DCIT (EXEMPTION), NEW DELHI vs. INDIAN MEDICAL ASSOCIATION, NEW DELHI

ORDER PER K. NARSIMHA CHARY, J.M. Aggrieved by the order dated 30.05.2016 in appeal no.

4/2015-16 Revenue preferred this appeal on the following grounds:

1. “On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has failed to appreciate the fact that the AO denied the claim of exemption of the assessee on the fact that assessee has not done any kind of ‘medical relief’ and neither do the objects of the assessee authorize the assessee to extend any kind of medical relief by way of running of any hospital, nursing home or similar institutions. 1

2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has failed to appreciate the fact that the claim of exemption was denied to the assessee as the assessee society has made commercial agreements with corporate entities and receiving contribution for specific endorsement which would result in the sale of their products.

3. The appellant craves leave to add, to alter or amend any ground of appeal

raised above at the time hearing.”

2. Briefly stated facts are that the assessee is an association of Medical doctors and is registered u/s 12AA on 27.06.1974 and u/s 80G of the Income Tax Act, 1961 (for short called as the ‘Act’) on 31.08.2009. The basic objective of the assessee was said to be to promote medical science and improvement of public health and medical education etc. The assessee had filed the nil return and during scrutiny, Ld. Assessing Officer had denied exemption u/s 11 of the Act mainly on the ground that the assessee is involved in commercial activity as the assessee had received endorsement money of Rs. 36,50,000/- by undersigning the ‘attributes’ of products of Dabur and Abbott India Ltd., that assessee has also received sponsorship income of Rs. 51,31,000/- and rental income of Rs. 92,70,185, that the receipt of such nature squarely satisfies the requirement in proviso to Section 2(15) of the Income Tax Act, 1961, and that in view thereof since the assessee had receipts arising out of activity in the nature of business or commerce and accordingly the first proviso to Section 2(15) of the Act is applicable in this case as the receipts are more than Rs. 10 lacs.

4291/Del/2012, 2091/Del/2014, 6076/Del/2015 respectively.

Following the order of this Tribunal in for the AY 2009-10, Ld. CIT (A) held that the assessee is not involved in any trade, commerce or business and is totally involved in charitable activity following within the definition of charitable 3 purpose u/s 2(15) of the Act under the head “medical relief” and consequently granted relief to the assessee. Subsequently for the assessment years 2010-11 & 2011-12 the Tribunal followed its own order rendered for the AY 2009-10. Absolutely there is no dispute on this factual matrix and the Revenue has not brought to our notice any fact to take a different view. We, therefore, while respectfully following the decisions of the coordinate benches of this Tribunal for the assessment years 2009-10 to 2011-12, hold that the impugned order does not suffer any illegality or irregularity and has to be upheld. We, therefore, find that the appeal of the Revenue is devoid of any merits and is liable to be dismissed. We, accordingly, dismissed the same.

Order pronounced in the open court on 22.12.2017