOWHER E BEEN DENIED BY THE ASSESSING OFFICER. 5.3 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE FREE CONSULTATION PROVIDED BY THE APPELLANT TO PATIENTS WAS NOT ON ACCOUNT OF ANY CHARITABLE INTENTION OF PROVI DING 'MEDICAL RELIEF' BUT WAS ONLY A MARKETING PLOY TO B OOST SALES OF THE PRODUCTS MANUFACTURED BY THE APPELLANT . 5.4 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN FAILING TO APPRECIATE THAT T HE ACTIVITIES BEING CARRIED OUT BY THE APPELLANT ARC I N FURTHERANCE OF ITS MAIN OBJECTIVE OF PROVIDING 'MED ICAL RELIEF FOR WHICH THE APPELLANT HAS BEEN SET UP AND ARE NOT COMMERCIAL IN NATURE. 5.5 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE MEDICAL PRACTITIONERS OF THE APPELLANT TRUST WERE PRESCRIBI NG MEDICINES WHICH WERE AVAILABLE ONLY IN THE MEDICAL SALES COUNTER MANAGED BY THE APPELLANT DISREGARDING THE FINDINGS IN THE REMAND REPORT. WHEREIN THE MEDI CAL PRACTITIONERS HAD CATEGORICALLY STATED THAT THEY AL SO PRESCRIBED MEDICINES MANUFACTURED BY OTHER PHARMACEUTICAL COMPANIES. 5.6 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT' S ACTIVITIES ARE SIMILAR TO PRIVATE PHARMACEUTICAL COMPANIES IN THE MARKET, WHO ARE WORKING ON COMMERCIAL BASIS AND EARNING PROFITS. 6. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) FA ILED TO APPRECIATE THE DISTINCTION BETWEEN PURSUING PREDOMINANT CHARITABLE OBJECTIVES OF PROVIDING 'MED ICAL RELIEF' AND IMPARTING 'EDUCATION' VIS-A-VIS CARRYIN G ON ITA NO. 387/DEL/2013 4 OF BUSINESS INCIDENTAL TO THE MAIN OBJECTS OF THE T RUST REFERRED TO IN SECTION 11(4A) OF THE ACT. 6.1 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT' S ACTIVITIES IN RELATION TO PRODUCTION AND SALE OF AYURVEDIC PREPARATIONS WERE NOT INCIDENTAL TO ITS M AIN OBJECTIVE AS THE SAME ARE COMMERCIAL IN NATURE. 7. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT W AS NOT ENGAGED IN PURSUING THE OBJECTIVE OF IMPARTING EDUCATION. 7. I THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT IMPARTED YOGA EDUCATION AND APPLIED SUBSTANTIAL AMOUNTS IN SETTIN G UP OF AYURVED COLLEGE. WHICH COMMENCED OPERATIONS W.E.F. 20.07.2009. 8. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ER RED ON !ACTS AND IN LAW IN HOLDING THAT THE INTER-TRUST DONATIONS AMOUNTING TO RS. 38.35 CRORES MADE TO PATANJALJ YOG PEETH, FOR THE PURPOSE OF SETTING UP YOG BHAVAN AND OTHER YOGA 'RELATED ACTIVITIES, DID NOT AMOUNT TO APPLICATION OF INCOME FOR THE PURPOSE OF 'MEDICAL RELIEF. 9. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN NOT ALLOWING EXPENDITURE INCURRED BY THE APPELLANT TOWARDS ACQUISITION OF CA PITAL ASSETS AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES. 10. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN NOT ALLOWING THE REVENUE EXPENDITURE INCURRED BY THE APPELLANT AS APPLICATIO N OF INCOME FOR CHARITABLE PURPOSES. 11. WITHOUT PREJUDICE TO THE CONTENTION THAT THE I NCOME OF THE APPLICANT WAS EXEMPT UNDER SECTION II AND THEREFORE SECTION 40(A)(IA) OF THE ACT HAD NO APPLI CATION, THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN AFFIRMING THE DISALLOWANCE OF RS.17,27,88,778/- UNDER SECTION 40(A)(IA) OF THE AC T, BEING PAYMENTS MADE TO SUPPLIERS FOR PURCHASE OF ITA NO. 387/DEL/2013 5 MATERIALS LIKE PACKING MATERIAL. CD. VCD. MAGAZINES AND BOOKS. 11.1 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLEGING THAT TAX WAS LIABLE TO BE DEDUCTED AT SOURCE UNDER SECTION 194C OF THE ACT IN RESPECT OF PAYMENTS MADE TO SUPPLIERS FOR PURCHASE OF MATERIALS BY INFERRING THAT A CONTRACTUAL RELATIONS HIP EXISTED BETWEEN THE APPELLANT AND THE SUPPLIER. 11.2 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THAT PAYMENT MADE TO SUPPLIERS WAS IN THE NATURE OF 'CONTRACT OF SALE' AND NOT AT ALL IN THE NATURE OF 'WORKS CONTRACT FALLING WITHIN THE SCOPE AND AMBIT OF SECTION 194C OF THE ACT. 11.3 THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT TAX HA VING ALREADY BEEN PAID BY THE RECIPIENT OF INCOME. THE AMOUNT PAID BY THE APPELLANT WAS ALLOWABLE AS EXPENDITURE. 12 WITHOUT PREJUDICE. THAT THE COMMISSIONER OF INC OME- TAX (APPEALS) FURTHER FAILED TO APPRECIATE THAT DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. IF ANY. SHOULD HAVE BEEN RESTRICTED ONLY TO THE AMOUNT REMAINING UNPAID/PAYABLE AS ON THE LAST DATE OF THE PREVIOUS YEAR. 13. WITHOUT PREJUDICE, THAT THE COMMISSIONER OF INC OME- TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT IN CASE THE APPELLANT WAS HELD TO BE NON-CHARITABLE, THEN THE DONATIONS RECEIVED AMOUNTI NG TO RS.3,99,14,400/- REPRESENTED CAPITAL RECEIPT, NO T LIABLE TO TAX UNDER THE PROVISIONS OF THE ACT. 14. WITHOUT PREJUDICE, THAT THE, COMMISSIONER OF IN COME- TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT IN CASE THE APPELLANT WAS HELD TO BE NON-CHARITABLE, THEN THE APPELLANT SHOULD HAVE BEEN ALLOWED, DEPRECATION ON ASSETS IN ACCORDANCE WITH T HE PROVISIONS OF THE ACT. 15. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN CONFIRMING CHARGING OF INTER EST UNDER SECTION 234A OF THE ACT. ITA NO. 387/DEL/2013 6 16. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) E RRED ON FACTS AND IN LAW IN NOT DIRECTING THE ASSESSING OFFICER TO DELETE INTEREST CHARGED UNDER SECTIONS 2 34B, 234D AND 244A OF THE ACT 2. WE HAVE HEARD AND CONSIDERED THE ARGUME NTS ADVANCED BY THE PARTIES, PERUSED THE ORDERS OF AUTHORITIES BELOW, M ATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT IS A PUBLIC CHARITABLE TRUST REGISTERED VIDE DEED DATED 05.01.1 995. IT IS ALSO REGISTERED U/S 12A OF THE I. T. ACT, 1961 VIDE ORDER DATED 2.0 3.1995 ISSUED BY DIT(E), DEHRADUN. IT WAS ALSO ENJOYING APPROVAL GRANTED U/ S 80G(5)(VI) OF THE ACT VIDE ORDER DATED 24.08.2007 APPLICABLE FOR THE YEAR UNDER CONSIDERATION. THE APPELLANT TRUST HAS BEEN DENIED EXEMPTION BY TR EATING IT AS COVERED UNDER THE PROVISO TO SECTION 2(15) OF THE ACT ON AC COUNT OF THE FACT THAT IT WAS CARRYING ON BUSINESS ACTIVITIES HAVING TURNOVER OF MORE THAN THE PRESCRIBED LIMIT. LD. CIT(A) HAS UPHELD THIS ACTIO N OF THE A.O. AGGRIEVED, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL ON TH E ABOVE GROUNDS. THE ISSUES RAISED IN THE GROUNDS ARE INTERCONNECTED AND HENCE, A CONSOLIDATED ORDER IS BEING PASSED TOUCHING ALL THESE ISSUES. 4. THE BASIC ISSUE INVOLVED IN THE GROUNDS IS AS TO WHETHER THE ASSESSEE IS ENTITLED TO THE CLAIM OF EXEMPTION U/S 11 AND 12 OF THE I. T. ACT, 1961. IN SUPPORT OF THE GROUNDS, THE LD. A.R. SUBMITTED T HAT THE TRUST WAS SET UP WITH THE PREDOMINANT OBJECTIVE OF PROVIDING MEDICAL RELIEF THROUGH YOGA, AYURVED, ACUPRESSURE AND NATUROPATHY AND IMPARTING EDUCATION IN THE FIELD OF YOGA FOR THE PURPOSE OF ALLEVIATING ALL KINDS OF DISEASES AND PROVIDE MEDICAL RELIEF THROUGH YOGA, NATUROPATHY, ACUPRESSU RE AND AYURVED, PROVIDING RELIEF TO THE POOR AND UNDERTAKING RESEAR CH & DEVELOPMENT ACTIVITIES IN THE FIELD OF YOGA, AYURVED AND VEDIC LITERATURE TO FURTHER THE ITA NO. 387/DEL/2013 7 CAUSE OF ALLEVIATING ALL KINDS OF DISEASES AND PROV IDE MEDICAL RELIEF. HE SUBMITTED THAT ON THE BASIS OF AFORESAID OBJECTIVES , THE APPELLANT WAS GRANTED REGISTRATION U/S 12A OF THE ACT, WHICH IS I N FORCE TILL DATE. LD. A.R. SUBMITTED THAT THE APPELLANT IN ACCORDANCE WITH THE APPROVED OBJECTIVE HAS BEEN CONSISTENTLY PURSUING ITS CHARITABLE ACTIVITIE S FOR THE PAST 18 YEARS INCLUDING THE ASSESSMENT YEAR UNDER CONSIDERATION A ND THE APPELLANT HAD ALWAYS BEEN ALLOWED EXEMPTION U/S 11/12 INCLUDING P REVIOUS ASSESSMENT COMPLETED U/S 143(3) OF THE ACT. THERE HAS BEEN NO CHANGE IN THE FACTS DURING THE YEAR UNDER CONSIDERATION. 4.1. IN FURTHERANCE OF ITS CHARITABLE OBJ ECTIVES THE APPELLANT HAS ESTABLISHED THE FOLLOWING: (I) DEPARTMENT OF MEDICAL SCIENCE & FACILITIES (DOMSF) COMMONLY KNOWN AS PATANJALI HOSPITAL. HE SUBMITTED THAT THE HOSPITAL IS RUN BY THE APPELLANT TRUST HAVING V ARIOUS DEPARTMENTS INCLUDING DENTAL DEPARTMENT, RADIOLOGY DEPARTMENT, SURGICAL DEPARTMENT, OPHTHALMOLOGY DEPARTMENT ETC. PROVIDING MEDICAL RELIEF TO OVER 20 00 PATIENTS EVERY DAY. APART FROM PRIMARY SET UP IN H ARDWAR, OVER 2,39,000 PATIENTS WERE TREATED DURING THE RELE VANT YEAR, THE HOSPITAL ALSO HAS ITS PRESENCE IN RANCHI & PATNA WHERE MORE THAN 60,000 AND 75,000 PATIENTS RESPECTI VELY ARE TREATED EVERY YEAR. (II) PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANST HAN: AYURVEDIC COLLEGE HAS BEEN SET UP, WHICH WAS UNDER CONSTRUCTION IN THE YEAR UNDER CONSIDERATION AND HA S SINCE STARTED OPERATIONS W.E.F. 20.07.2009, FOR IMPARTING EDUCATION IN THE FIELD OF AYURVED. (III) R&D YOGA AND AYURVED: ENGAGED IN CONTINUED RESEARCH AND DEVELOPMENT IN THE FIELD OF YOGA AND AYURVED TO ITA NO. 387/DEL/2013 8 FURTHER THE CAUSE OF ALLEVIATING ALL KINDS OF DISEA SES AND PROVIDE MEDICAL RELIEF. THE R&D OF THE APPELLANT T RUST IS DULY RECOGNIZED BY THE SCIENTIFIC AND INDUSTRIAL RE SEARCH ORGANIZATION (SIRO). IN THIS REGARD, THE LD. A.R. REFERRED TO PAGE 197-198 OF THE PAPER BOOK. (IV) PATANJALI CHIKITSALAYAS: APART FROM THE ABOVE, TH E APPELLANT TRUST HAS ALSO SET UP PATANJALI CHIKITSLA YAS ALL ACROSS THE COUNTRY FOR PROVIDING FREE MEDICAL CONSU LTATIONS TO PATIENTS SUFFERING FROM VARIOUS DISEASES. MORE THAN 1,000 VEDYAS ARE GIVING FREE CONSULTATION TO OVER 5 0,000 PATIENTS OF CURABLE AND INCURABLE DISEASES IN ABOUT 1,000 PATANJALI CHIKITSALAYAS ACROSS THE COUNTRY. 4.2. THE LD. A.R. SUBMITTED THAT TO FEED UP T HE AFORESAID CHARITABLE OBJECTS, THE APPELLANT HAS SET UP FIVE BUSINESS UND ERTAKINGS UNDER THE APPELLANT TRUST WHICH ARE CARRYING ON THE ACTIVITIE S STATED BELOW: I) DIVYA NURSERY: DEALING IN CULTIVATION, RESTORATI ON AND RESEARCH IN RARE MEDICINAL PLANTS/HERBS AND SELLING THESE PLANTS. II) DIVYA PHARMACY (AYURVEDIC PHARMACEUTICAL UNIT): IT IS AN UNDERTAKING ENGAGED IN MANUFACTURING OF QUALITY AYU RVEDIC MEDICINES AS PER THE TRADITION OF SAGES & MODERN SC IENCE. THE MOTTO OF DIVYA PHARMACY IS TO MAKE AVAILABLE TH E MEDICINES TO COMMON MAN AND DRIVEN BY THIS MOTIVE, THE PRICE OF ALL ITS AYURVEDIC PREPARATIONS ARE COMPARA TIVELY LOWER THAN OTHER COMPETITORS IN THE MARKET. LD. A.R. REF ERRED TO PAGE 199 OF THE PAPER BOOK. III) DIVYA PRAKASHAN: IT DEALS WITH PUBLICATION AND DISTRIBUTION OF DIFFERENT TYPES OF LITERATURE RELATING TO YOGA AND AYURVED WITH THE MOTIVE OF CREATING AWARENESS ABOUT YOGA AN D ITS ITA NO. 387/DEL/2013 9 EFFECTS WITH THE ULTIMATE OBJECTIVE OF PROVIDING ME DICAL RELIEF TO THE SOCIETY AT LARGE. IV) DIVYA YOG SADHNA: IT DEALS WIT H PREPARATION AND DISTRIBUTION OF AUDIO-VIDEO CDS, DVDS AND AUDIO-VIDEO CASSETTES RELATING TO YOGA AND AYURVEDA WITH THE MOTIVE OF CREATING AW ARENESS AND PROVIDING MEDICAL RELIEF TO THE SOCIETY AT LARG E. V) YOG SANDESH: IT IS A MONTHLY MAGAZINE HAVING MIL LIONS OF READERS, CONTAINING ARTICLES ON YOGA, AYURVEDA, ETC . WITH THE MOTIVE OF CREATING AWARENESS AND PROVIDING MEDICAL RELIEF TO THE SOCIETY AT LARGE. 4.3. LD. A.R. SUBMITTED THAT THE SURPLUS GENE RATED FROM THE AFORESAID BUSINESS UNDERTAKINGS OF THE APPELLANT TRUST ARE RE DEPLOYED FOR THE PURPOSE OF ACHIEVING ITS MAIN CHARITABLE OBJECTIVES. HE SU BMITTED THAT FROM THE AFORESAID ACTIVITIES OF THE UNDERTAKINGS OF THE APP ELLANT TRUST IT MAY BE APPRECIATED THAT THE APPELLANT IS SOLELY COMMITTED TO ACHIEVING ITS PREDOMINANT CHARITABLE OBJECTIVES OF PROVIDING MEDI CAL RELIEF, IMPARTING EDUCATION AND RELIEF TO THE POOR. THE AUTHORITIES BELOW WHILE ACCEPTING THAT THE OBJECTS/ACTIVITIES OF THE APPELLANT TRUST AS BE ING CHARITABLE IN NATURE, IN THE SAME BREADTH HELD THAT IT FELL UNDER THE SIXTH LIMB OF THE DEFINITION OF CHARITABLE PURPOSE GIVEN U/S 2(15) OF THE ACT, I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IT WAS COVERED U NDER THE MISCHIEF OF PROVISO TO THAT SECTION. APPLYING THE AFORESAID PROVISO, T HE AUTHORITIES BELOW HELD THE APPELLANTS TRANSACTION TO BE IN THE NATURE OF BUSINESS AND COMMERCE, SIMILAR TO PRIVATE PLAYERS IN THE MARKET AND DENIED EXEMPTION AMOUNTING TO RS.103,32,76,024/- U/S 11/12 OF THE ACT. HE POINTE D OUT THAT THE APPELLANT, SINCE ITS INCEPTION, IN THE YEAR 1995, HAS BEEN ENG AGED IN THE ACTIVITIES OF PROVIDING MEDICAL RELIEF THROUGH AYURVED, NATUROPAT HY, YOGA, ACUPRESSURE WHICH HAS BEEN CONSISTENTLY ACCEPTED BY THE REVENUE AUTHORITIES IN THE ASSESSMENT YEARS 2004-05 TO 2008-09 VIDE VARIOUS AS SESSMENTS COMPLETED ITA NO. 387/DEL/2013 10 U/S 143(3) OF THE ACT. IN SUPPORT, HE REFERRED TO PAGES 207-244 OF THE PAPER BOOK I.E. COPIES OF THESE ASSESSMENT ORDERS F OR ASSTT. YEARS 2004-05 TO 3008-09. IN ALL THESE ASSESSMENT ORDERS, THE A. O. HAS CONSISTENTLY HELD THAT HE APPELLANT WAS ENGAGED IN PROVIDING MEDICAL RELIEF, CONTENDED THE LD. A.R. LD. A.R. POINTED OUT FURTHER THAT IN THE ASSESSMENT YEARS 2004-05 TO 2008-09, THE A.O. HAS ALLOWED EXEMPTION U/S 11/1 2 OF THE ACT BUT THE ADDITION/DISALLOWANCES WERE MADE (PRIMARILY RELATAB LE TO COMPUTE THE INCOME OF THE BUSINESS UNDERTAKING) WHILE COMPUTING THE TAXABLE INCOME. ON APPEAL, THE FIRST APPELLATE AUTHORITY HAS DELETE D THE ADDITIONS/DISALLOWANCES MADE BY THE A.O. IN EACH OF THE SAID YEARS, THEREBY ACCEPTING THE RETURN OF INCOME OF THE APPELLANT AND ALSO ACCEPTED THAT THE APPELLANT TRUST WAS ENGAGED IN PROVIDING MEDICAL RE LIEF. LD. A.R. SUBMITTED THAT THE AFORESAID ORDERS OF THE FIRST APPELLATE AU THORITY HAVE NOT BEEN CHALLENGED BY THE REVENUE AND ACCORDINGLY, THE SAID ORDERS HAVE REACHED ITS FINALITY. HE SUBMITTED THAT THERE WAS NO DISPUTE R AISED BY THE A.O. AS REGARDS TO THE OBJECTS OF THE TRUST OF PROVIDING ME DICAL RELIEF BEING PURSUED BY THE APPELLANT. HE POINTED OUT FURTHER THAT THERE HAS BEEN NO CHANGE IN THE CHARITABLE OBJECTIVES PURSUED BY THE APPELLANT IN THE ASSESSMENT YEAR UNDER CONSIDERATION IN COMPARISON TO EARLIER YEARS. THUS, THE A.O. HAS DEVIATED FROM ITS STAND WHICH HAS BEEN CONSISTENTLY ACCEPTED IN THE PAST MANY YEARS. LD. A.R. CONTENDED THAT IN INCOME TAX PROCEEDINGS THOUGH THE PRINCIPLE OF RES JUDICATA DOES NOT STRICTLY APPLY, YET, THE RULE OF CONSISTENCY DOES APPLY. IN SUPPORT HE PLACED RELIANCE ON THE F OLLOWING DECISIONS: I)RADHASOAMI SATSANG VS CIT 193 ITR 321 (SC)) II)DIT(E) VS GURU NANAK VIDYA BHANDAR TRUST 272 ITR 379(DEL) III)CIT VS SHRI AGASTYAR TRUST 149 I TR 609 (MAD) IV)DIT VS ESCORTS CARDIAC DISEASES HO SPITAL 300 ITR 75 V)CIT VS SEWA BHARTI HARYANA PRADES H 325 ITR 599 (P & H) ITA NO. 387/DEL/2013 11 4.4. ON THE ISSUE OF APPLICABILITY OF THE P ROVISO TO SECTION 2(15) OF THE ACT, LD. A.R. SUBMITTED THAT IT IS NOT APPLICABLE I N THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. HE REFERRED THE PROVISIONS WITH THIS SUBMISSION THAT THE PROVISO TO SECTION 2(15) OF THE ACT PROVIDES THAT IF ANY OF THE OBJECTS OF THE ASSESSEE INVOLVES CARRYING ON ANY ACTIVITY IN NATURE OF TRADE, COMMERCE, OR BUSINESS FOR CESS OR FEE OR ANY OTHER CONSIDERATION, THEN IRRESPECTIVE OF THE NATURE OF USE, OR APPLICAT ION OR RETENTION OF INCOME, THE ASSESSEE SHALL NOT BE REGARDED AS EXISTING FOR CHARITABLE PURPOSES. SIMILARLY IF ANY OF THE OBJECTS OF THE ASSESSEE INV OLVES CARRYING ON THE ACTIVITY OF RENDERING SERVICES IN RELATION TO TRADE , COMMERCE OR BUSINESS FOR CONSIDERATION THEREIN, THEN TOO THE ASSESSEE SHALL SEIZE TO BE REGARDED AS CARRYING OUT ANY ACTIVITY FOR CHARITABLE PURPOSE. IT IS HOWEVER PERTINENT TO MENTION THAT THE PROVISO TO SECTION 2(15) OF THE AC T APPLIES ONLY TO THE TRUSTS/INSTITUTIONS FALLING IN THE LAST LIMB OF THE DEFINITION CHARITABLE PURPOSE, THAT TOO, IF SUCH TRUST/INSTITUTION CARRY OUT COMMERCIAL ACTIVITY IN NATURE OF BUSINESS, TRADE OR COMMERCE. THUS, THE A FORESAID PROVISO DOES NOT APPLY TO A TRUST/INSTITUTION ENGAGED IN THE CHA RITABLE OBJECTS OF PROVIDING RELIEF TO THE POOR, IMPARTING EDUCATION A ND PROVIDING MEDICAL RELIEF, CONTENDED THE LD. A.R. 4.5. THE LD. A.R. SUBMITTED THAT THE VISION W ITH WHICH THE APPELLANT TRUST HAS BEEN SET UP AND WHICH IS BEING FOLLOWED O VER THE YEARS ARE AS UNDER: TO MAKE A DISEASE FREE WORLD THROUGH A SCIENTIFIC APPROACH TO YOGA AND AYURVED AND TO FULFILL THE RESOLUTION O F MAKING A NEW WORLD FREE FROM DISEASE AND MEDICINE; TO ESTABLISH PRAN AS MEDICINE FOR THE TREATMENT O F ALL CURABLE AND INCURABLE DISEASES BY RESEARCH OF PRANAYAM/YOGA; ITA NO. 387/DEL/2013 12 TO PROPAGATE PRANAYAM AS A FREE MEDICINE FOR TREA TMENT OF DISEASES ROUND THE GLOBE, THROUGH IN-DEPTH RESEA RCH IN ACCORDANCE WITH THE PARAMETERS OF MODERN MEDICAL SC IENCE, SO THAT THE RICH AND POOR MAY AVAIL ITS BENEFITS IN ORDER TO ATTAIN SOUND HEALTH; TO FORM A NEW INTEGRATED SYSTEM OF TREATMENT, CONSI STING MAINLY OF THE TECHNIQUES OF YOGA AND AYURVEDA, FOR SURGERY AND EMERGENCY CASES, ALLOPATHY, HOMEOPATHY, UANI AND ACUPRESSURE TO SOOTHE PATIENTS SUFFERING FROM UNBEA RABLE PAINS AND RID THEM OF DISEASE. TO EVALUATE METHODS OF TREATMENT OF PHYSICAL BODY, ETHERIC BODY, ASTRAL BODY, MENTAL BODY AND CASUAL BODY BEYO ND THE PRESENT INCOMPLETE SYSTEM OF TREATMENT FOR CURE OF PHYSICAL BODY ALONE; IMPARTING YOGA AND HEALTH EDUCATION AND TO BEGIN DE GREE AND DIPLOMA COURSES FOR STUDENTS IN DISCIPLINE OF Y OGA AND AYURVEDA. 