INSTITUTE OF HEALTH SYSTEMS,HYDERABAD vs. INCOME TAX OFFICER, EXCEPTION-2, HYDERABAD

ITA 1783/HYD/2017Status: DisposedITAT Hyderabad25 June 2018AY 2014-1511 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's activity of water testing, which contributes to public health by ensuring good quality water supply, falls under the advancement of an object of general public utility. The fees collected were almost entirely spent on the testing activity, and the activity was service-oriented rather than profit-driven.

What were the facts?

The assessee, a society registered under Section 12A, claimed exemption under Section 11 for AY 2014-15. The AO denied this exemption, stating that the assessee's activity of water quality testing for the Hyderabad Metro Water Supply and Sewerage Board (HMWSSB) was commercial in nature and not for charitable purposes.

What were the issues?

Whether the activity of water quality testing for a government board, even if fee-based, constitutes a commercial activity or a charitable purpose under Section 2(15) of the Income Tax Act, thereby affecting eligibility for exemption under Section 11.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A,Section 2(15)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SHRI B. RAMAKOTAIAH & SHRI V. DURGA RAO

For Appellant: Shri Narahari Biswal
For Respondent: Shri K.J. Rao
Hearing: 13/06/2018Pronounced: 28/06/2018

PER V. DURGA RAO, J.M.:

This appeal filed by the assessee is directed against the order dated 7th July, 2017 of CIT(A) – 9, Hyderabad for AY 2014-15. 2. Briefly the facts of the case are, assessee is a society formed with effect from 5th December, 1990 and it is registered u/s 12A of the Income-tax Act, 1961 (in short ‘the Act’) on 19/12/1990. The memorandum of society is, unless Institute of Health Systems, Hyd. the context otherwise requires, “Health systems” includes the professional, technological, behavioural, social, economic, cultural and other subsystems whose interrelated action contribute to the health of the people. The objects of the assessee are as under: 3. 1.1 To promote and provide for study of health systems, health polic

The order continues below.

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