DCIT (Exemption), Ghaziabad V. M/s. Divya Yog Mandir Trust, Haridwar

ITA 779/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6645 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 10-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: ROHTI JAIN
• Keywords: Business income; Depreciation; Rectification of order; Charitable institution; Additional evidence; Benefit of exemption; Revenue expenditure; Capital expenditure; TDS
• Section: 43B; 143(3); 12A; 12AA; 250; 12; 154; 11

Judgement Text

ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT M EMBER ITA NO. 779/DEL/2017 ASSESSMENT YEAR: 2013-14 DCIT(EXEMPTIONS), ROOM NO. 105, 1 ST FLOOR, CGO-II, KAMLA NEHRU NAGAR, GHAZIABAD. VS DIVYA YOG MANDIR TRUST, KRIPALU BAGH, KANKHAL, HARIDWAR. (PAN: AAATD1114E) APPELLANT RESPONDENT DEPARTMENT BY: MS NIDHI SRIVASTAVA, C.I.T. DR ASSESSEE BY: SHRI ROHTI JAIN, ADVOCAT E DATE OF HEARING: 29.07.2019 DATE OF PRONOUNCEMENT: 31.07.2019 O R D E R PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT A GAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), DEHRADUN } CIT (A)} VIDE ORDER DATED 26. 10.2016 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TRUST FURNISHED ITS RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (HEREI NAFTER CALLED 'THE ACT'). THE CASE WAS SELECTED FOR SCRUTINY UND ER CASS ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 2 GUIDELINES AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. THE ASSESSEE TRUST WAS REGISTERED U/S 12A(A) OF THE ACT VIDE ORDER DATED 27.03.1995 AND SINCE THEN, THE ASSESSEE HAS B EEN CLAIMING EXEMPTION IN TERMS OF SECTION 11, 12A AND 12AA OF T HE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER (AO) NOTED THAT THE ASSESSEE TRUST WAS ALLE GEDLY ENGAGED IN THE BUSINESS ACTIVITIES THROUGH THE FOLLOWING BU SINESS UNDERTAKINGS:- 1. M/S DIVYA PHARMACY - MANUFACTURING AYURVEDIC MEDICINES 2. M/S YOG SANDESH - MONTHLY MAGAZINE DEDICATED TO YOG AND AYURVED 3. M/S DIVYA YOG SADHNA - CDS AND AUDIO CASSETTE S TO TEACH YOG AND PARANAYAM AND VEDIC AND PATRIOTIC SONGS (TR ADING) 4. M/S DIVYAPRAKASHAN - BOOKS RELATED TO YOG AND AYURVED (TRADING) 5. M/S DIVYA NURSERY - GOARK, VERMIN COMPOST AND AYURVEDIC PLANTS (TRADING) 6. PATANJALI YOGPEETH AUSHDHALAYA - RETAIL TRADI NG OF MEDICINES 2.1 THE ASSESSING OFFICER OBSERVED THAT THE GROSS RECEIPTS FROM THESE SIX UNDERTAKING AMOUNTED TO RS. 3,39,80, 67,065/- AND THE CONSOLIDATED PROFIT OF THESE UNDERTAKINGS A MOUNTED TO ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 3 RS. 97,82,19,889/-. THE ASSESSING OFFICER ALSO OBS ERVED THAT BESIDES THE ABOVE, THE ASSESSEE HAD A GROSS RECEIPT OF RS. 20,71,87,624/- FROM ITS MAIN TRUST AND THE ASSESSEE HAD FURTHER CLAIMED INTER-TRUST DONATIONS TO THE TUNE OF RS. 68 ,02,67,317/- TO VARIOUS ENTITIES, RESULTING IN A NEGATIVE NET INCOM E OF RS. 71,22,53,478/- AFTER INCURRING A TOTAL EXPENDITURE OF RS. 91,94,41,102/-. THE ASSESSING OFFICER ALSO OBSERVE D THAT THE TRUST HAD PURCHASED MATERIAL FROM ITS UNDERTAKINGS AND HAD SOLD IT THROUGH THE DEPARTMENT OF MEDICINES. THE ASSESS ING OFFICER WENT ON TO OBSERVE THAT THE TRUST WAS ONLY FOR NAME SAKE AND THAT THE ASSESSEE WAS IN FACT ENGAGED IN CARRYING O UT BUSINESS ACTIVITIES IN THE GARB OF TRUST. THE ASSESSING OFF ICER WAS OF THE OPINION THAT THE MAIN PURPOSE OF THE TRUST WAS TO A VOID TAX UNDER THE GARB OF CHARITABLE ACTIVITIES. THE ASSES SING OFFICER ALSO NOTED THAT THE CLAIM OF THE ASSESSEE BEING A CHARIT ABLE TRUST WAS NOT ACCEPTED BY THE ASSESSING OFFICER IN ASSESSMENT YEARS 2009- 10, 2010-11, 2011-12 AND 2012-13 AND SUCH DENIAL OF EXEMPTION WAS UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (A ) BUT THE ITAT HAD REVERSED IT. THE ASSESSING OFFICER ALSO N OTED THAT AGAINST THE ORDER OF THE ITAT, THE DEPARTMENT HAD A PPROACHED THE HONBLE HIGH COURT OF UTTARAKHAND. THEREAFTER, TH E ASSESSING ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 4 OFFICER PROCEEDED TO TAX THE SURPLUS OF THE ASSESSE E AS NET PROFIT FROM THE BUSINESS UNDERTAKING AND AFTER DENYING THE ASSESSEES CLAIM OF EXEMPTION U/S 11, PROCEEDED TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE AT RS. 19,88,53,210/-. WHIL E RECOMPUTING THIS INCOME, THE ASSESSING OFFICER ALSO MADE DISALL OWANCE U/S 43B OF THE ACT TO THE TUNE OF RS. 1,18,722/-, MADE ADDITION ON ACCOUNT OF INTEREST ON TDS TO THE TUNE OF RS. 15,5 84/- AND ALSO MADE A DISALLOWANCE ON ACCOUNT OF PF AND ESI CONTRI BUTION MADE AFTER DUE DATE TO THE TUNE OF RS. 3,70,331/-. 2.2 THE ASSESSEES APPEAL BEFORE THE LD. COMMISSI ONER OF INCOME TAX (A) WAS ALLOWED WHEREIN THE LD. COMMISSI ONER OF INCOME TAX (A) DULY NOTED THAT THE ITAT, IN ORDER F OR ASSESSMENT YEAR 2009-10 IN ITA 387/DEL/2013, HAD HELD THAT THE ASSESSEE TRUST WAS ENGAGED IN PROVIDING MEDICAL RELIEF, IMPA RTING EDUCATION AND RELIEF TO THE POOR AND THAT ITS BUSIN ESS UNDERTAKINGS SUB-SERVED THE CHARITABLE OBJECTIVE OF PROVIDING MEDICAL RELIEF, EDUCATION AND RELIEF TO THE POOR. THE LD. COMMISSIONER OF INCOME TAX (A) ALSO NOTED THAT THE ASSESSEE TRUST WAS EMPOWERED VIDE CLAUSE (O) OF ITS OBJECTIV ES TO ACCEPT VOLUNTARY DONATIONS AND THAT DONATIONS TO PATAJALI YOGPEETH TRUST AMOUNTED TO APPLICATION OF INCOME FOR THE PUR POSE OF ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 5 MEDICAL RELIEF AND THAT YOGA WAS A SYSTEM OF THERAP EUTIC VALUE. THE LD. COMMISSIONER OF INCOME TAX (A) WENT TO HOL D THAT IN VIEW OF THE FINDINGS OF THE ITAT IN ASSESSMENT YEAR 2009-10, THE ASSESSEE WAS NOT COVERED BY THE 5 TH LIMB OF SECTION 2(15) AND WAS, THEREFORE, ENTITLED TO THE BENEFIT OF EXEMPTION U/S 11 AND 12 OF THE ACT. THE ASSESSING OFFICER WAS ACCORDINGLY DIR ECTED TO EXTEND THE EXEMPTION U/S 11 AND 12 TO THE ASSESSEE AS PER THE OBSERVATIONS OF THE ITAT IN ASSESSEES OWN CASE AS AFOREMENTIONED. 2.3 AGGRIEVED WITH THIS FINDING OF THE LD. COMMISS IONER OF INCOME TAX (A), THE REVENUE IS NOW IN APPEAL BEFORE THIS TRIBUNAL AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ASSESSEE AND DELETING THE ADDITION MADE BY THE A.O. U/S 43B OF RS. 1,18,722/-. 2. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF INTEREST ON TDS OF RS. 15,584 /-. 3. LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERR ED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ASSESSEE REGARDING PF & EST CONTRIBUTION AFTER DUE DATE OF RS. 3,70,331/-. 4. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 6 ASSESSEE ON THE ISSUE OF DONATION AND OTHER INCOME OF RS. 13,95,69,790/-. 5. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BE CANCELLED AND THE ORDER OF THE A.O BE RESTORED. 6. APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 3.0 AT THE OUTSET, THE LD. AR SUBMITTED THAT THIS APPEAL WAS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST T HE REVENUE BY THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEARS 2009 -10, 2010-11 AND 2011-12. THE COPIES OF THE SAID ORDERS WERE PL ACED ON RECORD. THE LD. AR ALSO SUBMITTED THAT THE REVENUE S APPEAL AGAINST THE ORDER OF THE ITAT IN ASSESSMENT YEAR 20 09-10 HAD BEEN DISMISSED BY THE HONBLE HIGH COURT OF UTTARAK HAND IN ITA NO. 05/2014. A COPY OF THE SAID ORDER OF THE HONB LE HIGH COURT OF UTTARAKHAND WAS ALSO PLACED ON RECORD. THE LD. AR DREW OUR ATTENTION TO THE RELEVANT PARAGRAPHS IN THESE ORDER S AND SUBMITTED THAT THE FACTS IN THIS YEAR WERE IDENTICA L TO THE EARLIER ASSESSMENT YEARS 2009-10, 2010-11 AND 2011-12, A FA CT WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER ALSO. T HE LD. AR SUBMITTED THAT GROUND NO. 4 OF THE DEPARTMENTS APP EAL WAS THEREFORE COVERED BY THE AFORESAID ORDERS OF THE TR IBUNAL AND ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 7 UTTARAKHAND HIGH COURT IN FAVOUR OF THE ASSESSEE AN D AGAINST THE REVENUE. 3.1 WITH RESPECT TO GROUND NOS. 1, 2 AND 3 RAISED BY THE REVENUE REGARDING DELETION OF DISALLOWANCE U/S 43B OF THE ACT, INTEREST ON TDS AND DISALLOWANCE PERTAINING TO PF A ND ESI CONTRIBUTION, THE LD. AR FILED COPY OF COMPUTATION OF INCOME FOR THE RELEVANT ASSESSMENT YEAR AND POINTED OUT THAT T HE ASSESSEE HAD ITSELF DISALLOWED THESE ITEMS WHILE COMPUTING I TS INCOME AND, THEREFORE, THE ASSESSING OFFICER HAD INCORRECTLY MA DE ADDITIONS ON THIS ACCOUNT. 4.0 IN RESPONSE, THE LD. C.I.T. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. HOWEVER, THE LD. C.I.T. DR FAIRLY ACCEPTED THAT THE ISSUE AS RAISED IN GROUND NO. 4 BY THE DEP ARTMENT STOOD COVERED AGAINST THE DEPARTMENT BY THE ORDER OF THE ITAT IN ASSESSMENT YEARS 2009-10 TO 2011-12 AS WELL AS THE ORDER OF THE HONBLE UTTARAKHAND HIGH COURT FOR ASSESSMENT YEAR 2009-10. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE AGREE WITH THE CONTENTIONS OF THE LD. AR THAT THE ASSESSEES CASE IS COVERED IN I TS FAVOUR BY THE ORDERS OF THE COORDINATE BENCHES OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR THREE DIFFERENT ASSESSMENT YEARS. WE WOULD LIKE TO ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 8 MAKE A REFERENCE TO THE TRIBUNALS ORDER FOR ASSESS MENT YEAR 2009-10 WHEREIN DETAILED FINDINGS HAVE BEEN RECORDE D BY THE TRIBUNAL. THIS ORDER WAS UPHELD BY THE HONBLE UTT ARAKHAND HIGH COURT IN ITA NO. 05/2014 VIDE ORDER DATED 27 TH FEBRUARY, 2019. THE RELEVANT PARAGRAPHS OF THE TRIBUNALS OR DER IN ASSESSMENT YEAR 2009-10 REPORTED IN (2015) 153 ITR 368 (DELHI TRIBUNAL) ARE REPRODUCED HERE IN UNDER FOR A READY REFERENCE:- 6.1 WE, THEREFORE, PREFER TO ADJUDICATE UPON THE FIRST ISSUE AS TO WHETHER THE OBJECTS AND ACTIVITIES OF THE APPELL ANT TRUST DID FALL WITHIN THE PURVIEW OF PROVIDING 'MEDICAL RELIE F', 'IMPARTING EDUCATION' OR 'RELIEF TO THE POOR'. THE OBJECTS OF THE APPELLANT TRUST ARE AVAILABLE AT PAGE 1-7 OF THE PAPER BOOK D ECLARING THAT THE APPELLANT TRUST WAS SET UP AS CHARITABLE TRUST WITH THE FOLLOWING PREDOMINANT OBJECTIVES: (1) PROVIDING MEDICAL RELIEF THROUGH YOGA, NATUROPATHY, 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 DEVELOPMENT ACTIVITIES IN THE FIELD OF YOGA, AYURVED, VEDIC LITERATURE TO FURTHER THE CAUSE OF ALIENATING ALL KINDS OF DISEASES AND PROVIDE MED ICAL RELIEF TO THE PUBLIC AT LARGE. 