4.6. HE SUBMITTED THAT THE AFORESAID PREDOMIN ANT OBJECTS AND THE VISION WITH WHICH THE APPELLANT IS BEING RUN, MAKES IT PAT ENTLY CLEAR THAT THE OBJECTS OF THE APPELLANT ARE TO IMPART EDUCATION AN D PROVIDE MEDICAL RELIEF TO THE SOCIETY AT LARGE. IT MAY BE APPRECIATED THA T NONE OF THE ACTIVITIES OF THE APPELLANT ARE HIT BY THE PROVISO TO SECTION 2(1 5) OF THE ACT. 4.7. MEETING OUT THE PRIMARY OBJECTION OF THE AUTHORITIES BELOW, THAT YOGA AS A SYSTEM DOES NOT PROVIDE ANY MEDICAL RELIE F, THE LD. A.R. ITA NO. 387/DEL/2013 13 SUBMITTED THAT LD. CIT(A) HAS OBSERVED THAT YOGA UNLIKE OTHER MEDICAL SYSTEMS IS NOT A CURATIVE SYSTEM FOR ALLEVIATING DI SEASES BUT IS ONLY A SPIRITUAL SYSTEM HAVING INDIRECT SALUTARY BENEFITS ON THE HEALTH OF AN INDIVIDUAL. SUCH OBSERVATION OF LD. CIT(A) IS NOT CORRECT SINCE YOGA IS ONE OF THE WELL RECOGNIZED TRADITIONAL SYSTEM OF PHYSIC AL EXERCISE AND MEDITATION FOR ATTAINING THE PHYSICAL WELLBEING AND IS A COMPL ETE MEDICAL SCIENCE IN ITSELF. IN SUPPORT LD. A.R. REFERRED PAGES 161-176 OF THE PAPER BOOK I.E. A COPY OF CLINICAL ESTABLISHMENT (REGISTRATION AND RE GULATION) ACT, 2010. HE SUBMITTED THAT THIS ACT HAS BEEN ENACTED BY THE CEN TRAL GOVERNMENT TO PROVIDE FOR REGISTRATION AND REGULATION OF ALL CLIN ICAL ESTABLISHMENTS IN THE COUNTRY WITH A VIEW TO PRESCRIBING THE MINIMUM STAN DARDS OF FACILITIES AND SERVICES PROVIDED BY THEM. AS PER THIS ACT, YOGA I S A RECOGNIZED SYSTEM OF MEDICINE AND IT HAS BEEN DEFINED AS SUCH U/S 2(H) O F THE SAID ACT. LD. A.R. POINTED OUT THAT THE US NATIONAL CENTER FOR COMPLEM ENTARY AND ALTERNATIVE MEDICINE (NCCAM) HAS RECOGNIZED YOGA AS A COMPLEMEN TARY AND ALTERNATIVE MEDICINE (CAM) TO PREVENT AND TREAT DISEASES. NCCA M DEFINES CAM AS A GROUP OF DIVERSE MEDICAL AND HEALTH CARE SYSTEMS, P RACTICES, AND PRODUCTS THAT ARE NOT GENERALLY CONSIDERED AT PAR OF CONVENT IONAL MEDICINE (ALSO CALLED WESTERN OR ALLOPATHIC MEDICINE). HE SUBMITT ED THAT A SURVEY RELEASED IN DECEMBER 2008 BY NCCAM FOUND THAT YOGA WAS THE S IXTH MOST COMMONLY USED ALTERNATIVE THERAPY IN THE US DURING 2007, WIT H 6.1 PERCENT OF THE POPULATION PARTICIPATING. THE SAID STUDY ALSO SATE S THAT YOGA HAS BEEN USED AS SUPPLEMENTARY THERAPY FOR DIVERSE CONDITIONS SUC H AS CANCER, DIABETES, ASTHMA AND AIDS AND THE SCOPE OF MEDICAL ISSUES WHE RE YOGA IS USED AS A COMPLEMENTARY THERAPY CONTINUES TO GROW. IN SUPPOR T HE REFERRED PAGES 193-196 OF THE PAPER BOOK, I.E. COPY OF RELEVANT EX TRACT OF THE SURVEY CONDUCTED IN DECEMBER 2008 BY THE US NATIONAL CENTE R FOR COMPLIMENTARY AND ALTERNATIVE MEDICINES (NCCAM) WHICH IS ALSO REC OGNIZED. LD. A.R. POINTED OUT FURTHER THAT THE STANDING COMMITTEE OF HUMAN RESOURCE DEPARTMENT (HRD) MINISTRY HAS RECOMMENDED THAT YOGA BE MADE ITA NO. 387/DEL/2013 14 COMPULSORY FOR ALL SCHOOL GOING CHILDREN IN THE COU NTRY. THE SAID REPORT FURTHER PROVIDES THAT YOGA IS ONE OF THE CORE COMPO NENTS OF HEALTH AND PHYSICAL EDUCATION. IN SUPPORT HE REFERRED PAGE 181 OF THE PAPER BOOK. LD. A.R. POINTED OUT THAT RECENTLY IN SEP 2012, THE HARWARD UNIVERSITY OF USA CAME FORWARD TO INTRODUCE YOGA AND AYURVEDA IN THEIR UNIVERSITY IN COLLABORATION WITH SWAMI RAMDEVJI IN THE WAKE OF DR EADFUL DISEASES BEING CURED BY SAMIJIS PRANAYAM AND HIS AYURVED MEDICINE S. IN THIS REGARD HE REFERRED TO PAGE NOS. 636 TO 638 OF THE PAPER BOOK I.E. RELEVANT EXTRACTS FROM THE WEBSITE WIKIPEDIA PROVIDING DETAILS OF Y OGA AND AYURVEDA AS A SUBJECT IN THE HARWARD UNIVERSITY. 4.8. LD. A.R. REFERRED THE CONTENTS OF PAGE 16 OF T HE FIRST APPELLATE ORDER FOR THE PURPOSE OF ADJUDICATING AS TO WHETHER YOGA CAN BE CLASSIFIED AS A FORM OF MEDICAL RELIEF. HE SUBMITTED THAT LD. CIT( A) HAS PLACED RELIANCE ON THE DEFINITION OF THE TERM MEDICAL AS PROVIDED IN MAJOR LAW LEXICON BY P RAMANATHA AIYAR (2010 EDITION) AS PER WHICH OF PER TAINING TO OR HAVING TO DO WITH THE ART OF HEALING DISEASE OR THE SCIENCE O F MEDICINE; CONTAINING MEDICINE; USED IN MEDICINE. ON PERUSAL OF THIS DE FINITION, IT MAY BE OBSERVED THAT THE TERM MEDICAL HAS BEEN DEFINED V ERY BROADLY. THE DEFINITION CLEARLY PROVIDES THAT THE ART OF HEALIN G ANY DISEASE CONTINUES MEDICAL RELIEF AND THE SAME NEED NOT BE RESTRICTED TO CONVENTIONAL METHODS OF TREATMENT. HE ALSO REFERRED PAGE 15 OF THE FIRS T APPELLATE ORDER WITH THE SUBMISSION THAT LD. CIT(A) HAD SELECTIVELY QUOTED F ROM THE WEBSITE OF DEPARTMENT OF AYUSH (MINISTRY OF HEALTH AND FAMILY WELFARE). LD. A.R. REFERRED COMPLETE INFORMATION ON YOGA AS AVAILABLE ON THE WEBSITE HTTP://WWW.INDIANMEDICINE.NIC.IN REPRODUCED BELOW: YOGA THE CONCEPTS AND PRACTICES OF YOGA ORIGINATED IN I NDIA ABOUT SEVERAL THOUSAND YEARS AGO. ITS FOUNDERS WERE GREA T SAINTS AND SAGES. THE GREAT YOGIS PRESENTED RATIONAL INTERPRET ATION OF THEIR ITA NO. 387/DEL/2013 15 EXPERIENCES OF YOGA AND BROUGHT ABOUT A PRACTICAL A ND SCIENTIFICALLY SOUND METHOD WITHIN EVERY ONES REACH. YOGA TODAY, IS NO LONGER RESTRICTED TO HERMITS, SAINTS, AND SAGES; IT HAS EN TERED INTO OUR EVERYDAY LIVES AND HAS AROUSED A WORLDWIDE AWAKENIN G AND ACCEPTANCE IN THE LAST FEW DECADES. THE SCIENCE OF YOGA AND ITS TECHNIQUES HAVE NOW BEEN REORIENTED TO SUIT MODERN SOCIOLOGICAL NEEDS AND LIFESTYLES. EXPERTS OF VARIOUS BRANCHES O F MEDICINE INCLUDING MODERN MEDICAL SCIENCES ARE REALIZING THE ROLE OF THESE TECHNIQUES IN THE PREVENTION AND MITIGATION OF DISE ASES AND PROMOTION OF HEALTH. YOGA IS ONE OF THE SIX SYSTEMS OF VEDIC PHILOSOPHY , MAHARISHI PATANJALI, RIGHTLY CALLED THE FATHER OF YOGA COMP ILED AND REFINED VARIOUS ASPECTS OF YOGA SYSTEMATICALLY IN HIS YOGA SUTRAS (APHORISMS). HE ADVOCATED THE EIGHT FOLDS PATH OF YOGA, POPULARLY KNOWN AS ASHTANGA YOGA FOR ALL ROUND DEVELOPMENT OF HUMAN BEINGS. THEY ARE :- YAMA, NIYAMA, ASANA, PRANAYAMA , PRATYAHARA, DHARANA, DHYANA AND SAMADHI. THESE STEPS ARE BELIE VED TO HAVE A POTENTIAL FOR IMPROVEMENT OF PHYSICAL HEALTH BY ENH ANCING CIRCULATION OF OXYGENATED BLOOD IN THE BODY, RETRAINING THE SEN SE ORGANS THEREBY INDUCING TRANQUILITY AND SERENITY OF MIND. THE PRA CTICE OF YOGA PREVENTS PSYCHOSOMATIC DISORDERS AND IMPROVES AN IN DIVIDUALS RESISTANCE AND ABILITY TO ENDURE STRESSFUL SITUATIO NS. 4.9 THE LD. A.R. REFERRED OTHER INFORMATIONS DOWNLOADED FROM THE AFORESAID WEBSITE, PLACED AT PAGES 639 TO 659 OF TH E PAPER BOOK, AND SUBMITTED THAT THESE MAKE IT PATENTLY CLEAR THAT Y OGA IS ONE OF THE RECOGNIZED SYSTEM/METHOD OF PROVIDING MEDICAL RELIE F. YOGA THUS, AS A SYSTEM OF MEDICINE, HAS BEEN SUCCESSFUL IN CURING V ARIOUS DREADFUL DISEASES AND PROVIDING RELIEF TO THE SUFFERINGS OF PEOPLE. THUS, IT UNDOUBTEDLY QUALIFIES AS A FORM OF MEDICAL RELIEF AS PROVIDED IN SECTION 2(15) OF THE ACT. ITA NO. 387/DEL/2013 16 4.10. LD. A.R. SUBMITTED THAT THE ALLEGATION OF THE A.O. AT PARA 4.6 OF THE ASSESSMENT ORDER THAT THE APPELLANT HAS RECEIVED SU BSTANTIAL AMOUNT FROM ORGANIZING YOGA SHIVIRS/CAMPS IN THE ASSESSMENT YEA R UNDER CONSIDERATION, IS FACTUALLY INCORRECT AND VEHEMENTLY DENIED. HE SU BMITTED THAT IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE APPELLANT HAS NOT CONDUCTED ANY YOGA SHIVIR/CAMP AND THAT THE QUESTION OF RECEIVING ANY SUM ON THIS ACCOUNT DOES NOT ARISE AT ALL. IN THE ASSESSMENT Y EAR UNDER CONSIDERATION, THE APPELLANT MADE INTER-TRUST DONATIONS AMOUNTING TO RS.38.35 CRORES TO PATANJALI YOGPEETH, ANOTHER CHARITABLE TRUST, FOR T HE PURPOSE OF SETTING UP YOG BHAVAN AND OTHER YOGA RELATED ACTIVITIES, IN PURSUANCE OF ITS CHARITABLE OBJECTIVES OF IMPARTING YOGA TRAINING FOR PROVIDING MEDICAL RELIEF. THE YOGA IS ONE OF THE DEPARTMENTS IN THE PATANJALI HOSPITAL WHERE PATIENTS ARE CURED THROUGH YOGA. HE CONTENDED THAT THE AUTHORITIES BE LOW HAVE GONE WRONG IN HOLDING THAT (A) YOGA DOES NOT PROVIDE MEDICAL REL IEF AND/OR (B) ANY AMOUNT SPENT TOWARDS YOGA (EITHER IN ANY OF THE DEP ARTMENTS OF THE APPELLANT OR BY WAY OF DONATION) DOES NOT AMOUNT TO APPLICATION OF INCOME FOR PROVIDING MEDICAL RELIEF. THE LD. AR SUBMITTED THAT YOGA, IS ONE OF THE WELL RECOGNIZED TRADITIONAL SYSTEM OF PHYSICAL EXERCISE AND MEDITAT ION FOR ATTAINING PHYSICAL WELL BEING AND IS A COMPLETE MEDICINAL SCIENCE ITSE LF. HE POINTED OUT THAT VARIOUS FEATURES, METHODS, ASPECTS AND BENEFITS OF YOGA HAVE BEEN HIGHLIGHTED BY VARIOUS AUTHORS IN VARIOUS PUBLICATI ONS AND LITERATURE, ONE SUCH PUBLICATION BEING YOG IN SYNERGY WITH MEDICAL SCIENCE WRITTEN BY AN AYURVED ACHARYA OF THE APPELLANT. THE SAID PUBLICAT ION WAS DOCUMENTED ON THE BASIS OF CLINICAL TESTS WHICH WERE CONDUCTED IN THE MOST SCIENTIFIC MANNER SHOWING THE CLINICAL EFFECT OF YOGA ON THE P ARTICIPANTS IN VARIOUS YOGA CAMPS. THE AFORESAID PUBLICATION ALSO DOCUMENT S THE FEEDBACK/TESTIMONIES OF VARIOUS PEOPLE WHO WERE SUF FERING FROM VARIOUS CHRONIC DISEASES AND HAVE BENEFITED FROM YOGA. THE LD. AR POINTED OUT ITA NO. 387/DEL/2013 17 FURTHER THAT THESE ARE VARIOUS PUBLICATIONS WHICH C LEARLY HIGHLIGHT YOGA AS A MEANS TO CURE SEVERAL AILMENTS / DISEASES, INCLUDIN G BUT NOT LIMITED TO THE FOLLOWING :- A) YOG FOR CANCER B) YOG FOR MIGRAINE & EPILAPSY C) YOG FOR RENAL DISEASES D) YOG FOR PSONASIS (SKIN DISEASES ) E) YOG FOR MUSCULOSKETAL DISORDER F) YOG FOR CONSTIPATION AND PILES G) YOG FOR ASTHAMA H) YOG FOR PARKINSONS AND PARALYSI S 4.11. LD. A.R. SUBMITTED THAT RELIANCE PLACED ON TH E DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS RAJNISH FOU NDATIONS 280 ITR 553 (BOM.) BY THE CIT(A) IS MISPLACED AS THE SAID DECIS ION WAS RENDERED PRIOR TO INTRODUCTION OF THE PROVISO TO SECTION 2(15), WH EN THERE WAS NO DISPUTE IN SO FAR AS CLASSIFICATION OF CHARITABLE OBJECTIVE WAS COVERED FOR THE PURPOSE OF CLAIMING EXEMPTION U/S 11/12 OF THE ACT. THIS D ECISION WAS RENDERED IN THE CONTEXT OF CLASSIFYING MEDITATION AS A CHARIT ABLE OBJECTIVE FOR THE PURPOSE OF SECTION 2(15) OF THE ACT. THE HONBLE H IGH COURT IN THE GIVEN CASE HAS ADJUDICATED ONLY ON THE ISSUE OF CLASSIFIC ATION OF MEDITATION AND PREACHING/PROPAGATION OF PHILOSOPHY AS A CHARITAB LE OBJECT FALLING UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY, BUT HAS N OWHERE EXPLICITLY DEALT WITH YOGA, EXCEPT FOR MAKING PASSING REFERENCES IN RES PECT OF THE SAME. THE LD. A.R. SUBMITTED THAT IT IS PERTINENT TO NOTE THA T THE HONBLE COURT IN THE AFORESAID DECISION HAS OBSERVED THAT NOT ONLY IN I NDIA, MEDICATION AND YOGA ARE BEING ACCEPTED IN THE WESTERN COUNTRIES ALSO AS A GREAT SOURCE FOR PHYSICAL AND MENTAL HEALTH MEANING THEREBY THAT YO GA IS A SOURCE FOR MEDICAL RELIEF, AS IS IN THE CASE OF THE ASSESSEE. HE POINTED OUT THAT THE M P GOVERNMENT HAS INTRODUCED VARIOUS FORMS OF ALTERN ATIVE MEDICINES, ITA NO. 387/DEL/2013 18 MEDITATION CLASSES IN THE FIELD OF YOGA WHICH INTER ALIA INCLUDE M.SC. IN HUMAN CONSCIOUSNESS AND YOGIC SCIENCE, PH.D. IN YOG IC SCIENCE, M.PHIL. IN YOGIC SCIENCE AND POST GRADUATE DIPLOMA IN YOGA ETC . WHICH GOES TO PROVE THAT YOGA IS NOW A WELL EQUIPPED MEDICAL SCIENCE WH ICH IS EFFECTIVE IN PROVIDING MEDICAL RELIEF TO NUMEROUS DISEASES. IN THIS REGARD, HE REFERRED TO PAGES 634 AND 635 OF THE PAPER BOOK I.E. DETAILS OF VARIOUS FORMAL COURSES IN YOGA INTRODUCED BY THE MADHYA PRADESH GO VT. 4.12 . LD. A.R. SUBMITTED FURTHER THAT PROPAGATION OF YOGA CONSTITUTES IMPARTING OF EDUCATION. AUTHORITIES BELOW HAVE FAI LED TO APPRECIATE THAT THE PROPAGATION OF YOGA BY WAY OF CONDUCTING YOGA CLASS ES ON A REGULAR BASIS AND IN A SYSTEMATIC MANNER ALSO FALL UNDER THE CATE GORY OF IMPARTING EDUCATION PROVIDED U/S 2(15) OF THE ACT. HE SUBMI TTED THAT THE EXPRESSION EDUCATION HAS NOT BEEN DEFINED UNDER THE ACT. HO WEVER, RELIANCE IN THIS REGARDING MAY BE PLACED ON THE FOLLOWING LEGAL PREC EDENTS: I) LOK SHIKSHAN TRUST 101 ITR 234 (S.C.) II) DELHI MUSIC SOCIETY VS DGIT 246 CTR 327 (DEL.) III) ITO VS SRM FOUNDATION OF INDIA 21 ITD 598 (DEL.) 4.13. LD. A.R. SUBMITTED THAT EVEN AS PER HELSBURY S LAWS OF ENGLAND (4 TH EDITION, VOLUME 5, PARAGRAPH 522) THE ADVANCEMENT A ND PROPAGATION OF EDUCATION AND LEARNING GENERALLY ARE CHARITABLE PUR POSES, EVEN IN THE ABSENCE OF AN ELEMENT OF POVERTY IN THE CLASS OF BE NEFICIARIES, BUT THE TRUST MUST BE FOR THE BENEFIT OF A SUFFICIENT SECTION OF THE COMMUNITY. IT HAS BEEN FURTHER NOTED IN PARA 524 THAT THE PROMOTION O F EDUCATION IN PARTICULAR SUBJECTS, SUCH AS ART, ARTISTIC TASTE, THE APPRECIA TION OF FINE ARTS, MUSIC, COMMERCIAL EDUCATION, TRAINING FOR INDUSTRIAL EMPLO YMENT, THE ART AND SCIENCE OF GOVERNMENT, ECONOMIC AND SANITARY SCIENC E OR PSYCHOLOGICAL HEALING IS CHARITABLE. HE SUBMITTED THAT IN THE C ASE OF THE APPELLANT THE PREDOMINANT OBJECTS OF THE TRUST ARE TO PROVIDE PRA CTICAL AND THEORETICAL ITA NO. 387/DEL/2013 19 TRAINING IN THE FIELD OF YOGA, WHICH COULD ULTIMATE LY PROVIDE MEDICAL RELIEF TO THE SOCIETY AT LARGE. IN PURSUANCE OF THE SAID OBJ ECTIVE, THE APPELLANT TRUST HAS MADE INTER-TRUST DONATIONS TO PATANJALI YOG PEE TH TO SUPPORT THEIR ENDEAVORS OF IMPARTING YOGA EDUCATION BY MEANS OF O RGANIZING YOGA SHIVIRS/CAMPS ACROSS THE COUNTRY ON DAILY/WEEKLY/MO NTHLY BASIS IN A SYSTEMATIZED/ORGANIZED MANNER IN ORDER TO PROVIDE M EDICAL RELIEF TO PEOPLE WHO CANNOT AFFORD MODERN MEDICAL METHOD OR HAVE BEE N SUBJECTED TO ILL EFFECTS OF MODERN MEDICINE. SUCH YOGA EDUCATION WA S GIVEN IN THE SHIVIRS/CAMPS BY YOGA GURUS (I.E. YOGA TEACHERS). THUS, IMPARTING OF YOGA TRAINING THROUGH WELL STRUCTURED YOGA SHIVIRS/CAMPS ALSO FALLS UNDER THE CATEGORY OF IMPARTING EDUCATION, ONE OF THE CHARI TABLE OBJECTS DEFINED U/S 2(15) OF THE ACT AND ACCORDINGLY THE APPELLANTS AC TIVITIES ARE NOT HIT BY THE PROVISO INSERTED IN THE DEFINITION OF CHARITABLE P URPOSE AS CONTAINED IN THE SAID SECTION. 4.14 IN SUPPORT OF GROUND NO.5 THAT THE ACTUAL M EDICAL RELIEF NOT JUDICIOUSLY CONSIDERED, THE LD. A.R. SUBMITTED THAT THE APPELLANT HAS BEEN PROVIDING MEDICAL RELIEF TO MILLIONS OF PEOPLE ALL ACROSS THE COUNTRY THROUGH PATANJALI HOSPITAL AND PATANJALI CHIKITSALAYAS. HE REFERRED PAGE 59 OF THE PAPER BOOK TO SUPPORT HIS CONTENTION THAT ON PERUSA L OF SCHEDULE 31 OF THE INCOME AND EXPENDITURE ACCOUNT OF THE APPELLANT BEI NG THE NET EXPENDITURE ON DEVELOPMENT OF MEDICAL SCIENCE AND FACILITIES (D OMSF) IN PATANJALI HOSPITAL, IT WILL BE APPARENT THAT THE APPELLANTS EXPENDITURE ON PROVIDING MEDICAL RELIEF HAS EXCEEDED THE RECEIPT FROM PATIEN TS. HE POINTED OUT THAT THE AFORESAID HOSPITAL AT HARIDWAR, RANCHI AND PATN A SERVED MORE THAN 2.25 LACS, 0.60 LACS AND 0.75 LACS PATIENTS DURING THE R ELEVANT YEAR. THE HOSPITALS HAVE TEAM OF DOCTORS, NURSES AND PARAMEDI CAL STAFF WORKING ROUND THE CLOCK. THE HOSPITAL AT HARIDWAR IS WELL EQUIPP ED WITH ULTRA MODERN DIAGNOSTICS FACILITIES LIKE OPD & IPD, PATHOLOGY LA B, CARDIOLOGY LAB, PNCHKARMA CLINIC, YOGA & SHATKARMA CLINIC, SURGICAL DENTAL & ITA NO. 387/DEL/2013 20 OPHTHALMOLOGIC CLINIC AND PROVIDES FREE YOGIC AND A YURVED CONSULTANCY TO ALL ITS PATIENTS. LD. A.R. SUBMITTED THAT IN THE ASSES SMENT YEAR UNDER CONSIDERATION, THE APPELLANT HAS PROVIDED MEDICAL S ERVICES/TREATMENT TO MORE THAN 2.4 LACS PATIENTS THROUGH ITS AYURVEDIC H OSPITAL, WHICH HAS NOWHERE BEEN DENIED BY THE A.O. HE POINTED OUT FUR THER THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE APPELLANT HAS PROVIDED FREE MEDICAL RELIEF/TREATMENT TO MORE THAN 38 LACS PATIE NTS THROUGH PATANJALI CHIKITSALYAS SPREAD ALL ACROSS THE COUNTRY. ALL TH E RECORDS OF SUCH TREATMENT AND ACTIVITIES OF THE TRUST HAVE BEEN EXAMINED IN S CRUTINY ASSESSMENTS BY THE REVENUE DEPARTMENT OVER SO MANY YEARS AND HAVE NEVER BEEN DISPUTED. 