Director of Income Tax (Exemption) vs A.M.M. Medical Foundation

R. Jayasimha Babu, J.—The assessee runs a hospital. For the assessment year 1986-87, the assessee was denied exemption that had been

claimed by it u/s 10(22A) of the Income Tax Act, 1961. The denial was on the ground that in the view of the Assessing Officer, Section 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-medi-cal foundation is entitled to exemption u/s

10(22A).

Section 10(22A), which has since been repealed with effect from April 1, 1999 reads, thus :

(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 profits ;

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 Commissioner of Income Tax Vs. A.M.M. Arunachalam Educational Society, considered a claim for exemption u/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 u/s 10(22). In this case also, the assessee foundation, which

runs a hospital is entitled to the exemption provided u/s 10(22A).

The apex court, in the case of Aditanar Educational Institution Vs. Additional Commissioner of Income Tax, , 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 u/s 10(22) of the Act.

The question referred to us is, therefore, answered in favour of the assessee and against the Revenue.