6.2 THE FIRST ISSUE BEFORE US TO BE ADJUDICATED UPON I S AS TO WHETHER THE APPELLANT TRUST FALL WITHIN THE PURV IEW OF PROVIDING 'MEDICAL RELIEF', 'IMPARTING EDUCATION' O R 'RELIEF TO THE POOR' ? ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 9 6.3 IN THE PREVIOUS PARAGRAPHS WE HAVE DISCUSSED THE APPROACH OF THE AUTHORITIES BELOW ON THE ABOVE ISSU E AS WELL AS SUBMISSIONS OF THE PARTIES IN THIS REGARD. THE CONTENTION OF THE APPELLANT REMAINED THAT THEY ARE PROVIDING MEDICAL 'RELIEF THROUGH YOGA, NATUROPATHY , ACUPRESSURE AND AYURVED FOR THE PURPOSE OF ALLEVIAT ING ALL KINDS OF DISEASES ; THEY ARE IMPARTING EDUCATION IN THE FIELD OF YOGA, PROVIDING RELIEF TO THE POOR AND UND ERTAKING 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 TILL DATE. IT WAS ALSO CONTENDED THAT THE APPELLANT IN ACCORDANCE WITH THE APPROVED OBJECTIVES HAS BEEN CONSISTENTLY PURSUING ITS CHARI TABLE ACTIVITIES FOR THE LAST 18 YEARS INCLUDING THE ASSE SSMENT YEAR UNDER CONSIDERATION AND THE APPELLANT HAS ALWA YS BEEN ALLOWED EXEMPTION U/S 11/ 12 INCLUDING IN VARI OUS ASSESSMENT COMPLETED U/S 143(3) OF THE ACT. IT WAS SUBMITTED THAT THERE HAS BEEN NO CHANGE IN FACT DUR ING THE YEAR UNDER CONSIDERATION. BEFORE PROCEEDING ON THE ADJUDICATION OF THE ISSUE AS TO WHETHER 'YOGA' AS A SYSTEM PROVIDE ANY 'MEDICAL RELIEF' WHICH REMAINED THE MAI N OBJECTION OF THE REVENUE, WE WOULD LIKE TO POINT OU T 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 AVAM ANUSANDHAN SANSTHAN AT HARIDWAR. THIS FACT HAS BEEN CONSISTENTLY ACCEPTED BY THE REV ENUE IN THE ASSESSMENT YEARS 2004-05 TO 2008-09 VIDE VARIOU S ASSESSMENTS FRAMED U/S 143(3). THERE IS ALSO NO CHA NGE IN THE FACTS OF THIS ASPECT OF THE MATTER. THE REVE NUE AUTHORITIES ARE NOT DISPUTING THE FACT THAT AYURVED IC TREATMENT IS GIVEN BY THE ASSESSEE. THIS IS MEDICAL RELIEF. YOGA IN THIS CASE IS USED BY THE ASSESSEE IN ADDITI ON TO MEDICAL RELIEF THROUGH NATUROPATH AND AYURVEDA. WE FIND ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 10 THAT THERE IS ALSO NO DISPUTE THAT THE APPELLANT HA S ESTABLISHED (A) DEPARTMENT OF MEDICAL SCIENCE AND FACILITIES KNOWN AS PATANJALI HOSPITAL, (2) PATANJA LI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN (3) PATANJALI CHIKITSALAY AND (4) R & D YOGA AND AYURVE DA. (THE APPELLANT HAS ALSO SET UP (1) DIVYA NURSERY (D EALING IN CULTIVATION, RESTORATION AND RESEARCH IN RARE ME DICINAL PLANTS /HERBS AND SELLING THESE PLANTS);(2) DIVYA PHARMACY (AYURVEDIC PHARMACEUTICAL UNIT ENGAGED IN MANUFACTURING OF AYURVEDIC MEDICINES AS PER TRADITI ON OF SAGES AND MODERN SCIENCE); AND (3) DIVYA PRAKASHAN, ETC. (IT DEALS WITH PUBLICATION AND DISTRIBUTION OF DIFF ERENT TYPES OF LITERATURE RELATING TO YOGA AND AYURVED) DEPARTMENT OF MEDICAL SCIENCE AND FACILITIES COMMON LY KNOWN AS PATANJALI HOSPITALRUN BY THE APPELLANT TRU ST IS HAVING VARIOUS DEPARTMENTS INCLUDING DENTAL DEPARTM ENT, RADIOLOGY DEPARTMENT, SURGICAL DEPARTMENT, OPHTHALM OLOGY DEPARTMENT ETC. THE CLAIM OF THE APPELLANT 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 AROUND 2,39,000 PATIENTS WERE TREATE D DURING THE YEAR UNDER CONSIDERATION THE HOSPITAL AL SO HAS ITS PRESENCE IN RANCHI AND PATNA WHERE MORE THAN 60 ,000 AND 75,000 PATIENTS RESPECTIVELY ARE TREATED EVERY YEAR, HAS NOT BEEN DISPUTED BY THE REVENUE. PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN I.E. AN AYURVEDIC COLLEGE HAS BEEN SET UP, WHICH WAS UNDER CONSTRUCTION IN THE YEAR UNDER CONSIDERAT ION AND IT HAS STARTED OPERATIONS W.E.F. 20.07.2009, FO R IMPARTING EDUCATION IN THE FIELD OF AYURVED. IT HAS BEEN SET UP AT HARIDWAR AND WAS APPROVED AND DULY RECOGNIZED ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 11 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 RECOGNITION AND GRANTING PERMISSION FOR ESTABLISHME NT OF MEDICAL COLLEGE, THE DEPARTMENT OF AYUSH A BODY SET UP BY THE MINISTRY OF HEALTH & FAMILY WELFARE, GOVT, O F INDIA MANDATES FULFILMENT OF CERTAIN MINIMUM STANDARDS AN D REQUIREMENTS AS PRESCRIBED UNDER THE INDIAN MEDICAL CENTRAL COUNCIL ACT 1970 (IMCC ACT). IT IS ONLY ON FULFILLMENT OF THESE CONDITIONS PRESCRIBED IN THE I MCC ACT PERMISSION IS GRANTED TO ESTABLISH AND RUN AYURVEDI C MEDICAL COLLEGES. IT IS PERTINENT TO STATE HERE THA T ONE OF THE PRIMARY CONDITIONS LAID DOWN IN THE IMCC ACT FO R THE GRANT OF RECOGNITION IS THE EXISTENCE OF A MEDICAL HOSPITAL ATTACHED TO THE AYURVEDIC COLLEGE WITH THE PRESCRIB ED BED STRENGTH ALONGWITH OUTDOOR PATIENT DEPARTMENT (OPD) AND INDOOR PATIENT DEPARTMENT (IPD) FACILITIES. THUS TH ERE IS NO DOUBT IN THE PRESENT CASE BEFORE US THAT ON FULFILL MENT OF ALL THE MANDATORY REQUIREMENTS THE AYURVEDIC MEDICA L COLLEGE SET UP BY THE APPELLANT HAS BEEN DULY RECOG NIZED BY THE AYUSH. IT IS ALSO IMPERATIVE TO STATE HERE T HAT THE CENTRAL COUNCIL OF INDIAN MEDICINE UNDER AYUSH COND UCTS REGULAR INSPECTION OF THE AYURVEDIC COLLEGES TO VER IFY THAT THE PRESCRIBED MINIMUM STANDARDS ARE COMPLIED WITH BY SUCH COLLEGES AND IF THE PRESCRIBED STANDARDS ARE N OT COMPLIED WITH BY THE MEDICAL COLLEGES, THE PERMISSION/RECOGNITION IS EITHER REJECTED OR REVOKE D BY THE AYUSH. ALL THESE MATERIAL AND UNDISPUTED FACTS LEAD US TO A DEFINITE CONCLUSION THAT IT HAS BEEN UNDISPUTED T HAT APPELLANT HAS BEEN PROVIDING 'MEDICAL RELIEF THROUG H AYURVEDA AND NATUROPATHY SYSTEM OF MEDICINE IN ITS ABOVE STATED HOSPITALS AND HAS ALSO SET UP AN AYURV EDIC MEDICAL COLLEGE (PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN) AFFILIATED BY UTTARAKHAND TECHNICAL UNIVERSITY AND RECOGNIZED BY AYUSH TO IMP ART EDUCATION IN THE FIELD OF AYURVEDA AND NATUROPATHY ETC. AS ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 12 DISCUSSED ABOVE IT IS ALSO REMAINED AN UNDISPUTED F ACT THAT SINCE ITS INCEPTION IN THE YEAR 1995 THE 'MEDI CAL RELIEF PROVIDED THROUGH PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN' AT HARIDWAR, HAS BEEN CONSISTENTLY ACCEPTED BY THE REVENUE IN THE ASSESSM ENT YEARS 2004-05 TO 2008-09 AS ENGAGED IN THE ACTIVITY OF PROVIDING 'MEDICAL RELIEF' IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT. SINCE THERE IS NO CHANGE IN THIS OBJECT OF THE APPELLANT TRUST, AND THE RELATED FACTS DURING T HE YEAR UNDER CONSIDERATION, WE ARE OF THE VIEW THAT RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG (SUPRA) AND OTHERS THE REVENUE W AS 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 CHANGE IN THE OBJEC TS OF THE TRUST DURING THE YEAR. IN VIEW OF THESE DISCUSSIONS WE ARE IN A DEFINITE POSITION TO HOLD THAT THE APPELLANT W AS ENTITLED FOR THE EXEMPTION U/S 11/12 OF THE ACT ON THE BASIS THAT THE APPELLANT WAS ENGAGED IN THE ACTIVIT Y OF PROVIDING 'MEDICAL RELIEF' THROUGH AYURVEDA, NATURO PATHY ETC. DURING THE YEAR UNDER CONSIDERATION I.E. ASSTT . YEAR 2009-10 AND THE AUTHORITIES BELOW WERE NOT JUSTIFIE D IN REFUSING THE CLAIMED EXEMPTION TO THE ASSESSEE IN T HIS 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 AB OVE SUBMISSIONS MADE BY THE PARTIES WE FIND THAT IN THE CLINICAL ESTABLISHMENT (REGISTRATION AND REGULATION ) ACT 2010, THE LEGISLATURE HAS DEFINED 'RECOGNIZED SYSTE M OF ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 13 MEDICINE' IN SECTION 2 (H) OF THE SAID ACT. AS PER THIS DEFINITION '(H) RECOGNIZED SYSTEM OF MEDICINE MEANS ALLOPATHY, YOGA, NATUROPATHY, AYURVED, HOMEOPATHY, SIDDHA AND UNANI SYSTEM OF MEDICINES OR ANY OTHER SYSTEM OF MEDICINE AS MAY BE RECOGNIZED BY THE CENT RAL GOVERNMENT'. THIS BILL WAS INTRODUCED BY THE CENTRA L GOVERNMENT IN THE YEAR 2007 TO PROVIDE FOR REGISTRA TION AND REGULATION OF ALL CLINICAL ESTABLISHMENT IN THE COUNTRY WITH A VIEW TO PRESCRIBE THE MINIMUM STANDARDS OF FACILITIES AND SERVICES 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 THE STANDING COMMITTEE OF HUMAN RESOURCES DEVELOPMENT DEPARTMENT (HRD) MADE FOR MAKING THE YOGA A COMPULSORY FOR ALL SCHOOL GOING CHILDREN IN THE COUNTRY, HAS ALSO BEEN MADE WHEREIN IT HAS BEEN PROVIDED THAT THE YOGA IS ONE O F THE CORE COMPONENTS OF HEALTH AND PHYSICAL EDUCATION. F ULL COPY OF THE REPORT HAS BEEN MADE AVAILABLE AT PAGE NOS. 177 TO 192 OF THE PAPER BOOK AND PARA NO.9.8 AT PAG E NO. 181 THEREOF IS RELEVANT FOR THE PURPOSE. IT READS A S UNDER : '9.8 THE COMMITTEE IS OF THE OPINION THAT YOGA IS O NE STREAM OF EDUCATION, WHICH WILL MAKE A PERMANENT AN D POSITIVE IMPACT ON A STUDENTS LIFE. YOGA HAS BEEN G AINING IMMENSE POPULARITY DUE TO THE SHORT TERM AS WELL AS LONG TERM BENEFITS THAT IT PROVIDES. YOGA HELPS ONE TO A CHIEVE ALL ROUND DEVELOPMENT. CONSIDERING THE IMMENSE POTE NTIAL OF THIS ANCIENT KNOWLEDGE OF INDIA, THE COMMITTEE RECOMMENDS THAT YOGA BE MADE COMPULSORY FOR ALL SCH OOL GOING CHILDREN IN THE COUNTRY. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 14 ACTION TAKEN THE NATIONAL CURRICULUM FRAMEWORK IN SCHOOL EDUCATI ON - 2005 PREPARED BY THE NATIONAL COUNCIL OF EDUCATION RESEARCH AND TRAINING PROVIDES FOR HEALTH AND PHYSI CAL EDUCATION AS A COMPULSORY SUBJECT FROM PRIMARY TO SECONDARY STAGE AS AN OPTIONAL SUBJECT AT HIGHER SECONDARY STAGE. YOGA IS ONE OF THE CORE COMPONENTS OF HEALTH AND PHYSICAL EDUCATION.' 