4.15. IN SUPPORT OF GROUND NO.6, I.E. ON THE ISS UE OF DISTINCTION BETWEEN OBJECTS AND BUSINESS U/S 11(4)/(4A), THE LD. A.R. S UBMITTED THAT IT HAS BEEN MISUNDERSTOOD BY THE AUTHORITIES BELOW AS THEY HAVE SIMPLY BRUSHED ASIDE THE SUBMISSIONS OF THE APPELLANT BY HOLDING THAT TH E AFORESAID ACTIVITIES WERE MERELY SUB-SERVING THE BUSINESS OF DIVYA PHARM ACY, WITHOUT APPRECIATING THAT THE SAID BUSINESS UNDERTAKING WAS RUN BY THE APPELLANT AS AN ACTIVITY INCIDENTAL TO ATTAINMENT OF THE MAIN OB JECTS OF THE APPELLANT AND TO FEED CHARITY, WHICH IS CLEARLY PERMITTED U/S 1(4 )/)(4A) OF THE ACT. HE SUBMITTED THAT IT IS OUTSIDE LAW THAT ONCE REGISTRA TION U/S 12A OF THE ACT HAS BEEN GRANTED BY CIT, THE A.O. COULD NOT QUESTION TH E CHARITABLE CHARACTER OF THE INSTITUTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT OPEN TO THE A.O., IN THE ASSESSMENT PROCEEDINGS, TO HOLD THAT THE OBJECTS OF THE ASSESSEE ARE NOT CHARITABLE IN NATURE. IN THIS REGARD, RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS: I) ACIT VS SURAT CITY GYMKHANA: 300 ITR 214 (S.C.) II) SONEPAT HINDU EDUCATIONAL AND CHARITABLE SOCIETY VS CIT 278 ITR 262 (P & H) III) HIRALAL BHAGWATI VS CIT 246 ITR 188 (GUJ.) ITA NO. 387/DEL/2013 21 IV) ANANDA MARGA PRACHARAKA SANGHA V S CIT 218 ITR 254 (CAL.) V) ITO VS MRS. DWARIKA PRASAD TRUST 30 ITD 84 TM (DEL.) VI) ITO VS TRILOK TIRATH VIDYAVATI CHUTANI CHARITAB LE TRUST 90 ITD 569 (CHD.) VII) GAUR BRAHMIN VIDYA PRACHARINI SABHA VS CIT 34 SOT 371 (DEL.) 4.16. THE LD. A.R. SUBMITTED THAT SECTION 11 OF THE ACT, PROVIDES EXEMPTION FORM TAX FOR INCOME DERIVED FROM PROPERTY HELD UNDER TRUST FOR CHARITABLE OR RELIGIOUS PURPOSES. SECTION 11(4) LA YS DOWN THAT PROPERTY HELD UNDER TRUST FOR THE PURPOSE OF SECTION 11 OF THE ACT MAY INCLUDE THE BUSINESS UNDERTAKING HELD BY THE TRUST. THIS SECTIO N DEALS WITH CASES WHERE THE BUSINESS ITSELF IS STILL IN TRUST FOR A CHARITA BLE PURPOSE. HE SUBMITTED THAT SUB-SECTION (4A) OF SECTION 11 ALSO EXEMPTS TH E INCOME OF A BUSINESS CARRIED ON BY THE TRUST AS LONG AS THE BUSINESS CAR RIED ON BY IT IS; (A) INCIDENTAL TO THE ATTAINMENT OF MAIN OBJECTS; (B) F EEDS THE CHARITABLE OBJECTS AND (C) SEPARATE BOOKS OF ACCOUNTS ARE MAIN TAINED IN RESPECT OF THE SAME, EVEN ON FULFILLMENT OF THE AFORESAID CONDITIO NS, PROFIT FORM SUCH BUSINESSES ARE EXEMPT UNDER SECTIONS 11/12 OF THE A CT. 4.17 LD. A.R. SUBMITTED THAT IN THE CASE OF THE AP PELLANT, THE ACTIVITY OF MANUFACTURING AND SALE OF AYURVED PREPARATIONS HAS BEEN UNDERTAKEN ONLY FOR THE PURPOSE OF EFFECTUATING THE CHARITABLE OBJE CTIVE OF PROVING MEDICAL RELIEF TO THE SOCIETY AT LARGE, AS A GENUINE NEED WAS FELT TO PROVIDE SUPERIOR QUALITY AYURVED PREPARATIONS AT ECONOMICAL PRICES, IN ORDER TO ATTAIN EFFECTIVE MEDICAL RESULTS. HE POINTED OUT THAT THE TOTAL DONATIONS/VOLUNTARY CONTRIBUTIONS RECEIVED BY THE APPELLANT TRUST DURIN G THE ASSESSMENT YEAR UNDER CONSIDERATION AMOUNTED TO RS. 3,89,14,100/- O NLY WHEREAS THE TOTAL REVENUE EXPENDITURE INCURRED BY THE APPELLANT TRUST IN THE ASSESSMENT YEAR UNDER CONSIDERATION, FOR UNDERTAKING ITS CHARITABLE ACTIVITIES AMOUNTED TO RS.48,54,93,383/- (EXCLUDING DEPRECIATION). FURTHE R, SUBSTANTIAL CAPITAL ITA NO. 387/DEL/2013 22 EXPENDITURE HAS ALSO INCURRED BY THE APPELLANT TRUS T, IN PURSUING ITS CHARITABLE ACTIVITIES. IN SUPPORT, HE REFERRED PAG E 26 OF THE PAPER BOOK. HE SUBMITTED THAT MEANING OF EXPRESSION NOT FOR PURPO SE OF PROFIT IS NO LONGER RES INTEGRA, AND THE TEST BEING, WHAT IS THE PREDOM INANT OBJECT OF THE ACTIVITY WHETHER IT IS TO CARRY OUT A CHARITABLE PU RPOSE OR TO EARN PROFIT. IF THE PREDOMINANT OBJECT IS TO CARRY OUT A CHARITABLE PURPOSE AND NOT TO EARN PROFIT, THE ORGANIZATION WOULD NOT LOSE ITS CHARITA BLE CHARACTER MERELY BECAUSE SOME PROFIT ARISES FROM THE ACTIVITY. THE EXPRESSION FOR THE PURPOSE OF PROFIT IMPLIES THAT THE PREDOMINANT OBJ ECT SHOULD BE TO EARN PROFIT. FURTHER, TO DETERMINE THE PREDOMINANT OBJE CT, WHAT IS REQUIRED TO BE EXAMINED IS THE OBJECTS OF THE SOCIETY, AND NOT THE QUANTUM OF SURPLUS, THOUGH SUCH QUANTUM MAY BECOME RELEVANT IN CERTAIN CIRCUMSTANCES. THE LD. A.R. CITED FOLLOWING DECISIONS IN SUPPORT: I) ACIT VS SURAT ART SILK CLOTH MANUFACTURERS 121 ITR 124 II) CIT VS ANDHRA PRADESH STATE ROAD TRANSPORT CORPORAT ION 159 ITR 01 (S.C.) III) VICTORIA TECHNICAL INSTITUTE VS CIT 188 ITR 57 (S.C .) IV) THIAGARAJAR CHARITIES VS ADDL. CIT 225 ITR 1010, 10 26 (S.C.) V) ADITANAR EDUCATIONAL INSTITUTION VS ACIT 224 ITR 310 (S.C.) VI) CIT VS BAR COUNCIL OF MAHARASHTRA 130 ITR 28 (S.C.) VII) AMERICAN HOTEL LODGING ASSOCIATION EDUCATION INSTIT UTE VS CBDT 301 ITR 86 (S.C.) VIII) CIT VS DELHI KANNADA EDUCATION SOCIETY 246 ITR 73 (D EL.) IX) ACIT VS ALN RAO CHARITABLE TRUST 102 ITR 474 (KAR) X) CIT VS PULLIKAL MEDICAL FOUNDATION PVT. LTD.210 ITR 299 (KER.) XI) UMAID CHARITABLE TRUST VS CIT 125 ITR 55 (RAJ.) ETC . 4.18 THE LD. A.R. CONTENDED THAT THERE IS NO BAR IN THE CHARITABLE TRUST/INSTITUTION CARRYING ON BUSINESS, PROVIDED TH E CONDITIONS PRESCRIBED IN THE CONDITIONS PRESCRIBED IN SECTION 11(4)/11(4A) O F THE ACT ARE SATISFIED. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P. KRISHNA WARRIERS, 53 ITR 176 (SC), HAS BEEN PLEASED TO HOLD THAT WHERE B USINESS IS HELD IN TRUST FOR CHARITABLE PURPOSES, THE CONDITION PRESCRIBED I N PROVISO (B) TO SECTION 4(3)(I) OF 1922 ACT IS NOT APPLICABLE AND THE ASSES SEE WAS HELD TO BE ELIGIBLE ITA NO. 387/DEL/2013 23 FOR EXEMPTION. THE LD. A.R. ALSO PLACED RELIANCE O N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DCIT VS THATHI TRUST 2 47 ITR 785 (S.C.) AND ON HONBLE DELHI HIGH COURT IN THE CASE OF HAMDARD DAWAKHANA (WAKF) 157 ITSR 639 (DEL.). THE LD. A.R. SUBMITTED THAT IN FU RTHERANCE OF THE CHARITABLE OBJECTIVE TO PROVIDE MEDICAL RELIEF THRO UGH YOGA AND AYURVED, THE NEED WAS FELT TO PROVIDE AYURVEDIC MEDICINES TO THE PATIENTS TO ATTAIN OPTIMUM MEDICAL RESULTS AS RESULTS OF AYURVEDIC TRE ATMENT ARE LARGELY DEPENDENT UPON THE QUALITY OF MEDICINES PREPARED. HENCE, A SMALL SCALE MANUFACTURING UNIT OF AYURVEDIC MEDICINES WAS ESTAB LISHED BY THE APPELLANT. THIS WAS THE BEGINNING OF DIVYA AUSHADHI NIRMANSHAL A (DIVYA PHARMACY), WHICH WAS TOTALLY BASED ON TRADITIONAL METHODS. 4.19. LD. A.R. SUBMITTED THAT THE QUALITY OF MED ICINES SO PRODUCED IS OF HIGHEST LEVEL AND IT IS ALSO ENSURED THAT THE MEDI CINES ARE AVAILABLE TO COMMON MAN AT REASONABLE PRICES. IN SUPPORT, HE RE FERRED TO PAGE 199 OF THE PAPER BOOK WHEREIN THE PRICES OF AYURVEDIC MEDI CINES OF THE APPELLANT HAS BEEN COMPARED WITH OTHER PRODUCTS OF DIFFERENT COMPANIES AVAILABLE IN THE MARKET. LD. A.R. SUBMITTED THAT SURPLUS GENERA TED FORM THE BUSINESS UNDERTAKING IS, AS STATED ABOVE, REDEPLOYED FOR CHA RITABLE PURPOSE I.E. FOR PROVIDING MEDICAL RELIEF, IMPARTING EDUCATION AND R ELIEF TO THE POOR. THUS, THERE WAS NOTHING WRONG IN THE INCIDENTAL BUSINESS BEING CARRIED OUT BY THE APPELLANT TO FEED THE PREDOMINANT CHARITABLE OBJECT S OF PROVIDING MEDICAL RELIEF AND IMPARTING EDUCATION. IN SUPPORT, HE PLA CED RELIANCE ON THE FOLLOWING DECISIONS: I) CST VS SAI PUBLICATION FUND 258 I TR 70 II) DIT(E) VS AGRI HORTICULTURE SOCIE TY 273 ITR 198 III) DIT(E) VS WILLINGTON CHARITABLE TRUST 19 5 TAXMAN 232 IV) SHRI HARIDEVJI GAUSHALA TRUST VS CIT 11 9 TTJ 981 V) BOMBAY KERALEEYA SAMAJ VS ITO 56 ITD 26 (MUM.) ITA NO. 387/DEL/2013 24 4.20. LD. A.R. SUBMITTED FURTHER THAT THE FINDI NGS OF AUTHORITIES BELOW ARE PERVERSE AS IT IS FACTUALLY INCORRECT TO ALLEGE THA T THE MEDICAL PRACTITIONERS OF THE APPELLANT TRUST WERE PRESCRIBING MEDICINES WHIC H WERE AVAILABLE ONLY IN THE MEDICAL SALE COUNTER MANAGED BY THE APPELLANT A ND THE SAME IS VEHEMENTLY DENIED. CIT(A) HAS DISREGARDED THE FIND INGS OF THE A.O. IN REMAND REPORT DATED 11.10.2012 REPRODUCED AT PAGE 1 2 OF THE ORDER WHEREIN THE MEDICAL PRACTITIONER HAS CATEGORICALLY STATED THAT THEY ALSO PRESCRIBE MEDICINES MANUFACTURED BY OTHER PHARMACEU TICAL COMPANIES AND THERE WAS NO COMPULSION ON THE PATIENT TO PURCHASE THE MEDICINES FROM THE APPELLANT ONLY. THE AUTHORITIES BELOW HAVE TOTALLY FAILED TO APPRECIATE THAT OUT OF THE TOTAL SALE OF RS.168.12 CRORES BY DIVYA PHARMACY, MEDICINES OF RS.4.2 CRORES ONLY WERE SOLD FROM THE HOSPITAL SALE COUNTER. EVEN OTHERWISE THERE IS NO BAR IN SELLING MEDICINES FROM THE HOSPI TAL COUNTER. THE ALLEGATION OF THE AUTHORITIES BELOW THAT THE ASSESS EE DID NOT SELL ANY MEDICINES OTHER THAN PRODUCTS OF DIVYA PHARMACY IS LEGALLY AND FACTUALLY UNSUSTAINABLE. THE AUTHORITIES BELOW HAVE FURTHER FAILED TO APPRECIATE THAT MEDICINES OF RS.41,26,217/- WERE PURCHASED BY VARIO US DEPARTMENTS OF THE HOSPITAL RUN BY THE APPELLANT. IN SUPPORT HE REFER RED CONTENTS OF PAGE 13 OF THE FIRST APPELLATE ORDER. LD. A.R. SUBMITTED FURT HER THAT THE ASSESSEE HAD APPLIED SUBSTANTIAL AMOUNT IN SETTING UP AYURVEDIC COLLEGE IN THE NAME OF PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANST HAN, WHICH COMMENCED OPERATIONS W.E.F. 20.07.2009. THE SAID C OLLEGE IS AFFILIATED WITH UTTARAKHAND TECHNICAL UNIVERSITY AND RUNS BAMS COUR SE. HIGHLY QUALIFIED AND EXPERIENCED FACULTIES HAVE BEEN APPOINTED TO PR OVIDE QUALITY EDUCATION TO THE STUDENTS. 4.21. IN SUPPORT OF GROUND NO.7 REGARDING INTE R-TRUSTS DONATIONS, THE LD. A.R. SUBMITTED THAT THE AUTHORITIES BELOW HAVE WRON GLY HELD THAT THE INTER TRUST DONATIONS AMOUNTING TO RS.38.35 CRORES MADE TO PATANJALI YOGPEETH, ITA NO. 387/DEL/2013 25 ANOTHER CHARITABLE TRUST FOR THE PURPOSE OF SETTING UP OF YOGA GRAM AND OTHER YOGA RELATED ACTIVITIES, DID NOT AMOUNT TO AP PLICATION OF INCOME FOR THE PURPOSE OF MEDICAL RELIEF OR IMPARTING EDUCA TION. THE LEGAL POSITION IN THIS REGARD IS WELL SETTLED THAT WHEN DONOR TRUST W HICH ITSELF IS A CHARITABLE TRUSTS, DONATES ITS INCOME TO ANOTHER TRUST, THE SA ME CONSTITUTES APPLICATION OF INCOME U/S 11(1)(A) OF THE ACT. IN THIS REGARD, HE DREW OUR ATTENTION TO THE INSTRUCTIONS ISSUED BY CBDT VIDE INSTRUCTION NO .1132 DATED 05.01.1978 REPRODUCED HEREUNDER: A QUESTION HAS BEEN RAISED REGARDING THE AVAILABIL ITY OF EXEMPTION IN THE HANDS OF CHARITABLE TRUSTS OF AMOUNTS AID AS DO NATION TO OTHER CHARITABLE TRUSTS. THE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT H AS BEEN DECIDED THAT AS THE LAW STANDS AT PRESENT, THE PAYMENT OF A SUM BY ONE CHARITABLE TRUST TO ANOTHER FOR UTILIZATION BY THE DONEE TRUST TOWARDS ITS CHARITABLE OBJECTS IS PROPER APPLICATION OF INC OME FOR CHARITABLE PURPOSE IN THE HANDS OF THE DONEE TRUST; AND THE DO NOR TRUST WILL NOT LOSE EXEMPTION UNDER SECTION 11 OF THE I. T. ACT, 1 961, MERELY BECAUSE THE DONEE TRUST DID NOT SPEND THE DONATION DURING THE YEAR OF RECEIPT ITSELF. THE ABOVE POSITION MAY KINDLY BE BROUGHT TO THE NOT ICE OF ALL OFFICERS WORKING IN YOUR CHARGE. 4.22 IN SUPPORT, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS:- I) CIT VS THANTHI TRUST 239 ITR 5 02 (SC) II) CIT VS TRUSTEES OF JADI TRUST 133 ITR 494 (BOM.) III) CIT VS HINDUSTAN CHARITY TRUST 139 ITR 913 (CAL.) IV) CIT VS NIRMALA BAKUBHAI FOUNDATION 226 I TR 394 (GUJ.) V) CIT VS SHRI RAM MEMORIAL FOUNDATION 269 ITR 35 (DEL.) VI) CIT VS HPS SOCIAL WELFARE FOUNDATION 235 CTR 330 (DEL.) 4.23 IN SUPPORT OF GROUNDS NO.9 & 10 REGARDING NON ALLOWANCE FOR ACTUAL APPLICATION OF INCOME, LD. A.R. SUBMITTED THAT WITH OUT PREJUDICE TO THE ASSESSEES PRIMARY CONTENTION AGAINST DENIAL OF EXE MPTION UNDER SECTION 11/12 OF THE ACT, IT IS FURTHER SUBMITTED THAT THE A.O. /CIT(A) HAS ERRED IN NOT ALLOWING DEDUCTION FOR ACTUAL EXPENDITURE (BOTH REVENUE AND CAPITAL) INCURRED BY THE APPELLANT IN THE ASSESSMENT YEAR UN DER CONSIDERATION, FOR ITA NO. 387/DEL/2013 26 PURSUING ITS CHARITABLE ACTIVITIES. WHILE DENYING EXEMPTION U/S 11/12 OF THE ACT ON THE GROSS INCOME OF THE ASSESSEE, THE AUTHOR ITIES BELOW HAVE FAILED TO APPRECIATE THAT ADDITION/DISALLOWANCE IF ANY, CO ULD HAVE ONLY BEEN RESTRICTED TO THE NET AMOUNT/PROFIT ON WHICH EXEMPT ION WAS CLAIMED UNDER THE SAID SECTION AND NOT ON THE ENTIRE GROSS INCOME OF THE ASSESSEE. THE APPELLANT HAD INCURRED VARIOUS REVENUE EXPENDITURE AMOUNTING TO RS.52,26,81,441/- IN PURSUING ITS CHARITABLE ACTIVI TIES, FOR WHICH NO ALLOWANCE HAS BEEN GIVEN BY THE A.O. IT HAS BEEN SU BSEQUENTLY INTIMATED THAT THE APPLICATION U/S 154 OF THE ACT FOR RECTIFI CATION FILED BEFORE THE A.O. IN THIS REGARD HAS NOW BEEN DISPOSED OFF VIDE ORDER DATED 03.06.2013 WHEREBY HE HAS RECTIFIED THE ASSESSMENT ORDER AND A LLOWED DEDUCTION OF REVENUE EXPENDITURE AGGREGATING TO RS.52,26,81,441/ -. A COPY OF THIS ORDER HAS BEEN FILED, THUS THE GROUNDS NO.9 & 10 HAVE BEC OME INFRUCTUOUS AND ARE REJECTED AS SUCH. 4.24. GROUND NO.11 OF THE APPEAL IS AGAINST THE DISALLOWANCE MADE U/S 40(A)(IA) READ WITH SECTION 194C OF THE ACT. LD. A .R. POINTED OUT THAT APART FROM DENIAL OF EXEMPTION U/S 11/12 OF THE ACT, THE A.O. HAS FURTHER DISALLOWED A SUM OF RS.17,27,88,778/- ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE U/S 40(A)(IA) READ WITH SECTION 194C OF T HE ACT. HE SUBMITTED THAT THE ASSESSEE HAD DURING THE YEAR MADE PAYMENT TO VARIOUS SUPPLIERS AGAINST THE PURCHASE OF MATERIAL LIKE PACKING MATER IAL, CD, VCD, MAGAZINES AND BOOKS. SINCE THE SAID TRANSACTIONS BETWEEN THE ASSESSEE AND THE SUPPLIERS DID NOT INVOLVE ANY CONTRACTUAL RELATIONS HIP; AND NO RAW MATERIALS WERE SUPPLIED BY THE APPELLANT FOR UNDERTAKING ANY JOB WORK, THE SAME CONSTITUTED A CONTRACT OF SALE, NOT FALLING WITHI N THE AMBIT OF SECTION 194C OF THE ACT. ACCORDINGLY, THE APPELLANT DID NOT DED UCT TAX AT SOURCE ON SUCH PAYMENTS. THE AUTHORITIES BELOW HAVE HELD THAT THI S SYSTEM OF CONTRACTUAL RELATIONSHIP BETWEEN THE ASSESSEE AND THE SUPPLIERS SINCE THE TEXTUAL CONTENT AND LAYOUT FOR BOOKS/MAGAZINES AND CD DVDS , BEING THE MOST ITA NO. 387/DEL/2013 27 CRITICAL COMPONENTS, WERE SUPPLIED BY THE APPELLANT . ON THAT BASIS, THE A.O. INFERRED THAT THE SAME CONSTITUTED WORKS CONTRACT COVERED WITHIN THE AMBIT OF SECTION 194C OF THE ACT AND THE APPELLANT SHOULD HAVE DEDUCTED TAX ON SUCH PAYMENTS. ACCORDINGLY, THE A.O. DISALLOWED EX PENDITURE OF RS.17,27,88,778/- ON PURCHASE THEREOF U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE. LD. CIT(A) HAS UPHELD THE SAME. 4.25. IN SUPPORT OF THIS GROUND, LD. A.R. SUBMI TTED THAT SINCE THE ASSESSEE IS A CHARITABLE TRUST, IS ELIGIBLE FOR EXE MPTION U/S 11/12 OF THE ACT THE PROVISIONS OF SECTION 40(A)(IA) IN THE CASE OF APPELLANT HAS NO APPLICATION. WITHOUT PREJUDICE TO THIS PRIMARY CONT ENTION THAT NON APPLICABILITY OF THESE PROVISIONS IN THE CASE OF T HE ASSESSEE THE LD. A.R. FURTHER CONTENDED THAT THE AUTHORITIES BELOW HAVE F AILED TO APPRECIATE THE DISTINCTION BETWEEN THE CONTRACT FOR WORK AND A CON TRACT FOR SALE OF THE GOODS IN THE CONTEXT OF SECTION 194C OF THE ACT, SI NCE THE SAID SECTION IS APPLICABLE TO THE FORMER BUT NOT TO THE LATTER CATE GORY OF CONTRACTS. IN SUPPORT HE PLACED RELIANCE ON THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF STATE OF HIMACHAL PRADESH ASSOCIATED HOTELS OF INDIA LTD. 29 SOT 474, WHEREIN DIFFERENCE BETWEEN WORK OUT CONTRACT A ND SALE CONTRACT HAS BEEN DISCUSSED. LD. A.R. ALSO REFERRED CBDT CIRCUL AR NO.681 DATED 21.02.1994 AND 13.12.2006 PARA 7 (VI) OF CIRCULAR 6 89 DATED 08.03.1994. TAKING ASSISTANCE OF THESE CIRCULARS, THE LD. A.R. SUBMITTED THAT GOODS SOLD ARE MANUFACTURED ACCORDING TO SPECIFICATIONS OF THE BUYER IS NOT RELEVANT IN DETERMINING WHETHER THE CONTRACT IS A CONTRACT OF S ALE OR WORKS CONTRACT. WHAT IS RELEVANT TO DETERMINE IS PASSING OF PROPERT Y/TITLE IN THE GOODS FROM THE VENDOR TO THE BUYER. WHERE TITLE TO THE GOODS PASSES TO THE BUYER AT THE TIME GOODS ARE MANUFACTURED AND TRANSPORTED, TH E CONTRACT WOULD BE ONE FOR SALE OF GOODS, NOTWITHSTANDING THAT THE GOO DS ARE MANUFACTURED ACCORDING TO THE SPECIFICATIONS OF THE BUYER. THE LD. A.R. SUBMITTED THAT THE PRINCIPAL TEST TO BE APPLIED TO DETERMINE WHETH ER THE CONTRACT IS WORKS ITA NO. 387/DEL/2013 28 CONTRACT OF CONTRACT FOR SALE IS WHETHER TITLE TO T HE GOODS PASSES TO THE PURCHASER IN TIME ANTERIOR TO THE MANUFACTURE AND D ELIVERY OF GOODS TO THE PURCHASER. IF THE ANSWER TO THE AFORESAID QUERY IS IN THE NEGATIVE THEN, THE CONTRACT IS ONE OF SALE, WHERE THE VENDOR MANUFACTU RES GOODS IN HIS OWN RIGHT, AS PRINCIPAL, AND NOT AS JOB WORKER. IN SUP PORT HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS SILVER OAK LABORAT ORIES P. LTD. SLP NO.18012/2009 II) CIT VS DABUR INDIA LTD. 283 ITR 297 (DEL.) III) CIT VS REEBOK INDIA CO. 306 ITR 124 (DEL.) IV) CIT VS GLENMARK PHARMACEUTICALS LTD. 324 ITR 199 (BOM.) 4.26 THE LD. A.R. SUBMITTED FURTHER THAT SECT ION 194C AMENDED BY THE FINANCE (2) ACT OF 2009 W.E.F. 01.10.2009 WHEREBY T HE DIFFERENCE OF WORK WAS ENLARGED TO INCLUDE CONTRACT FOR MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FORM SUCH CUSTOMER. THE SAID AM ENDMENT ALSO PROVIDED THAT CONTRACT FOR CARRYING OUT WORK SHALL NOT INCLUDE CONTRACT FOR MANUFACTURING OR SUPPLYING OF PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF CUSTOMER BY USING MATERIAL PURCHAS ED FORM A PERSON OTHER THAN SUCH CUSTOMER. THE AFORESAID AMENDMENT IN SEC TION 194C OF THE ACT VIDE FINANCE (2) ACT, 2009 MADE THE POSITION ABSOLU TELY CLEAR THAT WHERE NO RAW MATERIAL IS SUPPLIED BY THE ULTIMATE PURCHASER TO THE VENDOR, THE GOODS SUPPLIED BY THE VENDOR ACCORDING TO THE SPECIFICATI ONS OF THE PURCHASER ARE, EVEN IN TERMS OF THE AMENDED PROVISIONS, NOT REGARD ED AS BEING IN THE NATURE OF CONTRACT FOR CARRYING OUT WORK, REQUIRING DEDUCTION OF TAX A SOURCE U/S 194C OF THE ACT. HE SUBMITTED THAT IN CASE OF THE ASSESSEE, THE FINISHED GOODS ARE MANUFACTURED BY THE SUPPLIER AS PER THE P RESCRIBED SPECIFICATIONS OF THE ASSESSEE. THE RAW MATERIAL AND OTHER INGRED IENTS REQUIRED FOR ITA NO. 387/DEL/2013 29 MANUFACTURE ARE SPECIFIED BY THE APPELLANT, IN ORDE R TO ENSURE PROPER QUALITY OF THE FINISHED PRODUCTS. SUCH RAW MATERIA LS ARE HOWEVER ACQUIRED BY THE VENDOR ON THEIR OWN ACCOUNT AND NOT ON BEHAL F OF THE APPELLANT. IN SUPPORT, HE REFERRED PAGES 202-204 OF THE PAPER BOO K WHICH ARE SAMPLE COPIES OF INVOICES RAISED. HE SUBMITTED THAT RIGHT OF OWNERSHIP PASSES TO THE APPELLANT ONLY AFTER THE GOODS COME INTO EXISTE NCE, ON MANUFACTURE AND ARE SUPPLIED TO THE APPELLANT AS FINISHED GOODS. P RIOR THERETO, THE RISK IN THE GOODS VESTS WITH THE VENDOR/SUPPLIER. WERE THE SUPPLIER TO INCUR ANY LOSS, SUCH AS, ON ACCOUNT OF FIRE, BEFORE PASSING O F TITLE IN THE GOODS, THE SAME WOULD BE BORNE BY THE VENDOR AND NOT THE APPEL LANT. ALL THE OTHER TERMS OF PURCHASE/SALE BETWEEN THE VENDOR AND SUPPL IER, LIKE PAYMENT TERMS, PERIOD OF DELIVERY, ETC., WERE AGREED INDEPE NDENTLY BETWEEN THE SAID TWO PARTIES AND APPELLANT HAD NO SAY IN THE SAME. THE CONTRACT BETWEEN THE APPELLANT AND THE SUPPLIERS IS FOR ACQUISITION OF ASCERTAINED GOODS. THE CONTRACT IS THUS ONE OF SALE AND NOT CONTRACT FOR C ARRYING OUT