Charitable exemption for medical relief upheld where unchallenged prior findings and non-perverse facts left no substantial legal question.

Section 10(23C) was not in issue because that exemption had been separately denied and was not the subject of the Tribunal's order. On section 11, the Tribunal's view that surcharge receipts from patients and honorary doctors were not to be denied exemption was upheld because it had followed earlier unchallenged orders on identical facts, and the concurrent findings were neither perverse nor legally erroneous. Directions under the Bombay Public Trust Act did not change the tax character of the receipts or prevent examination under the Income-tax Act. No substantial question of law arose, so the assessee's section 11 exemption remained undisturbed.

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Issues: (i) Whether the challenge relating to exemption under section 10(23C) of the Income-tax Act, 1961 arose from the Tribunal's order. (ii) Whether exemption under section 11 of the Income-tax Act, 1961 could be denied on the footing that surcharge receipts from patients and honorary doctors were income from the trust's activities and not corpus donations, despite earlier Tribunal orders and directions under the Bombay Public Trust Act, 1950.

Issue (i): Whether the challenge relating to exemption under section 10(23C) of the Income-tax Act, 1961 arose from the Tribunal's order.

Analysis: The exemption under section 10(23C) had been separately denied by the Commissioner and that order was under challenge in a pending writ petition. The Tribunal and the Commissioner, in the present matter, had decided the dispute only with reference to exemption under section 11. The question framed on section 10(23C) was therefore not borne out by the Tribunal's order.

Conclusion: The question relating to section 10(23C) did not arise from the Tribunal's order.

Issue (ii): Whether exemption under section 11 of the Income-tax Act, 1961 could be denied on the footing that surcharge receipts from patients and honorary doctors were income from the trust's activities and not corpus donations, despite earlier Tribunal orders and directions under the Bombay Public Trust Act, 1950.

Analysis: Charitable purpose under section 2(15) includes medical relief. The Tribunal had followed its earlier orders on identical facts for prior assessment years, and those orders had not been challenged by the revenue. The concurrent findings were not shown to be perverse or suffering from any error of law. The directions issued by the Charity Commissioner under the Bombay Public Trust Act, 1950 did not alter the character of the receipts or prevent the income-tax authorities from examining them under the Income-tax Act, 1961. The challenge to the treatment of the surcharge receipts therefore did not disclose any substantial question of law.

Conclusion: Exemption under section 11 could not be disturbed, and the revenue's challenge failed.

Final Conclusion: The appeal raised no substantial question of law and was dismissed, leaving the assessee's claim under section 11 undisturbed.

Ratio Decidendi: Where the Tribunal follows earlier unchallenged orders on identical facts and the concurrent findings are not perverse, no substantial question of law arises; directions under the Bombay Public Trust Act do not, by themselves, change the income's character for taxation purposes.

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