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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Navin Chawla, JJ.
Commissioner Of Income Tax - Appellant
Versus
Flt Lt Rajan Dhall Charitable Trust Regd - Respondent
Income Tax Appeal No. 137 of 2021
Decided On : 07-02-2022
Income Tax Act - Exemption under Sections 11 and 12 - Court finds no substantial questions of law due to consistency and uniformity
Fact of the Case:
The appeal challenges the order granting exemption under Sections 11 and 12 of the Income Tax Act for assessment Year 2012-13. The appellant argues that the activities are not for charitable purpose and the transfer of management is violative of Section 11.
Finding of the Court:
The Court finds that the Tribunal's order abides by the principle of consistency and uniformity, as exemptions have been allowed in similar circumstances for earlier and subsequent assessment years. No substantial questions of law arise for consideration.
Issues: Challenge to exemption under Sections 11 and 12 of the Income Tax Act, violation of Section 11, and the principle of consistency and uniformity.
Ratio Decidendi: The Court's decision is influenced by the principle of consistency and uniformity in granting exemptions under the Income Tax Act, as evidenced by orders in earlier and subsequent assessment years.
Final Decision: The appeal is dismissed on the ground of consistency and uniformity.
JUDGMENT
Manmohan, J. - C.M.No.27246/2021
Keeping in view the averments in the application, the delay of 47 days in filing the appeal is condoned.
accordingly, the application stands disposed of.
ITa No.137/2021
1. The appeal has been heard by way of video conferencing.
2. Present appeal has been filed challenging the order dated 28th august, 2019 passed by Delhi Bench 'B' of Income Tax appellate Tribunal in ITa No. 4257/De1/2016 for assessment Year 2012-13.
3. Learned counsel for the appellant submits that the Tribunal erred in granting the exemption under Sections 11 and 12 of the Income Tax act, 1961 (hereafter referred to as the 'act').
4. He submits that the Tribunal erred in ignoring the fact that the activities of the assessee are not the activities done for 'charitable purpose' according to the Section 2(15) of the act, since they are of a purely commercial nature.
5. Learned counsel for the appellant submits that the Tribunal erred in overlooking the fact that the act of transfer of the management and control of Rajan Dhall Hospital, Vasant Kunj, Delhi vide 'Operational and Management agreement with M/s Fortis Hospital Pvt. Ltd. existing absolutely for commercial purposes is violative of Section 11 of the act.
6. Upon a perusal of the paper book, this Court finds that the Tribunal as the last fact finding authority has held that the Revenue had failed to establish that the said activities had been undertaken by the Respondent only in the assessment Year under consideration. In fact, the said activities have been undertaken by the respondent right from the year 2007-08.
7. a perusal of the paper book also reveals that for the earlier and subsequent assessment Years, exemptions have been allowed in the similar circumstances.
8. On 23rd august, 2021, this Court had observed that the impugned order passed by the ITaT suffers from no perversity as it abides by the principle of consistency and uniformity by following orders passed in the earlier and subsequent assessment Years i.e. assessment Years 2007-08, 2008-09, 2009-10, 2011-12, 2013-14 and 2014-15. However, at that stage, learned counsel for the appellant had prayed for some time to obtain instructions and file additional documents.
9. Though, learned counsel for the appellant states that he has filed the additional documents, however, the same are not on record. In any event, in view of the principle of consistency and uniformity, this Court is of the view that no substantial questions of law arises for consideration in the present case.
10. accordingly, the present appeal is dismissed on the ground of consistency and uniformity.
The principle of consistency and uniformity in granting exemptions under the Income Tax Act influences the Court's decision.
The Tribunal correctly granted exemption under the Income Tax Act, 1961, based on the principle of consistency, affirming the Trust's activities as charitable.
Charging management fees to defray administrative costs does not change the charitable nature of an activity under the Income Tax Act.
A charitable institution can operate profitably without losing its status if profits are reinvested for charitable purposes, consistent with Income Tax Act provisions.
The main legal point established is that the absence of profit motive and the utilization of income for charitable activities are key factors in determining the charitable nature of an institution's ....
The main legal point established is that entities essentially for charitable purposes, not conducting activities for profit motive, and applying income for charitable activities are entitled to exemp....
Interpretation of 'charitable purpose' under tax law should prioritize the dominant objective of an institution to avoid taxation, aligning with constitutional principles of equality.
Activities deemed charitable under Income Tax Act, with established jurisprudence supporting exempt status despite commercial nature.
The court affirmed that the ITAT's decision on the exemption under Section 11 should stand, emphasizing that previously unresolved issues do not constitute substantial questions of law for appeal.
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