WORK. LD. A.R. SUBMITTED FURTHER THAT IT IS SETTLED LAW THAT INCOM E OF A CHARITABLE TRUST CLAIMING EXEMPTION U/S 11/12 OF THE ACT HAS TO BE C OMPUTED IN ACCORDANCE WITH THE NORMAL COMMERCIAL PRINCIPLES AND NOT UNDER ARTIFICIAL HEAD DEFINED IN SECTION 14 OF THE ACT. IN ORDER TO COMPUTE INCO ME NOT REQUIRED TO BE INCLUDED IN THE TOTAL INCOME U/S 11 OF THE ACT, A C HARITABLE TRUST/SOCIETY IS, REQUIRED TO CONSIDER THE EXTENT OF APPLICATION OF I NCOME FOR CHARITABLE PURPOSE. HE PLACED RELIANCE ON THE FOLLOWING DECISI ONS: I) RAO BAHADUR CALAVALA CUNNAN CH ETTY CHARITIES 135 ITR 485 (MAD) II) CIT VS ISHMIAN INDIA MARITIME P. LTD. 113 ITR 570 (MAD) III) CIT VS KOTAK SECURITIES LTD. 3 40 ITR 333 (BOM) 5. THE CONTENTION OF THE LD. CIT, D.R. WHO HAS BASICALLY PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW, ON THE CONTRARY REMAINED THAT THE VERY OBJECTIVES ARE IN THE NATURE OF GENERAL ACTIVITIES AS 7 OUT OF 15 OBJECTIVES IN THE TRUST DEED ARE DEVOTED TO YOGA, VEDIC DHARMA, M AKING COW SHEDS, ETC. ITA NO. 387/DEL/2013 30 THESE OBJECTIVES HAVE BEEN MENTIONED AT PAGE 7 OF T HE ASSESSMENT ORDER. THESE ARE IMPARTING PRACTICAL TRAINING ON VARIOUS A SANAS AS PRACTICED BY RISHIES AND MUNIES TO RECEIVE CALM STATE OF MIND AN D EXTREME HAPPINESS, CONSTRUCT BUILDINGS FOR YOGA AND MEDITATION, ORGANI ZE YOGA CAMPS TO PROPAGATE YOGA TRAINING AND VEDIC DHARMA, RESEARCH ON YOGA, AYURVEDA AND VEDIC LITERATURE, PREPARATION AND SALE OF MEDICINES , ARRANGEMENT OF STUDY OF VEDA, GEETA, UPNISHADS, PREPARE FOR UPROOTING ZEALO USNESS, HATE, EVIL ETC., ESTABLISH AND RUN STABLES FOR COWS AND CARRY ON AGN IHOTRAS AND YAGNYAS. SHE HAS ALSO POINTED OUT THAT A NEWLY ADDED CLAUSE IN THE OBJECTIVES IS RELATED TO THE FIELD OF ENERGY, AIR AND WATER. LD. CIT DR SUBMITTED THAT ALL THESE ARE OBJECTIVES OF GENERAL PUBLIC UTILITY AND NOT TO PROVIDE MEDICAL RELIEF. SHE SUBMITTED THAT IN THE ASSESSMENT YEAR 2009-10, THIS OBJECTIVE IS HIT BY THE PROVISO TO SECTION 2(15). YOGA IS A WAY OF MEDITATION RATHER THAN A WAY OF MEDICATION RATHER LIFY FOR MEDICAL RELIEF . IN INDIA, IT IS WELL KNOWN AGE OLD DISCIPLINE OF MEDITATION FOR SPIRITUAL WELL BEING AS DEFINED IN THE INDIAN LITERATURE ON THE SUBJECT WEBSITE, DEPARTMEN T OF AYUSH, MINISTRY OF HEALTH AND VARIOUS DICTIONARIES. SHE SUBMITTED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS RAJNISH FOUNDATION (SUP RA) AND COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF KASHYAP VEDIC RESEARCH FOUNDATION VS CIT 131 ITD 370 (COCHIN) CLEARLY DEFINES YOGA AS WAY OF MED ITATION, THERE IS NO CASE LAW TO PROVE THAT IT IS A WAY OF MEDICAL RELIE F. THE CLAIM OF MEDICAL RESEARCH ON THE GROUND OF YOGA IS NOT MAINTAINABLE. SHE SUBMITTED THAT YOGAS INCLUSION IN THE CURRICULUM ALONG WITH AYURV EDA ON AYUSH WEBSITE AS CLAIMED BY THE ASSESSEE BEFORE THE TRIBUNAL, IS ALS O NOT RECOGNIZED AS AN INDEPENDENT MEDICAL SCIENCE. HENCE, INCLUSION OF YOGA IS NEITHER BE CONSTRUED AS A RECOGNIZED INDEPENDENT MEDICAL SCIE NCE NOR AS A SUBSTITUTE OF PHYSIOTHERAPY. IT IS AYURVEDA AND NOT YOGA WHIC H IS RECOGNIZED AS AN INDEPENDENT MEDICAL SCIENCE. YOGA CANNOT BE TREATE D AT PAR WITH THE AYURVEDA. EVEN THE ASSESSEE IS DEPENDENT ON AYURVEDA FOR TREATMENT IN ITS OWN HOSPITAL AS PER TRUST DEED. LD. CIT DR SUBMITTE D THAT THE MAIN ITA NO. 387/DEL/2013 31 OBJECTIVE OF THE ASSESSEE IS NOT COMPARED TO ABOVE MEDICAL FORMULATION PRODUCED BY ASSESSEE AS CAN BE SEEN FROM THE SHEER MAGNITUDE OF BUSINESS IN PRODUCTION, SALE COUNTERS OPENED THROUGHOUT INDI A, HUGE EXPORT BUSINESS, VOLUMINOUS TRUST PROMOTION AND PUBLICATIO N HOUSE. IN DEVELOPMENT TO THE MAIN OBJECTIVE OF THE MEDICAL RE LIEF AS CLAIMED, THE ASSESSEE HAS ESTABLISHED A CHAIN OF RETAIL OUTLETS FOR ITS PRODUCTS ALL OVER INDIA UNDER THE NAME OF PATANJALI DIVYA YOGA TRUST WHICH IS SOLD THROUGH SEVA KENDRAS FOR WHICH SECURITY DEPOSITS HAS BEEN T AKEN BY THE ASSESSEE AND COLLECTED RS.6.21 CRORES FROM THESE SEVA KENDRA S AS SECURITY DEPOSITS. IN SUPPORT, SHE REFERRED THE CONTENTS OF PAGES 4 TO 7 OF THE ASSESSMENT ORDER AND PAGE NO.17 TO 22 OF THE FIRST APPELLATE O RDER AND PAGES 17 TO 19 OF THE PAPER BOOK FILED ON BEHALF OF THE DEPARTMENT . 5.1. LD. CIT DR SUBMITTED FURTHER THAT THE ASSESS EE IS ALSO ENGAGED IN EXPORT OF ITS PRODUCTS, THE VOLUME OF NET EXPORT BE ING RS.5,15,64,050/- WHILE THE CLAIM OF CHARITY IS CONFINED TO INDIA ONL Y DUE TO LEGAL RESTRICTION, THE ASSESSEE IS HAVING A BRISK SALE OF ITS PRODUCTS IN INDIA AS WELL AS ABROAD, EXPLAIN THE REAL INTENTION OF OBJECTIVES OF THE ASS ESSEE. LD. CIT DR REFERRED THE CONTENTS OF PAGES 106 AND 107 OF THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. THESE ARE BALANCE SHEETS O F DIVYA PHARMACY AS ON 31.03.2009 WITH ACCOUNTING POLICY AND NOTES TO THE ACCOUNTS. SHE SUBMITTED THAT THE DETAILS OF BUSINESS VENTURES HA VE BEEN PROVIDED AT PAGES 68 TO 108 OF THE PAPER BOOK I.E. COPIES OF AN NUAL AUDITED ACCOUNTS FOR THE FINANCIAL YEAR, RETURN OF INCOME., COMPUTAT ION FOR THE FINANCIAL YEAR AND TAX AUDIT REPORT FOR THE ASSESSMENT YEAR 2009-1 0. 5.2. LD. CIT DR SUBMITTED THAT APPLICATION OF INC OME ON CHARITABLE OBJECTIVES IS MINIMAL WHICH IS OBSERVED FROM THE CO NTENTS OF PAGES 4 TO 7 OF THE ASSESSMENT ORDER AND THOSE OF PAGES 19 TO 21 OF THE FIRST APPELLATE ORDER AS WELL AS THE REMAND REPORTS PAGES 4 AND 5. SHE POINTED OUT THAT ITA NO. 387/DEL/2013 32 EVEN THE DONATION TO THE OTHER TRUST IS ACTUALLY A CONDUCT FOR TRANSFER OF ITS FUNDS TO ITS SISTER CONCERN I.E. PATANJALI YOGPEET TRUST. IT IS NOT DONATION TO OTHER CONCERN BUT RETENTION OF FUNDS WITHIN ITS OWN CONTROL. 5.3. LD. CIT DR SUBMITTED THAT THE INQUIRY CONDUCT ED BY THE DEPARTMENT SHOWS THAT NO WORK WAS DONE FOR THE CHARITY IN CHIK ITSALAYAS AND YOGA CAMPS SO AS TO QUALIFY FOR MEDICAL RELIEF BUT TO BO OST THE SALE OF ITS PRODUCTS. SHE SUBMITTED THAT INQUIRY U/S 133(6) RE VEALS THAT ASSESSEE TRUST IS CHARGING EXORBITANT RATES FOR ACCOMMODATION FEE AT YOGA SHIVIRS @ RS.9800/- PER DAY IN THE NAME OF DONATION FROM THE PARTICIPANTS.SHE DREW OUR ATTENTION IN THIS REGARD AT PAGE NOS. 6 TO 8 OF THE PAPER BOOK FILED BY THE DEPARTMENT, I.E. COPY OF THE ABOVE SATED REPORT U/S 133(6) OF THE ACT. SHE POINTED OUT THAT THE TOTAL AMOUNT COLLECTED DUR ING THE YEAR IS RS.68.45 LACS AS STATED IN PARA (I) TO (IX) AT PAGE NO. 11 O F THE ASSESSMENT ORDER. SHE SUBMITTED THAT THE ASSESSEE CHARGED RS.290.79 L ACS FROM PARTICIPANTS DURING THE YEAR THROUGH ITS DEPARTMENT OF MEDICAL S CIENCE (CHIKITSALAYAS) WHICH IS IN ADDITION TO THE PRICE OF MEDICINES CHAR GED FROM PATIENTS BY THE ASSESSEE TRUST. SHE SUBMITTED THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE NEVER PRODUCED ANY DOCUME NTARY EVIDENCE REGARDING CHARITY WORK QUALIFYING AS MEDICAL RELIE F IN ANY OF THE HOSPITALS AS CAN BE SEEN FROM THE COPY OF THE ORDER SHEET MADE A VAILABLE AT PAGES 9 TO13 OF THE PAPER BOOK FILED ON BEHALF OF THE DEPAR TMENT. EVEN DURING THE REMAND PROCEEDINGS WHEN THE ASSESSEE WAS ASKED TO P RODUCE THE DOCTORS PRESCRIPTIONS GIVEN TO PATIENTS, NONE WAS PRODUCED. WHEN THE MATTER WAS AGAIN REMANDED, THE ASSESSEE COULD PRODUCE A LIST O F 15 DOCTORS ONLY AGAINST 71 DOCTORS. OUT OF THESE 71, ONLY 11 DOCTO RS WERE PRODUCED. SURPRISINGLY 59 DOCTORS HAD QUIT THE JOB IN TWO YE ARS AS CLAIMED. IN THIS REGARD, SHE REFERRED THE REMAND REPORT II AVAILABLE AT PAGES 14 AND 15 OF THE PAPER BOOK FILED ON BEHALF OF THE DEPARTMENT. LD. CIT D.R. POINTED OUT THAT ALL THE 11 DOCTORS PRODUCED STATED THAT PATIEN TS HAVE TO PAY FOR ALL ITA NO. 387/DEL/2013 33 SERVICES EXCEPT CONSULTATION IN WHICH THEY SUGGEST MEDICINES, BOTH CLASSICAL AND PATENT AND ADVISED PATIENTS TO GET ADMITTED IN ASSESSEES HOSPITAL WHEN REQUIRED. THE A.O. SAYS IN ITS REMAND REPORT THAT THE DOCTORS BEING PAID EMPLOYEES ARE VERY USEFUL TO BOOST THE SALE OF THE PRODUCTS MADE BY THEIR EMPLOYER TRUST. IN SUPPORT SHE REFERRED PAGE NOS. 15 TO 17 OF THE PAPER BOOK FILED BY THE DEPARTMENT AND CONTENTS OF PAGE NOS. 18 AND 19 OF THE FIRST APPELLATE ORDER. SHE SUBMITTED THAT DURIN G THE APPELLATE PROCEEDINGS, THE APPELLANT COULD NOT PRODUCE THE RE CORD AND HAS ADMITTED THAT THE DOCTORS PRESCRIBE THE MEDICINES MANUFACTUR ED BY THE ASSESSEE TRUST WHICH ARE SAID TO BE OF SUPERIOR QUALITY AT C HEAPER RATES. LD. CIT DR SUBMITTED FURTHER THAT THERE IS VIOLATION OF THE TR UST DEED BY THE APPELLANT TRUST. THE TRUST RECEIVED THE AMOUNT OF RS.132.50 LACS FROM FOREIGN MEMBERSHIP AND RS.98.88 LACS FROM MEMBERSHIP DONATI ONS AND RS.52 LACS THROUGH MONEY ORDERS WHICH ARE NOT PERMITTED BY THE TRUST DEED. ONE DOCTOR KULDEEP SINGH STATED THAT HE PRESCRIBES ALLO PATHIC TREATMENT TO THE PATIENTS. THIS IS ALSO NOT IN ACCORDANCE WITH THE TRUSTS OBJECTIVES. IN SUPPORT, SHE REFERRED PAGE 22 OF THE PAPER BOOK FIL ED ON BEHALF OF THE DEPARTMENT I.E. THE RECORDED STATEMENTS OF THE SAID DOCTOR. 5.4. LD. CIT DR SUBMITTED THAT THE ALTERNATIVE CLA IM OF EDUCATION IN YOGA COLLEGE DOES NOT PERTAIN TO THIS ASSESSMENT YEAR AS THE COLLEGE WAS NOT CONSTRUCTED. THE CERTIFICATE FROM SIRO SHOWN AT THI S STAGE ENCLOSED IN THE ASSESSEES PAPER BOOK WAS NEVER PRODUCED BEFORE THE AUTHORITIES BELOW TO VERIFY THE CORRECTNESS OF THE CLAIM FOR EXEMPTION O R DEDUCTION AS CONFIRMED BY THE A.O. MOREOVER, R&D WORK DONE FOR GOVERNMEN T AND OTHER INSTITUTIONS IS OBJECT OF GENERAL PUBLIC UTILITY AS PER THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS IEAI 322 ITR 73 (DEL.). SHE CONTENDED THAT THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS FIXED THE RATES OF ITS MEDICINES LOWER THAN THAT OF THE E STABLISHED COMPANIES AS IT IS A NEW ENTRANT IN THE FIELD OF MARKET STRATEGY IS NOTHING BUT AN ACT OF ITA NO. 387/DEL/2013 34 NORMAL BUSINESS PRUDENCE TO BOOST ITS SALE, NOT AN ACT OF CHARITY. SHE SUBMITTED THAT THE CLAIM OF THE ASSESSEE THAT ALL T HE PAPERS IN THE PAPER BOOK WERE PRODUCED BEFOR THE AUTHORITIES BELOW IS N OT CORRECT. IN THIS REGARD SHE REFERRED PAGE NO. 20 OF THE PAPER BOOK F ILED BY THE DEPARTMENT WHEREBY THE AO VIDE ITS LETTER DATED 2.5.2013 HAS I NFORMED THAT LETTER NO. 14/408/2005/TU-V DATED 20.5.2006 ISSUED BY THE DEPA RTMENT OF SCIENTIFIC & INDUSTRIAL RESEARCH ORGANISATIONS, NEW DELHI AND COMPARATIVE CHART OF LIST OF SALE PRICE FURNISHED BEFORE THE TRIBUNAL WE RE NOT PRODUCED BEFORE THE AUTHORITIES BELOW. SUPPORTING ABOVE SUBMISSION THE LD. CIT (DR) PLACED RELIANCE ON THE FOLLOWING LEGAL PRECEDENTS :- CIT V RAJNEESH FOUNDATION - 280 ITR 553 (BOM) KASYAPA VEDA RESEARCH FOUNDATION V CIT [2011]1 31 ITD 370 (COCHIN) SAMAJBADI SOCIETY V ACIT - 79 ITD 112 (CUTT) AUROLAB TRUST V CIT - 46 SOT 125 (CHE) CIT V ICAI 321 ITR 73 (DEL) CIT V QUEENS' EDUCATIONAL SOCIETY ITA NO.L03 SAURASHTRA EDUCATIONAL FOUNDATION V CIT - 273 ITR 139 (GUJ) SANJEEVAMMA HANUMANTHA GOWDA CHARITABLE TRUST V DITCE 9 SOT 293 (BANG) DAULATRAM PUBLIC TRUST V CIT - 244 ITR 514 (DEL) JACOB V THASILDAR [1989] 176 ITR 243 (KER) ITA NO. 387/DEL/2013 35 SOLE TRUSTEE, LOK SHIKSHANA TRUST V CIT - 101 TR 234 (SC) CIT V JODHPUR CAS SOCIETY - 258 ITR 548 (RAJ) A DETAILED REJOINDER HAS ALSO BEEN FURNI SHED BY THE LD. AR, WHICH WE WILL DISCUSS IN OUR DECISION IN THE FOLLOWING PA RAGRAPHS. 6. WE FIND THAT GROUNDS NO.1-9 INVOLVE THE ISS UE AS TO WHETHER THE APPELLANT IS ENTITLED TO CLAIM THE EXEMPTION U/S 11 /12 OF THE I. T. ACT, 1961 FOR ADJUDICATION UPON THIS ISSUE, WE WILL HAVE TO D ECIDE THE OTHER CONNECTED ISSUES. THESE ISSUES ARE AS UNDER: A) AS TO WHETHER THE APPELLANT TRUST DID FALL WITHI N THE PURVIEW OF PROVIDING MEDICAL RELIEF, IMPARTING EDUCATION OR RELIEF TO THE POOR. B) IF THE ABOVE ISSUE IS DECIDED IN NEGATIVE THEN T HE ISSUE WILL ARISE AS TO WHETHER THE OBJECTIVITY OF THE APPELLAN T WERE IN THE NATURE OF OBJECT OF GENERAL PUBLIC UTILITY AS CONTAINED IN THE DEFINITION OF CHARITABLE PURPOSE U/S 2(15) OF T HE ACT? C) AS TO WHETHER YOGA AS A SYSTEM, FALLS IN THE RES IDUARY CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECTS OF TH E GENERAL PUBLIC UTILITY CONTAINED IN SECTION 2(15) OF THE ACT?. D) AS TO WHETHER THE DONATION OF RS.38.356 CRORES M ADE TO PATANJALI YOGPEETH FOR THE PURPOSE OF SETTING UP OF YOGA BHAWAN AND OTHER EXPENDITURE INCURRED FOR ACQUISITI ON OF CAPITAL ASSETS AS APPLICATION OF INCOME FOR CLASSIF IED PURPOSES. 6.1. WE, THEREFORE, PREFER TO ADJUDICATE UPON TH E FIRST ISSUE AS TO WHETHER THE OBJECTS AND ACTIVITIES OF THE APPELLANT TRUST D ID FALL WITHIN THE PURVIEW OF PROVIDING MEDICAL RELIEF, IMPARTING EDUCATION OR RELIEF TO THE POOR. THE OBJECTS OF THE APPELLANT TRUST ARE AVAILABLE AT PAG E 1-7 OF THE PAPER BOOK DECLARING THAT THE APPELLANT TRUST WAS SET UP AS CH ARITABLE TRUST WITH THE FOLLOWING PREDOMINANT OBJECTIVES: ITA NO. 387/DEL/2013 36 1) PROVIDING MEDICAL RELIEF THROUGH YOGA, NATUROPAT HY, ACUPRESSURE AND AYURVEDA FOR THE PURPOSE OF ALIENAT ING ALL KINDS OF DISEASES; 2) IMPARTING EDUCATION IN THE FIELD OF YOGA, 3) PROVIDING RELIEF TO THE POOR AND 4) UNDERTAKING RESEARCH AND DEVELOPM ENT ACTIVITIES IN THE FIELD OF YOGA, AYURVED, VEDIC LITERATUR E TO FURTHER THE CAUSE OF ALIENATING ALL KINDS OF DISEASES AND PROVIDE MEDICAL RELIEF TO THE PUBLIC AT LARGE. 6.2. THE FIRST ISSUE BEFORE US TO BE ADJUDICATED UPON IS AS TO WHETHER THE APPELLANT TRUST FALL WITHIN THE PURVIEW OF PROVIDIN G MEDICAL RELIEF , IMPARTING EDUCATION OR RELIEF TO THE POOR ? 6.3. IN THE PREVIOUS PARAGRAPHS WE HAVE DISCUSS ED THE APPROACH OF THE AUTHORITIES BELOW ON THE ABOVE ISSUE AS WELL AS SUB MISSIONS OF THE PARTIES IN THIS REGARD. THE CONTENTION OF THE APPELLANT REMAIN ED THAT THEY ARE PROVIDING MEDICAL RELIEF THROUGH YOGA, NATUROPATHY, ACUPRESSURE AND AYURVED FOR THE PURPOSE OF ALLEVIATING ALL KINDS OF DISEASES ; THEY ARE IMPARTING EDUCATION IN THE FIELD OF YOGA, PROVIDING RELIEF TO THE POOR AND UNDERTAKING RESEARCH AND DEVELOPMENT ACTIVITIES IN THE FIELD OF YOGA, AYURVEDA TO ALL KINDS OF DISEASE AND PROVIDE MEDICA L RELIEF. IT WAS CONTENDED THAT ON THE BASIS OF THESE OBJECTIVES THE APPELLANT WAS GRANTED REGISTRATION U/S 12A OF THE ACT WHICH IS IN FORCE T ILL DATE. IT WAS ALSO CONTENDED THAT THE APPELLANT IN ACCORDANCE WITH THE APPROVED OBJECTIVES HAS BEEN CONSISTENTLY PURSUING ITS CHARITABLE ACTIV ITIES FOR THE LAST 18 YEARS INCLUDING THE ASSESSMENT YEAR UNDER CONSIDERATION A ND THE APPELLANT HAS ALWAYS BEEN ALLOWED EXEMPTION U/S 11/ 12 INCLUDING IN VARIOUS ASSESSMENT COMPLETED U/S 143(3) OF THE ACT. IT WAS SUBMITTED T HAT THERE HAS BEEN NO CHANGE IN FACT DURING THE YEAR UNDER CONSIDERATION. BEFORE PROCEEDING ON THE ADJUDICATION OF THE ISSUE AS TO WHETHER YOGA AS A SYSTEM PROVIDE ANY ITA NO. 387/DEL/2013 37 MEDICAL RELIEF WHICH REMAINED THE MAIN OBJECTION OF THE REVENUE, WE WOULD LIKE TO POINT OUT OVER HERE THAT THERE IS NO DISPUTE ON THIS MATERIAL FACT THAT THE APPELLANT SINCE ITS INCEPTION IN THE YEAR 1995 HAS BEEN ENGAGED IN THE ACTIVITY OF PROVIDING MEDICAL RELIE F THROUGH AYURVEDA UNDER THE ORGANIZATION PATANJALI BHARTIYA AYURVIGYAN AVA M ANUSANDHAN SANSTHAN AT HARIDWAR. THIS FACT HAS BEEN CONSISTENTLY ACCEP TED BY THE REVENUE IN THE ASSESSMENT YEARS 2004-05 TO 2008-09 VIDE VARIOUS AS SESSMENTS FRAMED U/S 143(3) . THERE IS ALSO NO CHANGE IN THE FACTS OF TH IS ASPECT OF THE MATTER. THE REVENUE AUTHORITIES ARE NOT DISPUTING THE FACT THAT AYURVEDIC TREATMENT IS GIVEN BY THE ASSESSEE. THIS IS MEDICAL RELIEF. Y OGA IN THIS CASE IS USED BY THE ASSESSEE IN ADDITION TO MEDICAL RELIEF THROUGH NATUROPATH AND AYURVEDA. WE FIND THAT THERE IS ALSO NO DISPUTE THAT THE APPE LLANT HAS ESTABLISHED (A) DEPARTMENT OF MEDICAL SCIENCE AND FACILITIES KNOWN AS PATANJALI HOSPITAL, (2) PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANST HAN (3) PATANJALI CHIKITSALAY AND (4) R & D YOGA AND AYURVEDA. (THE A PPELLANT HAS ALSO SET UP (1) DIVYA NURSERY (DEALING IN CULTIVATION, RESTO RATION AND RESEARCH IN RARE MEDICINAL PLANTS / HERBS AND SELLING THESE PLANTS); (2) DIVYA PHARMACY (AYURVEDIC PHARMACEUTICAL UNIT ENGAGED IN MANUFACTU RING OF AYURVEDIC MEDICINES AS PER TRADITION OF SAGES AND MODERN SCIE NCE); AND (3) DIVYA PRAKASHAN, ETC. (IT DEALS WITH PUBLICATION AND DIST RIBUTION OF DIFFERENT TYPES OF LITERATURE RELATING TO YOGA AND AYURVED) DEPARTMENT OF MEDICAL SCIENCE AND FACILITIES COMMONLY KNOWN AS PATANJALI HOSPITAL RUN BY THE APPELLANT TRUST IS HA VING VARIOUS DEPARTMENTS INCLUDING DENTAL DEPARTMENT, RADIOLOGY DEPARTMENT, SURGICAL DEPARTMENT, OPHTHALMOLOGY DEPARTMENT ETC. THE CLAIM OF THE APPE LLANT THAT IN THIS HOSPITAL THE APPELLANT PROVIDE MEDICAL RELIEF TO OV ER 2000 PATIENTS EVERY DAY AND FROM ITS PRIMARY SET UP IN HARIDWAR WHERE AROUN D 2,39,000 PATIENTS WERE TREATED DURING THE YEAR UNDER CONSIDERATION TH E HOSPITAL ALSO HAS ITS PRESENCE IN RANCHI AND PATNA WHERE MORE THAN 60,000 AND 75,000 PATIENTS RESPECTIVELY ARE TREATED EVERY YEAR, HAS NOT BEEN D ISPUTED BY THE REVENUE. ITA NO. 387/DEL/2013 38 PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANST HAN I.E. AN AYURVEDIC COLLEGE HAS BEEN SET UP, WHICH WAS UNDER CONSTRUCTI ON IN THE YEAR UNDER CONSIDERATION AND IT HAS STARTED OPERATIONS W.E.F. 20.07.2009, FOR IMPARTING EDUCATION IN THE FIELD OF AYURVED. IT HAS