The Commissioner Of Income Tax -Exemption v. St. Stephen's Hospital

$~12 IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 463/2018 & CM APP No. 14771/2018 THE COMMISSIONER OF INCOME TAX -EXEMPTION ..... Appellant Through:Mr.Zoheb Hossain, Sr. St. Counselversus ST. STEPHEN'S HOSPITAL ..... Respondent Through;Mr.Tarun Gulati with Ms.RachnaYadav, Advs. CORAM:HON'BLE MR. JUSTICE SANJIV KHANNAHON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANIO R D E R %19.11.2018 This appeal under Section 260A of the Income Tax Act, 1961 (‘Act’for short) in the case of St. Stephen’s Hospital relates to the assessment year2009-10 and arises from the order of the Income Tax Appellate Tribunal(‘Tribunal’ for short) dated 08.11.2017. The Assessing Officer in the present year had followed the assessmentorder for the assessment year 2008-09, which was predicated on the SpecialAudit Report. Pursuant to the Special Audit Report, registration of therespondent-society was cancelled under Section 12AA of the Act. Thecancellation was, however, struck down by the Tribunal vide order dated11.05.2012. Revenue had thereupon preferred ITA No.37/2013 whichappeal was dismissed by a detailed order dated 26.09.2013. The Tribunal in the impugned order has primarily followed the orderof the Tribunal dated 11.05.2012 in relation to assessment year 2008-09 andthe order dated 26.09.2013 in ITA No.37/2013 passed by the Delhi HighCourt affirming the same. Learned counsel for the Revenue while accepting the aforesaidposition submits that the Assessing Officer has also recorded someadditional facts. He submits that the respondent-assessee had permittedsetting up of a bookstall where religious books were displayed anddistributed free of cost. This contention has not been accepted by theTribunal for several reasons including the finding that no rent was chargedand that the books being displayed and distributed included other books onphilosophy and moral science etc. This contention was also found to bewithout merit in ITA No.450/2018. Another contention raised before us relates to the facilities in the formof Kendriya Bhandar, Mother Dairy booth, STD booth, a bank, a canteenand a cooperative store in the hospital. Opening of a Kendriya Bhandar,Mother Dairy booth, STD booth, bank, canteen or co-operative store cannotbe treated as commercial activities. These facilities were necessary andrequired for proper functioning of the hospital and providing medicalfacilities to the patients. These were ancillary activities for benefit of thepatients and their attendants and staff. The primary purpose and objectivewas to provide medical facilities and aid to patients. Accordingly, we do not find any merit in the present appeal and holdthat no substantial question of law arises for consideration. The appeal stands dismissed. NOVEMBER 19, 2018neelam SANJIV KHANNA, J. ANUP JAIRAM BHAMBHANI, J.