Arihant Charitable Hospital Society, Ghaziabad V. ITO, Ward(Exemption), Ghaziabad

ITA 4524/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3059 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Business income; Depreciation; Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER I.T.A. NO.4524/DEL/2015 ASSESSMENT YEAR: 2010-11 ARIHANT CHARITABLE HOSPITAL SOCIETY, 2, GAUTAM NAGAR, PATEL NAGAR-IIC, GHAZIABAD, PAN-AABTA0478K VS. INCOME TAX OFFICER, WARD (EXMP.), GHAZIABAD [APPELLANT] [RESPONDENT] ASSESSEE BY: SH. NARENDER CHHILAR, ADV RESPONDENT BY: SH. S.L. ANURAGI, SR. DR DATE OF HEARING: 18 02 2019 DATE OF PRONOUNCEMENT: 06 0 3 2019 O R D E R R.K. PANDA, A.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22 ND MARCH, 2018 OF THE CIT(A), GHAZIABAD RELATING TO ASSESSMENT YEAR 2010- 11. 2. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNAL. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE SOCIETY FILED ITS RETURN OF INCOME ON 2 ND AUGUST, 2011 DECLARING NIL INCOME. THE ASSESSMENT WAS COMPLETED ON 28 TH FEBRUARY, 2013 DETERMINING TOTAL INCOME OF RS. 7,80,855/- WHEREIN THE BENEFIT OF PROVISIONS OF SECTION 10(23C)(IIIAE) OF THE I.T. ACT WAS NOT ALLOWED ON THE GROUND THAT THE HOSPITAL IS RUN AT THE PREMISE OF DR. PRADEEP KUMAR JAIN, ITA NO.4524/DEL/2018 2 SECRETARY AND THE LOAN IS RAISED IN THE NAME OF DR. PRADEEP KUMAR JAIN, FOR PURCHASE OF MEDICAL EQUIPMENT. AFTER CONSIDERING THE OTHER FACTS OF THE CASE, THE THEN AO TREATED IT AS BUSINESS INCOME AND TAXED BY DISALLOWING THE BENEFIT OF SECTION 10(23C)(IIIAE) OF THE INCOME TAX ACT. THEREAFTER, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), GHAZIABAD WHO VIDE HIS ORDER DATED 15.5.2015 UPHELD THE ACTION OF AO THAT ASSESSEE SOCIETY IS NOT ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAE) OF THE INCOME TAX ACT. THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 17.11.2015 ALLOWED RELIEF ON THE POINT OF DEPRECIATION AND THE ISSUE REGARDING CLAIM OF BENEFIT U/S 10(23C)(IIIAE) WAS REMITTED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE AO DURING THE SET ASIDE PROCEEDINGS OBSERVED FROM THE RENEWAL CERTIFICATE FOR THE YEAR 2015-16 AND ITS APPLICATION THAT THE HOSPITAL IS A PRIVATE NURSING HOME, WHICH LEADS TO THE CONCLUSION THAT THE SOCIETY IS SHOWING ITS RECEIPTS AND EXPENDITURE AND SURPLUS IS CLAIMED EXEMPT U/S 10(23C)(IIIAE) OF THE INCOME TAX ACT, WHICH ACTUALLY PERTAINS TO THE PRIVATE HOSPITAL AND THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAE)OF THE INCOME TAX ACT. ACCORDINGLY, THE AO AGAIN REJECTED THE CLAIM OF EXEMPTION UNDER SECTION U/S 10(23C)(IIIAE)OF THE INCOME TAX ACT. 3. IN APPEAL THE LEARNED CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER:- GROUND NOS. 1 TO 6: THE APPELLANT HAS CHALLENGED THE DISALLOWANCE OF EXEMPTION U/S 10(23C)(IIIAE) CONTENDING THAT THE AO HAS WRONGLY TREATED HOSPITALS OWNERSHIP AND THE CMO ISSUING REGISTRATION RENEWAL CERTIFICATE CLASSIFIED THE HOSPITAL PRIVATE OR GOVERNMENT HOSPITAL ONLY. DURING THE COURSE OF APPELLATE PROCEEDINGS IT WAS OBSERVED THAT APPELLANT FAILED TO ESTABLISH THAT EVEN APPLICATION FOR RENEWAL OF REGISTRATION IS MADE BY M/S ARIHANT CHARTABLE HOSPITAL TRUST SOCIETY. COPY OF APPLICATION FOR RENEWAL FOR REGISTRATION HAS BEEN MADE BY M/S JAIN HOSPITAL AND RESEARCH CENTER ONLY NOT BY THE APPELLANT I.E. M/S ARIHANT CHARITABLE HOSPITAL TRUST SOCIETY. IN VIEW OF THESE FACTS APPELLANT FAILED TO SUBSTANTIATE APPELLANT SOCIETY IS ENGAGED IN CHARITABLE ACTIVITIES U/S ITA NO.4524/DEL/2018 3 10(23C)(IIIAE) HENCE THE ACTION OF THE AO IS UPHELD AND ACCORDING THESE GROUNDS OF APPEAL ARE DISMISSED. 4. AGGRIEVED WITH SUCH ORDER OF THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO PAGE 32 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH TO THE CERTIFICATE ISSUED BY CHIEF MEDICAL OFFICER, GHAZIABAD ACCORDING TO WHICH JAIN HOSPITAL AND RESEARCH CENTRE IS A UNIT OF ARIHANT CHARITABLE HOSPITAL SOCIETY HAVING ITS REGISTERED OFFICE AT 14A/636 VASUNDHARA, GHAZIABAD WHICH WAS FILED THROUGH DR. P.K. JAIN. HE ACCORDINGLY SUBMITTED THAT THIS CERTIFICATE WAS NOT PROPERLY PERUSED BY LEARNED CIT(A) AND THEREFORE HE HAS NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO VERIFY THE SAME AND ADJUDICATE THE ISSUE AFRESH. THE LEARNED DR HAS NO OBJECTION FOR THE SAME. 6. AFTER HEARING BOTH THE SIDES, I FIND THE LEARNED CIT(A) REFUSED THE CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAE) BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THAT EVEN APPLICATION FOR RENEWAL OF REGISTRATION IS MADE BY ARIHANT CHARITABLE HOSPITAL SOCIETY. ACCORDING TO HIM THE APPLICATION FOR RENEWAL OF REGISTRATION WAS MADE BY M/S JAIN HOSPITAL ONLY AND NOT BY ASSESSEE I.E. M/S ARIHANT CHARITABLE HOSPITAL SOCIETY. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT JAIN HOSPITAL AND RESEARCH CENTRE IS A UNIT OF ARIHANT CHARITABLE HOSPITAL SOCIETY WHICH WAS OVERLOOKED BY THE LEARNED CIT(A). THEREFORE, I DEEM IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO VERIFY THE SAME AND DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.4524/DEL/2018 4 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.03.2019. SD/ - [R.K. PANDA] ACCOUNTANT MEMBER DATED: 06.03.2019 SH ITA NO.4524/DEL/2018 5 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR SL. NO. PARTICULARS DATE 1. DATE OF DICTATION 28 .02.2019 DATE ON WHICH THE DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR. PS/PS 5. KEPT FOR PRONOUNCEMENT ON 6. FINAL ORDER RECEIVED AFTER PRONOUNCEMENT 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILES GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR 10. DATE OF DISPATCH OF ORDER 11. DATE OF UPLOADING 06 .0 3 .2019