2018 (11) TMI 597

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....part of MAJ Hospital, is only commercial in nature and is therefore to be assessed u/s 11 (4) and (4A) of the IT Act and also held that it is mandatory to carry out the audit of Accounts under section' 44AB of the IT Act. 2. It is respectfully submitted that the fact is that the MAJ Nursing School is an integral part of MAJ Hospital and for the smooth functioning of the Hospital and in order to carry out the objectives of the Trust it is necessary to have Nursing School as part of the Hospital, and therefore the income of the Nursing School (a division of' the Hospital) is eligible for assessment u/s 11(1) of the Act. 3. Without prejudice to the above, even if the income of the Nursing School is assessable U/s 11(4), (4A); the....

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....hat the assessee is entitled to exemption u/s 11 of the I. T. Act in respect of the income received from hospital. However, with regard to the income from nursing school, it was held that it was not entitled to exemption u/s 11 of the I. T. Act. As regards the denial of depreciation, the CIT(A) confirmed the view taken by the Assessing Officer. The CIT(A) also held that the assessee ought to have got its books of account audited u/s 44AB of the I. T. Act in respect of the income earned from nursing school. 5. The assessee being aggrieved by the order of the CIT(A) in denying exemption of income from nursing school, denial of depreciation and for initiation of penalty u/s 271B of the I. T. Act in respect of non-audit of books of account of ....

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....r medical reliefs by running a hospital. Article 4(iv) of the trust deed authorizes the assessee to engage in any legitimate activity for the attainment of objects of the charitable institution. Article 4(iv) of the trust deed reads as follows:- "(iv) To engage in any legitimate activity which is incidental or conducive to the attachment of the objects as a Charitable Institution. " 6. 1 It is clear from the above Article 4(iv) of the trust deed that the carrying on the activity of nursing school is part of the objects of the assessee-trust and that both medical relief and education are charitable objects entitled for exemption u/s 11(1) of the I. T. Act. The above view was further confirmed by the Department Circular No. 11/2008 dated ....