Charitable hospital exemption under municipal tax law covers private OPD rooms where receipts fund medical relief and charitable objects.

Section 115(4) of the Delhi Municipal Corporation Act, 1957 exempts land or buildings exclusively occupied and used for a charitable purpose by a qualifying society, including medical relief, where income is applied to the society's objects and no dividend or bonus is paid to members. Charging fees in part of a hospital does not by itself destroy the charitable character if the receipts support the charitable objects and the cost of treatment for those unable to pay. Section 115(5) applies only where trade, business, or rent is carried on for private benefit, while Section 115(6) treats separately the taxable and exempt portions of premises.

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Issues: Whether the eight rooms of the Private O.P.D. used by a charitable hospital society were exempt from municipal general tax under Section 115(4) of the Delhi Municipal Corporation Act, 1957, or were taxable under Sections 115(5) and 115(6).

Analysis: The exemption under Section 115(4) applies to lands or buildings exclusively occupied and used for a charitable purpose by a society supported wholly or in part by voluntary contributions, provided its profits or income are applied in promoting its objects and no dividend or bonus is paid to members. The expression "charitable purpose" includes medical relief and is based on public benefit rather than private gain. Charging fees in a part of the hospital does not by itself make the activity non-charitable if the receipts are used to advance the society's charitable objects and to meet the cost of medical relief for those unable to pay. Section 115(5) excludes only cases where trade, business, or rent is carried on for private benefit, and Section 115(6) operates only to treat separately the portion actually used for taxable or exempt purposes. On the facts, the society was non-profit, its dominant object was medical relief, and the income from the Private O.P.D. was applied to charitable purposes.

Conclusion: The eight rooms of the Private O.P.D. were held to fall within Section 115(4) and were exempt from municipal general tax; the assessment was quashed.

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