BEEN SET UP AT HARIDWAR AND WAS APPROVED AND DULY RECOGNIZED BY THE DEPARTMENT OF AYURVEDA, YOGA AND NATUROPATHY, UNANI, SIDDHA AND HOMOEOPATHY SYSTEMS OF MEDICINES(AYUSH) VIDE NOTIFICATION DATED 20.7.2009. IT IS PERTINENT TO MENTION OVER HERE THAT FOR THE PURPOSE OF RECOGNITI ON AND GRANTING PERMISSION FOR ESTABLISHMENT OF MEDICAL COLLEGE, TH E DEPARTMENT OF AYUSH A BODY SET UP BY THE MINISTRY OF HEALTH & FAMILY WE LFARE, GOVT. OF INDIA MANDATES FULFILLMENT OF CERTAIN MINIMUM STANDARDS A ND REQUIREMENTS AS PRESCRIBED UNDER THE INDIAN MEDICAL CENTRAL COUNCIL ACT 1970 (IMCC ACT). IT IS ONLY ON FULFILLMENT OF THESE CONDITIONS PRESCRIB ED IN THE IMCC ACT PERMISSION IS GRANTED TO ESTABLISH AND RUN AYURVEDI C MEDICAL COLLEGES. IT IS PERTINENT TO STATE HERE THAT ONE OF THE PRIMARY CON DITIONS LAID DOWN IN THE IMCC ACT FOR THE GRANT OF RECOGNITION IS THE EXISTE NCE OF A MEDICAL HOSPITAL ATTACHED TO THE AYURVEDIC COLLEGE WITH THE PRESCRIB ED BED STRENGTH ALONGWITH OUTDOOR PATIENT DEPARTMENT (OPD) AND INDO OR PATIENT DEPARTMENT (IPD) FACILITIES. THUS THERE IS NO DOUB T IN THE PRESENT CASE BEFORE US THAT ON FULFILLMENT OF ALL THE MANDATORY REQUIREMENTS THE AYURVEDIC MEDICAL COLLEGE SET UP BY THE APPELLANT H AS BEEN DULY RECOGNIZED BY THE AYUSH. IT IS ALSO IMPERATIVE TO STATE HERE T HAT THE CENTRAL COUNCIL OF INDIAN MEDICINE UNDER AYUSH CONDUCTS REGULAR INSPEC TION OF THE AYURVEDIC COLLEGES TO VERIFY THAT THE PRESCRIBED MINIMUM STAN DARDS ARE COMPLIED WITH BY SUCH COLLEGES AND IF THE PRESCRIBED STANDARDS AR E NOT COMPLIED WITH BY THE MEDICAL COLLEGES, THE PERMISSION / RECOGNITION IS EITHER REJECTED OR REVOKED BY THE AYUSH. ALL THESE MATERIAL AND UNDISP UTED FACTS LEAD US TO A DEFINITE CONCLUSION THAT IT HAS BEEN UNDISPUTED THA T APPELLANT HAS BEEN PROVIDING MEDICAL RELIEF THROUGH AYURVEDA AND NAT UROPATHY SYSTEM OF MEDICINE IN ITS ABOVE STATED HOSPITALS AND HAS ALSO SET UP AN AYURVEDIC ITA NO. 387/DEL/2013 39 MEDICAL COLLEGE (PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN) AFFILIATED BY UTTRAKHAND TECHNICAL UNIVERSITY AND R ECOGNIZED BY AYUSH TO IMPART EDUCATION IN THE FIELD OF AYURVEDA AND NATUR OPATHY ETC. AS DISCUSSED ABOVE IT IS ALSO REMAINED AN UNDISPUTED FACT THAT S INCE ITS INCEPTION IN THE YEAR 1995 THE MEDICAL RELIEF PROVIDED THROUGH PAT ANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN AT HARIDWAR, H AS BEEN CONSISTENTLY ACCEPTED BY THE REVENUE IN THE ASSESSMENT YEARS 200 4-05 TO 2008-09 AS ENGAGED IN THE ACTIVITY OF PROVIDING MEDICAL RELIE F IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT. SINCE THERE IS NO CHA NGE IN THIS OBJECT OF THE APPELLANT TRUST, AND THE RELATED FACTS DURING THE Y EAR UNDER CONSIDERATION, WE ARE OF THE VIEW THAT RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT (SUPRA) AND OTHE RS THE REVENUE WAS NOT JUSTIFIED IN REFUSING THE CLAIMED EXEMPTION U/S 11/12 OF THE ACT DURING THE YEAR. THE REVENUE IS EXPECTED TO BE CONSISTENT WITH ITS OWN STAND WHICH HAS BEEN TAKEN IN EARLIER YEARS, WHEN THERE IS NO C HANGE IN THE OBJECTS OF THE TRUST DURING THE YEAR. IN VIEW OF THESE DISCUSS IONS WE ARE IN A DEFINITE POSITION TO HOLD THAT THE APPELLANT WAS ENTITLED FO R THE EXEMPTION U/S 11/12 OF THE ACT ON THE BASIS THAT THE APPELLANT WAS ENGA GED IN THE ACTIVITY OF PROVIDING MEDICAL RELIEF THROUGH AYURVEDA, NATURO PATHY ETC. DURING THE YEAR UNDER CONSIDERATION I.E. ASSTT. YEAR 2009-10 A ND THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REFUSING THE CLAIMED EXEMPTIO N TO THE ASSESSEE IN THIS REGARD. IT IS ORDERED ACCORDINGLY. MEDICAL RELIEF THROUGH YOGA 6.4.1. WHILE EXAMINING THE ISSUE AS TO WHETHER MEDICAL RELIEF CAN BE GIVEN THROUGH YOGA ON THE BASIS OF ABOVE SUBMISSION S MADE BY THE PARTIES WE FIND THAT IN THE CLINICAL ESTABLISHMENT (REGISTRA TION AND REGULATION) ACT 2010, THE LEGISLATURE HAS DEFINED RECOGNIZED SYSTE M OF MEDICINE IN SECTION 2 (H ) OF THE SAID ACT . AS PER THIS DEFINI TION (H) RECOGNIZED SYSTEM OF MEDICINE MEANS ALLOPATHY, YOGA, NATUROPATHY, AYU RVED, HOMEOPATHY, ITA NO. 387/DEL/2013 40 SIDDHA AND UNANI SYSTEM OF MEDICINES OR ANY OTHER S YSTEM OF MEDICINE AS MAY BE RECOGNIZED BY THE CENTRAL GOVERNMENT. THIS BILL WAS INTRODUCED BY THE CENTRAL GOVERNMENT IN THE YEAR 2007 TO PROVIDE FOR REGISTRATION AND REGULATION OF ALL CLINICAL ESTABLISHMENT IN THE COU NTRY WITH A VIEW TO PRESCRIBE THE MINIMUM STANDARDS OF FACILITIES AND S ERVICES PROVIDED BY THEM. A COPY OF THIS ACT HAS BEEN MADE AVAILABLE AT PAGE NOS. 161 TO 163 OF THE PAPER BOOK. 6.4.2. A REFERENCE OF THE RECOMMENDATION OF TH E STANDING COMMITTEE OF HUMAN RESOURCES DEVELOPMENT DEPARTMENT (HRD) MADE F OR MAKING THE YOGA A COMPULSORY FOR ALL SCHOOL GOING CHILDREN IN THE COUNTRY, HAS ALSO BEEN MADE WHEREIN IT HAS BEEN PROVIDED THAT THE YOG A IS ONE OF THE CORE COMPONENTS OF HEALTH AND PHYSICAL EDUCATION. FULL C OPY OF THE REPORT HAS BEEN MADE AVAILABLE AT PAGE NOS. 177 TO 192 OF THE PAPER BOOK AND PARA NO.9.8 AT PAGE NO. 181 THEREOF IS RELEVANT FOR THE PURPOSE. IT READS AS UNDER :- 9.8 THE COMMITTEE IS OF THE OPINION THAT YOGA IS ONE STREAM OF EDUCATION, WHICH WILL MAKE A PERMANENT AND POSITIVE IMPACT ON A STUDENTS LIFE. YOGA HAS BEEN GAINING IMMENSE POPULARITY DUE TO THE SHOR T TERM AS WELL AS LONG TERM BENEFITS THAT IT PROVIDES. YOGA HELPS ONE TO A CHIEVE ALL ROUND DEVELOPMENT. CONSIDERING THE IMMENSE POTENTIAL OF T HIS ANCIENT KNOWLEDGE OF INDIA, THE COMMITTEE RECOMMENDS THAT YOGA BE MA DE COMPULSORY FOR ALL SCHOOL GOING CHILDREN IN THE COUNTRY. ACTIION TAKEN THE NATIONAL CURRICULUM FRAMEWORK IN SCHO OL EDUCATION 2005 PREPARED BY THE NATIONAL COUNCIL OF EDUCATION RESEAR CH AND TRAINING PROVIDES FOR HEALTH AND PHYSICAL EDUCATION AS A COM PULSORY SUBJECT FROM PRIMARY TO SECONDARY STAGE AS AN OPTIONAL SUBJECT A T HIGHER SECONDARY STAGE. YOGA IS ONE OF THE CORE COMPONENTS OF HEALTH AND PHYSICAL EDUCATION. ITA NO. 387/DEL/2013 41 6.4.3. ON THE CONTRARY THE LD. CIT(A) FOR THE PURPOSE OF DETERMINING WHETHER YOGA CAN BE CLASSIFIED AS A FORM OF MEDICAL RELIEF HAS PLACED RELIANCE ON THE DETERMINATION OF THE TERM MEDICAL AS PROVIDED IN MAJOR LAW LAXICON BY P RAMANATHA AIYAR (2010 EDITION) AS PER WHICH PERTAINING TO OR HAVING TO DO WITH THE ART OF HEALING DISEASE OR THE SCIENCE OF MEDICINE ; CONTAINING MEDICINE ; USED IN MEDICINE. WE FIND THAT THE TERM MEDICAL HAS BEEN DEFINED VERY BROADLY IN THIS DEFINITION AS PER WHICH THE ART OF HEALING ANY DISEASE CONSTITUTE A MEDICAL RELIEF AND THE SAME NEED NOT BE RESTRICTED TO CONVENTIONAL METHOD OF TREATMENT . LD. CIT(A) AT PAGE 15 OF THE FIRST APPELLANT ORDER HAS ALSO SELECTIVELY QUOT ED FROM THE WEBSITE OF DEPARTMENT OF AYUSH (MINISTRY OF HEALTH AND FAMILY WELFARE) TO COME THIS CONCLUSION THAT YOGA IS A DISCIPLINE APPEARS TO ADD RESS MORE THE ISSUES OF SPIRITUAL WELL BEING RATHER ADDRESS THE PROBLEMS A SSOCIATED WITH THE MORE WORDLY MEDICAL RELIEF AND EXERCISES FORMING PART OF THE YOGA SYSTEM WOULD AT THE BEST HAVE INDIRECT SALUTARY BENEFIT ON THE HEALTH OF AN INDIVIDUAL. HE HELD THAT YOGA IS A SPIRITUAL SYSTEM MORE THAN A CU RATIVE SYSTEM FOR ALLEVIATING OR EVEN CURING VARIOUS AILMENTS. IT IS NOT SEEN AS A SPECIFIC REMEDY FOR PHYSICAL AILMENT AT PAR WITH MEDICAL SYS TEM LIKE ALLOPATHY OR EVEN AYURVEDA. IN THIS REGARD THE LD. CIT(A) HAS PL ACED RELIANCE ON THE DECISIONS IN THE CASES OF KASYAP VED RESEARCH FOUND ATION VS. CIT 131 ITD 370 (COCHIN) AND CIT VS. RAJNEESH FOUNDATION, 280 I TR 533 (BOM). A COMPLETE INFORMATION ON YOGA AVAILABLE ON THE WEBSI TE OF THE AYUSH I.E,. HTTPP://WWW.INDIAMEDICINE.NIC.IN HAS BEEN MADE AV AILABLE BY THE ASSESSEE AT PAGE NOS. 639 TO 655 OF THE SUPPLEMENTA RY PAPER BOOK NO. 1 AND AT PAGE NO. 757 TO 793 OF THE SUPPLEMENTARY PAP ER BOOK NO. 2 FILED BY THE ASSESSEE. THE LD. AR HAS DRAWN OUR ATTENTION AL SO ON THE FOLLOWING INFORMATION ON YOGA AVAILABLE ON THE AFORESAID WEBS ITE : 'YOGA THE CONCEPTS AND PRACTICES OF YOGA ORIGINATED IN IN DIA ABOUT SEVERAL THOUSAND YEARS AGO. ITS FOUNDERS WERE GREAT SAINTS AND SAGES. THE GREAT ITA NO. 387/DEL/2013 42 YOGIS PRESENTED RATIONAL INTERPRETATION OF THEIR EX PERIENCES OF YOGA AND BROUGHT ABOUT A PRACTICAL AND SCIENTIFICALLY SOUND METHOD WITHIN EVERYONE'S REACH. YOGA TODAY, IS NO LONGER RESTRICTED TO HERMI TS, SAINTS, AND SAGES; IT HAS ENTERED INTO OUR EVERYDAY LIVES AND HAS AROUSED A WORLDWIDE AWAKENING AND ACCEPTANCE IN THE LAST FEW DECADES. T HE SCIENCE OF YOGA AND ITS TECHNIQUES HAVE NOW BEEN REORIENTED TO SUIT MODERN SOCIOLOGICAL NEEDS AND LIFESTYLES. EXPERTS OF VARIOUS BRANCHES OF MEDICINE INCLUDING MODERN MEDICAL SCIENCES ARE REALISING THE ROLE OF THESE TECHNIQUES IN THE PREVENTION AND MITIGATION OF DISE ASES AND PROMOTION OF HEALTH. YOGA IS ONE OF THE SIX SYSTEMS OF VEDIC PHILOSOPHY. MAHARISHI PATANJALI, RIGHTLY CALLED 'THE FATHER OF YOGA' COMPILED AND RE FINED VARIOUS ASPECTS OF YOGA SYSTEMATICALLY IN HIS 'YOGA SUTRAS' (APHORISMS ). HE ADVOCATED THE EIGHT FOLDS PATH OF YOGA, POPULARLY KNOWN AS 'ASHTA NGA YOGA' FOR ALL-ROUND DEVELOPMENT OF HUMAN BEINGS. THEY ARE:- YAMA, NIYAM A, ASANA, PRANAYAMA, PRATYAHARA, DHARANA, DHYANA AND SAMADHI. THESE COMPONENTS ADVOCATE CERTAIN RESTRAINTS AND OBSERVAN CES, PHYSICAL DISCIPLINE, BREATH REGULATIONS, RESTRAINING THE SEN SE ORGANS, CONTEMPLATION, MEDITATION AND SAMADHI. THESE STEPS ARE BELIEVED TO HAVE A POTENTIAL FOR IMPROVEMENT OF PHYSICAL HEA LTH BY ENHANCING CIRCULATION OF OXYGENATED BLOOD IN THE BO DY, RETRAINING THE SENSE ORGANS THEREBY INDUCING TRANQUILITY AND S ERENITY OF MIND. THE PRACTICE OF YOGA PREVENTS PSYCHOSOMATIC D ISORDERS AND IMPROVES AN INDIVIDUALS RESISTANCE AND ABILITY TO E NDURE STRESSFUL SITUATIONS.' (EMPHASIS SUPPLIED) 6.4.4. IN THE ABOVE SAID INFORMATION IT HAS B EEN OBSERVED THAT EXPERTS OF VARIOUS BRANCHES OF MEDICINE INCLUDING MODERN ME DICAL SCIENCES ARE REALIZING THE ROLE OF THESE TECHNIQUES IN THE PREVE NTION AND MITIGATION OF DISEASES AND PROMOTION OF HEALTH. IT HAS BEEN FURTH ER OBSERVED THAT THESE STEPS ARE BELIEVED TO HAVE A POTENTIAL FOR IMPROVEM ENT OF PHYSICAL HEALTH BY ENHANCING CIRCULATION OF OXYGENATED BLOOD IN THE BO DY, RETRAINING THE SENSE ORGANS THEREBY INDUCING TRANQUILITY AND SERENITY OF MIND ; THE PRACTICE OF YOGA PREVENTS PSYCHOSOMATIC DISORDERS AND IMPROVES AN INDIVIDUALS RESISTANCE AND ABILITY TO ENDURE STRESSFUL SITUATIO NS. EVEN IN THE EXTRACTS OF THE INFORMATION AVAILABLE ON THE WEBSITE OF AYUSH R EPRODUCED BY THE LD. CIT(A) AT PAGE 15 OF THE FIRST APPELLATE ORDER IN T HE DEFINITION OF YOGA IT HAS ITA NO. 387/DEL/2013 43 BEEN STATED THAT YOGA IS A DISCIPLINE TO IMPROVE OR DEVELOP ONES INHERENT POWER IN A BALANCED MANNER. IT OFFERS THE MEANS TO ATTAIN COMPLETE SELF- REALISATION. AS PER LITERAL MEANING OF SANSKRIT WOR D YOKE IT HAS BEEN NOTED THAT THE YOGA CAN BE DEFINED AS A MEANS OF UNITING THE INDIVIDUAL SPIRIT WITH THE UNIVERSAL SPIRIT OF GOD AND ACCORDING TO MAHARI SHI PATANJALI, YOGA IS THE SUPPRESSION OF MEDICATIONS OF THE MIND. THE INFORMA TION GIVEN UNDER THE HEAD YOGA AS SOUL THERAPY HAS ALSO BEEN EXTRACTED BY THE LD. CIT(A) AS PER WHICH ALL PARTS OF YOGA (JAPA, KARMA, BHAKTI) HAVE HEALING POTENTIAL TO SHELTER OUT THE EFFECTS OF PAINS. IT HAS BEEN FURTH ER NOTED THEREIN THAT ONE ESPECIALLY NEEDS PROPER GUIDANCE FROM AN ACCOMPLISH ED EXPONENT, WHO HAS ALREADY TREATED THE SAME TRACK TO REACH THE ULTIMAT E GOAL. IF WE READ THESE INFORMATIONS AVAILABLE ON THE WEBSITE OF AYUSH IN I TS TOTALITY WE FIND IT DIFFICULT TO CONCUR WITH THE VIEW OF LD. CIT(A) THA T YOGA AS A SYSTEM DOES NOT FIT INTO THE DEFINITION OF MEDICAL RELIEF AS ME NTIONED IN SECTION 2(15) OF THE ACT. THE VERY OBSERVATION OF LD. CIT(A) IN THIS REGARD AT PAGE NO. 16 OF THE FIRST APPELLATE ORDER THAT YOGA IS A DISCIPLINE APPEARS TO ADDRESS MORE THE ISSUES OF SPIRITUAL WELL BEING RATHER THAN ADDR ESS THE PROBLEMS ASSOCIATED WITH THE MORE WORDLY MEDICAL RELIEF I TSELF SUGGESTS THAT THE LD. CIT(A) REMAINED OF THE VIEW THAT YOGA AS A DISCIPLI NE ADDRESSES THE PROBLEMS ASSOCIATED WITH THE MEDICAL RELIEF BUT IT ADDRESS MORE THE ISSUES OF SPIRITUAL WELL BEING. THUS HE HAS NOT COMPLETELY DISAGREED WITH THE SUBMISSION OF THE ASSESSEE THAT YOGA AS A DISCIPLIN E ADDRESSES MEDICAL RELIEF ALSO. SO FAR AS THE DECISIONS RELIED UPON BY THE LD. CIT(A) TO ARRIVE AT A CONCLUSION THAT YOGA AS A SYSTEM DOES NOT FIT INT O THE DEFINITION OF MEDICAL RELIEF ARE CONCERNED, WE FIND THAT THESE ARE HAVING DISTINGUISHABLE FACTS AND ISSUES HENCE ARE NOT HELPFUL TO THE REVENUE. IN THE CASE OF KASYAPA VEDA RESEARCH FOUNDATION VS. CIT (SUPRA) IT HAS BEEN OBS ERVED BY THE COCHIN BENCH THAT YOGA IS AN ANCIENT INDIAN SCIENCE OF MED ITATION. THERE IS NO DISPUTE ON IT. BUT ONLY ON THE BASIS OF SUCH OBSERV ATIONS WHICH IS ONE OF THE ASPECTS OF THE YOGA IT CANNOT BE ARRIVED AT A CONCL USION THAT YOGA AS A ITA NO. 387/DEL/2013 44 SYSTEM DOES NOT CLEARLY FIT INTO THE DEFINITION OF MEDICAL WHICH IN TURN LEADS TO THE TERM MEDICAL RELIEF. THE ISSUE RAISE D BEFORE THE COCHIN BENCH OF THE TRIBUNAL IN THIS CASE WAS AS TO WHETHER ASS ESSEE TRUST FORMS FOR PROPAGATING OF VEDAS WAS ENTITLED TO REGISTRATION U /S 12A IN THE STATUS OF A RELIGIOUS AND CHARITABLE TRUST. LIKEWISE THE DECISI ON OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RAJNEESH FOUNDATION (SUPRA) IS NOT RELEVANT AS THE SAID DECISION WAS RENDERED PRIOR TO INTRODUCTION OF PROV ISO TO SECTION 2 (15), WHEN THERE USED TO BE NO DISPUTE IN SO FAR AS CLASS IFICATION OF CHARITABLE OBJECTIVES WAS CONCERNED FOR THE PURPOSE OF CLAIMIN G EXEMPTION U/S 11/12 OF THE ACT. THE DECISION WAS REFERRED IN THE CONTEX T OF CLASSIFYING MEDITATION AS A CHARITABLE OBJECTIVES FOR THE PUR POSE OF SECTION 2(15) OF THE ACT. THE HONBLE HIGH COURT HAS ADJUDICATED ONL Y UPON THE ISSUE OF CLASSIFICATION OF MEDITATION , PREACHING/PROPAG ATION OF PHILOSOPHY AS A CHARITABLE OBJECT FALLING UNDER THE CATEGORY OF GEN ERAL PUBLIC UTILITY BUT HAS NOWHERE EXPLICITLY DEALT WITH YOGA EXCEPT FOR MAKIN G PASSING REFERENCES IN RESPECT OF THE SAME. IN THE SAID DECISION THE HONB LE HIGH COURT HAS HOWEVER ALSO BEEN PLEASED TO OBSERVE THAT NOT ONLY IN INDIA BUT IN THE WESTERN COUNTRIES ALSO MEDITATION AND YOGA ARE BEIN G ACCEPTED AS A GREAT SOURCE OF PHYSICAL AND MENTAL HEALTH. MEANING THERE BY THAT YOGA IS A SOURCE FOR MEDICAL RELIEF. FOR A READY REFERENCE THE RELEV ANT EXTRACT OF THE SAID DECISION IS BEING REPRODUCED HEREUNDER :- ADMITTEDLY, MAIN THRUST OF THE RESPONDENT IS ON MED ITATION AND NOBODY CAN DISPUTE THAT IN INDIA MEDITATION HAS BEE N VERY IMPORTANT SOURCE FOR PHYSICAL, MENTAL AND SPIRITUAL ~ WELL-BEING OF THE HUMAN BEINGS. COGNIZANCE HAS TO BE TAKEN THAT THE MEDITATION AND YOGA I ARE BECOMING MORE AND MORE POPULAR AMONG THE INDIANS WHO ARE NOW BECOMING CONSCIOUS ABOUT THEIR PHYSICAL, MENTAL AND SPIRITUA L HEALTH. NOT ONLY IN INDIA, MEDITATION AND YOGA ARE BEING ACCEPTED IN TH E WESTERN COUNTRIES ALSO AS A GREAT SOURCE FOR PHYSICAL AND M ENTAL HEALTH AND SPIRITUAL ATTAINMENT. WHEN A LARGE NUMBER OF PEOPLE FEEL THAT ITA NO. 387/DEL/2013 45 MEDITATION IS A GREAT SOURCE FOR PHYSICAL, MENTAL A ND SPIRITUAL WELL- BEING, IT MUST BE HELD TO BE AN ACTIVITY FOR THE A DVANCEMENT OF GENERAL PUBLIC UTILITY'. (EMPHASIS SUPPLIED) 6.4.5. LD. AR HAS ALSO REFERRED THE SURVE Y REPORT OF US NATIONAL CENTER FOR COMPLEMENTARY AND ALTERNATIVE MEDICINE ( NCCAM) BASED ON SURVEY CONDUCTED IN DECEMBER, 2008, MADE AVAILABLE AT PAGE NOS. 193 TO 196 OF THE PAPER BOOK (ASSESSEE) AS PER WHICH YOGA HAS BEEN RECOGNIZED AS A COMPLEMENTARY AND ALTERNATIVE MEDICINE TO PREV ENT AND TREAT DISEASE. NCCAM DEFINES CAM AS A GROUP OF DIVERSE MEDICAL AND HEALTH CARE SYSTEMS, PRACTICES AND PRODUCTS THAT ARE NOT GENERALLY CONSI DERED PART OF CONVENTIONAL MEDICINES. NCCAM FOUND THAT YOGA WAS T HE SIXTH MOST COMMONLY USED ALTERNATIVE THERAPY IN THE USA DURING 2007, WITH 6.1% OF THE POPULATION PARTICIPATING. THE SAID STUDY STATES YOGA HAS BEEN USED AS SUPPLEMENTARY THERAPY FOR DIVERSE CONDITIONS SUCH A S CANCER, DIABETES, ASTHAMA AND AIDS AND THE SCOPE OF MEDICAL ISSUES WH ERE YOGA IS USED AS A COMPLEMENTARY THERAPY CONTINUES TO GROW. A REFERENCE OF THE PUBLICATION YOG IN SY NERGY WITH MEDICAL SCIENCE: WRITTEN BY AN AYURVED ACHARYA ASSOCIATED WITH THE A PPELLANT, HAS ALSO BEEN MADE, RELEVANT EXTRACTS OF WHICH AHS BEEN MADE AVAI LABLE AT PAGE NOS. 555 TO 633 OF THE SUPPLEMENTARY PAPER BOOK (APPELLANT). THIS PUBLICATION HAS BEEN DOCUMENTED ON THE BASIS OF CLINICAL TESTS COND UCTED SHOWING THE CLINICAL EFFECT OF YOGA ON THE PARTICIPANTS IN VARI OUS YOGA CAMPS. AS DISCUSSED ABOVE THE LD. CIT (DR) HAS BASICALLY PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW ASSERTING TH AT YOGA IS A WAY OF MEDITATION RATHER THAN A WAY OF MEDICATION TO QUALI FY FOR MEDICAL RELIEF. A REFERENCE OF CONTENTS OF PAGE NO. 638 OF THE PAPER BOOK HAS ALSO BEEN MADE TO SUPPORT HIS SUBMISSION THAT IN SEPTEMBER, 2 012. THE HARVARD UNIVERSITY OF USA CAME FORWARD TO INTRODUCE YOGA AN D AYURVED SUBJECT IN ITA NO. 387/DEL/2013 46 THEIR UNIVERSITY IN COLLABORATION WITH SWAMI RAMDEV JI IN THE WAKE OF DREADFUL DISEASES BEING CURED BY SWAMIJIS PRANAYAM AND HIS AYURVED MEDICINES. 