ITO (EXEMPTION), UDAIPUR vs. M/S. RAJASTHAN MEDICARE RELIEF SOCIETY, CHITTORGARH

PER: SANDEEP GOSAIN, JM

This is an appeal filed by the revenue against the order of the ld.

CIT(A)-1, Udaipur dated 20/11/2018 for the A.Y.2015-16. The grounds

taken by the revenue reads as under:

"1. On the facts and the circumstances of the case and in law the Ld.CIT(Appeals) has erred in allowing the claim of the assessee for exemption u/s 10(23C)(iiiac) of the IT Act, 1961 ignoring the crucial fact that the assessee neither filed a return original or revised, claiming exemption u/s 10(23C) (iiiac) nor claimed such exemption in the course of assessment proceedings & hence, in view of the decision of the Supreme Court in Goetze (India) Vs. CIT 284 ITR 323, the claim of the assessee U/s 10(23C)(iiiac) is not sustainable.

2 ITA 54/Jodh/2019 ITO Vs M/s Rajasthan Medicare Relief Society 2. Any other question of law as deemed fit in the facts and circumstances of the case may also be framed before the Hon’ble Tribunal in the interest of justice." 2. No body appeared on behalf of the assessee in spite of giving the

opportunity, therefore, the Bench decided to dispose off the appeal after

considering the contention of the ld. Departmental Representative and the

material placed on record.

appeal, for which, an application for condonation of delay has also been

filed by the revenue. After considering the contention made in the

condonation petition, we condone the delay and heard the appeal on merit.

for exemption U/s 10(23C)(iiiac) of the Income Tax Act, 1961 (in short, the

Act). In this regard, the facts of the case, in brief, are that the assessee is a

society in healthcare space registered under Rajasthan Societies

Registration Act, 1958. Government of Rajasthan has outsourced

maintenance of District Hospital, Chittorgarh to the assessee society. The

assessee society is also entrusted with the task of executing various

healthcare schemes financed by government from to time which include the

National Rural Health Mission of the Government of India. The society's

revenue comprises grants-in-aid from central and state governments, fees

from patients and firms for various services and donations from

3 ITA 54/Jodh/2019 ITO Vs M/s Rajasthan Medicare Relief Society

philanthropic agencies. The assessee is registered u/s 12AA and holds

exemption u/s 80G of the Act. The assessee society filed its Return of

Income for the year under consideration on 31-10-2015 declaring total

income at Rs. NlL and claiming exemption u/s 11 of the Act. The AO issued

Notice u/s 142(1) of the Act and after verification of Books of Accounts and

other materials, AO assessed the income of the assessee at Rs. 77,60,420/-

.

before the ld. CIT(A), who after considering the facts and material placed

on record allowed the appeal of the assessee by observing as under:

" 8. I have carefully considered the observation made by the Assessing Officer, appellant's submissions, remand report and rejoinder to the remand report submitted by the appellant. The AO made addition as per section 11(1)(a) of the Act. The appellant contended that its income is exempt u/s 10(23C)(iiiac) of the Act. The AO was asked to verify whether the receipts from government were in excess of 50% of the total receipts. Vide his report dated 31.08.2018, the Assessing Officer has confirmed as under:-

" The supporting documents submitted by the ld. AR of the assessee during the remand report proceedings have been examined and it is found that various funds allotted to the assessee by the State/Central government under the head RCH, NRHM, JSY, Shubhlakshmi Yojna etc. The assessee expends these funds and at the end of the month submit utility certificate showing head-wise expenditure and balance out of funds allotted by the government. These various grants/funds received by the assessee from the State Government under various schemes are more than 50% of the total receipts of the assessee for the year under consideration.”

4 ITA 54/Jodh/2019 ITO Vs M/s Rajasthan Medicare Relief Society Considering the facts of the case as above and provisions of Section 10(23C) (iiiac) of the Act, it is clear that the appellant is substantially funded by the Government and, therefore, is eligible for exemption u/s 10(23C)(iiiac) of the Act. Therefore, the same is allowed. Thus, without going into the merits of the addition made by the AO u/s 11(1)(a) of the Act, the same is deleted. The ground raised by the appellant regarding this issue is allowed.”

the record and found that the ld. CIT(A) had adjudicated the ground now

raised by the revenue before us by seeking and relying upon the remand

report. Therefore, considering those facts, the ld. CIT(A) had rightly noted

that the assessee had substantially funded by the Government and is

eligible for exemption u/s 10(23C)(iiiac) of the Act. Hence, we allow the

claim of the assessee. No new facts or contrary judgments have been

placed on record before us in order to controvert the findings so recorded

by the ld. CIT(A). Therefore, we find no reason to interfere in the order of

the ld. CIT(A). Hence, we uphold the same.

Sd/- Sd/- (R.C. SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated :19/03/2020 *Ranjan Copy to : 1. The Appellant 2. The Respondent

5 ITA 54/Jodh/2019 ITO Vs M/s Rajasthan Medicare Relief Society

Assistant Registrar Jodhpur Bench