High Court Of Madras
Director Of Income Tax vs. A.M.M. Medical Foundation
Section 10(22A)
Asst. Year 1986-87
R. Jayasimha Babu & A.K. Rajan, JJ.
T.C. Nos. 310 & 311 of 1998
8th November, 2001
Counsel Appeared
Mrs. Chitra Venkataraman, for the Applicant : Philip George, for the Respondent
JUDGMENT
R. JAYASIMHA BABU, J. :
The assessee runs a hospital. For the asst. yr. 1986-87 the assessee was denied exemption that had been claimed by it under s. 10(22A) of the IT Act. The denial was on the ground that in the view of the AO, s. 10(22A) required the claimant to be the hospital and not the foundation which ran the hospital. That view, though upheld in appeal, was reversed by the Tribunal. The reference arises from the order of the Tribunal, which held that the assessee- medical foundation is entitled to exemption under s. 10(22A).
2. Sec. 10(22A), which has since been repealed w.e.f. 1st April, 1999, reads thus: “10(22A). Any income of a hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for purposes of profit ?” There is no dispute about the fact that the hospital run by the assessee is solely for philanthropic purposes and not for the purpose of profit and that the hospital is being run for the treatment of persons suffering from illness. This Court, in the case of CIT vs. A.M.M. Arunachalam Educational Society (2000) 243 ITR 229 (Mad) considered a claim for exemption under s. 10(22) by an educational society, which is an associate of the assessee here. The Court held that having regard to the object of the assessee therein which was to run the educational institution, the assessee was entitled to the exemption under s. 10(22). In this case also, the assessee-foundation, which runs a hospital is entitled to the exemption provided under s. 10(22A).
The apex Court, in the case of Adhithanar Educational Institution vs. Addl. CIT (1997) 139 CTR (SC) 7 : (1997) 224 ITR 310 (SC) : TC S32.3102 has held that an educational society formed under the sole purpose of establishing, running and managing or assisting schools and colleges is an educational institution and is entitled to exemption under s. 10(22) of the Act.
The question referred to us is, therefore, answered in favour of the assessee and against the Revenue.
[Citation : 257 ITR 292]