6.4.6. IN VIEW OF ABOVE DISCUSSIONS ESPECIALLY THE RECOGNITION OF YOGA AS A RECOGNIZED SYSTEM OF MEDICINE AS PER SECTION 2 (H ) OF CLINICAL ESTABLISHMENT (REGISTRATION AND REGULATION) ACT 2010 AND THE COMPLETE INFORMATION MADE AVAILABLE BY THE AYUSH ON ITS WEBS ITE WE FIND NO HESITATION IN COMING TO THE CONCLUSION THAT YOGA CA N BE SAFELY ACCEPTED AS A SYSTEM FIT INTO THE DEFINITION OF MEDICAL RELIEF . YOGA AS A SCIENCE IS A WELL RECOGNIZED SYSTEM OF MEDICINE, WHICH HAS THERAPEUTI C EFFECTS IN TREATING VARIOUS SERIOUS AILMENTS. THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRUST AS IT IS APPARENT FROM ITS OBJECTS, REMAINED TO PRO VIDE MEDICAL RELIEF THROUGH AYURVEDA AND PROPAGATION OF YOGA FOR THE PURPOSE OF TREATING / CURING VARIOUS DISEASES. IMPARTING EDUCATION 6.5. THE QUESTION NOW IS AS TO WHETHER THE APPELLANT TRUST FALLS WITHIN THE PURVIEW OF PROVIDING IMPARTING EDUCATION. THE GRIEVANCE OF THE APPELLANT IS THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT THE PROPAGATION OF YOGA BY WAY OF CONDUCTING YOGA CLASS ES ON A REGULAR BASIS AND IN A SYSTEMIZED MANNER ALSO FALLS UNDER THE CAT EGORY OF IMPARTING OF EDUCATION AS PROVIDED U/S 2(15) OF THE ACT. RELIAN CE HAS BEEN PLACED ON SEVERAL DECISIONS, WHICH WE WILL DISCUSS HEREUNDER. THE CONTENTION OF THE LD. AR REMAINED THAT THE PREDOMINANT OBJECT OF THE APPELLANT TRUST ARE TO PROVIDE PRACTICAL AND THEORETICAL TRAINING IN THE F IELD OF YOGA, WHICH WOULD ULTIMATELY PROVIDE MEDICAL RELIEF TO THE SOCIETY AT LARGE. IT WAS SUBMITTED THAT IN PURSUANCE OF THE SAID OBJECTIVE THE APPELLA NT TRUST HAS MADE INTER- TRUST DONATIONS TO PATANJALI YOG PEETH TO SUPPORT THEIR ENDEAVORS OF IMPARTING YOGA EDUCATION BY MEANS OF ORGANIZING YOG SHIVIRS/CAMPS ACROSS THE COUNTRY ON DAILY/WEEKLY/MONTHLY BASIS IN A SYST EMIZED/ORGANIZED MANNER IN ORDER TO PROVIDE MEDICAL RELIEF TO PEOPLE WHO CANNOT AFFORD ITA NO. 387/DEL/2013 47 MODERN MEDICAL METHOD OR HAVE BEEN SUBJECTED TO ILL EFFECTS OF MODERN MEDICINE. IT WAS SUBMITTED THAT IMPARTING OF YOGA TRAINING THROUGH WELL STRUCTURED YOGA SHIVIIRS/CAMPS ALSO FALLS UNDER THE CATEGORY OF IMPARTING EDUCATION ONE OF THE CHARITABLE OBJECTS DEFINED U/S 2(15) OF THE ACT AND ACCORDINGLY THE APPELLANTS ACTIVITIES ARE NOT HIT BY THE PROVISO INSERTED IN THE DEFINITION OF CHARITABLE PURPOSE AS CONTAINED I N THE SAID SECTION. DURING THE COURSE OF HEARING THE APPELLANT WAS DIRECTED TO PROVIDE COMPLETE DETAILS OF THE PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHA N SANSTHAN AT HARIDWAR FOR IMPARTING EDUCATION IN THE FIELD OF AY URVEDA WHICH STARTED OPERATIONS W.E.F. 20.7.2009. IN COMPLIANCE THE LD. AR SUBMITTED THAT DURING THE YEAR THE APPELLANT HAD APPLIED SUBSTANTIAL AMOU NT ON CONSTRUCTION OF THE AYURVEDA MEDICAL COLLEGE WHICH IS AFFILIATED TO THE UTTARAKHAND TECHNICAL UNIVERSITY. IT WAS SUBMITTED THAT AYURVED A MEDICAL COLLEGE SET UP BY THE APPELLANT WAS APPROVED AND DULY RECOGNIZED B Y THE DEPARTMENT OF AYURVEDA, YOGA & NATUROPATHY, UNANI, SIDDHA AND HOM OEOPATHY (AYUSH) VIDE NOTIFICATION DATED 20.7.2009, A COPY THEREOF H AS BEEN MADE AVAILABLE AT PAGE NO. 805 AND 806 OF THE SUPPLEMENTARY PAPER BOOK II. DEPARTMENT OF AYUSH IS A BODY SET UP BY THE MINISTRY OF HEALTH & FAMILY WELFARE, GOVT. OF INDIA WITH THE PRIMARY OBJECTIVE OF REGULATING AND UPGRADING THE EDUCATIONAL STANDARDS, QUALITY CONTROL AND STANDARD IZATION OF DRUGS, IMPROVING THE AVAILABILITY OF MEDICINAL PLANT MATER IAL, RESEARCH AND DEVELOPMENT AND AWARENESS GENERATION ABOUT THE EFF ICACY OF AYURVEDA, YOGA AND NATUROPATHY, UNANI, SIDDHA AND HOMOEOPATHY SYSTEMS OF MEDICINES. FOR THE PURPOSE OF RECOGNIZING AND GRANT ING PERMISSION FOR ESTABLISHMENT OF MEDICAL COLLEGES, THE DEPARTMENT O F AYUSH MANDATES FULFILLMENT OF CERTAIN MINIMUM STANDARD AND REQUIRE MENTS AS PRESCRIBED UNDER THE INDIAN MEDICAL CENTRAL COUNCIL ACT 1970 ( IMCC ACT). ONE OF THE PRIMARY CONDITIONS LAID DOWN IN THE IMCC ACT FOR TH E GRANT OF RECOGNITION IS THE EXISTENCE OF A MEDICAL HOSPITAL ATTACHED TO THE AYURVEDIC COLLEGE WITH THE PRESCRIBED BED STRENGTH ALONGWITH OUTDOOR PATIE NT DEPARTMENT (OPD) ITA NO. 387/DEL/2013 48 AND INDOOR PATIENT DEPARTMENT (IPD) FACILITIES. LD. CIT(DR) ON THE OTHER HAND HAS PLACED RELIANCE ON THE ORDERS OF THE AUTHO RITIES BELOW, AS DISCUSSED ABOVE. 6.5.1. THE EXPRESSION EDUCATION HAS NOT BEEN DEFINED UNDER THE PROVISIONS OF INCOME TAX ACT. THE HONBLE SUPREME C OURT IN THE CASE OF LOK SHIKSHANA TRUST (SUPRA), RELIED UPON BY THE LD. AR, HAS BEEN PLEASED TO EXPLAIN THE MEANING OF THE WORD EDUCATION IN T HE CONTEXT OF SECTION 2(15) OF THE ACT. AS PER THIS DECISION THE EDUCATI ON IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY SCHOOLING BY WAY OF SYSTEMATIC INSTRUCT ION, SCHOOLING OR TRAINING. THE HONBLE DELHI HIGH COURT IN THE CASE OF DELHI MUSIC SOCIETY VS. DGIT (SUPRA) HAS BEEN PLEASED TO HOLD THAT SINCE TH E ASSESSEE SOCIETY WAS TEACHING AND PROMOTING ALL FORMS OF MUSIC AND DANCE , WESTERN, INDIAN OR ANY OTHER AND WAS RUN LIKE ANY SCHOOL OR EDUCATIONA L INSTITUTION IN A SYSTEMIC MANNER WITH REGULAR CLASSES, THE SAME THER EFORE MEET THE REQUIREMENT OF AN EDUCATIONAL INSTITUTION WITHIN TH E MEANING OF SECTION 10(23C)(VI) OF THE ACT. IN THE CASE OF ITO VS. SRM FOUNDATION OF INDIA (SUPRA) THE DELHI BENCH OF THE TRIBUNAL, WHERE THE ASSESSEE WAS ENGAGED IN SPREADING THE SYSTEM OF TRANSCENDENTAL MEDITATIO N (TM) HAS HELD THAT IRRESPECTIVE OF THE FACT THAT THE ASSESSEE HAS ITS OWN PRESCRIBED SYLLABUS, TRAINED TEACHERS, BRANCHES ALL OVER INDIA TO SPREAD SYSTEM OF TRANSCENDENTAL DEEP MEDITATION AMONG PEOPLE IN ALL WALKS OF LIFE, THE SAME CONSTIT UTED IMPARTING OF EDUCATION AND THE ASSESSEE WAS ENTITLE D TO EXEMPTION U/S 10(22) OF THE ACT. WE THUS COME TO THE CONCLUSION T HAT ANY FORM OF EDUCATIONAL ACTIVITY INVOLVING IMPARTING OF SYSTEMA TIC TRAINING IN ORDER TO DEVELOP THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS, IS TO BE REGARDED AS EDUCATION COVERED U/S 2(15) OF THE AC T. IN VIEW OF THESE DECISIONS WE HOLD THAT IMPARTING OF YOGA TRAINING T HROUGH WELL STRUCTURED YOGA SHIVIR / CAMPS ALSO FALLS UNDER THE CATEGORY O F IMPARTING EDUCATION WHICH IS ONE OF THE CHARITABLE OBJECTS DEFINED U/S 2(15) OF THE ACT. THE ITA NO. 387/DEL/2013 49 APPELLANTS ACTIVITIES ARE THUS NOT HIT BY THE PROV ISO INSERTED IN THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT. RELIEF TO THE POOR 6.6. SO FAR AS QUESTION OF PROVIDING RELIEF TO THE POOR BY THE APPELLANT TRUST TO BRING IT WITHIN THE PURVIEW OF THE SAME IS CONCERNED, WE FIND THAT THE CONTENTION OF THE ASSESSEE REMAINED THAT THE AP PELLANT THROUGH ITS HOSPITAL, PATANJALI HOSPITAL AND PATANJALI CHIKITS ALAYA AT HARIDWAR, RANCHI AND PATNA HAS SERVED MORE THAN 2.25 LACS, 0.60 LACS AND 0.75 LACS PATIENTS DURING THE RELEVANT YEAR. THE HOSPITALS HAVE TEAM O F DOCTORS, NURSES AND PARAMEDICAL STAFF WORKING ROUND THE CLOCK. IT WAS S UBMITTED THAT THE HOSPITAL AT HARIDWAR IS WELL EQUIPPED WITH ULTRA MO DERN DIAGNOSTIC FACILITIES LIKE OPD AND IPD, PATHOLOGY LAB, CARDIOLOGY LAB, PA NCHKARMA CLINIC, YOGA AND SHATKARMA CLINIC, SURGICAL, DENTAL AND OPHTHAL MOLOGICAL CLINIC AND PROVIDES FREE YOGIC AND AYURVEDIC CONSULTANCY TO AL L ITS PATIENTS. IT WAS POINTED OUT THAT DURING THE YEAR THE APPELLANT HAS PROVIDED FREE MEDICAL SERVICES/TREATMENT TO MORE THAN 38 LACS PATIENTS TH ROUGH PATANJALI CHIKITSALAYA SPREAD ALL ACROSS THE COUNTRY. IT WAS SUBMITTED THAT ALL RECORDS OF SUCH TREATMENTS AND ACTIVITIES OF THE TRUST HAS BEEN EXAMINED IN SCRUTINY ASSESSMENT BY REVENUE DEPARTMENT OVER SO MANY YEARS AND HAVE NEVER BEEN DISPUTED. 6.6.1. THE TRUST DEED IN CLAUSE J AND N H AS PROVIDED THE OBJECTIVE OF APPELLANT TO IMPART EDUCATION AND PROVIDE RELIEF TO THE POOR. THE CONTENTION OF THE LD. CIT(DR) REMAINED THAT 7 OUT OF 15 OBJECT IVES IN THE TRUST DEED OF THE APPELLANT ARE IN A NATURE OF GENERAL PUBLIC UTI LITY. THE OBJECTS OF THE APPELLANT ARE AS UNDER :- A. 'THE MAIN AIM OF THE TRUST WOULD BE TO IMPART THE PRACTICAL AND FUNCTIONAL TRAINING OF ASTUNG YOG, RA J YOG, HATH YOG, ASHAN AND PRANAYAM ETC AS RECEIVED FROM THE ANCIENT TRADITION PROPOUNDED BY THE RISHIS AND MUNIS TO MAKE AN END OF EXTREME SUFFERINGS TO ITA NO. 387/DEL/2013 50 CURE DISEASES AND TO RECEIVE A CALM STAGE OF MIND A ND EXTREME HAPPINESS. B. TO CONSTRUCT THE BUILDING ETC FOR BOAR DING AND LODGING FOR THOSE WHO ARE INSTRUCTED III Y OG AND MEDITATION. C. TO ORGANIZE YOGA CAMPS IN THE COUNTRY AND ABROAD IN ORDER TO PROPAGATE THE YOGA, TRAINING AND VEDIC DHARMA. D. TO OPEN AND ESTABLISH CHARITABLE HOSPITALS FOR THE TREATMENT OF THE HELPLESS POOR, OUT CASTE AND ALSO TO DISTRIBUTE MEDICINES, CLOTHES AND FOOD ARTICLES IN THE TRIBAL AREA. E. TO FURNISH AND EQUIP THE CHARITABLE HOSPITAL WITH MODERN MEDICAL FACILITIES. F. TO CARRY OUT CONDUCT RESEARCH ON YOGA, AYURVEDA AND VEDIC LITERATURE AND ALSO TO ORGANIZE SCHOLARLY SEMINARS AND COMPETITIONS. G. TO PREPARE AND TO SALE AND PURCHASE OF THE AYURVEDIC MEDICINES FOR THE CHARITABLE HOSPITALS, HOSPITAL COLLEGES, SCHOOLS AND FOR THE SOCIAL AND Y OGIC ACTIVITIES OF THE TRUST. H. TO MAKE AN ARRANGEMENT FOR THE STU DY OF VEDS, THE GEETA, THE PHILOSOPHY AND UPANISHADS, GRAMMER AND YOGIC SCRIPTURES FOR CHARACTER BUILDING, MORAL CULTURAL U PLIFTMENT AND IMPARTING EDUCATION FOR CHARACTER BUILDING AND UPLIFTMENT OF MORAL VALUES. 1. TO PREPARE MISSIONARIES AND F ACILITATE THEM AND SENSITIZE PEOPLE FOR UPROOTING JEALOUSLY, HATE, EVILS, INJUST ICE, TYRANNY AND HEAVENLY THIS ON EARTH BY KEEPING ABOVE THE COMMUNALISM, CASTES AND THE FEELING OF SEX AND CREE D. J. TO RUN THE FREE EDUCATIONAL CENTERS AND TO FACILITATE THE WORTHY POOR HELPLESS ORPHANS, STUDE NTS BY PROVIDING CLOTHES, FOOD, STUDY MATERIAL AND LODGING. K. TO ESTABLISH AND RUN STABLES FOR THE POOR COWS TO SAVE THEM FROM VICTIMIZATION AND KILLIN GS. ITA NO. 387/DEL/2013 51 L. TO CARRY OUT RESEARCHES OR AGNI H OTRA AND PERFORM SCIENTIFIC YAJNAS IN ORDER TO SO LVE THE SERIOUS PROBLEMS OF ENVIRONMENTAL POLLUTION OF MO DERN AGE. M. TO GIVE AWARD AND CERTIFICATES TO THE TRAINEES WHO UNDERTAKE WEEKLY, FORTNIGHTLY, MONT HLY, QUARTERLY AND ANNUALLY YOG AND ACUPRESSURE TRAINING. N. TO HELP AND CO-OPERATE THE RELIEF ACTIVITIES RELATE D TO FLOOD, EARTHQUAKES, EPIDEMIC, DROUGHT ETC. O. TO CO-OPERATE OTHER SUCH INSTITUTIONS AND ORGANIZATIONS WHICH MATCH OR AIMS AND OBJECTIVES , AND ORDER TO FULFILL THESE AIMS AND OBJECTIVES TO ACCEPT THE DONATING OF MONEY, LAND ETC.' (EMPHASIS SUPPLIED) 6.6.2. WE FIND THAT THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRUST HAS BEEN SET OUT IN CLAUSE A OF THE TRUST DEED AS PER W HICH THE OBJECT IS TO ALLEVIATE EXTREME SUFFERINGS AND CURE DISEASES BY P ROVIDING PRACTICAL AND FUNCTIONAL TRAINING OF ASTANG YOG, RAJ YOG, DHYAN Y OG, HATH YOG, ASHAN AND PRANAYAM ETC. AS RECEIVED FROM THE ANCIENT TRAD ITION PRONOUNCED BY THE RISHIES AND MUNIS. THUS TO KNOW THE MISSION AND REA SON OF THE APPELLANT TRUST WE HAVE TO READ ITS OBJECTIVES IN TOTALITY. T HE VARIOUS OTHER OBJECTIVES PROVIDED IN THE TRUST DEED ARE MERELY INDEPENDENT / ANCILLARY TO THE MAIN OBJECTION WHICH IS TO PROVIDE MEDICAL RELIEF AND IM PART EDUCATION AND DO NOT IN ANY WAY CONSTITUTE OBJECTIVES OF GENERAL PUBLIC UTILITY AS CONTENDED BY THE LD. CIT(DR). WE THUS HOLD THAT THE CASE OF THE A PPELLANT DOES NOT FALL WITHIN THE LAST LIMB OF THE DEFINITION OF CHARITABL E PURPOSE GIVEN U/S 1(15) OF THE ACT. IN THE CASE OF THIAGARAJAR CHARITIES VS. A CIT (SUPRA) BEFORE THE HONBLE SUPREME COURT, THE MAIN OBJECTS OF THE ASSE SSEE TRUST WERE EDUCATION, MEDICAL RELIEF AND RELIEF TO THE POOR. O NE OF THE OBJECTS CONTEMPLATED THE TRUST TO ENGAGE IN CARRYING ON, HE LP, AID, ASSIST AND PROMOTE RURAL RECONSTRUCTION WORK, COTTAGE INDUSTRY AND ALL MATTERS ITA NO. 387/DEL/2013 52 INCIDENTAL THERETO. THE TRUSTEE CARRIED ON BUSINESS BY INVESTING THE CORPUS AS PER POWERS GIVEN UNDER SOME CLAUSE OF ARTICLE OF TRUST. THE ASSESSEE CLAIMED THAT THE BUSINESS CARRIED ON BY IT AND FROM OUT OF WHICH IT HAD DERIVED INCOME WAS HELD UNDER TRUST AND SINCE THE T RUST WAS FOR CHARITABLE PURPOSE, THE INCOME WAS EXEMPT FROM TAX U/S 11. THE AO REJECTED ITS CLAIM. THE TRIBUNAL AS WELL AS HONBLE HIGH COURT H ELD THAT THE OBJECT COVERED BY CLAUSE 1(G) INVOLVED CARRYING ON AN ACTI VITY FOR PROFIT. ON APPEAL THE HONBLE SUPREME COURT HELD IN FAVOUR OF THE ASS ESSEE BY OBSERVING THAT CLAUSE I(G) REFERRED BY THE LOWER AUTHORITIES WAS N OT AN OBJECT BUT WAS REALLY IN THE NATURE OF A POWER. THE HONBLE COURT FURTHER HELD THAT THE ANCILLARY ACTIVITY UNDERTAKEN BY THE ASSESSEE WAS T O AFFORD RELIEF TO POOR FALLING WITHIN SCOPE OF SECTION 2(15) OF THE ACT AN D WAS NOT AN OBJECT OF GENERAL PUBLIC UTILITY. IT WAS FURTHER HELD THAT BU SINESS BEING ONLY A MEANS OF ACHIEVING THE OBJECT OF THE TRUST, EXEMPTION COU LD NOT BE DENIED. 6.6.3. THE CONTENTION OF THE LD. CIT(DR) ALSO RE MAINED THAT THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRUST IS TO PREPARE AND SELL MEDICAL FORMULATIONS, WHICH IS APPARENT FROM THE SHEER MAGN ITUDE OF BUSINESS, SALES COUNTERS AND VOLUME OF ITS PROMOTION AND PUBLICATIO N HOUSE WHICH IS NOT INCIDENTAL TO THE MAIN OBJECTIVE OF PROVIDING MEDIC AL RELIEF. SHE HAS FURTHER ALLEGED THAT APPELLANT HAS ESTABLISHED A CHAIN OF R ETAIL OUTLETS (SEVA KENDRA) FOR SELLING ITS PRODUCTS ALL OVER INDIA AND HAS ALS O COLLECTED SECURITY DEPOSIT OF RS. 6.21 CRORES FROM THESE SEVA KENDRAS. SHE ALL EGED FURTHER THAT THE ASSESEE IS ALSO ENGAGED IN EXPORT OF ITS PRODUCTS A ND QUANTUM OF SUCH EXPORTS AGGREGATES TO RS. 5,15,64,050/- DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, WHICH PORTRAYS THAT THE APPELLANT IS PRE DOMINANTLY ENGAGED IN UNDERTAKING COMMERCIAL ACTIVITIES. IN THE REJOIO NDER THE SUBMISSION OF THE LD. AR REMAINED THAT BUSINESS UNDERTAKINGS WERE RUN BY THE APPELLANT AS AN ACTIVITY INCIDENTAL TO ATTAINMENT OF THE MAIN OB JECTS OF THE APPELLANT AND TO FEED CHARITY, WHICH IS PERMITTED U/S 11(4) / 11( 4A) OF THE ACT. IT WAS ITA NO. 387/DEL/2013 53 SUBMITTED THAT THE AYURVEDIC PREPARATIONS/MEDICINES HAVE BEEN EXPORTED BY THE APPELLANT AT THE REQUEST OF THE PATIENTS, IN ORDER TO FULFILL ITS PREDOMINANT OBJECTIVE OF MAKING THE WORLD DISEASE F REE. IT WAS SUBMITTED THAT THE SAID EXPORTS WERE MADE BY THE BUSINESS UND ERTAKING HELD UNDER THE TRUST AND THERE IS NO EMBARGO UNDER THE PROVISI ONS OF THE ACT TO RESTRICT BUSINESS UNDERTAKING FROM MAKING EXPORTS IN THE COU RSE OF UNDERTAKING ITS BUSINESS ACTIVITIES. IT WAS SUBMITTED THAT THE CHIK ITSALAYS WERE SET UP BY THE APPELLANT ALL ACROSS THE COUNTRY FOR PROVIDING FREE MEDICAL CONSULTATIONS TO PATIENTS SUFFERING FROM VARIOUS DISEASES. MORE THAN 1000 VAIDAYS ARE GIVING FREE CONSULTATION TO OVER 50,000 PATIENTS FOR CURAB LE AND INCURABLE DISEASE IN ABOUT 1000 PATANJALI CHIKITSALAYS ACROSS THE COU NTRY. FURTHER THAT ACCEPTANCE OF SECURITY DEPOSIT FOR SETTING UP SEVA KENDRAS DOES NOT IN ANY WAY IMPACT THE CHARITABLE NATURE OF THE ACTIVITIES UNDERTAKEN BY THE APPELLANT. 6.6.4. FURTHER ALLEGATION OF LD. CIT(DR) RE MAINED THAT THE APPELLANT HAS APPLIED MINIMUM AMOUNT OF INCOME FOR CHARITABLE PURPOSE AND DIVERTED SUBSTANTIAL AMOUNT TO ITS SISTER CONCERN I.E. PATAN JALI YOGPEETH TRUST WITH THE INTENTION OF RETAINING FUNDS WITHIN ITS OWN CON TROL. IT WAS ALLEGED BY HER THAT THE APPELLANT WAS CHARGING EXHORBITANT RATES FOR ACCOMMODATION FEE IN THE NAME OF PARTICIPATION FEE. IN ALLEGING SO THE L D. CIT(DR) HAS PLACED RELILANCE ON THE STATEMENT OF ONE SHRI BALWANT SING H MINHAS, WHEREIN HE HAS ALLEGED TO HAVE PAID AMOUNT OF RS. 49,000/- AS PARTICIPATION FEE FOR THE YOGA SHIVIR PURPORTEDLY CONDUCTED BY THE APPELLANT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. CIT(DR) HAS FURTHER AL LEGED THAT APPELLANT HAS COLLECTED A SUM OF RS. 68.45 LACS UNDER THIS HE AD DURING THE YEAR. SHE ALLEGED FURTHER THAT THE ASSESSEE HAS CHARGED RS. 2 90.79 LACS FROM PATIENTS DURING THE ASSESSMENT YEAR THROUGH MEDICAL HOSPITAL WHICH WAS IN ADDITION TO THE PRICE OF MEDICINE CHARGED FROM PATIENTS. SHE ALLEGED THAT THE APPELLANT WAS UNABLE TO PRODUCE DURING THE APPELLAT E PROCEEDINGS ANY DOCUMENTARY EVIDENCE TO SUPPORT THE CHARITABLE ACTI VITIES IN THE FORM OF ITA NO. 387/DEL/2013 54 MEDICAL RELIEF IN THE HOSPITAL RUN BY THE APPELLANT . SHE ALLEGED THAT THE APPELLANT WAS UNABLE TO PRODUCE THE MEDICAL PRACTIC ITIONER DURING THE ASSESSMENT PROCEEDINGS. THE REJOINDER OF THE LD. AR REMAINED THAT THERE IS NO LEGAL IMPEDIMENTS IN ONE CHARITABLE TRUST GIVING DONATION TO INTER CHARITABLE TRUST. IT WAS SUBMITTED THAT IT IS A WEL L SETTLED POSITION THAT WHEN A CHARITABLE DONATION AMOUNT OUT OF ITS CURRENT INC OME IS DONATED TO INTER CHARITABLE TRUST, THE SAME CONSTITUTE APPLICATION O F INCOME U/S 11(1)(9) OF THE ACT. A COPY OF CERTIFICATE OF REGISTRATION OF T HE DONEE TRUST U/S 12A OF THE ACT HAS BEEN PLACED AT PAGE 856 OF THE SUPPLEME NTARY PAPER BOOK (III). THE CBDT INSTRUCTION NO. 1132 DATED 5.1.197 8, EXTRACT OF WHICH HAS BEEN MADE AVAILABLE AT PAGE NO. 857 OF THE SUPPLEME NTARY PAPER BOOK-III HAS MADE IT CLEAR THAT PAYMENT OF A SUM BY ONE CHAR ITABLE TRUST TO ANOTHER FOR UTILIZATION BY THE DONEE TRUST TOWARDS ITS CHAR ITABLE OBJECTS IS PROPER APPLICATION OF INCOME FOR CHARITABLE PURPOSE IN THE HANDS OF THE DONEE TRUST AND THE DONOR TRUST WILL NOT LOOSE EXEMPTION U/S 11 OF THE INCOME TAX ACT 1961. WE THUS DO NOT FIND SUBSTANCE IN THE CONTENTI ON OF THE LD. CIT(DR) THAT THE APPELLANT HAS DONATED AN AMOUNT TO THE DON EE TRUST TO DEVIATE FROM ITS OBJECTIVES. SINCE IT IS NOT THE CASE OF TH E DEPARTMENT THAT PATANJALI YOG TRUST, THE DONEE HAS NOT APPLIED SUCH SUMS FOR CHARITABLE PURPOSES, THERE IS NO SUBSTANCE IN THE ALLEGATION THAT THE AP PELLANT HAS DEVIATED THE FUNDS. 