Relief to Sushila Birla Memorial Institute: ITAT allows exemption u/s 10(23C)(iiiae) of Income Tax Act [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench in a relief to Sushila Birla Memorial Institute allowed exemption under section 10(23C)(iiiae) of Income Tax Act.

The assessee, Sushila Birla Memorial Institute (SBMI) is a Trust, running a speciality school for retarded children as well as providing medical aid and treatment for persons who are suffering from illness or mental defectiveness.

The SBMI owns a number of mobile medical vans. These medical vans are run in collaboration with M/s. Bharat Sevashram Sangha, M/s. Vivekananda Swasthya Seva Sangha etc. which are charitable organizations. The mobile medical vans are well staffed with doctors, nurses, attendants etc and also are equipped with surgical equipment, x- rays, diagnostic equipment and medicines.

The entire expenditure incurred on these mobile medical vans are paid by the assessee i.e. SBMI. These mobile medical vans provide medical services in remote and rural areas, where no medical facilities are available. The total annual receipt of the assessee is less than Rs.1 crore.

The assessee claimed exemption under section 10(23C)(iiiae) of the Act. The AO in the assessment order passed under section 143(3) of the Act held that, M/s. Bharat Sevashram Sangha and M/s. Vivekananda Swasthya Seva Sangha was running a mobile medical unit and submitting the bills monthly to the assessee for reimbursement. He was of the view that this mobile medical van is a part and parcel of the hospital of M/s. Bharat Sevashram Sangha or M/s. Vivekananda Swasthya Seva Sangha and it was only funded by the assessee and that the assessee was merely reimbursing the bills raised by them.

The first appellate authority held that exemption under section 10(23C)(iiiae) of the Act is available if the assessee is having a hospital and doing medical services by itself. He observed that the doctors are not regular employees of the assessee and they were employees of Bharat Sevashram Sangha, Kolkata and Vivekananda Swasthya Seva Sangha, Kolkata, on part time basis and that they have been paid very meagrely. He observed that the assessee could not establish that they are having permanent doctors for all treatments, much less specialised doctors. He held that “hospital” denotes reception centre, pathology lab, radiology and surgery department, female ward etc.

It was held that the term “hospital” denotes complete treatment of the patient. Thus he concluded that the assessee is simply a financier and is organizing medical camps with the help of deployment of doctors on a part time pay basis, for a few days.

The coram Aby T. Varkey and J. Sudhakar Reddy noted that the Revenue has been granting exemption to the assessee under this Section for earlier assessment years as well as for the subsequent years and held that the assessee is eligible for deduction under section 10(23C)(iiiae) of the Act.

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