6.4.3 ON THE CONTRARY THE LD. CIT(A) FOR THE PURPOSE OF DETERMINING WHETHER YOGA CAN BE CLASSIFIED AS A FOR M OF MEDICAL RELIEF HAS PLACED RELIANCE ON THE DETERMINA TION OF THE TERM 'MEDICAL' AS PROVIDED IN MAJOR LAW LAXICON BY P RAMANATHA AIYAR (2010 EDITION) AS PER WHICH 'PERTAI NING 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 WHIC H 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 APPEL LANT ORDER HAS ALSO SELECTIVELY QUOTED FROM THE WEBSITE OF DEP ARTMENT OF AYUSH (MINISTRY OF HEALTH AND FAMILY WELFARE) TO COME THIS CONCLUSION THAT YOGA IS A DISCIPLINE APPEARS T O ADDRESS MORE THE ISSUES OF SPIRITUAL WELL BEING RAT HER ADDRESS THE PROBLEMS ASSOCIATED WITH THE MORE WORLD LY 'MEDICAL RELIEF' AND EXERCISES FORMING PART OF THE YOGA SYSTEM WOULD AT THE BEST HAVE INDIRECT SALUTARY BEN EFIT ON THE HEALTH OF AN INDIVIDUAL. HE HELD THAT YOGA IS A SPIRITUAL SYSTEM MORE THAN A CURATIVE SYSTEM FOR ALLEVIATING OR EVEN CURING VARIOUS AILMENTS. IT IS NOT SEEN AS A SPECIF IC REMEDY FOR PHYSICAL AILMENT AT PAR WITH MEDICAL SYSTEM LIK E ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 15 ALLOPATHY OR EVEN AYURVEDA. IN THIS REGARD THE LD. CIT(A) HAS PLACED RELIANCE ON THE DECISIONS IN THE CASES O F KASYAP VEDA RESEARCH FOUNDATION (SUPRA) AND RAJNEES H FOUNDATION (SUPRA). A COMPLETE INFORMATION ON YOGA AVAILABLE ON THE WEBSITE OF THE AYUSH I.E., 'HTTPP://WWW.INDIAMEDICINE.NIC.IN' HAS BEEN MADE AVAILABLE BY THE ASSESSEE AT PAGE NOS. 639 TO 655 O F THE SUPPLEMENTARY PAPER BOOK NO. 1 AND AT PAGE NO. 757 TO 793 OF THE SUPPLEMENTARY PAPER BOOK NO. 2 FILED BY THE ASSESSEE. THE LD. AR HAS DRAWN OUR ATTENTION ALSO O N THE FOLLOWING INFORMATION ON YOGA AVAILABLE ON THE AFOR ESAID WEBSITE : '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 YOGIS PRESENTED RATIONA L INTERPRETATION OF THEIR EXPERIENCES OF YOGA AND BRO UGHT ABOUT A PRACTICAL AND SCIENTIFICALLY SOUND METHOD W ITHIN EVERYONE'S REACH. YOGA TODAY, IS NO LONGER RESTRICT ED TO HERMITS, SAINTS, AND SAGES; IT HAS ENTERED 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 O F VARIOUS BRANCHES OF MEDICINE INCLUDING MODERN MEDIC AL SCIENCES ARE REALISING THE ROLE OF THESE TECHNIQUES IN THE PREVENTION AND MITIGATION OF DISEASES AND PROMOTION OF HEALTH. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 16 YOGA IS ONE OF THE SIX SYSTEMS OF VEDIC PHILOSOPHY. MAHARISHI PATANJALI, RIGHTLY CALLED 'THE FATHER OF YOGA' COMPILED AND REFINED VARIOUS ASPECTS OF YOGA SYSTEMATICALLY IN HIS 'YOGA SUTRAS' (APHORISMS). HE ADVOCATED THE EIGHT FOLDS PATH OF YOGA, POPULARLY K NOWN AS 'ASHTANGA YOGA' FOR ALL-ROUND DEVELOPMENT OF HUM AN BEINGS. THEY ARE:- YAMA, NIYAMA, ASANA, PRANAYAMA, PRATYAHARA, DHARANA, DHYANA AND SAMADHI. THESE COMPONENTS ADVOCATE CERTAIN RESTRAINTS AND OBSERVAN CES, PHYSICAL DISCIPLINE, BREATH REGULATIONS, RESTRAININ G THE SENSE ORGANS, CONTEMPLATION, MEDITATION AND SAMADHI . THESE STEPS ARE BELIEVED TO HAVE A POTENTIAL FOR IMPROVEMENT OF PHYSICAL HEALTH BY ENHANCING CIRCULA TION OF OXYGENATED BLOOD IN THE BODY, RETRAINING THE SENSE ORGANS THEREBY INDUCING TRANQUILITY AND SERENITY OF MIND. THE PRACTICE OF YOGA PREVENTS PSYCHOSOMATIC DISORDERS A ND IMPROVES AN INDIVIDUALS RESISTANCE AND ABILITY TO E NDURE STRESSFUL SITUATIONS.' (EMPHASIS SUPPLIED) 6.4.4 IN THE ABOVE SAID INFORMATION IT HAS BEEN OBSERVED THAT EXPERTS OF VARIOUS BRANCHES OF MEDICINE INCLUD ING MODERN MEDICAL SCIENCES ARE REALIZING THE ROLE OF T HESE TECHNIQUES IN THE PREVENTION AND MITIGATION OF DISE ASES AND PROMOTION OF HEALTH. IT HAS BEEN FURTHER OBSERV ED THAT THESE STEPS ARE BELIEVED TO HAVE A POTENTIAL FOR IMPROVEMENT OF PHYSICAL HEALTH BY ENHANCING CIRCULA TION OF OXYGENATED BLOOD IN THE BODY, RETRAINING THE SENSE ORGANS THEREBY INDUCING TRANQUILITY AND SERENITY OF MIND ; THE PRACTICE OF YOGA PREVENTS PSYCHOSOMATIC DISORDERS A ND IMPROVES AN INDIVIDUAL'S RESISTANCE AND ABILITY TO ENDURE STRESSFUL SITUATIONS. EVEN IN THE EXTRACTS OF THE I NFORMATION AVAILABLE ON THE WEBSITE OF AYUSH REPRODUCED BY THE LD. CIT(A) AT PAGE 15 OF THE FIRST APPELLATE ORDER IN T HE DEFINITION OF YOGA IT HAS BEEN STATED THAT YOGA IS A DISCIPLINE TO IMPROVE OR DEVELOP ONE'S INHERENT POW ER IN A ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 17 BALANCED MANNER. IT OFFERS THE MEANS TO ATTAIN COMP LETE SELF-REALISATION. AS PER LITERAL MEANING OF SANSKRI T WORD 'YOKE' IT HAS BEEN NOTED THAT THE YOGA CAN BE DEFIN ED AS A MEANS OF UNITING THE INDIVIDUAL SPIRIT WITH THE UNI VERSAL SPIRIT OF GOD AND ACCORDING TO MAHARISHI PATANJALI, YOGA IS THE SUPPRESSION OF MEDICATIONS OF THE MIND. THE INFORMATION GIVEN UNDER THE HEAD 'YOGA AS SOUL THER APY' HAS ALSO BEEN EXTRACTED BY THE LD. CIT(A) AS PER WH ICH ALL PARTS OF YOGA (JAPA, KARMA, BHAKTI) HAVE HEALING PO TENTIAL TO SHELTER OUT THE EFFECTS OF PAINS. IT HAS BEEN FU RTHER NOTED THEREIN THAT ONE ESPECIALLY NEEDS PROPER GUIDANCE F ROM AN ACCOMPLISHED EXPONENT, WHO HAS ALREADY TREATED THE SAME TRACK TO REACH THE ULTIMATE GOAL. IF WE READ T HESE INFORMATIONS AVAILABLE ON THE WEBSITE OF AYUSH IN I TS TOTALITY WE FIND IT DIFFICULT TO CONCUR WITH THE VI EW OF LD. CIT(A) THAT YOGA AS A SYSTEM DOES NOT FIT INTO THE DEFINITION OF MEDICAL RELIEF AS MENTIONED IN SECTION 2(15) OF THE ACT. THE VERY OBSERVATION OF LD. CIT(A) IN THIS REGARD A T PAGE NO. 16 OF -THE FIRST APPELLATE ORDER THAT YOGA IS A DISCIPLINE APPEARS TO ADDRESS MORE THE ISSUES OF SPIRITUAL WEL L BEING RATHER THAN ADDRESS THE PROBLEMS ASSOCIATED WITH TH E MORE, WORLDLY 'MEDICAL RELIEF' ITSELF 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 BE ING. THUS HE HAS NOT COMPLETELY DISAGREED WITH THE SUBMISSION OF THE ASSESSEE THAT YOGA AS A DISCIPLINE ADDRESSES ME DICAL RELIEF ALSO. SO FAR AS THE DECISIONS RELIED UPON BY THE LD. CIT(A) TO ARRIVE AT A CONCLUSION THAT YOGA AS A SYS TEM DOES NOT FIT INTO THE DEFINITION OF MEDICAL RELIEF ARE C ONCERNED, 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 (SUPRA) IT HAS BEE N OBSERVED BY THE COCHIN BENCH THAT YOGA IS AN ANCIEN T INDIAN SCIENCE OF MEDITATION. THERE IS NO DISPUTE O N IT. BUT ONLY ON THE BASIS OF SUCH OBSERVATIONS WHICH IS ONE OF THE ASPECTS OF THE YOGA IT CANNOT BE ARRIVED AT A CONCL USION ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 18 THAT YOGA AS A SYSTEM DOES NOT CLEARLY FIT INTO THE DEFINITION OF 'MEDICAL' WHICH IN TURN LEADS TO THE TERM 'MEDICAL RELIEF'. THE ISSUE RAISED BEFORE THE COCHI N BENCH OF THE TRIBUNAL IN THIS CASE WAS AS TO WHETHER ASSE SSEE TRUST FORMS FOR PROPAGATING OF VEDAS WAS ENTITLED T O REGISTRATION U/S 12A IN THE STATUS OF A RELIGIOUS A ND CHARITABLE TRUST. LIKEWISE THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF RAJNEESH FOUNDATION (SUPR A) IS NOT RELEVANT AS THE SAID DECISION WAS RENDERED PRIO R TO INTRODUCTION OF PROVISO TO SECTION 2 (15), WHEN THE RE USED TO BE NO DISPUTE INSOFAR AS CLASSIFICATION OF CHARI TABLE OBJECTIVES WAS CONCERNED FOR THE PURPOSE OF CLAIMIN G EXEMPTION U/S 11/12 OF THE ACT. THE DECISION WAS RE FERRED IN THE CONTEXT OF CLASSIFYING 'MEDITATION' AS A CHA RITABLE OBJECTIVES FOR THE PURPOSE OF SECTION 2(15) OF THE ACT. THE HON'BLE HIGH COURT HAS ADJUDICATED ONLY UPON THE IS SUE OF CLASSIFICATION OF 'MEDITATION', 'PREACHING/PROPAGAT ION OF PHILOSOPHY AS A CHARITABLE OBJECT FALLING UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY BUT HAS NOWHERE EXPLICITLY DEALT WITH YOGA EXCEPT FOR MAKING PASSIN G REFERENCES IN RESPECT OF THE SAME. IN THE SAID DECI SION THE HON'BLE HIGH COURT HAS HOWEVER ALSO BEEN PLEASED TO OBSERVE THAT NOT ONLY IN INDIA BUT IN THE WESTERN C OUNTRIES ALSO MEDITATION AND YOGA ARE BEING ACCEPTED AS A GR EAT SOURCE OF PHYSICAL AND MENTAL HEALTH. MEANING THERE BY THAT YOGA IS A SOURCE FOR MEDICAL RELIEF. FOR A REA DY REFERENCE THE RELEVANT EXTRACT OF THE SAID DECISION IS BEING REPRODUCED HEREUNDER : 'ADMITTEDLY, MAIN THRUST OF THE RESPONDENT IS ON MEDITATION AND NOBODY CAN DISPUTE THAT IN INDIA MEDITATION HAS BEEN VERY IMPORTANT SOURCE FOR PHYSI CAL, 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 INDIAN S ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 19 WHO ARE NOW BECOMING CONSCIOUS ABOUT THEIR PHYSICAL , MENTAL AND SPIRITUAL HEALTH. NOT ONLY IN INDIA, MED ITATION AND YOGA ARE BEING ACCEPTED IN THE WESTERN COUNTRIE S ALSO AS A GREAT SOURCE FOR PHYSICAL AND MENTAL HEAL TH AND SPIRITUAL ATTAINMENT. WHEN A LARGE NUMBER OF PEOPLE FEEL THAT MEDITATION IS A GREAT SOURCE FOR PHYSICAL, MEN TAL AND SPIRITUAL WELL-BEING, IT MUST BE HELD TO BE AN ACTI VITY FOR THE ADVANCEMENT OF GENERAL PUBLIC UTILITY' (EMPHASI S SUPPLIED) 6.4.5 LD. AR HAS ALSO REFERRED THE SURVEY 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 MEDIC INE TO PREVENT 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 YO GA WAS THE SIXTH MOST COMMONLY USED ALTERNATIVE THERAP Y 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 SUC H AS CANCER, DIABETES, ASTHMA AND AIDS AND THE SCOPE OF MEDICAL ISSUES WHERE YOGA IS USED AS A COMPLEMENTAR Y THERAPY CONTINUES TO GROW. A REFERENCE OF THE PUBLICATION 'YOG IN SYNERGY WITH MEDICAL SCIENCE: WRITTEN BY AN AYURVED ACHARYA ASSOCIATED W ITH THE APPELLANT, HAS ALSO BEEN MADE, RELEVANT EXTRACT S OF WHICH HAS BEEN MADE AVAILABLE AT PAGE NOS. 555 TO 6 33 OF THE SUPPLEMENTARY PAPER BOOK (APPELLANT). THIS ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 20 PUBLICATION HAS BEEN DOCUMENTED ON THE BASIS OF CLI NICAL TESTS CONDUCTED SHOWING THE CLINICAL EFFECT OF YOGA ON THE PARTICIPANTS IN VARIOUS YOGA CAMPS. AS DISCUSSED ABOVE THE LD. CIT (DR) HAS BASICALLY P LACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW ASS ERTING THAT YOGA IS A WAY OF MEDITATION RATHER THAN A WAY OF MEDICATION TO QUALIFY FOR 'MEDICAL RELIEF. A REFERE NCE OF CONTENTS OF PAGE NO. 638 OF THE PAPER BOOK HAS ALSO BEEN MADE TO SUPPORT HIS SUBMISSION THAT IN SEPTEMBER, 2 012. THE HARIWARD UNIVERSITY OF USA CAME FORWARD TO INTR ODUCE YOGA AND AYURVED SUBJECT IN THEIR UNIVERSITY IN COLLABORATION WITH SWAMI RAMDEVJI IN THE WAKE OF DREADFUL DISEASES BEING CURED BY SWAMIJI'S PRANAYAM AND HIS AYURVED MEDICINES. 