6.6.5. AGAINST THE ALLEGATION OF CHARGING EXORBI TANT RATES FOR ACCOMMODATION FEE SUBMISSION OF THE LD. AR IN REJOI NDER REMAINED THAT THE ALLEGATION IS BASED ON THE STATEMENT OF ONE SHRI BA LWANT SINGH MINHAS WITHOUT APPRECIATING THAT THE APPELLANT DID NOT CON DUCT ANY YOG SHIVIR/CAMPS IN THE ASSESSMENT YEAR UNDER CONSIDERA TION, THUS THE QUESTION OF CHARGING EXORBITANT FEES FOR CONDUCTING YOGA SHI VIR DOES NOT ARISE AT ALL. THE FURTHER CONTENTION OF THE LD. AR REMAINED THAT RELIANCE HAS BEEN PLACED ON THE EX PARTE STATEMENT OF SHRI BALWANT SI NGH RECORDED BEHIND THE BACK OF THE APPELLANT WITHOUT AFFORDING OPPORTUNITY TO CROSS EXAMINE HIM, ITA NO. 387/DEL/2013 55 WHICH ITSELF IS IN VIOLATION OF SETTLED PRINCIPLES OF NATURAL JUSTICE. IT WAS SUBMITTED THAT AN AMOUNT OF RS. 68.45 LACS REPRESEN TS THE AMOUNT OF ROOM RENT CHARGES RECEIVED BY THE APPELLANT FROM THE PAT IENTS WHO HAVE AVAILED IN HOUSE FACILITIES IN THE HOSPITAL RUN BY THE APPE LLANT AT HARIDWAR. THE AMOUNT OF ROOM RENT CHARGES RECEIVED BY THE APPELLA NT IN THE ASSESSMENT YEAR IS MINUSCULE AS COMPARED TO THE NUMBER OF PATI ENTS WHO HAVE TREATED IN THE HOSPITAL RUN BY THE APPELLANT. LD. AR SUBMIT TED FURTHER THAT AN AMOUNT OF RS. 2 .2 CRORES APPROXIMATELY HAS BEEN CH ARGED FROM THE PATIENTS WHO HAVE BEEN TREATED IN THE HOSPITAL RUN BY THE APPELLANT, ROOM RENT CHARGES, DIAGNOSIS AND SURGICAL SERVICES PROVI DED BY THE APPELLANT WHICH HAS ALSO BEEN CHARGED AT NOMINAL RATES IN ORD ER TO MEET THE ACTUAL COSTS INCURRED WITHOUT ANY ELEMENT OF PROFIT IMBIBE D THEREIN. IN THIS REGARD ATTENTION WAS DRAWN ON THE INCOME AND EXPENDITURE S TATEMENT OF APPELLANT TRUST PLACED AT PAGE 379 OF THE PAPER BOOK, WHEREIN APPELLANT HAS INCURRED AN EXPENDITURE OF RS. 5.1 CRORES AS AGAINST INCOME OF RS. 2.2 CRORES THEREBY RESULTING IN A DEFICIT OF RS. 2.8 CRORES. REGARDING THE ALLEGATION THAT THE APPELLANT WAS UNABLE TO PRODUCE ANY RECORD IN THE F ORM OF MEDICAL PRESCRIPTIONS TO SUBSTANTIATE THAT MEDICAL RELIEF W AS PROVIDED IN THE HOSPITAL RUN BY THE APPELLANT, LD. AR SUBMITTED THAT AS A MA TTER OF PRACTICE THE PRESCRIPTIONS MADE BY THE MEDICAL PRACTITIONERS IN THE OPD ARE NEVER RETAINED AND ARE ALWAYS GIVEN TO THE PATIENTS. NONE THELESS THE APPELLANT MAINTAINS A RECORD OF THE PATIENTS WHO HAVE BEEN TR EATED IN HOUSE WHICH HAS NOWHERE BEEN DISPUTED BY THE DEPARTMENT. AGAINS T THE ALLEGATION OF THE DEPARTMENT THAT APPELLANT WAS UNABLE TO PRODUCE THE MEDICAL PRACTITIONERS FOR VERIFICATION DURING THE COURSE OF REMAND PROCEEDINGS IS ERRONEOUS. THE LD. AR SUBMITTED THAT THE APPELLANT HAS PRODUCED 15 OUT OF 71 MEDICAL PRACTITIONERS WHOSE DETAILS AND PERMANEN T RESIDENTIAL ADDRESSES WERE MADE KNOWN TO THE REVENUE. IT WAS SUBMITTED TH AT IN THEIR STATEMENT RECORDED ON OATH , THE MEDICAL PRACTITIONERS WHO WE RE IN THE EMPLOYMENT WITH THE HOSPITAL RUN BY THE APPELLANT HAVE CATEGOR ICALLY ADMITTED TO THE ITA NO. 387/DEL/2013 56 FACT THAT THERE IS NO COMPULSION ON THE PATIENTS TO BUY MEDICINES PREPARED / MANUFACTURED BY THE APPELLANT ONLY AND THAT THEY AL SO PRESCRIBED MEDICINE MANUFACTURED BY OTHER PHARMACEUTICAL COMPANIES. THE SE SUBMISSIONS OF THE LD. AR HAVE NOT BEEN REBUTTED. 6.6.6. CONSIDERING ABOVE SUBMISSIONS IN TOTALITY WE HOLD THAT THE APPELLANT TRUST FALLS WITHIN THE PURVIEW OF PROVIDI NG RELIEF TO THE POOR. 6.6.7. THE FIRST ISSUE AS TO WHETHER THE APPEL LANT TRUST DID FALL WITHIN THE PURVIEW OF PROVIDING OF MEDICAL RELIEF IMPARTIN G EDUCATION OR RELIEF TO THE POOR IS THUS DECIDED IN FAVOUR OF THE APPELLANT. I N VIEW OF THE ABOVE FINDING ON FIRST ISSUE THE SECOND AND THIRD ISSUE HAVE BECO ME INFRUCTUOUS. IN THESE ISSUES THE QUESTIONS ARE AS TO WHETHER THE ACTIVIT Y OF THE APPELLANT WERE IN THE NATURE OF PROVIDING GENERAL PUBLIC UTILITY OR O F ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS CONTAINED IN SE CTION 2(15) OF THE ACT. RELEVANT PROVISIONS U/S 2(15) ARE REPRODUCED AS UND ER :- SECTION 2 (15) OF THE ACT DEFINES CHARITABLE PURP OSE AS UNDER :- . (15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATE RSHEDS, FORESTS AND WILDLIFE AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: THE PROVISO INSERTED IN SECTION 2(15) OF THE ACT BY THE FINANCE ACT, 2008, WITH EFFECT FROM 1.4.2009, READS AS UNDER :- .. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS , OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS, FOR A ITA NO. 387/DEL/2013 57 CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIV E OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY; . (EMPHASIS SUPPLIED) THEREFORE, THE AFORESAID PROVISO DOES NOT APP LY TO A TRUST/INSTITUTION ENGAGED IN THE CHARITABLE OBJECT OF PROVIDING RELIE F TO THE POOR, IMPARTING EDUCATION AND PROVIDING MEDICAL RELIEF. THE VISION WITH WHICH THE APPLICANT TRUST HAS BEEN SET UP AND WHICH IS BEING FOLLOWED OVER THE YEARS ARE AS UNDER:- - TO MAKE A DISEASE FREE WORLD THROUGH A SCIENTIFIC A PPROACH TO YOGA AND AYURVED AND TO FULFILL THE RESOLUTION OF M AKING A NEW WORLD FREE FROM DISEASE AND MEDICINE; - TO ESTABLISH PRAN AS MEDICINE FOR THE TREATMENT OF ALL CURABLE AND INCURABLE DISEASES BY RESEARCH ON PRANAYAM /YOGA. - TO PROPAGATE PRANAYAM AS A FREE MEDICINE FOR TREA TMENT OF DISEASES ROUND THE GLOBE, THROUGH IN-DEPTH RESEARCH IN ACCORDANCE WITH THE PARAMETERS OF MODERN MEDICAL SC IENCE, SO THAT THE RICH AND POOR MAY AVAIL ITS BENEFITS IN OR DER TO ATTAIN SOUND HEALTH; - TO FORM A NEW INTEGRATED SYSTEM OF TREATMENT, CONSI STING MAINLY OF THE TECHNIQUES OF YOGA AND AYURVEDA, FOR SURGERY AND EMERGENCY CASES , ALLOPATHY, HOMOEPATHY, UNANI AND ACUPRESSURE TO SOOTHE PATIENTS SUFFERING FROM UNBEA RABLE PAINS AND RID THEM OF DISEASE. - TO EVALUATE METHODS OF TREATMENT OF PHYSICAL BODY, ETHERIC BODY , ASTRAL BODY, MENTAL BODY AND CASUAL BODY BEYOND THE PRESENT INCOMPLETE SYSTEM OF TREATMENT FOR CURE OF PHYSICAL BODY ALONE; - IMPARTING YOGA AND HEALTH EDUCATION AND TO BEGIN DE GREE AND DIPLOMA COURSES FOR STUDENTS IN DISCIPLINES OF YOGA AND AYURVEDA. AS DISCUSSED ABOVE THE PROVISO TO SECTION 2(15) OF THE ACT APPLIES ONLY TO TRUSTS/INSTITUTION FALLING IN THE LAST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE ; THAT TOO, IF SUCH TRUST / INSTITUTION CAR RY ON COMMERCIAL ACTIVITIES IN THE NATURE OF BUSINESS, TRADE OR COMMERCE. THE SAID PROVISO DOES NOT APPLY TO TRUST / INSTITUTION ENGAGED IN THE CHARITABLE OB JECT OF PROVIDING RELIEF TO THE POOR, IMPARTING EDUCATION AND PROVIDING MEDICAL RELIEF. THE LAST LIMB OF ITA NO. 387/DEL/2013 58 THE DEFINITION OF CHARITABLE PURPOSE U/S 2 (15) TA LKS ABOUT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE AFORESAID PREDOMINANT OBJECTS AND THE VISION MAKE IT CLEAR THAT THE OBJEC TS OF THE APPELLANT ARE TO PROVIDE MEDICAL RELIEF IMPART EDUCATION TO THE SOCIETY AT LARGE AND RELIEF TO THE POOR HENCE THE PROVISO TO SECTION 2 (15) DO ES NOT APPLY IN THE CASE OF THE ASSESSEE / APPELLANT. THE FORTH ISSUE AS TO WHETHER DONATION OF RS. 38.35 CRORES MADE TO PATANJALI YOG PEETH FOR THE PU RPOSE OF SETTING UP YOG BHAWAN AND OTHER YOGA RELATED ACTIVITIES THESE AMOU NTS TO APPLICATION OF MONEY FOR THE PURPOSE OF MEDICAL RELIEF HAS ALSO BE EN DISCUSSED AND DECIDED WHILE ADJUDICATING UPON THE FIRST ISSUE UND ER THE HEAD MEDICAL RELIEF OR RELIEF TO THE POOR, FOLLOWING THE SAME THE FOURT H ISSUE IS ALSO DECIDED IN FAVOUR OF THE APPELLANT. OTHER OBJECTIONS OF THE REVENUE 6.7. LD. CIT(DR) HAS ALSO CONTENDED THAT THE APP ELLANT HAS RECEIVED MEMBERSHIP FEES AGGREGATING TO RS. 283.38 LACS IN T HE ASSESSMENT YEAR UNDER CONSIDERATION WHICH IS IN VIOLATION OF THE TR UST DEED. SHE HAS CONTENDED FURTHER THAT PRESCRIBING OF ALLOPATHIC ME DICINES BY ONE DENTIST SHRI KULDEEP SINGH IN THE MEDICAL HOSPITAL RUN BY THE APPELLANT WAS ALSO IN VIOLATION OF THE OBJECTIVE OF THE TRUST. REJOINDER OF THE LD. AR IN THIS REGARD REMAINED THAT CLAUSE O OF THE TRUST DEED CLEARLY EM POWERS THE APPELLANT TRUST TO ACCEPT VOLUNTARY DONATIONS. THUS THERE WAS NO BAR ON THE APPELLANT TO RECEIVE VOLUNTARY DONATIONS IN THE FORM OF MEMBE RSHIP FEES AND THUS THE OBJECTION RAISED BY THE DEPARTMENT DOES NOT SURVIVE . THE LD. AR SUBMITTED FURTHER THAT THE PREDOMINANT OBJECTIVE OF THE APPEL LANT TRUST IS TO PROVIDE MEDICAL RELIEF TO THE SOCIETY AT LARGE. HENCE THERE IS NO SPECIFIC RESTRICTION STIPULATED IN THE TRUST DEED TO PREVENT THE APPELLA NT FROM PRESCRIBING ALLOPATHIC MEDICINES. HE REFERRED CLAUSE A & D OF T HE TRUST DEED IN SUPPORT. HE HOWEVER SUBMITTED THAT THOUGH THE APPELLANT PRI MARILY ADOPTS AYURVED AND YOGA AS TECHNIQUES TO CURE DISEASES BUT THERE I S NO EMBARGO IN THE TRUST DEED TO PREVENT THE APPELLANT FROM PRESCRIBIN G ALLOPATHIC MEDICAINES ITA NO. 387/DEL/2013 59 TO CURE THE PATIENTS OF DISEASES. IT WAS SUBMITTED FURTHER THAT THIS CONTENTION IS ALSO CONTRARY TO PRIMARY CONTENTION OF THE DEPARTMENT THAT THE APPELLANT PRESCRIBED ONLY MEDICINES WHICH ARE M ANUFACTURED IN HOUSE AND MADE AVAILABLE IN THE SALES COUNTERS MANAGED BY THE APPELLANT. WE FULLY AGREE WITH THE ABOVE SUBMISSION THAT LD. AR M ADE IN REJOINDER THAT THERE IS NO SUBSTANCE IN THE ALLEGATIONS OF LD. CIT (DR) THAT THERE WAS VIOLATION OF TRUST DEED BY THE APPELLANT IN ACCEPTI NG MEMBERSHIP FEES AND PRESCRIBING ALLOPATHIC MEDICINES TO ITS PATIENTS. 6.7.1. IN GROUND NO. 10 OF THE APPEAL THE APPEL LANT HAS TAKEN ALTERNATIVE PLEA THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE TAXATION OF GROSS INCOME AND NOT DIRECTING THE AO TO ALLOW DEDUCTION OF REV ENUE EXPENDITURE INCURRED DURING THE ASSESSMENT YEAR 2009-10 WHILE C OMPUTING THE TAXABLE INCOME. THIS GROUND HAS BECOME INFRUCTUOUS AS THE A O IN ITS RECTIFICATION ORDER DATED 3.6.2013 U/S 154 OF THE ACT HAS RECTIF IED THE ASSESSMENT ORDER AND ALLOWED THE DEDUCTION OF REVENUE EXPENDITURE AG GREGATING TO RS. 52,26,88,442/-. THIS GROUND IS ACCORDINGLY REJECTED . 6.7.2. THE OTHER CONTENTION OF THE LD. CIT(DR) DURING THE COURSE OF HEARING OF THE APPEAL HAVE ALSO BEEN MET OUT BY THE LD. AR IN HIS REJOINDER. ON THE ISSUE OF IMPARTING OF EDUCATION THE CONTENTI ON OF THE LD. DR REMAINED THAT AYURVEDIC MEDICAL COLLEGE IN THE NAME OF PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN AT HARIDWAR WAS NOT IN OPERATION DURING THE YEAR. THE SUBMISSION OF THE LD. AR REMAI NED THAT THOUGH THE AFORESAID MEDICAL COLLEGE WAS NOT IN OPERATION IN T HE ASSESSMENT YEAR UNDER CONSIDERATION BUT THE APPELLANT HAD APPLIED S UBSTANTIAL AMOUNT IN SETTING UP THE AYURVEDIC COLLEGE WHICH AMOUNTS TO A PPLICATION OF INCOME FOR THE PURPOSE OF IMPARTING EDUCATION IN THE FIELD OF AYURVEDA. IN THE ABSENCE OF REBUTTAL OF THIS FACT WE DO NOT FIND SUBSTANCE I N THE ALLEGATION OF THE LD. CIT(DR). 6.7.3. THE FURTHER CONTENTION OF THE LD. CIT(DR) REMAINED THAT THE CERTIFICATE OF RECOGNITION GRANTED BY THE MEDICAL A ND INDUSTRIAL RESEARCH ITA NO. 387/DEL/2013 60 ORGANIZATION (SIRO) WAS NEVER FILED BEFORE THE LOWE R AUTHORITIES WHICH CONSTITUTED ADDITIONAL EVIDENCE AT THE SECOND STAGE OF APPEAL PROCEEDINGS. IN THIS CONTEXT THE LD. CIT(DR) HAS OBJECTED FURTH ER THAT THE R & D ACTIVITIES UNDERTAKEN BY THE APPELLANT AMOUNTED TO OBJECT OF GENERAL PUBLIC UTILITY U/S 2(!5) OF THE ACT. SHE ALLEGED FURTHER T HAT COMPARATIVE RATE CHART FURNISHED BY THE APPELLANT IN THE PAPER BOOK WAS NO T FILED BEFORE THE AUTHORITIES BELOW HENCE THE SAME CONSTITUTES ADDITI ONAL EVIDENCE. LD. AR HAS MET OUT THESE CONTENTIONS OF THE LD. DR WITH TH IS REJOINDER THAT THE NOTIFICATION GRANTING RECOGNITION TO THE R & D CEN TER OF THE APPELLANT BY THE SIRO IS AVAILABLE ON THE PUBLIC DOMAIN AND CAN BE ACCESSED AT WWW.DSIR.GOV.IN/DIRECT/SIRO06.PDF . THUS THE CERTIFICATE DOES NOT CONSTITUTE ADDITIONAL EVIDENCE. IT WAS SUBMITTED FURTHER THAT THE R & D ACTIVITIES UNDERTAKEN BY THE APPELLANT WAS ONLY ANCILLARY AND INCIDENTAL TO THE PREDOMINANT OBJECTIVE OF PROVIDING MEDICAL RELIEF B EING PURSUED BY THE APPELLANT. HENCE DOES NOT FALL TO THE OBJECTS OF GE NERAL PUBLIC UTILITY AS DEFINED U/S 2(15) OF THE ACT. REGARDING COMPARATIVE RATE CHART FURNISHED BY THE ASSESEE BEFORE THE TRIBUNAL AMOUNTING TO ADDITI ONAL EVIDENCE, LD. AR SUBMITTED THAT THIS FACT WAS VERY MUCH HIGHLIGHTED BEFORE THE AUTHORITIES BELOW AND REFERENCE OF THE CONTENTS OF PAGE NO. 13 OF THE FIRST APPELLATE ORDER HAS BEEN MADE IN SUPPORT. IT WAS SUBMITTED FU RTHER THAT THE CHART FILED IS NOTHING BUT COLLATION OF THE DETAILS OF PR ICES AVAILABLE IN PUBLIC DOMAIN AND HAS BEEN FILED MERELY IN FURTHERANCE OF THE CONTENTION TAKEN BEFORE THE AUTHORITIES BELOW. CONSIDERING THE ABOVE SUBMISSION WE FIND SUBSTANCE IN THE SUBMISSION OF THE LD. AR AND THE S AME IS ACCEPTED AS SUCH. 67.4. BESIDES, ABOVE, IT IS PERTINENT TO NOTE HERE THAT THE APPELLANT SINCE ITS INCEPTION IN THE YEAR 1995 HAS BEEN ENGAG ED IN THE ACTIVITY OF PROVIDING MEDICAL RELIEF THROUGH PATANJALI BHARTIY A AYURVIGYAN AVAM ANUSANDHAN SANSTHAN AT HARIDWAR WHICH HAS BEEN CON SISTENTLY ACCEPTED BY THE REVENUE IN THE ASSESSMENT YEARS 2004-05 TO 2008 -09 VIDE VARIOUS ITA NO. 387/DEL/2013 61 ASSESSMENTS FRAMED U/S 143(3) OF THE ACT AND THERE IS NO CHANGE IN THE PREDOMINANT OBJECTS OF THE APPELLANT TRUST. WE THUS FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RA DHASOAMI SATSANG VS. CIT (SUPRA) AND OTHERS HOLD THAT THE REVENUE WAS NO T JUSTIFIED IN REFUSING THE CLAIMED EXEMPTION U/S 11/12 OF THE ACT DURING T HE YEAR. THE HONBLE SUPREME COURT IN THE CASE OF RADHA SOAMI SATSANG V S. CIT (SUPRA) HAS BEEN PLEASED TO HOLD THAT WHERE A FUNDAMENTAL ASPEC T PERMITTING THROUGH THE DIFFERENT ASSESSMENT YEARS IS ACCEPTED ONE WAY OR THE OTHER A DIFFERENT VIEW IN THE MATTER IS NOT WARRANTED, UNLESS THERE I S ANY MATERIAL CHANGE IN FACTS. IN THE CASE OF DIT (EXEMPTIONS) VS GURU NANAK VIDYA BHANDAR TRUST (SUPRA) THE HONBLE DELHI HIGH COURT HAS BEEN PLEAS ED TO HOLD THAT THE DEPARTMENT IS EXPECTED TO BE CONSISTENT WITH ITS OW N STAND WHICH HAS BEEN TAKEN IN EARLIER YEARS, WHEN THERE IS NO CHANGE IN THE OBJECTS OF THE TRUST DURING THE YEAR AND SUCH OBJECTS WHEN FOUND PERMISS IBLE FOR EXEMPTION IN THE PAST NOTWITHSTANDING THE FACT THAT IT HAD MANY FOLD OBJECTS SOME OF WHICH ARE VULNERABLE. SIMILAR VIEW HAS BEEN EXPRESS ED BY THE OTHER DECISIONS RELIED UPON BY THE LD. AR. 6.7.5. WE HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY THE LD. CIT(DR) AND FIND THAT THE FACTS OF THOSE CASES ARE DISTINGUISHABLE FROM THE CASE OF THE ASSESEE, HENCE THESE ARE NOT HELPFUL TO THE REVENUE. IN THE CASE OF SAMAJBADI SOCIETY VS. ACIT 79 ITD 112 (CUTT) THE ASSESSEE WAS ENGAGED IN PRINTING AND PUBLISHING NEWSPAPERS AND PERIODICA LS ON COMMERCIAL LINES AND IT CLAIMED EXEMPTION ON THE GROUND THAT IT WAS ENGAGED IN THE CHARITABLE ACTIVITY OF IMPARTING EDUCATION. THE T RIBUNAL BY PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF SOLE TRUSTEE, LOK SHIKSHANA TRUST VS.CIT 101 TR 234 (SC) HELD THAT TH E ACTIVITIES UNDERTAKEN BY THE APPELLANT WERE IN THE NATURE OF GENERAL PUB IC UTILITY AS DEFINED U/S 2(!5) OF THE ACT AND SINCE THERE WAS NO ITOTA OF EV IDENCE TO SUBSTANTIATE THE CHARITABLE ACTIVITIES UNDERTAKEN BY THE ASSESSEE NO EXEMPTION WAS GRANTED IN THE GIVEN ASSESSMENT YEAR. IN THE CASE OF AUROLA B TRUST VS. CIT 46 SOT ITA NO. 387/DEL/2013 62 125 (CHENNAI) ASSESSEE ENGAGED IN THE SINGULAR ACTI VITY OF MANUFACTURING AND TRADING IN OPHTHALIMIC AND CARDIOVASCULAR PRODU CTS AND ACCESSORIES, HAD NOT TAKEN ANY CHARITABLE ACTIVITY AS PROVIDED IN TH E TRUST DEED. EVEN THE SALE PRICE OF THE PRODUCTS SOLD BY THE ASSESSEE WAS HIGH ER THAN THOSE AVAILABLE IN THE MARKET. TAKING INTO ACCOUNT THESE ASPECTS TH E TRIBUNAL HELD THAT SINCE THERE WAS NO ELEMENT OF CHAITY INVOLVED IN TH E ACTIVITIES UNDERTAKEN BY THE APPELLANT THE ASSESSEE WAS NOT ENTITLED TO C LAIM EXEMPTION U/S 11/12 OF THE ACT. IN THE CASE OF CIT VS. ICAI 321 ITR 73 (DELHI) THE ASSESSEE WAS PRE-DOMINANTLY ENGAGED IN UNDERTAKING R & D ACTIVIT IES ON BEHALF OF GOVERNMENT AND OTHER INSTITUTION AND PROVIDING CONS ULTANCY SERVICES. IN VIEW OF THE PRIMARY ACTIVITY UNDERTAKEN BY THE ASSE SSEE IT WAS HELD TO BE IN THE NATURE OF PROVIDING GENERAL PUBLIC UTILITY AS DEFINED U/S 2 (15) OF THE ACT. HOWEVER THE CASE WAS ULTIMATELY DECIDED IN FAV OUR OF THE ASSESEE AND EXEMPTION WAS GRANTED U/S 10(23C)(IV) OF THE ACT. IN THE CASE OF CIT VS. QUEENS EDUCATIONAL SOCIETY, ITA NO. 103 (UTTRAKHAND HIGH COURT) DECISION WAS RENDERED IN THE CONTEXT OF ALLOWABILITY OF EXEM PTION U/S 10(23C) OF THE ACT ON THE FACTS OF THE CASE