DIRECTOR OF INCOME TAX EXEMPTIONS Vs. A M M HOSPITALS AND MEDICAL BENEFIT SOCIETY
LAWS(MAD)-2003-3-22
HIGH COURT OF MADRAS
Decided on March 20,2003

DIRECTOR OF INCOME-TAX (EXEMPTIONS) Appellant
VERSUS
A.M.M. HOSPITALS AND MEDICAL BENEFIT SOCIETY Respondents




JUDGEMENT

R. Jayasimha Babu J. - (1.)THE assessment years are 1985-86 to 1987-88. THE following question has been referred to us for our consideration :
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the Commissioner was not justified in setting aside the order of the Commissioner of Income-tax (sic) under Section 263 of the Income-tax Act for the assessment years 1985-86 to 1987-88 and in directing the Assessing Officer to restrict the exemption under Section 10(22A) only to that income which is directly received from the medical institution under Section 10(22A) ?"

(2.)THE assessee runs a hospital. That hospital is not run for profit. THE benefit under Section 10(22) of the Act was nevertheless denied to the assessee by the Commissioner, who revised the order of the Assessing Officer who had granted such exemption by holding that a part of the income of the assessee was derived from sources other than the treatment of patients and, therefore, such income would disentitle the assessee to the benefit of Section 10(22). THE Tribunal, at the instance of the assessee, has set aside that order of the Commissioner and has directed that exemption be granted to the income received from the hospital.
This court in the case of CIT v. A.M. M. Arunachalam Educational Society has held that Section 10(22) exempts "any" income of a university or other educational institution existing solely for educational purposes and not for profit. Section 10(22A) exempts from levy of tax "any income" of a hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit.

The ratio of the decision of this court in CIT v. A.M.M. Arunachalam Educational Society is equally applicable to the income referred to in Section 10(22A). "Any" income in that provision in effect means all income. The material requirement of Section 10(22A) is that the hospital or institution referred to therein of the nature set out in that provision should exist solely for philanthropic purposes and not for the purposes of profit. In this case, it is not in dispute that the assessee exists solely for philanthropic purposes and not for the purposes of profit. All income from all sources received by the assessee is exempt.

The question is answered in favour of the assessee and against the Revenue.



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