6.4.6 IN VIEW OF ABOVE DISCUSSIONS ESPECIALLY THE RECOGNITION OF YOGA AS A RECOGNIZED SYSTEM OF MEDIC INE AS PER SECTION 2 (H) OF CLINICAL ESTABLISHMENT (REGIST RATION AND REGULATION) ACT 2010 AND THE COMPLETE INFORMATI ON MADE AVAILABLE BY THE AYUSH ON ITS WEBSITE 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 RECOG NIZED SYSTEM OF MEDICINE, WHICH HAS THERAPEUTIC EFFECTS I N TREATING VARIOUS SERIOUS AILMENTS. THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRUST AS IT IS APPARENT FROM ITS OBJECTS, REMAINED TO PROVIDE MEDICAL RELIEF THROUGH AYURVEDA AND PROPAGATION OF YOGA FOR THE PURPOSE OF TREATING/CURING VARIOUS DISEASES. ' ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 21 IMPARTING EDUCATION' 6.5 THE QUESTION NOW IS AS TO WHETHER THE APPELLANT TR UST FALLS WITHIN THE PURVIEW OF PROVIDING 'IMPARTING ED UCATION'. THE GRIEVANCE OF THE - APPELLANT IS THAT THE AUTHOR ITIES BELOW HAVE FAILED TO APPRECIATE THAT THE PROPAGATIO N OF YOGA BY WAY OF CONDUCTING YOGA CLASSES ON A REGULAR BASIS AND IN A SYSTEMIZED MANNER ALSO FALLS UNDER T HE CATEGORY OF 'IMPARTING OF EDUCATION' AS PROVIDED U/ S 2(15) OF THE ACT. RELIANCE HAS BEEN PLACED ON SEVERAL DEC ISIONS, WHICH WE WILL DISCUSS HEREUNDER. THE CONTENTION OF THE LD. AR REMAINED THAT THE PREDOMINANT OBJECT OF THE APPE LLANT TRUST ARE TO PROVIDE PRACTICAL AND THEORETICAL TRAI NING IN THE FIELD OF YOGA, WHICH WOULD ULTIMATELY PROVIDE MEDIC AL RELIEF TO THE SOCIETY AT LARGE. IT WAS SUBMITTED TH AT IN PURSUANCE OF THE SAID OBJECTIVE THE APPELLANT TRUST HAS MADE INTER-TRUST DONATIONS TO PATANJALI YOG PEETH T O SUPPORT THEIR ENDEAVORS OF IMPARTING YOGA EDUCATION BY MEANS OF ORGANIZING YOG SHIVIRS/CAMPS ACROSS THE CO UNTRY ON DAILY/WEEKLY/MONTHLY BASIS IN A SYSTEMIZED/ORGANIZED MANNER IN ORDER TO PROVIDE MED ICAL RELIEF TO PEOPLE WHO CANNOT AFFORD MODERN MEDICAL M ETHOD OR HAVE BEEN SUBJECTED TO ILL EFFECTS OF MODERN MED ICINE. IT WAS SUBMITTED THAT IMPARTING OF YOGA TRAINING THROU GH WELL STRUCTURED YOGA SHIVIRS/CAMPS ALSO FALLS UNDER THE CATEGORY OF IMPARTING 'EDUCATION' ONE OF THE CHARIT ABLE OBJECTS DEFINED U/S 2(15) OF THE ACT AND ACCORDINGL Y THE APPELLANT'S ACTIVITIES ARE NOT HIT BY THE PROVISO I NSERTED IN THE DEFINITION OF CHARITABLE PURPOSE AS CONTAINED I N THE SAID SECTION. DURING THE COURSE OF HEARING THE APPE LLANT WAS DIRECTED TO PROVIDE COMPLETE DETAILS OF THE PAT ANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN AT HARIDWAR FOR IMPARTING EDUCATION IN THE FIELD OF AY URVEDA WHICH STARTED OPERATIONS W.E.F. 20.7.2009. IN COMPL IANCE THE LD. AR SUBMITTED THAT DURING THE YEAR THE APPEL LANT ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 22 HAD APPLIED SUBSTANTIAL AMOUNT ON CONSTRUCTION OF T HE AYURVEDA MEDICAL COLLEGE WHICH IS AFFILIATED TO THE UTTARAKHAND TECHNICAL UNIVERSITY. IT WAS SUBMITTED THAT AYURVEDA MEDICAL COLLEGE SET UP BY THE APPELLANT WA S APPROVED AND DULY RECOGNIZED BY THE DEPARTMENT OF AYURVEDA, YOGA & NATUROPATHY, UNANI, SIDDHA AND HOMOEOPATHY (AYUSH) VIDE NOTIFICATION DATED 20.7.20 09, A COPY THEREOF HAS BEEN MADE AVAILABLE AT PAGE NO. 805 AND 806 OF THE SUPPLEMENTARY PAPER BOOK -II. DEPART MENT OF AYUSH IS A BODY SET UP BY THE MINISTRY OF HEALTH & FAMILY WELFARE, GOVT. OF INDIA WITH THE PRIMARY OBJ ECTIVE OF REGULATING AND UPGRADING THE EDUCATIONAL STANDAR DS, QUALITY CONTROL AND STANDARDIZATION OF DRUGS, IMPRO VING THE AVAILABILITY OF MEDICINAL PLANT MATERIAL, RESEA RCH AND DEVELOPMENT AND AWARENESS GENERATION ABOUT THE EFFI CACY OF AYURVEDA, YOGA AND NATUROPATHY, UNANI, SIDDHA AN D HOMOEOPATHY SYSTEMS OF MEDICINES. FOR THE PURPOSE O F RECOGNIZING AND GRANTING PERMISSION FOR ESTABLISHME NT OF MEDICAL COLLEGES, THE DEPARTMENT OF AYUSH MANDATES FULFILLMENT OF CERTAIN MINIMUM STANDARD AND REQUIRE MENTS AS PRESCRIBED UNDER THE INDIAN MEDICAL CENTRAL COUN CIL ACT 1970 (IMCC ACT). ONE OF THE PRIMARY CONDITIONS LAID DOWN IN THE IMCC ACT FOR THE GRANT OF RECOGNITION I S THE EXISTENCE OF A MEDICAL HOSPITAL ATTACHED TO THE AYU RVEDIC COLLEGE WITH THE PRESCRIBED BED STRENGTH ALONGWITH OUTDOOR PATIENT DEPARTMENT (OPD) AND INDOOR PATIENT DEPARTM ENT (IPD) FACILITIES. LD. CIT(DR) ON THE OTHER HAND HAS PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW, AS DISCUSSED ABOVE. 6.5.1 THE EXPRESSION 'EDUCATION' HAS NOT BEEN DEFINED UNDER THE PROVISIONS OF INCOME TAX ACT. THE HON'BLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE, LOK SHIK SHANA TRUST (SUPRA), RELIED UPON BY THE LD. AR, HAS BEEN PLEASED TO EXPLAIN THE MEANING OF THE WORD 'EDUCATION' IN T HE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 23 CONTEXT OF SECTION 2(15) OF THE ACT. AS PER THIS DE CISION THE EDUCATION IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY SCHOOLING BY WAY OF SYSTEMATIC INSTRUCTION, SCHOOLI NG OR TRAINING. THE HON'BLE DELHI HIGH COURT IN THE CASE OF DELHI MUSIC SOCIETY (SUPRA) HAS BEEN PLEASED TO HOLD THAT SINCE THE ASSESSEE SOCIETY WAS TEACHING AND PROMOTING ALL FORMS OF MUSIC AND DANCE, WESTERN, INDIAN OR ANY OT HER AND WAS RUN LIKE ANY SCHOOL OR EDUCATIONAL INSTITUT ION IN A SYSTEMIC MANNER WITH REGULAR CLASSES, THE SAME THER EFORE MEET THE REQUIREMENT OF AN EDUCATIONAL INSTITUTION WITHIN THE MEANING OF SECTION 10(23C)(VI) OF THE ACT. IN T HE CASE OF SRM FOUNDATION OF INDIA (SUPRA) THE DELHI BENCH OF THE TRIBUNAL, WHERE THE ASSESSEE WAS' ENGAGED IN SPREAD ING THE SYSTEM OF TRANSCENDENTAL MEDITATION (TM) HAS HE LD 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 MEDIT ATION 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(72) OF THE ACT. WE THUS COME TO TH E CONCLUSION THAT ANY FORM OF EDUCATIONAL ACTIVITY IN VOLVING IMPARTING OF SYSTEMATIC TRAINING IN ORDER TO DEVELO P THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS, I S TO BE REGARDED AS 'EDUCATION' COVERED U/S 2(15) OF THE AC T. IN VIEW OF THESE DECISIONS WE HOLD THAT IMPARTING OF Y OGA TRAINING THROUGH WELL STRUCTURED YOGA SHIVIR/CAMPS ALSO FALLS UNDER THE CATEGORY OF IMPARTING EDUCATION WHI CH IS ONE OF THE CHARITABLE OBJECTS DEFINED U/S 2(15) OF THE ACT. THE APPELLANT'S ACTIVITIES ARE THUS NOT HIT BY THE PROVISO INSERTED IN THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) OF THE ACT. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 24 RELIEF TO THE POOR 6.6 SO FAR AS QUESTION OF PROVIDING 'RELIEF TO THE POO R' BY THE APPELLANT TRUST TO BRING IT WITHIN THE PURVIEW OF THE SAME IS CONCERNED, WE FIND THAT THE CONTENTION OF T HE ASSESSEE REMAINED THAT THE APPELLANT THROUGH ITS HO SPITAL, PATANJALI HOSPITAL AND PATANJALI CHIKITSALAYA AT HA RIDWAR, RANCHI AND PATNA HAS SERVED MORE THAN 2.25 LACS, 0. 60 LACS AND 0.75 LACS PATIENTS DURING THE RELEVANT YEA R. THE HOSPITALS HAVE TEAM OF DOCTORS, NURSES AND PARAMEDI CAL STAFF WORKING ROUND THE CLOCK. IT WAS SUBMITTED THA T THE HOSPITAL AT HARIDWAR IS WELL EQUIPPED WITH ULTRA MO DERN DIAGNOSTIC FACILITIES LIKE OPD AND IPD, PATHOLOGY L AB, CARDIOLOGY LAB, PANCHKARMA CLINIC, YOGA AND SHATKAR MA CLINIC, SURGICAL, DENTAL AND OPHTHALMOLOGICAL CLINI C AND PROVIDES FREE YOGIC AND AYURVEDIC CONSULTANCY TO AL L ITS PATIENTS. IT WAS POINTED OUT THAT DURING THE YEAR T HE APPELLANT HAS PROVIDED FREE MEDICAL SERVICES/TREATM ENT TO MORE THAN 38 LACS PATIENTS THROUGH PATANJALI CHIKIT SALAYA SPREAD ALL ACROSS THE COUNTRY. IT WAS SUBMITTED THA T ALL RECORDS OF SUCH TREATMENTS AND ACTIVITIES OF THE TR UST 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 HAS PROVIDED THE OBJECTIVE OF APPELLANT TO IMPART EDUCATION AND PROV IDE RELIEF TO THE POOR. THE CONTENTION OF THE LD. CIT(D R) REMAINED THAT 7 OUT OF 15 OBJECTIVES IN THE TRUST D EED OF THE APPELLANT ARE IN A NATURE OF GENERAL PUBLIC UTI LITY. THE OBJECTS OF THE APPELLANT ARE AS UNDER : ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 25 A. 'THE MAIN AIM OF THE TRUST WOULD BE TO IMPART THE P RACTICAL AND FUNCTIONAL TRAINING OF ASTUNG YOG, RAJ YOG, HAT H YOG, ASHAN AND PRANAYAM ETC AS RECEIVED FROM THE ANCIENT TRADITION PROPOU NDED BY THE RISHIS AND MUNIS TO MAKE AN END OF EXTREME SUFFERINGS TO CURE DISEASES AND TO R ECEIVE A CALM STAGE OF MIND AND EXTREME HAPPINESS. B. TO CONSTRUCT THE BUILDING ETC FOR BOARDING AND LODG ING FOR THOSE WHO ARE INSTRUCTED III YOG 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 DISTRIB UTE MEDICINES, CLOTHES AND FOOD ARTICLES IN THE TRIBAL AREA. E. TO FURNISH AND EQUIP THE CHARITABLE HOSPITAL WITH M ODERN MEDICAL FACILITIES. F. TO CARRY OUT CONDUCT RESEARCH ON YOGA, AYURVEDA AND VEDIC LITERATURE AND ALSO TO ORGANIZE SCHOLARLY SEM INARS AND COMPETITIONS. G. TO PREPARE AND TO SALE AND PURCHASE OF THE AYURVEDI C MEDICINES FOR THE CHARITABLE HOSPITALS, HOSPITAL CO LLEGES, SCHOOLS AND FOR THE SOCIAL AND YOQIC ACTIVITIES OF THE TRUST. H. TO MAKE AN ARRANGEMENT FOR THE STUDY OF VEDS, THE G EETA, 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. I. TO PREPARE MISSIONARIES AND FACILITATE THEM AND SEN SITIZE PEOPLE FOR UPROOTING JEALOUSLY, HATE, EVILS, INJUSTICE, TYRANRTY AND HEAVENLY THIS ON EARTH BY KEEPING ABOV E THE COMMUNALISM, CASTES AND THE FEELING OF SEX AND CREE D. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 26 J. TO RUN THE FREE EDUCATIONAL CENTERS AND TO FACILITA TE THE WORTHY POOR HELPLESS ORPHANS, ST UDENTS BY PROVIDING CLOTHES, FOOD, STUDY MATERIAL AND LODGING. K. TO ESTABLISH AND RUN STABLES FOR THE POOR COWS TO S AVE THEM FROM VICTIMIZATION AND KILLINGS. L. TO CARRY OUT RESEARCHES OR AGNI HOTRA AND PERFORM S CIENTIFIC YAJNAS IN ORDER TO SOLVE THE SERIOUS PROBLEMS OF ENVIRONMENTAL POLLUTION OF MODERN AGE. M. TO GIVE AWARD AND CERTIFICATES TO THE TRAINEES WHO UNDERTAKE WEEKLY, FORTNIGHTLY, MONTHLY, QUARTERLY A ND ANNUALLY YOG AND ACUPRESSURE TRAINING. N. TO HELP AND CO-OPERATE THE RELIEF ACTIVITIES RELATED TO FLOOD, EARTHQUAKES, EPIDEMIC, DROUGHT ETC. O. TO CO- OPERATE OTHER SUCH INSTITUTIONS AND ORGANIZATIONS WHICH MATCH OR AIMS AND OBJECTIVES, AND ORDER TO FU LFILL 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 WHICH THE OBJECT IS TO ALLEVIATE EXTREM E SUFFERINGS AND CURE DISEASES BY PROVIDING PRACTICAL AND FUNCTIONAL TRAINING OF ASTANG YOG, RAJ YOG, DHYAN Y OG, HATH YOG, ASHAN AND PRANAYAM ETC. AS RECEIVED FROM THE ANCIENT TRADITION PRONOUNCED BY THE RISHIES AND MUN IS. THUS TO KNOW THE MISSION AND REASON OF THE APPELLAN T TRUST WE HAVE TO READ ITS OBJECTIVES IN TOTALITY. T HE VARIOUS OTHER OBJECTIVES PROVIDED IN THE TRUST DEED ARE MER ELY INDEPENDENT/ANCILLARY TO THE MAIN OBJECTION WHICH I S TO PROVIDE MEDICAL RELIEF AND I MPART EDUCATION AND DO NOT IN ANY WAY CONSTITUTE/OBJECTIVES OF GENERAL PUBLIC UTI LITY AS CONTENDED BY THE LD. CIT(DR). WE THUS HOLD THAT THE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 27 CASE OF THE APPELLANT DOES NOT FALL WITHIN THE LAST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE GIVEN U/S 1(15 ) OF THE ACT. IN THE CASE OF THIAGARAJAR CHARITIES ( SUPRA ) BEFORE THE HON'BLE SUPREME COURT, THE MAIN OBJECTS OF THE ASSESSEE TRUST WERE EDUCATION, MEDICAL RELIEF AND R ELIEF TO THE POOR. ONE OF THE OBJECTS CONTEMPLATED THE TRUST TO ENGAGE IN CARRYING ON, HELP, AID, ASSIST AND PROMOT E RURAL RECONSTRUCTION WORK, COTTAGE INDUSTRY AND ALL MATTE RS 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 TH AT 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 F ROM TAX U/S 11. THE AO REJECTED ITS CLAIM. THE TRIBUNAL AS WELL AS HON'BLE HIGH COURT HELD THAT THE OBJECT COV ERED BY CLAUSE 1(G) INVOLVED CARRYING ON AN ACTIVITY FOR PROFIT. ON APPEAL THE HON'BLE SUPREME COURT HELD IN FAVOUR OF THE ASSESSEE BY OBSERVING THAT CLAUSE 1(G) REFERRED BY THE LOWER AUTHORITIES WAS NOT AN OBJECT BUT WAS REALLY IN THE NATURE OF A POWER. THE HON'BLE COURT FURTHER HELD T HAT THE ANCILLARY ACTIVITY UNDERTAKEN BY THE ASSESSEE W AS TO AFFORD RELIEF TO POOR FALLING WITHIN SCOPE OF SECTI ON 2(15) OF THE ACT AND WAS NOT AN OBJECT OF GENERAL PUBLIC UTI LITY. IT WAS FURTHER HELD THAT BUSINESS BEING ONLY A MEANS O F ACHIEVING THE OBJECT OF THE TRUST, EXEMPTION COULD NOT BE DENIED. 6.6.3 THE CONTENTION OF THE LD. CIT(DR) ALSO REMAINED TH AT THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRUST IS TO PREPARE AND SELL MEDICAL FORMULATIONS, WHICH IS APP ARENT FROM THE SHEER MAGNITUDE OF BUSINESS, SALES COUNTER S AND VOLUME OF ITS PROMOTION AND PUBLICATION HOUSE WHICH IS NOT INCIDENTAL TO THE MAIN OBJECTIVE OF PROVIDING MEDIC AL RELIEF. SHE HAS FURTHER ALLEGED THAT APPELLANT HAS ESTABLIS HED A ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 28 CHAIN OF RETAIL OUTLETS (SEVA KENDRA) FOR SELLING I TS PRODUCTS ALL OVER INDIA AND HAS ALSO COLLECTED SECURITY DEPO SIT OF RS. 6.21 CRORES FROM THESE SEVA KENDRAS. SHE ALLEGED FU RTHER THAT THE ASSESSEE IS ALSO ENGAGED IN EXPORT OF ITS PRODUCTS AND 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 ACTIVI TIES. IN THE REJOIONDER THE SUBMISSION OF THE LD. AR REMA INED THAT BUSINESS UNDERTAKINGS WERE RUN BY THE APPELLAN T AS AN ACTIVITY INCIDENTAL TO ATTAINMENT OF THE MAIN OB JECTS OF THE APPELLANT AND TO FEED CHARITY, WHICH IS PERMITT ED U/S 11(4)/11(4A) OF THE ACT. IT WAS SUBMITTED THAT THE AYURVEDIC PREPARATIONS/MEDICINES HAVE BEEN EXPORTED BY THE APPELLANT AT THE REQUEST OF THE PATIENTS, IN OR DER TO FULFILL ITS PREDOMINANT OBJECTIVE OF MAKING THE WOR LD DISEASE FREE. IT WAS SUBMITTED THAT THE SAID EXPORT S WERE MADE BY THE BUSINESS UNDERTAKING HELD UNDER THE TRU ST AND THERE IS NO EMBARGO UNDER THE PROVISIONS OF THE ACT TO RESTRICT BUSINESS UNDERTAKING FROM MAKING EXPORTS I N THE COURSE OF UNDERTAKING ITS BUSINESS ACTIVITIES. IT W AS SUBMITTED THAT THE CHIKITSALAYS WERE SET UP BY THE APPELLANT ALL ACROSS THE COUNTRY FOR PROVIDING FREE MEDICAL CONSULTATIONS TO PATIENTS SUFFERING FROM VARIOUS DI SEASES. MORE THAN 1000 VAIDAYS ARE GIVING FREE CONSULTATION TO OVER 50,000 PATIENTS FOR CURABLE AND INCURABLE DISE ASE IN ABOUT 1000 PATANJALI CHIKITSALAYS ACROSS THE COUNTR Y. FURTHER THAT ACCEPTANCE OF SECURITY DEPOSIT FOR SET TING UP SEVA KENDRAS DOES NOT IN ANY WAY IMPACT THE CHARITA BLE NATURE OF THE ACTIVITIES UNDERTAKEN BY THE APPELLAN T. 6.6.4 FURTHER ALLEGATION OF LD. CIT(DR) REMAINED THAT TH E APPELLANT HAS APPLIED MINIMUM AMOUNT OF INCOME FOR CHARITABLE PURPOSE AND DIVERTED SUBSTANTIAL AMOUNT TO ITS SISTER CONCERN I.E. PATANJALI YOGPEETH TRUST WITH T HE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 29 INTENTION OF RETAINING FUNDS WITHIN ITS OWN CONTROL . IT WAS ALLEGED BY HER THAT THE APPELLANT WAS CHARGING EXHO RBITANT RATES FOR ACCOMMODATION FEE IN THE NAME OF PARTICIP ATION FEE. IN ALLEGING SO THE LD. CIT(DR) HAS PLACED RELI ANCE ON THE STATEMENT OF ONE SHRI BALWANT SINGH MINNAS, WHE REIN HE HAS ALLEGED TO HAVE PAID AMOUNT OF RS. 49,000/- AS PARTICIPATION FEE FOR THE YOGA SHIVIR PURPORTEDLY C ONDUCTED BY THE APPELLANT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. CIT(DR) HAS FURTHER ALLEGED THAT APPELLANT HAS COLLECTED A SUM OF RS. 68.45 LACS UND ER THIS HEAD DURING THE YEAR. SHE ALLEGED FURTHER THAT THE ASSESSEE HAS CHARGED RS. 290.79 LACS FROM PATIENTS DURING THE ASSESSMENT YEAR THROUGH MEDICAL HOSPITAL WHICH WAS IN ADDITION TO THE PRICE OF MEDICINE CHAR GED FROM PATIENTS. SHE ALLEGED THAT THE APPELLANT WAS U NABLE TO PRODUCE DURING THE APPELLATE PROCEEDINGS ANY DOCUMENTARY EVIDENCE TO SUPPORT THE CHARITABLE ACTI VITIES IN THE FORM OF MEDICAL RELIEF IN THE HOSPITAL RUN B Y THE APPELLANT. SHE ALLEGED THAT THE APPELLANT WAS UNABL E TO PRODUCE THE MEDICAL PRACTICITIONER DURING THE ASSES SMENT PROCEEDINGS. THE REJOINDER OF THE LD. AR REMAINED T HAT THERE IS NO LEGAL IMPEDIMENTS IN ONE CHARITABLE TRU ST GIVING DONATION TO INTER CHARITABLE TRUST. IT WAS SUBMITTE D THAT IT IS A WELL SETTLED POSITION THAT WHEN A CHARITABLE D ONATION AMOUNT OUT OF ITS CURRENT INCOME IS DONATED TO INTE R CHARITABLE TRUST, THE SAME CONSTITUTE APPLICATION O F INCOME U/S 11(1)(9) OF THE ACT. A COPY OF CERTIFICATE OF R EGISTRATION OF THE DONEE TRUST U/S 12A OF THE ACT HAS BEEN PLAC ED AT PAGE 856 OF THE SUPPLEMENTARY PAPER BOOK -(III). TH E CBDT INSTRUCTION NO. 1132 DATED 5.1.1978, EXTRACT OF WHI CH HAS BEEN MADE AVAILABLE AT PAGE NO. 857 OF THE SUPPLEMENTARY PAPER BOOK-ILL HAS MADE IT CLEAR THAT PAYMENT OF A SUM BY ONE CHARITABLE TRUST TO ANOTHER FOR UTILIZATION BY THE DONEE TRUST TOWARDS ITS CHARITAB LE OBJECTS IS PROPER APPLICATION OF INCOME FOR CHARITABLE PURP OSE IN THE HANDS OF THE DONEE TRUST AND THE DONOR TRUST WI LL NOT LOOSE EXEMPTION U/S 11 OF THE INCOME TAX ACT 1961. WE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 30 THUS DO NOT FIND SUBSTANCE IN THE CONTENTION OF THE LD. CIT(DR) THAT THE-APPELLANT HAS DONATED AN AMOUNT TO THE DONEE TRUST TO DEVIATE FROM ITS OBJECTIVES. SINCE I T IS NOT THE CASE OF THE DEPARTMENT THAT PATANJALI YOG TRUST, TH E DONEE HAS NOT APPLIED SUCH SUMS FOR CHARITABLE PURPOSES, THERE IS NO SUBSTANCE IN THE ALLEGATION THAT THE APPELLAN T HAS DEVIATED THE FUNDS. 6.6.5 AGAINST THE ALLEGATION OF CHARGING EXORBITANT RATE S FOR ACCOMMODATION FEE SUBMISSION OF THE LD. AR IN REJOINDER REMAINED THAT THE ALLEGATION IS BASED ON THE STATEMENT OF ONE SHRI BALWANT SINGH MINHAS WITHOUT APPRECIATING THAT THE APPELLANT DID NOT CONDUCT ANY YOG SHIVIR/CAMPS IN THE ASSESSMENT YEAR UNDER CONSIDERA TION, THUS THE QUESTION OF CHARGING EXORBITANT FEES FOR CONDUCTING YOGA SHIVIR DOES NOT ARISE AT ALL. THE F URTHER 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, WHICH I TSELF IS IN VIOLATION OF SETTLED PRINCIPLES OF NATURAL JUSTI CE. IT WAS SUBMITTED THAT AN AMOUNT OF RS. 68.45 LACS REPRESEN TS THE AMOUNT OF ROOM RENT CHARGES RECEIVED BY THE APPELLA NT FROM THE PATIENTS WHO HAVE AVAILED IN HOUSE FACILIT IES IN THE HOSPITAL RUN BY THE APPELLANT AT HARIDWAR. THE AMOUNT OF ROOM RENT CHARGES RECEIVED BY THE APPELLANT IN T HE ASSESSMENT YEAR IS MINUSCULE AS COMPARED TO THE NUM BER OF PATIENTS WHO HAVE TREATED IN THE HOSPITAL RUN BY THE APPELLANT. LD. AR SUBMITTED FURTHER THAT AN AMOUNT OF RS. 2 .2 CRORES APPROXIMATELY HAS BEEN CHARGED FROM THE PATIENTS WHO HAVE BEEN TREATED IN THE HOSPITAL RUN BY THE APPELLANT, ROOM RENT CHARGES, DIAGNOSIS AND SURGICA L SERVICES PROVIDED BY THE APPELLANT WHICH HAS ALSO B EEN CHARGED AT NOMINAL RATES IN ORDER TO MEET THE ACTUA L COSTS INCURRED WITHOUT ANY ELEMENT OF PROFIT IMBIBED THER EIN. IN ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 31 THIS REGARD ATTENTION WAS DRAWN ON THE INCOME AND EXPENDITURE STATEMENT OF APPELLANT TRUST PLACED AT PAGE 379 OF THE PAPER BOOK, WHEREIN APPELLANT HAS INCURR ED AN EXPENDITURE OF RS. 5.1 CRORES AS AGAINST INCOME OF RS. 2.2 CRORES THEREBY RESULTING IN A DEFICIT OF RS. 2.8 CR ORES. REGARDING THE ALLEGATION THAT THE APPELLANT WAS UNA BLE TO PRODUCE ANY RECORD IN THE FORM OF MEDICAL PRESCRIPT IONS TO SUBSTANTIATE THAT MEDICAL RELIEF WAS PROVIDED IN TH E HOSPITAL RUN BY THE APPELLANT, LD. AR SUBMITTED THA T AS A MATTER OF PRACTICE THE PRESCRIPTIONS MADE BY THE ME DICAL PRACTITIONERS IN THE OPD ARE NEVER RETAINED AND ARE ALWAYS GIVEN TO THE PATIENTS. NONETHELESS THE APPEL LANT MAINTAINS A RECORD OF THE PATIENTS WHO HAVE BEEN TR EATED IN HOUSE WHICH HAS NOWHERE BEEN DISPUTED BY THE DEPARTMENT. AGAINST THE ALLEGATION OF THE DEPARTMEN T THAT APPELLANT WAS UNABLE TO PRODUCE THE MEDICAL PRACTIT IONERS FOR VERIFICATION DURING THE COURSE OF REMAND PROCEE DINGS IS ERRONEOUS. THE LD. AR SUBMITTED THAT THE APPELLANT HAS PRODUCED 15 OUT OF 71 MEDICAL PRACTITIONERS WHOSE D ETAILS AND PERMANENT RESIDENTIAL ADDRESSES WERE MADE KNOWN TO THE REVENUE. IT WAS SUBMITTED THAT IN THEIR STAT EMENT RECORDED ON OATH , THE MEDICAL PRACTITIONERS WHO WE RE IN THE EMPLOYMENT WITH THE HOSPITAL RUN BY THE APPELLA NT HAVE CATEGORICALLY ADMITTED TO THE FACT THAT THERE IS NO COMPULSION ON THE PATIENTS TO BUY MEDICINES PREPARED/MANUFACTURED BY THE APPELLANT ONLY AND THA T THEY ALSO PRESCRIBED MEDICINE MANUFACTURED BY OTHER PHARMACEUTICAL COMPANIES. THESE 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 O F PROVIDING 'RELIEF TO THE POOR'. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 32 6.6.7 THE FIRST ISSUE AS TO WHETHER THE APPELLANT TRUST DID FALL WITHIN THE PURVIEW OF PROVIDING OF 'MEDICAL RE LIEF 'IMPARTING EDUCATION' OR 'RELIEF TO THE POOR' IS TH US DECIDED IN FAVOUR OF THE APPELLANT. IN VIEW OF THE ABOVE FI NDING ON FIRST ISSUE THE SECOND AND THIRD ISSUE HAVE BECOME INFRUCTUOUS. IN THESE ISSUES THE QUESTIONS ARE AS T O WHETHER THE ACTIVITY OF THE APPELLANT WERE IN THE N ATURE OF PROVIDING GENERAL PUBLIC UTILITY OR OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS CONTAINED IN SECTION 2(15) OF THE ACT. RELEVANT PROVISIONS U/S 2(15) ARE REPRODUCED AS UNDER : 'SECTION 2(15) OF THE ACT DEFINES 'CHARITABLE PURPO SE' AS UNDER: '** ** ** (15) 'CHARITABLE, PURPOSE' INCLUDES RELIEF OF THE P OOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONM ENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OT HER 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: ** ** **' ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 33 PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERAT ION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, O R RETENTION, OF THE INCOME FROM SUCH ACTIVITY; ** ** '(EMPHASIS SUPPLIED) THEREFORE, THE AFORESAID PROVISO DOES NET APPLY TO A TRUST/INSTITUTION ENGAGED IN THE CHARITABLE OBJECT OF PROVIDING RELIEF TO THE POOR, IMPARTING EDUCATION A ND 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 FULFIL THE RESOLUTION OF MAKING 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 PRANA YAM /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 ORDER TO ATTAIN SOUND HEALTH; - TO FORM A NEW INTEGRATED SYSTEM OF TREATMENT, CONSI STING ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 34 MAINLY OF THE TECHNIQUES OF YOGA AND AYURV EDA, 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 L AST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE ; THAT TOO, IF SUCH TRUST/INSTITUTION CARRY ON COMMERCIAL ACTIVITIES IN THE NATURE OF BUSINESS, TRADE OR COMMERCE. THE SAID PRO VISO DOES NOT APPLY TO TRUST/INSTITUTION ENGAGED IN THE CHARITABLE OBJECT OF PROVIDING RELIEF TO THE POOR, IMPARTING EDUCATION AND PROVIDING MEDICAL RELIEF. THE LAST LI MB OF THE DEFINITION OF CHARITABLE PURPOSE U/S 2 (15) TALKS A BOUT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. THE AFORESAID PREDOMINANT OBJECTS AND THE VISION MA KE IT CLEAR THAT THE OBJECTS OF THE APPELLANT ARE TO PROV IDE 'MEDICAL RELIEF 'IMPART EDUCATION' TO THE SOCIETY A T LARGE AND 'RELIEF TO THE POOR' HENCE THE PROVISO TO SECTION 2 (15) DOES NOT APPLY IN THE CASE OF THE ASSESSEE/APPELLANT. TH E FORTH ISSUE AS TO WHETHER DONATION OF RS. 38.35 CRORES MA DE TO PATANJALI YOG PEETH FOR THE PURPOSE OF SETTING UP Y OG BHAWAN AND OTHER YOGA RELATED ACTIVITIES THESE AMOU NTS TO APPLICATION OF MONEY FOR THE PURPOSE OF MEDICAL RELIEF HAS ALSO BEEN DISCUSSED AND DECIDED WHILE ADJUDICAT ING UPON THE FIRST ISSUE UNDER THE HEAD MEDICAL RELIEF OR RELIEF ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 35 TO THE POOR, FOLLOWING THE SAME THE FOURTH ISSUE IS ALSO DECIDED IN FAVOUR OF THE APPELLANT. OTHER OBJECTIONS OF THE REVENUE 6.7 LD. CIT(DR) HAS ALSO CONTENDED THAT THE APPELLANT HAS RECEIVED MEMBERSHIP FEES AGGREGATING TO RS. 283.38 LACS IN THE ASSESSMENT YEAR UNDER CONSIDERATION WHICH IS IN VIOLATION OF THE TRUST DEED. SHE HAS CONTENDED FURT HER THAT PRESCRIBING OF ALLOPATHIC MEDICINES BY ONE DENTIST SHRI KULDEEP SINGH IN THE MEDICAL HOSPITAL RUN BY THE AP PELLANT WAS ALSO IN VIOLATION OF THE OBJECTIVE OF THE TRUST . REJOINDER OF THE LD. AR IN THIS REGARD REMAINED THAT CLAUSE 0 OF THE TRUST DEED CLEARLY EMPOWERS THE APPELLANT TRUST TO ACCEPT VOLUNTARY DONATIONS. THUS THERE WAS NO BAR ON THE APPELLANT TO RECEIVE VOLUNTARY DONATIONS IN THE FOR M OF MEMBERSHIP FEES AND THUS THE OBJECTION RAISED BY TJ HE DEPARTMENT DOES NOT SURVIVE. THE LD. AR SUBMITTED F URTHER THAT THE PREDOMINANT OBJECTIVE OF THE APPELLANT TRU ST IS TO PROVIDE MEDICAL RELIEF TO THE SOCIETY AT LARGE. HEN CE THERE IS NO SPECIFIC RESTRICTION STIPULATED IN THE TRUST DEED TO PREVENT THE APPELLANT FROM PRESCRIBING ALLOPATHIC MEDICINES. HE REFERRED CLAUSE A & D OF THE TRUST DE ED IN SUPPORT. HE HOWEVER SUBMITTED THAT THOUGH THE APPEL LANT PRIMARILY ADOPTS AYURVED AND YOGA AS TECHNIQUES TO CURE DISEASES BUT THERE IS NO EMBARGO IN THE TRUST DEED TO PREVENT THE APPELLANT FROM PRESCRIBING ALLOPATHIC MEDICINES TO CURE THE PATIENTS OF DISEASES. IT WAS SUBMITTED FURTHER THAT THIS CONTENTION IS ALSO CONT RARY TO PRIMARY CONTENTION OF THE DEPARTMENT THAT THE APPEL LANT PRESCRIBED ONLY MEDICINES WHICH ARE MANUFACTURED IN HOUSE AND MADE AVAILABLE IN THE SALES COUNTERS MANA GED BY THE APPELLANT. WE FULLY AGREE WITH THE ABOVE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 36 SUBMISSION THAT LD. AR MADE IN REJOINDER THAT THERE IS NO SUBSTANCE IN THE ALLEGATIONS OF LD. CIT(DR) THAT TH ERE WAS VIOLATION OF TRUST DEED BY THE APPELLANT IN ACCEPTI NG MEMBERSHIP FEES AND PRESCRIBING ALLOPATHIC MEDICINE S TO ITS PATIENTS. 6.7.1 IN GROUND NO. 10 OF THE APPEAL THE APPELLANT HAS TAKEN ALTERNATIVE PLEA THAT THE LD. CIT(A) HAS ERRE D IN UPHOLDING THE TAXATION OF GROSS INCOME AND NOT DIRE CTING THE AO TO ALLOW DEDUCTION OF 'REVENUE EXPENDITURE' INCURRED DURING THE ASSESSMENT YEAR 2009-10 WHILE COMPUTING THE TAXABLE INCOME. THIS GROUND HAS BECOM E INFRUCTUOUS AS THE AO IN ITS RECTIFICATION ORDER DA TED 3.6.2013 U/S 154 OF THE ACT HAS RECTIFIED THE ASSES SMENT ORDER AND ALLOWED THE DEDUCTION OF REVENUE EXPENDIT URE AGGREGATING 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 IMPART ING OF EDUCATION THE CONTENTION OF THE LD. DR REMAINED THA T 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 REMAINED THAT THOUGH THE AFORESAID MEDICAL (COLLEGE WAS NOT IN OPERATION IN THE ASSESSMENT YEAR UNDER CONSIDERATION BUT THE APPELLA NT HAD APPLIED SUBSTANTIAL AMOUNT IN SETTING UP THE AYURVEDIC COLLEGE WHICH AMOUNTS TO APPLICATION OF I NCOME FOR THE PURPOSE OF IMPARTING EDUCATION IN THE FIELD OF AYURVEDA. IN THE ABSENCE OF REBUTTAL OF THIS FACT W E DO NOT FIND SUBSTANCE IN THE ALLEGATION OF THE LD. CIT(DR) . ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 37 6.7.3 THE FURTHER CONTENTION OF THE LD. CIT(DR) REMAINED THAT THE CERTIFICATE OF RECOGNITION GRANTED BY THE MEDICAL AND INDUSTRIAL RESEARCH ORGANIZATION (SIRO) WAS NEV ER FILED BEFORE THE LOWER AUTHORITIES WHICH CONSTITUTE D ADDITIONAL EVIDENCE AT THE SECOND STAGE OF APPEAL PROCEEDINGS. IN THIS CONTEXT THE LD. CIT(DR) HAS OB JECTED FURTHER THAT THE R & D ACTIVITIES UNDERTAKEN HY THE APPELLANT AMOUNTED TO OBJECT OF GENERAL PUBLIC UTIL ITY U/S 2(15) OF THE ACT. SHE ALLEGED FURTHER THAT COMPARAT IVE RATE CHART FURNISHED BY THE APPELLANT IN THE PAPER BOOK WAS NOT FILED BEFORE THE AUTHORITIES BELOW HENCE THE SA ME CONSTITUTES ADDITIONAL EVIDENCE. LD. AR HAS MET OUT THESE CONTENTIONS OF THE LD. DR WITH THIS REJOINDER THAT THE NOTIFICATION GRANTING RECOGNITION TO THE R & D CENT ER OF THE APPELLANT BY THE SIRO IS AVAILABLE ON THE PUBLIC DO MAIN AND CAN BE ACCESSED AT WWW.DSIR.GOV.IN/DIRECT/SIRO06.PDF. THUS THE CERTIFI CATE DOES NOT CONSTITUTE ADDITIONAL EVIDENCE. IT WAS SUB MITTED 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 TH E OBJECTS OF GENERAL PUBLIC UTILITY AS DEFINED U/S 2( 15) OF THE ACT. REGARDING COMPARATIVE RATE CHART FURNISHED BY THE ASSESEE BEFORE THE TRIBUNAL AMOUNTING TO ADDITIONAL EVIDENCE, LD. AR SUBMITTED THAT THIS FACT WAS VERY MUCH HIGHLIGHTED BEFORE THE AUTHORITIES BELOW AND REFERE NCE OF THE CONTENTS OF PAGE NO. 13 OF THE FIRST APPELLATE ORDER HAS BEEN MADE IN SUPPORT. IT WAS SUBMITTED FURTHER THAT THE CHART FILED IS NOTHING BUT COLLATION OF THE DETAILS OF PRICES AVAILABLE IN PUBLIC DOMAIN AND HAS BEEN FILED MEREL Y IN FURTHERANCE OF THE CONTENTION TAKEN BEFORE! THE AUT HORITIES BELOW. CONSIDERING THE ABOVE SUBMISSION WE FIND SUBSTANCE IN THE SUBMISSION OF THE LD. AR AND THE S AME IS ACCEPTED AS SUCH. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 38 6.7.4 BESIDES, ABOVE, IT IS PERTINENT TO NOTE HERE THAT T HE APPELLANT SINCE ITS INCEPTION IN THE YEAR 1995 HAS BEEN ENGAGED IN THE ACTIVITY OF PROVIDING MEDICAL RELIEF THROUGH PATANJALI BHARTIYA AYURVIGYAN AVAM ANUSANDHAN SANSTHAN' AT HARIDWAR WHICH HAS BEEN CONSISTENTLY ACCEPTED BY THE REVENUE IN THE ASSESSMENT YEARS 200 4-05 TO 2008-09 VIDE VARIOUS ASSESSMENTS FRAMED U/S 143( 3) OF THE ACT AND THERE IS NO CHANGE IN THE PREDOMINAN T OBJECTS OF THE APPELLANT TRUST. WE THUS FOLLOWING T HE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG (SUPRA) AND OTHERS HOLD THAT THE REVENUE WAS NOT JUSTIFIED IN REFUSING THE CLAIMED EXEMPTION U/S 11/12 OF THE ACT DURING THE YEAR. THE HON'BLE SUPREME COURT, IN THE CASE OF RADHA SOAMI SATSANG (SUPRA) HAS BEEN PLEASED TO HOLD THAT WHERE A FUNDAMENTAL ASPECT PERMITTING THROUGH THE DIFFERENT ASSESSMENT YEARS IS ACCEPTED ONE WAY OR THE OTHER A DIFFERENT VIEW IN THE MATTER IS NOT WARRANTED, UNLE SS THERE IS ANY MATERIAL CHANGE IN FACTS. IN THE CASE OF GUR U NANAK VIDYA BHANDAR TRUST (SUPRA) THE HON'BLE DELHI HIGH COURT HAS BEEN PLEASED TO HOLD THAT THE DEPARTMENT IS EXP ECTED TO BE CONSISTENT WITH ITS OWN STAND WHICH HAS BEEN TAKEN IN EARLIER YEARS, WHEN THERE IS NO CHANGE IN THE OB JECTS OF THE TRUST DURING THE YEAR AND SUCH OBJECTS WHEN FOU ND PERMISSIBLE FOR EXEMPTION IN THE PAST NOTWITHSTANDI NG THE FACT THAT IT HAD MANY FOLD OBJECTS SOME OF WHICH AR E VULNERABLE. SIMILAR VIEW HAS BEEN EXPRESSED 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 ASSE SEE, HENCE THESE ARE NOT HELPFUL TO THE REVENUE. IN THE CASE OF SAMAJBADI SOCIETY (SUPRA) THE ASSESSEE WAS ENGAGED IN PRINTING AND PUBLISHING NEWSPAPERS AND PERIODICALS ON ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 39 COMMERCIAL LINES AND IT CLAIMED EXEMPTION ON THE GR OUND THAT IT WAS ENGAGED IN THE CHARITABLE ACTIVITY OF ' IMPARTING EDUCATION'. THE TRIBUNAL BY PLACING RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SO LE TRUSTEE, LOK SHIKSHANA TRUST (SUPRA) HELD THAT THE ACTIVITIES UNDERTAKEN BY THE APPELLANT WERE IN THE NATURE .OF 'GENERAL PUBIC UTILITY' AS DEFINED U/S 2(15) OF THE ACT AND SINCE THERE WAS NO ITOTA OF EVIDENCE TO SUBSTAN TIATE THE CHARITABLE ACTIVITIES UNDERTAKEN BY THE ASSESSE E NO EXEMPTION WAS GRANTED IN THE GIVEN ASSESSMENT YEAR. IN THE CASE OF AUROLAB TRUST (SUPRA) ASSESSEE ENGAGED IN THE SINGULAR ACTIVITY OF MANUFACTURING AND TRADING IN OPHTHALIMIC AND CARDIOVASCULAR PRODUCTS AND ACCESSO RIES, HAD NOT TAKEN ANY CHARITABLE ACTIVITY AS PROVIDED I N THE TRUST DEED. EVEN THE SALE PRICE OF THE PRODUCTS SOL D BY THE ASSESSEE WAS HIGHER THAN THOSE AVAILABLE IN THE MAR KET. TAKING INTO ACCOUNT THESE ASPECTS THE 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 CLAIM EXEMPTION U/S 11/12 OF THE AC T. IN THE CASE OF ICAI ACCOUNTING RESEARCH FOUNDATION (SUPRA) THE ASSESSEE WAS PRE-DOMINANTLY ENGAGED IN UNDERTAKING R&D ACTIVITIES ON BEHALF OF GOVERNMENT AND OTHER INSTITUTION AND PROVIDING CONSULTANCY SERVICES. IN VIEW OF THE PRIMARY ACTIVITY UNDERTAKEN BY THE ASSESSEE IT WAS HELD TO BE IN THE NATURE OF PROVIDING 'GENERAL PUBL IC UTILITY' AS DEFINED U/S 2(15) OF THE ACT. HOWEVER THE CASE W AS ULTIMATELY DECIDED IN FAVOUR OF THE ASSESEE AND EXE MPTION WAS GRANTED U/S 10(23C)(IV) OF THE ACT. IN THE CASE OF QUEEN'S EDUCATIONAL SOCIETY, (SUPRA) DECISION WAS RENDERED IN THE CONTEXT OF ALLOWABILITY OF EXEMPTIO N U/S 10(23C) OF THE ACT ON THE FACTS OF THE CASE BEFORE THE HON'BLE HIGH COURT. IN THIS CASE PROFITS OF THE ASS ESSEE WAS CONSIDERED WITHOUT TAKING INTO CONSIDERATION TH E CAPITAL EXPENDITURE INCURRED BY THE ASSESSEE FOR CH ARITABLE PURPOSES. THIS DECISION WAS SUBSEQUENTLY BEEN DISSE NTED FROM IN SEVERAL DECISIONS INCLUDING DECISION OF HON 'BLE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 40 PUNJAB & HARYANA HIGH COURT IN THE CASES OF PINEGRO VE INTERNATIONAL CHARITABLE TRUST V. UOI [2010] 327 IT R 73/188 TAXMAN 402 (PUNJ. & HAR.) AND CIT V. GAUR BRAHMIN VIDYA PRACHARINI SABHB [2011] 203 TAXMAN 226/115 TAXMANN.COM 250 (PUNJ. & HAR.); MAA SARASWA TI EDUCATIONAL TRUST V. UOI [2010] 194 TAXMAN 84 (H.P) ; DIT (EXEMPTION) V. LILAVATI KIRTILAL MEHTA MEDICAL TRUS T ITA(L) NO. 2990/2009 (BOM) ETC. IN THE CASE OF SANJEEVAMMA HANUMANTHA GOWDA CHARITABLE (SUPRA) THE PREDOMINANT ACTIVITY UNDERTAKEN BY THE ASSESSEE WAS LETTING OUT OF MARRIAGE HALLS ON PURELY COMMERCIAL BASIS AND NOT I N FURTHERANCE OF THE CHARITABLE OBJECTIVITIES. FURTHE R THE ASSESSEE HAD NOT UNDERTAKEN ANY CHARITABLE ACTIVITY IN PURSUANCE OF THE CHARITABLE OBJECTS PROVIDED IN THE TRUST DEED. THE ASSESSEE WAS THEREFORE DENIED REGISTRATIO N U/S 12A OF THE ACT. IN THE CASE OF DAULAT RAM PUBLIC TR UST (SUPRA) THERE WAS NO DOMINANT CHARITABLE OBJECTIVE IN THE TRUST DEED WHICH THE ANCILLARY OBJECTS SUB SERVED. IT WAS ALSO OBSERVED THAT NO AMOUNT WAS UTILIZED FOR CHARI TABLE PURPOSES AND THE ASSESSEE WAS PREDOMINANTLY ENGAGED IN UNDERTAKING COMMERCIAL ACTIVITIES FOR THE PURPOS E OF GENERATING PROFITS. IN THE CASE OF JACOB THASILDAR (SUPRA) DECISION WAS GIVEN IN THE CONTEXT OF THE KERALA BUI LDING TAX ACT 1975 WHEREIN THE SCHEME OF THAT ACT IS COMP LETELY DIFFERENT FROM THE APPLICABLE PROVISIONS OF THE INC OME TAX ACT. IN THE CASE OF JODHPUR CHARTERED ACCOUNTANTS S OCIETY (SUPRA) THE ASSESEE WAS ENGAGED IN ORGANIZING CONFERENCE, SEMINARS AND WORKSHOPS WHICH WAS HELD T O BE IN THE NATURE OF 'GENERAL PUBLIC UTILITY' ENTITL ED TO EXEMPTION U/S 11/12 OF THE ACT. WE THUS FIND THAT T HESE DECISIONS RELIED UPON BY THE LD. CIT(DR) DO NOT ADV ANCE THE CASE OF THE REVENUE AND HENCE NOT HELPFUL TO TH E REVENUE. ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 41 DISTINCTION BETWEEN OBJECTS AND BUSINESS U/S 11 (4) /(4A) 6.7.6 THE AUTHORITIES BELOW HELD THAT THE ACTIVITIES OF T HE APPELLANT WERE MERELY SUB SERVING THE BUSINESS OF D IVYA PHARMACY. THE CONTENTION OF THE APPELLANT TO IT REM AINED THAT THE BUSINESS UNDERTAKING WAS RUN BY THE APPELL ANT AS AN ACTIVITY IN INCIDENTAL TO THE ATTAINMENT OF T HE MAIN OBJECTS OF THE APPELLANT AND TO GIVE CHARITY WHICH IS PERMITTED U/S 11(4)/11(4A) OF THE ACT. 6.7.7 CONSIDERING THE SUBMISSION OF TRIE PARTIES ON THES E ISSUES WE ARE OF THE VIEW THAT IT IS A TRITE LAW TH AT ONCE REGISTRATION U/S 12A OF THE ACT HAS BEEN GRANTED BY LD. CIT, THE AO COULD NOT QUESTION THE CHARITABLE CHARA CTER OF THE INSTITUTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT OPEN TO THE AO IN THE ASSESS MENT PROCEEDINGS TO HOLD THAT THE OBJECTS OF THE ASSESSE E ARE NOT CHARITABLE IN NATURE. THE CONTENTION OF LD. AR REMAINED THA THE MEANING OF THE EXPRESSION 'NOT FOR PURPOSE OF PROFIT' IN THE ABOVE PROVISIONS IS NO LO NGER RES INTEGRA, THE TEST BEING, WHAT IS THE PREDOMINANT OB JECT OF THE ACTIVITY - WHETHER IT IS TO CARRY OUT A CHARITA BLE PURPOSE OR TO EARN PROFIT' IF THE PREDOMINANT OBJECT IS TO CARRY OUT A CHARITABLE PURPOSE AND NOT EARN PROFIT, THE ORGANIZ ATION WOULD NOT LOOSE ITS CHARITABLE CHARACTER MERELY BEC AUSE SOME PROFIT ARISES FORM THE ACTIVITY. LD. AR HAS PL ACED RELIANCE IN THIS REGARD ON THE FOLLOWING DECISIONS INCLUDING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F SURAT ART SILK MANUFACTURERS (SUPRA) : ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 42 - CIT V. ANDHRA PRADESH STATE ROAD TRANSPORT CORPN. [1986] 159 ITR 1 (SC) - VICTORIA TECHNICAL INSTITUTE (SUPRA) - THIAGARAJAR CHARITIES (SUPRA) - ADITANAR EDUCATIONAL INSTITUTION (SUPRA) - BAR COUNCIL OF MAHARASHTRA (SUPRA) - AMERICAN HOTEL LODGING ASSOCIATION EDUCATION INSTIT UTE (SUPRA) - DELHI KANNADA EDUCATION SOCIETY (SUPRA) - A.L.N. RAO CHARITABLE TRUST (SUPRA) - PULLIKAL MEDICAL FOUNDATION (P.) LTD: (SUPRA) - UMAID CHARITABLE TRUST (SUPRA) - CIT V. SIVAKASI HINDU NADARS [1996] 217 ITR 118/86 TAXMAN 290 (MAD.) - CIT V. JANAKIAMMA AYYANADAR CHARITABLE TRUST [2013] 212 TAXMAN 274/29 TAXMANN.COM 159 (MAD) - SAMAJ KALYAN PARISHAD V. ITO [2007] 105 ITD 29 (DELHI) (SB) THE RELEVANT PROVISIONS U/S 11 (4)/11(4A) OF THE AC T ARE BEING REPRODUCED FOR A READY REFERENCE : '(4) FOR THE PURPOSES OF THIS SECTION 'PROPERTY HEL D UNDER TRUST' INCLUDES BUSINESS UNDERTAKING SO HELD, AND W HERE A CLAIM IS MADE THAT THE INCOME OF ANY SUCH UNDERTAKI NG SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PE RSONS IN RECEIPT THEREOF, THE ASSESSING OFFICER SHALL HAVE P OWER TO ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 43 DETERMINE THE INCOME OF SUCH UNDERTAKING IN ACCORDA NCE WITH THE PROVISIONS OF THIS ACT RELATING TO ASSESSM ENT; AND WHERE ANY INCOME SO DETERMINED IS IN EXCESS OF THE INCOME AS SHOWN IN THE ACCOUNTS OF THE UNDERTAKING, SUCH EXCESS SHALL BE DEEMED TO BE APPLIED TO PURPOSES OT HER THAN CHARITABLE OR RELIGIOUS 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 INSTITUTION, BEING PROFITS GAINS O F BUSINESS, UNLESS THE BUSINESS IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECTIVES OF THE TRUST OR, AS THE CASE MAY BE, INS TITUTION, AND SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED BY SUC H TRUST OR INSTITUTION IN RESPECT OF SUCH BUSINESS.' 6.7.8 WE FIND THAT THE SECTION DEALS WITH CASES WHERE TH E BUSINESS ITSELF IS SETTLED TO TAKE CARE OF INTEREST FOR A CHARITABLE 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) FE EDS THE CHARITABLE OBJECTS (C) SEPARATE BOOKS OF ACCOUNTS A RE MAINTAINED IN RESPECT OF THE SAME, EVEN ON FULFILLM ENT OF THE AFORESAID CONDITIONS PROFIT FROM SUCH BUSINESS ARE EXEMPT U/S 11/12 OF THE ACT. THUS IT IS CLEAR THAT THE CHARITABLE 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 BUSINESS UNDERTAKING OF THE APPELLANT AS DISCUSSED ABOVE ARE THUS THE MEANS FOR EFFECTUATING A CHARITY, BUT NOT A CHARITABLE OBJECT ITSELF. WE FIN D THAT IN THE CASE OF APPELLANT BEFORE US THE ACTIVITY OF ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 44 MANUFACTURING AND SALE OF AYURVEDIC PREPARATIONS HA S BEEN UNDERTAKEN ONLY FOR THE PURPOSE OF EFFECTUATIN G THE CHARITABLE OBJECTIVE OF PROVIDING 'MEDICAL RELIEF T O THE SOCIETY AT LARGE ON A GENUINE NEED WAS FELT TO PROV IDE SUPERIOR QUALITY AYURVEDIC PREPARATIONS AT ECONOMIC AL PRICES IN ORDER TO ATTAIN EFFECTIVE MEDICAL RESULTS . ONLY BECAUSE THE ACTIVITY CARRIED ON YIELDED' PROFITS A NEGATIVE INFERENCE CANNOT DRAWN THAT THE ACTIVITY WAS UNDERT AKEN WITH THE SOLE INTENTION OF EARNING PROFITS. IT IS A LSO PERTINENT TO NOTE THAT THE TOTAL DONATIONS/VOLUNTAR Y CONTRIBUTIONS RECEIVED BY THE APPELLANT TRUST DURIN G THE ASSESSMENT YEAR UNDER CONSIDERATION AMOUNTED TO RS. 3,89,14,100/- ONLY. 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). FURTHER IT IS APPARENT FR OM PAGE 26 OF THE PAPER BOOK I.E. INCOME AND EXPENDITURE AC COUNT FOR THE YEAR ENDING 31ST MARCH, 2009 THAT SUBSTANTI AL CAPITAL EXPENDITURE HAS ALSO BEEN INCURRED BY THE APPELLANT TRUST IN PURSUING ITS CHARITABLE ACTIVITI ES. WE ALSO FIND THAT THE DONATIONS/CONTRIBUTIONS RECEIVED BY THE APPELLANT TRUST CONSTITUTED ONLY A MINUSCULE PORTIO N OF THE HEAVY OUTLAY OF EXPENDITURE INCURRED IN PURSUING TH E CHARITABLE ACTIVITIES. THE MEANING OF EXPRESSION NO T FOR PURPOSE OF PROFIT IS NO LONGER RES INTEGRA THE TEST BEING WHAT IS THE PREDOMINANT OBJECT OF THE ACTIVITY WHET HER IT IS TO CARRY OUT A CHARITABLE PURPOSE OR TO EARN PROFIT ? IF THE PREDOMINANT OBJECT IS TO CARRY OUT AS CHARITABLE PU RPOSE AND NOT TO EARN PROFIT THE ORGANIZATION WOULD NOT L OSE ITS CHARITABLE CHARACTER MERELY BECAUSE SOME PROFITS AR ISES FROM THE ACTIVITY. THE HON'BLE SUPREME COURT IN THE CASE OF SURAT ART SILK CLOTH MANUFACTURERS (SUPRA) HAS BEEN PLEASED TO OBSERVE THAT THE EXPRESSION 'FOR THE PUR POSE OF 'PROFIT' IMPLIES THAT THE PREDOMINANT OBJECT SHOULD BE TO EARN PROFIT. FURTHER TO DETERMINE THE PREDOMINANT O BJECT, WHAT IS REQUIRED TO BE EXAMINED IS THE OBJECTS OF T HE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 45 SOCIETY AND NOT THE QUANTUM OF SURPLUS THOUGH SUCH QUANTUM MAY BECOME RELEVANT IN CERTAIN CIRCUMSTANCE S. THE SAME RATIO HAS BEEN LAID DOWN BY THE SUPREME CO URT IN THE CASE OF ANDHRA PRADESH STATE ROAD TRANSPORT CORPN. (SUPRA), VICTORIA TECHNICAL INSTITUTE (SUPRA ), THIAGARAJAR CHARITIES (SUPRA), ADITANAR EDUCATIONAL INSTITUTION (SUPRA), BAR COUNCIL OF MAHARASHTRA (SU PRA), AMERICAN HOTEL LODGING ASSOCIATION EDUCATION INSTIT UTE (SUPRA), DELHI KANNADA EDUCATION SOCIETY (SUPRA), S AMAJ KALYAN PARISHAD (SUPRA). 6.7.9 THUS WE FIND THAT THERE IS NO BAR IN THE CHARITABLE TRUST/INSTITUTION CARRYING ON BUSINESS PROVIDED THE CONDITIONS PRESCRIBED IN SECTION 11(4)/11(4A) OF TH E ACT ARE SATISFIED. THE HON'BLE SUPREME COURT IN THE CASE OF P. KRISHNA WARRIERS (SUPRA) HAS BEEN PLEASED TO HOLD W ITH REFERENCE TO INCOME TAX ACT 1922 THAT IF THE TRUST CARRIED ON BUSINESS AND THE BUSINESS ITSELF IS HELD IN TRUS T AND THE INCOME FROM SUCH BUSINESS IS APPLIED OR ACCUMULATED FOR APPLICATION FOR THE CHARITABLE 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 HON'BLE SUPREME COURT BUSINESS OF MAKING AND SELLING AYURVEDIC MEDICINES WAS SETTLED AND HELD IN TRUST AND 60% OF INCOME FROM SUCH BUSINESS WAS APPLIED FOR CHARITABLE PURPOSE. THE AO DENIED EXEMP TION ON THE GROUND THAT PART OF THE INCOME FROM BUSINESS WAS NOT APPLIED FOR CHARITABLE PURPOSES, THE HON'BLE SU PREME COURT HELD THAT WHERE BUSINESS IS HELD FOR CHARITAB LE PURPOSES THE CONDITIONS PRESCRIBED IN PROVISO (B) T O SECTION 4(3) (I) OF THE INCOME TAX ACT IS NOT APPLICABLE AN D THE ASSESSEE WAS HELD TO BE ELIGIBLE FOR EXEMPTION. THE DECISION OF DELHI HIGH COURT IN THE CASE OF HAMDARD DAWAKHANA (WAQF) (SUPRA) THOUGH RENDERED IN THE CON TEXT OF THE PRE AMENDED LAW I.E. BEFORE INSERTION OF SEC TION ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 46 11(4A) IN THE 1961 ACT. BUT THE HON'BLE COURT HELD THAT IT WAS IMMATERIAL HOW MONEY WHICH WAS OBTAINED BY RUNNING OF AN ACTIVITY FOR PROFIT DID NOT MAKE THE OBJECTIVE NON CHARITABLE. IF THAT MONEY WAS USED FOR CHARITAB LE PURPOSE AND NOT FOR THE CARRYING ON ANY BUSINESS AT A PROFIT, THEN THE OBJECT OF THE TRUST WAS CHARITABLE NOTWITHSTANDING THE SOURCE OF THE INCOME. THE HON'B LE SUPREME COURT AGAIN IN THE CASE OF THANTHI TRUST (S UPRA) HELD THAT THE TRUST WAS ENTITLED TO EXEMPTION WHEN THE BUSINESS OF THE TRUST WAS INCIDENTAL TO THE ATTAINM ENT OF THE OBJECTIVES OF THE TRUST, NAMELY THE OBJECTIVES OF EDUCATION AND RELIEF TO THE POOR. THEIR LORDSHIPS O BSERVED THAT AFTER AMENDMENT OF SECTION 11(4A) IN 1992, ALL THAT IS REQUIRED FOR THE BUSINESS INCOME OF THE TRUST OR IN STITUTION TO BE EXEMPT FROM TAX IS THAT THE BUSINESS SHOULD B E INCIDENTAL TO THE ATTAINMENT OF THE OBJECTS OF THE TRUST OR INSTITUTION. THE HON'BLE COURT FURTHER HELD THAT IF BUSINESS WHOSE INCOME IS UTILIZED BY THE TRUST OR THE INSTIT UTION FOR THE PURPOSES OF ACHIEVING ITS OBJECTIVES IS A BUSIN ESS WHICH IS INCIDENTAL TO THE ATTAINMENT OF THE OBJECT IVES OF THE TRUST OR INSTITUTION. RESPECTFULLY FOLLOWING TH E RATIO LAID DOWN IN THE ABOVE CITED DECISIONS WE COME TO THE CONCLUSION THAT THE AUTHORITIES BELOW HAVE FAILED T O APPRECIATE THAT INCOMES FROM BUSINESS UNDERTAKEN BY THE APPELLANT FULFILLS THE AFORESAID CONDITIONS IN AS M UCH AS (A) ALL THE BUSINESS, INCLUDING THE BUSINESS OF DIVYA PHARMACY, WERE INCIDENTAL TO THE ATTAINMENT OF MAIN OBJECTS: (B) PROFITS FROM BUSINESS ARE APPLIED FOR CHARITABLE OBJECTS ; AND (C) SEPARATE BOOKS OF ACCOUNTS ARE MAINTAINED. THEY WERE THUS NOT JUSTIFIED IN HOLDING THAT THE CHARITABLE OBJECTS WAS SUB-SERVING THE BUSINESS , WHEREAS AS A MATTER OF FACT IT WAS THE OTHER WAY RO UND. WE FIND THAT IN THE CASE OF BOMBAY KERALEEYA SAMAJ (SUPRA) THE OBJECTS OF THE ASSESSEE REGISTERED U/S 12A WAS INTER ALIA PROPAGATION OF THE KERALA SYSTEM OF AYUR VEDA AND FOR THIS PURPOSE THE ASSESSEE RAN FIVE DISPENSA RIES RENDERING FREE CONSULTATION BY AYURVED PHYSICIANS. THE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 47 ASSESSEE WAS OBTAINING AYURVEDIC MEDICINES FROM AN INSTITUTION (A) AT A DISCOUNT OF 11 % WHICH WAS SOL D TO THE PATIENTS AT THE DISPENSARIES AS PER THE PRESCRIPTIO N OF THE DOCTORS. THE AMOUNT OF DISCOUNT _ WHICH THE ASSESSE E RECEIVED FROM A WAS BEING USED FOR RUNNING THE DISPENSARIES AND FOR CARRYING OUT THE OTHER OBJECTS OF THE TRUST. THE ASSESSEE ALSO LEVIED 11% SERVICE CHARGE ON THE PRICE OF MEDICINES FROM NON-MEMBERS AND CLAIMED TO HAVE UTILIZED THE AMOUNT SO COLLECTED FOR RUNNING THE DISPENSARIES. IN THE PRECEDING ASSESSMENT YEARS, BE NEFIT OF SECTION 11 WAS GIVEN TO THE ASSESSEE. THE ASSESS EE CLAIMED THE BENEFIT U/S 10(22A) WHICH WAS REFUSED B Y THE ASSESSING OFFICER MAINLY ON THE BASIS THAT THE DOMI NANT OBJECT OF THE TRUST WAS TO SELL MEDICINES AND DERIV E PROFIT THEREFROM. THE FIRST APPELLATE AUTHORITY REJECTED T HE ASSESSEE'S APPEAL. THE TRIBUNAL HAS HOWEVER GIVEN R ELIEF WITH THIS FINDING THAT THE MERE FACT THAT THE ASSES SEE TRUST HAS OBJECTS OTHER THAN MEDICAL RELIEF WAS NOT A CON DITION ALIUNDE TO WHICH THE EXEMPTION U/S 10(22A) COULD BE DENIED TO THE ASSESSEE. THE SURPLUS DERIVED FROM RU NNING THE DISPENSARIES WAS UTILISED FOR PHILANTHROPIC PUR POSES. CBDT CIRCULAR NO. 194/16-17-II(A-1) MAKES IT CLEAR THAT IF A SURPLUS IS USED FOR PHILANTHROPIC PURPOSES THE IN COME OF THE INSTITUTION WILL BE ELIGIBLE FOR EXEMPTION U/S 10(22A). WE ARE THUS OF THE VIEW THAT IN THE PRESENT CASE TH E AUTHORITIES BELOW HAVE GROSSLY ERRED IN HOLDING THA T THE APPELLANT'S ACTIVITIES IN RELATION TO PRODUCTION AN D SALE OF AYURVEDIC PREPARATIONS ARE NOT INCIDENTAL TO ITS MA IN OBJECTIVE AS THE SAME ARE COMMERCIAL IN NATURE. LIK EWISE IN THE CASE OF BAUN FOUNDATION TRUST V. CHIEF CIT [ 2013] 33 TAXMANN.COM 677, THE HON'BLE BOMBAY HIGH COURT H AS BEEN PLEASED TO HOLD THAT ACTIVITY OF RUNNING CHEMI ST SHOP WITHIN THE PREMISES OF THE HOSPITAL WAS INCIDENTAL OR ANCILLARY TO THE DOMINANT OBJECT OF RUNNING A HOSPI TAL. WE THUS HOLD THAT IN THE PRESENT CASE THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT THE BUSINESS SET UP AND HELD BY THE APPELLANT UNDER TRUST IS TO SUB SERVE T HE ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 48 PREDOMINANT CHARITABLE OBJECTS OF PROVIDING MEDICAL RELIEF EDUCATION AND RELIEF TO POOR. FURTHERMORE, SINCE SE PARATE BOOKS OF ACCOUNTS WERE MAINTAINED AND THE ENTIRE PR OFITS ARE FOR CHARITABLE OBJECTS, THE CONDITIONS PRESCRIB ED IN SECTION 11(4A) OF THE ACT, TOO WERE FULFILLED. THE AUTHORITIES BELOW HAVE ALSO FAILED TO APPRECIATE THAT OUT OF TO TAL SALES.OF RS. 168.12 CRORES OF DIVYA PHARMACY MEDICI NES OF RS. 4.2 CRORES ONLY WERE SOLD FROM THE HOSPITAL SAL ES COUNTER (SIC). AS SO FAR AS GROUND NO. 10 IS CONCER NED 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 RAI SED IN GROUND NOS. 11 TO 14 HAVE BECOME INFRUCTUOUS IN VIEW OF OUR FINDING IN FAVOUR OF THE APPELLANT IN GROUND NOS. 1 TO 9 , HENCE DO NOT NEED ADJUDICATION 10. IN VIEW OF THE ABOVE DECISION OF THE COORDINAT E BENCH IN ASSESSEES OWN CASE WE DO NOT FIND ANY REASON TO DEV IATE FROM THE SAME. THE LD. DR HAS ALSO NO SHOWN US ANY REASON TO DO SO. HENCE WE RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT (A) IN ALLOWING THE EXEMPTION U/S 11 AND 12 OF THE ACT T O THE ASSESSEE. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. 5.1 THEREFORE, IN VIEW OF THE ABOVE AND IN THE ABSENCE OF ANY DISTINGUISHING FACT AND RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH, WE DISMISS GROUND NO. 4 OF THE DE PARTMENTS APPEAL. 5.2 AS FAR AS GROUND NOS. 1, 2 AND 3 ARE CONCERNED , THE LD. AR HAS DEMONSTRATED THAT THESE THREE ITEMS HAD ALRE ADY BEEN DISALLOWED BY THE ASSESSEE WHILE COMPUTING ITS TOTA L INCOME AND, ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 49 THEREFORE, THERE WAS NO REQUIREMENT FOR THE ASSESSI NG OFFICER TO HAVE MADE THIS DISALLOWANCE. WE ALSO NOTE THAT THI S ISSUE HAS NOT BEEN ADJUDICATED BY THE LD. COMMISSIONER OF INC OME TAX (A) AND, THEREFORE, THE GROUNDS RAISED BY THE DEPART MENT IN THIS REGARD ARE INFRUCTUOUS. THESE ARE ACCORDINGLY DISMISSED AS INFRUCTUOUS. 5.3 GROUND NOS. 5 AND 6 ARE GENERAL IN NATURE AND DO NOT REQUIRE A SEPARATE ADJUDICATION. 6.0 IN THE RESULT, THE APPEAL OF THE DEPARTMENT ST ANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST JULY, 2019. SD/- SD/- (O.P. KANT) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST JULY, 2019 GS COPY FORWARDED TO: - 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR BY ORDER ASSTT. REGISTRAR ITA NO. 779/DEL/2017 ASSESSMENT YEAR 2013-14 50 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER