News Update

International Road Federation calls for intelligent transport system to reduce accidents on Yamuna e-wayBihar Governor Satya Pal Malik receives additional charge of OdishaST VCES, 2013 is not an open ended scheme - benefits thereunder cannot be derived dehors scheme or after its life or duration has come to an end: High CourtReduced rate of GST on construction serviceI-T - Claim of wrong presumption regarding status of payee will not earn reprieve for payer for default committed in withholding tax liability: ITATRenewable Energy based on Waste - Lost its Power under GST!ST - Contract is primarily for transportation of sand and activity of loading/unloading is merely incidental - No tax under Cargo Handling Service: CESTATUS moves WTO against India's export subsidy schemesDoubling farmers’ income - Govt releases Draft Agri Export Policy; proposes to set up Agri Start-up FundIndia, Hong Kong ink agreement on avoidance of double taxation & exchange of tax infoIndia, USA focus on resolving MAP cases; Also wrap up two APAsOffences against Children - SC asks HCs to furnish details of special courtsI-T - Genuineness of gifts made under natural love & affection, should not be decided on touchstone of 'existence of occasion' and needs no prior sanction from Department: HCDomestic Tourist Visits jump from 128 Cr to 161 CroreRural Schemes - Expert Panel suggests measures to sharpen internal audit toolsNITI Aayog releases SATH-Education Roadmaps2G case - CBI moves Delhi HC against acquittal of A RajaIGST Refund - Shipping lines filing EGMs with errors, says CBECGovt about to finalise Sand Mining Policy; Delhi to host 3rd National ConclavePutin wins again; to remain in power till 2024India Needs Good Governance & Not New Law to Catch FugitivesI-T - Resultant profit out of investment in shares is to be taxed as capital gains even if intention of investor is not to earn only dividend income: ITATGST Council's latest recommendations - Part-IIST - Supply of (DMF)/(TECHPACK) to customers - since assessee is manufacturer of excisable goods, they cannot be treated as provider of Scientific or Technical Consultancy service: CESTATA Tale of Two Countries - And Their College Education SystemsCX - Debit note, arising from contractual liability, cannot be considered to be credit note relating to rendering of service u/r 4(7) of CCR, 2004: CESTAT
I-T - Mere alteration in their MoA which did not alter basic purpose of providing medical relief, is no ground to deny exemption to hospitals: ITAT

By TIOL News Service

NEW DELHI, JAN 02, 2018: THE ISSUE BEFORE THE TRIBUNAL IS - Whether receipt of fee or charges for services rendered by a hospital, can be a ground to conclude that such hospital is engaged in trade & commerce with a profit earning motive. NO IS THE VERDICT.

Facts of the case:

The assessee, a charitable society registered u/s 12AA(1), is running a hospital in Old Delhi, which provides medical treatment, pathological tests & conducts surgeries, at very subsidised costs for the benefit of the poor, destitute and economically weaker sections of society. The assessee did not receive any donations and the major source of its income was fees collected from patients. During relevant A.Y, scrutiny assessments were conducted on completion of which, exemption u/s 11(1) was denied to the assessee by invoking provisions of Section 2(15), on grounds that the assessee was running the hospital with intent of earning profit. Subsequently, the registration u/s 12AA(1) was also cancelled by the DIT(Exemption). Such cancellation of registration was overturned by the Tribunal, and the Departmental appeal against such order was dismissed by the High Court.

The assessee also sought exemption u/s 10(23C) which was denied by the Revenue but later allowed by the High Court. For the succeeding AY, the AO also denied exemption u/s 11(1) on grounds that the assessee was not performing any charitable activities. Later, the CIT(A) allowed the assessee's appeal against such order.

Tribunal held that,

++ it is is submitted that in earlier A.Ys, the Exemption was granted by the Department which was taken into cognizance by the CIT(A) in his order. There is no need to interfere with the order of the CIT(A). As per the decision in assessee's own case passed by the ITAT which was confirmed by the High Court, the issue is squarely covered in favour of the assessee. In the said decision, on the question of alteration in Memorandum of Association and communication to the Revenue authorities, the Tribunal has examined the changes/amendments and held that these were minor in nature and did not detract or alter the main/basic purpose which was to provide medical relief. Thus, there was no change in the object and purpose of the assessee. The CIT(A) has rightly held that mere receipt of fee or charge cannot be said that the assessee is involved in any trade, commerce or business.

(See 2018-TIOL-11-ITAT-DEL)