DIT Vs SAIFEE HOSPITAL TRUST (Dated: November 28, 2016)
Income Tax - Sections 10(23C)(vi), 11 & 12A
Keywords - amendment of trust deed - charitable purpose - exhorbitant medical charges - exemption - medical treatment & registration of trust.
The assessee is a charitable trust and was granted registration. The AO, during assessment, found that the charges received by assessee from patients were exorbitant and concluded that assessee was engaged in the business of running hospital and not charity. Thus, he held that the assessee was not entitled to the benefit of exemption either u/s 10(23C)(vi) or u/s 11. On appeal, the CIT(A), Tribunal & High Court found that the assessee had applied more than 85% of its income for charitable purpose and decided the matter against the Revenue. Revenue applied to the Supreme Court for leave to defend.
Having heard the parties, the Supreme Court granted leave to the Revenue.
Leave granted
2016-TIOL-204-SC-IT
PREM VASISHT Vs CIT (Dated: November 28, 2016)
Income Tax - Section 143(2).
Keywords - balance of probabilities - issue of notice - barred by limitation.
Whether assessee would be bound by a time barred notice if such assessee had previously filed a reply to the said notice and not contended it to be time barred at that time - YES: SC
The assessee is an individual and had filed a return. The last date for serving a notice u/s 143(2) was 31.12.1999. The assessee denied the receipt of this notice. CIT served another notice u/s 143(2) dated 09.02.2001. The receipt of this notice was not denied. However, this notice was beyond the period prescribed for serving a notice u/s 143(2). The assessee filed appeal before CIT(A) which was disposed of. Another appeal was filed before Tribunal which restored the issue to the file of CIT(A), who examined the matter again but rejected the assessee's contention in respect of the notice dated 30.09.1999. This order was upheld by the impugned order of Tribunal. The High Court observed that if the first notice had not been served upon the assessee and if the notice dated 25.01.2001 was the first notice u/s 143(2), the assessee's Advocate, would have contended that it was beyond the stipulated period. However, no such contention was raised on behalf of the assessee. Thus, High Court decided the matter in favour of Revenue.
Having heard the parties, the Supreme Court held that,
++ there is no reason to entertain this Special Leave Petition and accordingly, dismissed the same.
Assessee's appeal dismissed
2016-TIOL-203-SC-IT
CIT Vs NIRAV MODI (Dated: November 28, 2016)
Income Tax Act - Sections 68, 263.
The Assessee had filed his return of income for Assessment Year 2007-08, declaring income. Assessee had claimed an amount as gift from his father. The AO was satisfied about genuineness of the gifts and did not disturb the claim made by the Assessee in respect of the gift received from abroad. However, CIT exercised revisional powers u/s 263 and directed the AO to enquire into the capacity of the donors and to decide the genuineness of the gifts. The High Court held that revisional power cannot be exercised unless the CIT is able to establish that the order of the AO is erroneous and prejudicial to the Revenue. The court observed that the AO was satisfied about the identities of the donors and source from where these funds have come, therefore it was not open to the CIT in exercise of his revisional powers to direct further enquiry.
Having heard the parties the Supreme Court confirmed the decision of the High Court that it was not open to the CIT to excercise revisional jurisdiction when AO was satisfied with the explanation given by the assessee.
Revenue's appeal dismissed