BEFORE THE HONBLE HIG H COURT. IN THIS CASE PROFITS OF THE ASSESSEE WAS CONSIDERED WITHOUT TAKI NG INTO CONSIDERATION THE CAPITAL EXPENDITURE INCURRED BY THE ASSESSEE FOR CH ARITABLE PURPOSES. THIS DECISION WAS SUBSEQUENTLY BEEN DISSENTED FROM IN SE VERAL DECISIONS INCLUDING DECISION OF HONBLE PUNJAB & HARYANA HIG H COURT IN THE CASES OF PINEGROVE INTERNATIONAL CHARITABLE TRUST VS. UOI 3 27 ITR 73 (P & H) AND CIT VS. GAUR BRAHMIN VIDYA PRACHARINI SABHA 203 TAX MAN 226 (P & H); MAA SARASWATI EDUCATIONAL TRUST VS. UOI 194 TAXMAN 84 (H .P) ; DIT (EXEMPTION) VS. LILAVATI KIRTILAL MEHTA MEDICAL TRUST ITA(L) N O. 2990/2009 (BOM) ETC. IN THE CASE OF SANJEEVAMMA HANUMANTHA GOWDA CHARITABLE VS. DIT(E) 9 SOT 293 (BOMBAY) THE PREDOMINANT ACTIVITY UNDERTAKEN BY THE ASSESSEE WAS LETTING OUT OF MARRIAGE HALLS ON PURELY COMMERCIAL BASIS AND NOT IN FURTHERANCE OF THE CHARITABLE OBJECTIVITIES. FURTH ER THE ASSESSEE HAD NOT UNDERTAKEN ANY CHARITABLE ACTIVITY IN PURSUANCE OF THE CHARITABLE OBJECTS ITA NO. 387/DEL/2013 63 PROVIDED IN THE TRUST DEED. THE ASSESSEE WAS THEREF ORE DENIED REGISTRATION U/S 12A OF THE ACT. IN THE CASE OF DAULATRAM PUBLI C TRUST VS. CIT 244 ITR 514 (DELHI) THERE WAS NO DOMINANT CHARITABLE OBJECT IVE IN THE TRUST DEED WHICH THE ANCILLARY OBJECTS SUB SERVED. IT WAS ALSO OBSERVED THAT NO AMOUNT WAS UTILIZED FOR CHARITABLE PURPOSES AND THE ASSESS EE WAS PREDOMINANTLY ENGAGED IN UNDERTAKING COMMERCIAL ACTIVITIES FOR TH E PURPOSE OF GENERATING PROFITS. IN THE CASE OF JACOB THASILDAR, 176 ITR 24 3 (KERALA) DECISION WAS GIVEN IN THE CONTEXT OF THE KERALA BUILDING TAX ACT 1975 WHEREIN THE SCHEME OF THAT ACT IS COMPLETELY DIFFERENT FROM THE APPLICABLE PROVISIONS OF THE INCOME TAX ACT. IN THE CASE OF CIT VS. JODHPUR CAS SOCIETY 258 ITR 548 (RAJ.) THE ASSESEE WAS ENGAGED IN ORGANIZING CO NFERENCE, SEMINARS AND WORKSHOPS WHICH WAS HELD TO BE IN THE NATURE OF GE NERAL PUBLIC UTILITY ENTITLED TO EXEMPTION U/S 11/12 OF THE ACT. WE THUS FIND THAT THESE DECISIONS RELIED UPON BY THE LD. CIT(DR) DO NOT ADV ANCE THE CASE OF THE REVENUE AND HENCE NOT HELPFUL TO THE REVENUE. DISTINCTION BETWEEN OBJECTS AND BUSINESS U/S 11 (4) /(4A) 6.7.6. THE AUTHORITIES BELOW HELD THAT THE ACTIV ITIES OF THE APPELLANT WERE MERELY SUB SERVING THE BUSINESS OF DIVYA PHARMACY. THE CONTENTION OF THE APPELLANT TO IT REMAINED THAT THE BUSINESS UNDERTAK ING WAS RUN BY THE APPELLANT AS AN ACTIVITY IN INCIDENTAL TO THE ATTAI NMENT OF THE MAIN OBJECTS OF THE APPELLANT AND TO GIVE CHARITY WHICH IS PERMI TTED U/S 11(4)/11(4A) OF THE ACT. 6.7.7. CONSIDERING THE SUBMISSION OF THE PART IES ON THESE ISSUES WE ARE OF THE VIEW THAT IT IS A TRITE LAW THAT ONCE REGIST RATION U/S 12A OF THE ACT HAS BEEN GRANTED BY LD. CIT, THE AO COULD NOT QUESTION THE CHARITABLE CHARACTER OF THE INSTITUTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT OPEN TO THE AO IN THE ASSESSMENT PROCEEDINGS TO HOL D THAT THE OBJECTS OF THE ASSESSEE ARE NOT CHARITABLE IN NATURE. THE CONT ENTION OF LD. AR REMAINED THA THE MEANING OF THE EXPRESSION NOT FOR PURPOSE OF PROFIT IN THE ABOVE PROVISIONS IS NO LONGER RES INTEGRA, THE TEST BEING, WHAT IS THE ITA NO. 387/DEL/2013 64 PREDOMINANT OBJECT OF THE ACTIVITY WHETHER IT IS TO CARRY OUT A CHARITABLE PURPOSE OR TO EARN PROFIT IF THE PREDOMINANT OBJE CT IS TO CARRY OUT A CHARITABLE PURPOSE AND NOT EARN PROFIT, THE ORGANIZ ATION WOULD NOT LOOSE ITS CHARITABLE CHARACTER MERELY BECAUSE SOME PROFIT ARI SES FORM THE ACTIVITY. LD. AR HAS PLACED RELIANCE IN THIS REGARD ON THE FOLLOW ING DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F ACIT VS. SURAT ART SILK MANUFACTURERS 121 ITR 124(SC) :- - CIT VS. ANDHRA PRADESH STATE ROAD TRANSPORT CORPORA TION: 159 ITR 1 (SC) - VICTORIA TECHNICAL INSTITUTE VS. CIT: 188 ITR 57 (S C) - THIAGARAJAR CHARITIES VS. ADD!. CIT: 225 ITR 1010, 1026 (SC) - ADITANAR EDUCATIONAL INSTITUTION VS. ACIT: 22 4 ITR 310 (SC) - CIT V. BAR COUNCIL OF MAHARASHTRA: 130 ITR 28 (SC) - AMERICAN HOTEL LODGING ASSOCIATION EDUCATION INSTITUTE VS. CBDT: 301 ITR 86 (SC) - CIT VS. DELHI KANNADA EDUCATION SOCIETY: 246 ITR 731(DE!.) - ACIT VS A.L.N. RAO CHARITABLE TRUST: 102 ITR 474 (KAR) - CIT V. PULLIKAL MEDICAL FOUNDATION PVT. LTD: 210 ITR 299 (KER) - UMAID CHARITABLE TRUST VS. CIT: 125 ITR 55 (R AJ) - CIT VS. SIVAKASI HINDU NADARS: 217 ITR 118 (M AD) - CIT VS. JANAKIAMMAL AYYANADAR CHARITABLE TRUS T: ITA NO. 1566 & 1567 OF 2005 (MAD) - SAMAJ KALYAN PARISHAD VS. ITO: 291 ITR(AT) 1 (DEL) THE RELEVANT PROVISIONS U/S 11 (4) / 1 1(4A) OF THE ACT ARE BEING REPRODUCED FOR A READY REFERENCE :- (4) FOR THE PURPOSES OF THIS SECTION 'PROPERTY HELD UNDER TRUST' INCLUDES BUSINESS UNDERTAKING SO HELD, AND WHERE A CLAIM IS MADE THAT THE INCOME OF ANY SUCH UNDERTAKING SHALL NOT B E INCLUDED IN THE TOTAL INCOME OF THE PERSONS IN RECEIPT THEREOF, THE ASSESSING OFFICER SHALL HAVE POWER TO DETERMINE THE INCOME OF SUCH UN DERTAKING IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT RELATING TO ASSESSMENT; AND WHERE ANY INCOME SO DETERMINED IS IN EXCESS OF THE INCOME AS SHOWN IN THE ACCOUNTS OF THE UNDERTAKING, SUCH EXCESS SHA LL BE DEEMED TO BE APPLIED TO PURPOSES OTHER THAN CHARITABLE OR RELIGI OUS PURPOSES. (4A) SUB-SECTION (1) OR SUB-SECTION (2) OR SUB-SECT ION (3) OR SUB-SECTION (3A) SHALL NOT APPLY IN RELATION TO ANY INCOME OF A TRUST OR AN ITA NO. 387/DEL/2013 65 INSTITUTION, BEING PROFITS GAINS OF BUSINESS, UNLES S THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF T HE TRUST OR, AS THE CASE MAY BE, INSTITUTION, AND SEPARATE BOOKS OF ACC OUNT ARE MAINTAINED BY SUCH TRUST OR INSTITUTION IN RESPECT OF SUCH BUSINESS. 6.7.8. WE FIND THAT THE SECTION DEALS WITH CAS ES WHERE THE BUSINESS ITSELF IS SETTLED TO TAKE CARE OF INTEREST FOR A CHARITAB LE PURPOSE. SUB SECTION (4A) OF SECTION 11 ALSO EXEMPTS INCOME TAX OF A BUSINESS CARRIED ON BY THE TRUST SO LONG AS THE BUSINESS CARRIED ON BY THE TRUST IS (A) INCIDENTAL TO THE ATTAINMENT OF MAIN OBJECTS (B) FEEDS THE CHARITABLE OBJECTS (C) SEPARATE BOOKS OF ACCOUNTS ARE MAINTAINED IN RESPECT OF THE SAME, EVEN ON FULFILLMENT OF THE AFORESAID CONDITIONS PROFIT FROM SUCH BUSINESS ARE EXEMPT U/S 11/12 OF THE ACT. THUS IT IS CLEAR THAT THE CHA RITABLE TRUST CAN CARRY ON BUSINESS AND UTILIZE ITS PROFITS THEREFROM FOR THE CHARITABLE PURPOSES BUT A CHARITABLE TRUST CANNOT HAVE ITS PURPOSE, AN ACTIVI TY THAT INVOLVES THE BUYING AND SELLING OF GOODS AND MAKING PROFITS. THE BUSIN ESS UNDERTAKING OF THE APPELLANT AS DISCUSSED ABOVE ARE THUS THE MEANS FO R EFFECTUATING A CHARITY, BUT NOT A CHARITABLE OBJECT ITSELF. WE FIND THAT I N THE CASE OF APPELLANT BEFORE US THE ACTIVITY OF MANUFACTURING AND SALE OF AYURVEDIC PREPARATIONS HAS BEEN UNDERTAKEN ONLY FOR THE PURPOSE OF EFFECTU ATING THE CHARITABLE OBJECTIVE OF PROVIDING MEDICAL RELIEF TO THE SOCI ETY AT LARGE ON A GENUINE NEED WAS FELT TO PROVIDE SUPERIOR QUALITY AYURVEDIC PREPARATIONS AT ECONOMICAL PRICES IN ORDER TO ATTAIN EFFECTIVE MEDI CAL RESULTS. ONLY BECAUSE THE ACTIVITY CARRIED ON YIELDED PROFITS A NEGATIVE INFERENCE CANNOT DRAWN THAT THE ACTIVITY WAS UNDERTAKEN WITH THE SOLE INTE NTION OF EARNING PROFITS. IT IS ALSO PERTINENT TO NOTE THAT THE TOTAL DONATIONS / VOLUNTARY CONTRIBUTIONS RECEIVED BY THE APPELLANT TRUST DURING THE ASSESSME NT YEAR UNDER CONSIDERATION AMOUNTED TO RS. 3,89,14,100/- ONLY. W HEREAS THE TOTAL REVENUE EXPENDITURE INCURRED BY THE APPELLANT TRUST IN THE ASSESSMENT YEAR UNDER CONSIDERATION FOR UNDERTAKING ITS CHARITABLE ACTIVITIES AMOUNTED TO RS. 48,54,93,383/- (EXCLUDING DEPRECIATION). FURTHER IT IS APPARENT FROM PAGE 26 ITA NO. 387/DEL/2013 66 OF THE PAPER BOOK I.E. INCOME AND EXPENDITURE ACCOU NT FOR THE YEAR ENDING 31 ST MARCH, 2009 THAT SUBSTANTIAL CAPITAL EXPENDITURE H AS ALSO BEEN INCURRED BY THE APPELLANT TRUST IN PURSUING ITS CHARITABLE A CTIVITIES. WE ALSO FIND THAT THE DONATIONS / CONTRIBUTIONS RECEIVED BY THE APPEL LANT TRUST CONSTITUTED ONLY A MINUSCULE PORTION OF THE HEAVY OUTLAY OF EXP ENDITURE INCURRED IN PURSUING THE CHARITABLE ACTIVITIES. THE MEANING OF EXPRESSION NOT FOR PURPOSE OF PROFIT IS NO LONGER RES INTEGRA THE TEST BEING WHAT IS THE PREDOMINANT OBJECT OF THE ACTIVITY WHETHER IT IS TO CARRY OUT A CHARITABLE PURPOSE OR TO EARN PROFIT ? IF THE PREDOMINANT OBJE CT IS TO CARRY OUT AS CHARITABLE PURPOSE AND NOT TO EARN PROFIT THE ORGAN IZATION WOULD NOT LOSE ITS CHARITABLE CHARACTER MERELY BECAUSE SOME PROFITS AR ISES FROM THE ACTIVITY. THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. S URAT ART SILK CLOTH MANUFACTURERS 121 ITR 124 (SC) HAS BEEN PLEASED TO OBSERVE THAT THE EXPRESSION FOR THE PURPOSE OF PROFIT IMPLIES THAT THE PREDOMINANT OBJECT SHOULD BE TO EARN PROFIT. FURTHER TO DETERMINE THE PREDOMINANT OBJECT, WHAT IS REQUIRED TO BE EXAMINED IS THE OBJECTS OF THE SO CIETY AND NOT THE QUANTUM OF SURPLUS THOUGH SUCH QUANTUM MAY BECOME R ELEVANT IN CERTAIN CIRCUMSTANCES. THE SAME RATIO HAS BEEN LAID DOWN BY THE SUPREME COURT IN THE CASE OF CIT VS. ANDHRA PRADESH STATE ROAD TRANS PORT CORPORATION 159 ITR 1 (SC), VICTORIA TECHNICAL INSTITUTE VS. CIT 18 8 ITR 57 (SC), THIAGARAJAR CHARITIES VS. ACIT 225 ITR 1010 (SC), ADITANAR EDUCA TIONAL INSTITUTION VS ACIT 224 ITR 310 (SC), CIT VS. BAR COUNCIL OF MAHAR ASHTRA 130 ITR 28(SC), AMERICAN HOTEL LODGING ASSOCIATION EDUCAITON INSTITU TE VS. CBDT 301 ITR 86 (SC), CIT VS. DELHI KANNADA EDUCATION SOCIETY 246 ITR 731 (DELHI), CIT VS. SAMAJ KALYAN PARISHAD VS. ITO 291 ITR (AT) 1 (D ELHI SB) ETC. 6.7.9. THUS WE FIND THAT THERE IS NO BAR IN THE CHARITABLE TRUST/INSTITUTION CARRYING ON BUSINESS PROVIDED THE CONDITIONS PRESCR IBED IN SECTION 11(4) / 11(4A) OF THE ACT ARE SATISFIED. THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. P. KRISHNA WARRIERS 53 ITR 176 (SC) HAS BEE N PLEASED TO HOLD WITH REFERENCE TO INCOME TAX ACT 1922 THAT IF THE TRUST CARRIED ON BUSINESS AND ITA NO. 387/DEL/2013 67 THE BUSINESS ITSELF IS HELD IN TRUST AND THE INCOME FROM SUCH BUSINESS IS APPLIED OR ACCUMULATED FOR APPLICATION FOR THE CHAR ITABLE OR RELIGIOUS PURPOSE OF THE TRUST, THE CONDITIONS PRESCRIBED IN SECTION 4(3)(I) AND FULFILLED AND THE INCOME IS EXEMPT FROM TAXATION. I N THAT CASE BEFORE THE HONBLE SUPREME COURT BUSINESS OF MAKING AND SELLIN G AYURVEDIC MEDICINES WAS SETTLED AND HELD IN TRUST AND 60% OF INCOME FRO M SUCH BUSINESS WAS APPLIED FOR CHARITABLE PURPOSE. THE AO DENIED EXEMP TION ON THE GROUND THAT PART OF THE INCOME FROM BUSINESS WAS NOT APPLI ED FOR CHARITABLE PURPOSES, THE HONBLE SUPREME COURT HELD THAT WHERE BUSINESS IS HELD FOR CHARITABLE PURPOSES THE CONDITIONS PRESCRIBED IN PR OVISO (B) TO SECTION 4(3) (I) OF THE INCOME TAX ACT IS NOT APPLICABLE AND THE ASSESSEE WAS HELD TO BE ELIGIBLE FOR EXEMPTION. THE DECISION OF DELHI HIGH COURT IN THE CASE OF HAMDARD DAWAKHANA (WAQF) 157 ITR 639 (DEL) THOUGH R ENDERED IN THE CONTEXT OF THE PRE AMENDED LAW I.E. BEFORE INSERTI ON OF SECTION 11(4A) IN TEHE 1961 ACT. BUT THE HONBLE COURT HELD THAT IT W AS IMMATERIAL HOW MONEY WHICH WAS OBTAINED BY RUNNING OF AN ACTIVITY FOR PROFIT DID NOT MAKE THE OBJECTIVE NON CHARITABLE. IF THAT MONEY WAS USE D FOR CHARITABLE PURPOSE AND NOT FOR THE CARRYING ON ANY BUSINESS AT A PROFI T, THEN THE OBJECT OF THE TRUST WAS CHARITABLE NOTWITHSTANDING THE SOURCE OF THE INCOME. THE HONBLE SUPREME COURT AGAIN IN THE CASE OF DCIT VS. THANTHI TRUST 247 ITR 785 (SC) HELD THAT THE TRUST WAS ENTITLED TO EXEMPTION WHEN THE BUSINESS OF THE TRSUT WAS INCIDENTAL TO THE ATTAINMENT OF THE OBJEC TIVES OF THE TRUST, NAMELY THE OBJECTIVES OF EDUCATION AND RELIEF TO THE POOR. THEIR LORDSHIPS OBSERVED THAT AFTER AMENDMENT OF SECTION 11(4A) IN 1992, ALL THAT IS REQUIRED FOR THE BUSINESS INCOME OF THE TRUST OR INSTITUTION TO BE E XEMPT FROM TAX IS THAT THE BUSINESS SHOULD BE INCIDENTAL TO THE ATTAINMENT OF THE OBJECTS OF THE TRUST OR INSTITUTION. THE HONBLE COURT FURTHER HELD THAT IF BUSINESS WHOSE INCOME IS UTILIZED BY THE TRUST OR THE INSTITUTION FOR THE PU RPOSES OF ACHIEVING ITS OBJECTIVES IS A BUSINESS WHICH IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR INSTITUTION. RESPECTFULL Y FOLLOWING THE RATIO LAID ITA NO. 387/DEL/2013 68 DOWN IN THE ABOVE CITED DECISIONS WE COME TO THE CO NCLUSION THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT IN COMES FROM BUSINESS UNDERTAKEN BY THE APPELLANT FULFILLS THE AFORESAID CONDITIONS IN AS MUCH AS (A) ALL THE BUSINESS, INCLUDING THE BUSINESS OF DI VYA PHARMACY, WERE INCIDENTAL TO THE ATTAINMENT OF MAIN OBJECTS: (B) P ROFITS FROM BUSINESS ARE APPLIED FOR CHARITABLE OBJECTS ; AND (C) SEPARATE B OOKS OF ACCOUNTS ARE MAINTAINED. THEY WERE THUS NOT JUSTIFIED IN HOLDIN G THAT THE CHARITABLE OBJECTS WAS SUB-SERVING THE BUSINESS, WHEREAS AS A MATTER OF FACT IT WAS THE OTHER WAY ROUND. WE FIND THAT IN THE CASE OF BO MBAY KERALEEYA SAMAJ VS. ITO (SUPRA) THE OBJECTS OF THE ASSESSEE REGISTE RED U/S 12A WAS INTER ALIA PROPOGATION OF THE KERALA SYSTEM OF AYURVEDA AND FO R THIS PURPOSE THE ASSESSEE RAN FIVE DISPENSARIES RENDERING FREE CONS ULTATION BY AYURVED PHYSICIANS. THE ASSESSEE WAS OBTAINING AYURVEDIC ME DICINES FROM AN INSTITUTION (A) AT A DISCOUNT OF 11 % WHICH WAS SOL D TO THE PATIENTS AT THE DISPENSARIES AS PER THE PRESCRIPTION OF THE DOCTORS . THE AMOUNT OF DISCOUNT WHICH THE ASSESSEE RECEIVED FROM A WAS BEING USED F OR RUNNING THE DISPENSARIES AND FOR CARRYING OUT THE OTHER OBJECTS OF THE TRUST. THE ASSESSEE ALSO LEVIED 11% SERVICE CHARGE ON THE PRIC E OF MEDICINES FROM NON-MEMBERS AND CLAIMED TO HAVE UTILIZED THE AMOUNT SO COLLECTED FOR RUNNING THE DISPENSARIES. IN THE PRECEDING ASSESSME NT YEARS, BENEFIT OF SECTION 11 WAS GIVEN TO THE ASSESSEE. THE ASSESSEE CLAIMED THE BENEFIT U/S 10(22A) WHICH WAS REFUSED BY THE ASSESSING OFFICER MAINLY ON THE BASIS THAT THE DOMINANT OBJECT OF THE TRUST WAS TO SELL MEDIC INES AND DERIVE PROFIT THEREFROM. THE FIRST APPELLATE AUTHORITY REJECTED T HE ASSESSEES APPEAL. THE TRIBUNAL HAS HOWEVER GIVEN RELIEF WITH THIS FINDING THAT THE MERE FACT THAT THE ASSESSEE TRUST HAS OBJECTS OTHER THAN MEDICAL R ELIEF WAS NOT A CONDITION ALIUNDE TO WHICH THE EXEMPTION U/S 10(22A) COULD BE DENIED TO THE ASSESSEE. THE SURPLUS DERIVED FROM RUNNING THE DISP ENSARIES WAS UTLISED FOR PHILANTHROPIC PURPOSES. CBDT CIRCULAR NO. 194/16-17 -II(A-1) MAKES IT CLEAR THAT IF A SURPLUS IS USED FOR PHILANTHROPIC PURPOSE S THE INCOME OF THE ITA NO. 387/DEL/2013 69 INSTITUTION WILL BE ELIGIBLE FOR EXEMPTION U/S 10(2 2A). WE ARE THUS OF THE VIEW THAT IN THE PRESENT CASE THE AUTHORITIES BELOW HAVE GROSSLY ERRED IN HOLDING THAT THE APPELLANTS ACTIVITIES IN RELATION TO PRODUCTION AND SALE OF AYURVEDIC PREPARATIONS ARE NOT INCIDENTAL TO ITS MA IN OBJECTIVE AS THE SAME ARE COMMERCIAL IN NATURE. LIKEWISE IN THE CASE OF B AUN FOUNDATION TRUST VS. CCIT & ANR: 251 CTR 237 (BOMBAY), THE HONBLE BOMBA Y HIGH COURT HAS BEEN PLEASED TO HOLD THAT ACTIVITY OF RUNNING CHEMI ST SHOP WITHIN THE PREMISES OF THE HOSPITAL WAS INCIDENTAL OR ANCILLAR Y TO THE DOMINANT OBJECT OF RUNNING A HOSPITAL. WE THUS HOLD THAT IN THE PRE SENT CASE THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT THE BUSINESS S ET UP AND HELD BY THE APPELLANT UNDER TRUST IS TO SUB SERVE THE PREDOMINA NT CHARITABLE OBJECTS OF PROVIDING MEDICAL RELIEF EDUCATION AND RELIEF TO PO OR. FURTHERMORE, SINCE SEPARATE BOOKS OF ACCOUNTS WERE MAINTAINED AND THE ENTIRE PROFITS ARE FOR CHARITABLE OBJECTS, THE CONDITIONS PRESCRIBED IN SE CTION 11(4A) OF THE ACT, TOO WERE FULFILLED. THE AUTHORITIES BELOW HAVE ALSO FAILED TO APPRECIATE THAT OUT OF TOTAL SALES OF RS. 168.12 CRORES OF DIVYA PH ARMACY MEDICINES OF RS. 4.2 CRORES ONLY WERE SOLD FROM THE HOSPITAL SALES C OUNTER. AS IT IS APPARENT FROM PAGE NO. 14 OF THE FIRST APPELLATE ORDER THERE IS NO LEGAL REQUIREMENT THAT APPARENT MUST SELL MEDICINES MANUFACTURED BY OTHER MANUFACTURERS, DESPITE THAT FACT THAT THE MEDICINES MANUFACTURED B Y THE APPELLANT IS FAR SUPERIOR IN QUALITY AND PRICED MUCH LESS THAN SIMI LAR PRODUCTS AVAILABLE IN THE MARKET. 6.8. IN THE RESULT THE ISSUES RAISED IN THE GR OUND NOS. 1 TO 9 ARE DECIDED IN FAVOUR OF THE ASSESSEE WITH THIS FINDING THAT THE APPELLANT WAS VERY MUCH ENTITLED TO THE CLAIMED EXEMPTION U/S 11/ 12 OF THE ITA 1961. WE THUS WHILE ALLOWING THESE GROUNDS IN FAVOUR OF THE ASSESSEE DIRECT THE AO TO ALLOW THE CLAIMED EXEMPTION. SO FAR AS GROUND NO. 1 0 IS CONCERNED IT IS REJECTED AS HAVING BECOME INFRUCTUOUS IN VIEW OF TH E ORDER DATED 3.6.2013 OF THE AO U/S 154 AND THE ISSUES RAISED IN GROUND N OS. 11 TO 14 HAVE BECOME INFRUCTUOUS IN VIEW OF OUR FINDING IN FAVOUR OF THE APPELLANT IN ITA NO. 387/DEL/2013 70 GROUND NOS. 1 TO 9 , HENCE DO NOT NEED ADJUDICATION . THE ISSUE OF CHARGING OF INTEREST UNDER SECTIONS 234A, 234B, 234D AND 244 A OF THE ACT RAISED IN GROUND NOS. 15 AND 16 ARE CONSEQUENTIAL IN NATURE. 7. CONSEQUENTLY APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27 TH .AUGUST, 2013. SD/- SD/- (J.S. REDDY) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 27 TH .AUGUST, 2013 SP / VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT