Section 11 exemption remains available absent the Charity Commissioner's adverse finding on an alleged Indigent Patient Fund breach.

Section 11 exemption cannot be denied for an alleged shortfall in transfers to an Indigent Patient Fund where compliance with the Scheme is not a condition for examining exemption after Section 12A registration. Whether doctors' fees form part of gross billing and whether the Scheme was breached falls within the Charity Commissioner's exclusive jurisdiction. In the absence of an adverse finding or revocation of charitable status, the Revenue cannot determine a breach. Revision under Section 263 also requires an assessment order to be both erroneous and prejudicial to Revenue; it cannot rest on disagreement where two sustainable views exist.

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Issues: Whether exemption under Section 11 could be denied on the alleged shortfall in transfer to the Indigent Patient Fund, and whether the Revenue could determine a breach of the Scheme in the absence of an adverse finding by the Charity Commissioner.

Analysis: The Scheme did not make compliance with its requirement for transfer of two percent of gross billing a condition governing entitlement to examination for exemption under Section 11 after registration under Section 12A. The question whether doctors' fees were includible in gross billing for calculating the required transfer, and consequently whether the Scheme was breached, lay within the exclusive jurisdiction of the Charity Commissioner. No material showed that the Charity Commissioner had found any breach or revoked the trust's charitable status. Further, revision under Section 263 requires material establishing that the assessment order is both erroneous and prejudicial to Revenue; where two legally sustainable views are possible, the view adopted by the assessing authority cannot be treated as erroneous merely because the revisional authority disagrees. The concurrent factual findings accepting the assessee's claim disclosed neither perversity nor an incorrect application of law, and no substantial question of law arose.

Conclusion: Exemption under Section 11 could not be denied on the alleged breach of the Scheme without a competent adverse determination by the Charity Commissioner; the issue is decided in favour of the assessee.

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