Compensation from hospital management agreement qualifies for section 11 exemption for charitable trust providing medical relief via financial aid to patients; no infrastructure required, agreement doesn't constitute trust's business activity.

आदेश /ORDER

Per, Dr. Arjun Lal Saini, AM:

Captioned appeal filed by the assessee, pertaining to Assessment Year 2015-16, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi / Commissioner of Income-tax (Appeals) (in short ‘Ld. CIT(A)’), dated 03.12.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s. 144 r.w.s.263 of the Act on 30.03.2022.

2. The grounds of appeal raised by the assessee are as under:

1. The learned Commissioner (Appeals), NFAC, Delhi erred in confirming the action of the assessing officer in treating compensation of Rs.2,30,00,004/- received from Wockhardt Hospitals Ltd, as business income and in denying the benefit of Section 11 of the Act to the assessee-trust.

2. The learned Commissioner (Appeals), NFAC, Delhi erred in treating compensation of Rs. 2,30,00,004/- as business income by failing to appreciate benefit of section 11 was already allowed to the assessee in the first appeal filed against the order u/s 143(3) by the CIT(A), NFAC, prior to passing of the impugned order of CIT(A) in respect of order u/s 143(3) r.w.s 263.

3. Alternatively, the learned Commissioner (Appeals), NFAC, Delhi has grievously erred in not allowing the set -off of deficit of the assessment year under consideration and that being brought forward from the earlier years.

4. The learned Commissioner (Appeals), NFAC, Delhi erred in not following the decisions of Hon'ble Rajkot Tribunal in own cases for earlier years.

5. The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal.

3. Learned Counsel for the assessee, at the outset submitted that assessing officer made the addition treating the assessee- trust, as if, assessee-trust is engaged in commercial activity, therefore, the hospital management fees receipt of Rs. 2,30,00,004/- received from M/S. Wockhardt Hospitals Ltd was treated as income from business/commercial activities of the assessee and added as income of the assessee -trust. Aggrieved by the order of assessing officer, the assessee carried the matter in appeal before ld. CIT(A), who has confirmed the action of the assessing officer, therefore, assessee is in appeal before this Tribunal.

4. The Ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee, by the decision of the ITAT Rajkot- Bench, in the assessee’s own case. The ld.Counsel submitted that present appeal is against the order of CIT(A) dated 03-12-2025 arising out of order u/s 144 rws 263 of the Act dated 30-03-2022. The only issue in appeal is regarding the income/receipt of Rs. 2,30,00,004/- received from Wockhardt Hospitals Ltd, treated as business income and denying the benefit of Section 11 of the Act to the said income. The ld.Counsel submitted that the issue in appeal is fully and squarely covered in favour of assessee by the decisions of Rajkot Tribunal in own case for earlier years. The Department's appeal before the Hon’ble Gujarat High Court against said Tribunal decisions are withdrawn/not pressed due to low tax effect, thus the prior years’ decisions of CIT(A) have become final and accepted by Department. The Hon'ble Rajkot Tribunal while allowing the appeal of the assessee for. A.Y. 2007-08, has held that the objects of the assessee-trust are to carry out activities concerning medical relief and that the appellant trust had given monetary benefits to the patients by giving