TaxTMI 
TaxTMI 
2019 (9) TMI 915
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....r percentage basis?" 2. The assessee is a charitable trust registered since 21.11.1977 and is running medical institution (hospital) and also in the imparting of education. The assesses trust besides have registered u/s 12AA of the Act was also approved u/s 10(23C)(via) of the Act. The assessee trust is running the hospital in the name of BIMR Hospital and BIMR Heart Centre. The assessee had filed return of income declaring the NIL income for the AY 2012-13. However, the assessment was completed by the AO by assessing the income of the assessee to the tune of Rs. 7,34,12,020/- by not allowing the exemption u/s 10(23C) (viia) viz-a-viz Section 11 of the Income Tax Act, 1961. 3. The AO records in the assessment order that the payments were made to the prohibit person u/s 13(3) of the Act at unreasonable rate.At Page 5 of the AO mentioned as under: S.No. Name Qualification Designation Relation Amount Paid 1. Dr. Ravi Shankar Dalmia M.D. (Medicine) Gold Medal 1st D.M. Cardiology Director BIMR Heart Centre Son of Shri B.D. Dalmia President/ Executive Trustee Salary Rs. 54,00,000/- 02 Dr. Prathistha Dalmia M.D. (Obs-Gynae) Visiting Cons....
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....ital. This information collected by the AO and was put across to the assessee and the assessee had filed the reply to AO after receiving this information. However, the AO was not convinced with the reply given by the assessee and had therefore, disallowed the benefit arising to the assessee u/s 11 of the Act. As the AO come to the conclusion that the salary/visiting fees paid to the Doctors were excessive and unreasonable having regard to the market rate and thus, the AO has forfeited exemption u/s 11 of the Act and computed the income at Rs. 7,34,12,020/-. 7. Feeling aggrieved by the order passed by the AO, the assessee filed an appeal before the CIT(A). The CIT(A) has examined the reasoning given by the AO and recorded the finding in Para 5.1.1 and 5.2.1 as under: "5.1.1 Decision: I have carefully considered the submissions put forward alongwith the judgments of the cases relied upon & argument advanced on behalf of the appellant, perused the facts of the case and other material available on record and the issue is decided as under;- (i) It is not in dispute that appellant has made payment to the persons who referred to in section 13(3) of the Act, The AO has made the disall....
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....3(2) provides that if the person covered under section 13(3) is paid remuneration for services rendered by him at reasonable rate then the provision of section 13(3) will not apply. In the present case I am of the view that the remuneration paid to Dr. Ravi Shankar Dalmia who is full time looking after the Cardiac Center of the appellant and is attending emergencies and is not doing any private practice is reasonable and accordingly the benefit of section 11 cannot be denied to appellant for paying remuneration of Rs. 54,00,000/- to Dr. Ravi Shankar Dalmia. (iii) Payment to Dr Sunil Agrawal Orthopedic- Theappellant is making payment to Doctors on the basis of fees collected by the appellant on surgery done by them. In the case of Dr. Abhishek Bohre the appellant has paid nearly 41.3% of fees collected on work done by him as his remuneration. Similarly in the case of Dr. Sunil Shrivastav the appellanthas paid as remuneration nearly 40% of fees collected on work done by him. In the case of the Dr. Sunil Agrawal the appellant has paid as remuneration 40.36% of fees collected on the surgery done by him. As per the Id AR the appellant has made payment to DrAgrawalin similar manner....
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....ted as reasonable. Since the payment made to Shri Sunil Dalmia in earlier year has been accepted as reasonable hence in view of principle of consistency I am of the view that the benefit of exemption under section 11 cannot be denied to the appellant on account of payment of remuneration to Shri Sunil Dalmia. 5.2.1 Decision: After carefully considering the argument advanced on behalf of the appellant and perusing the facts of the case and other material available on record , this issue is decided as under:- As stated by the AO the appellant has not claimed exemption under section 10(23C)(via) of the Act and during the appellate proceeding no specific submission in support of this ground has been advanced hence this ground is dismissed as not pressed." 8. The Revenue feeling aggrieved by the decision filed the appeal before us on the above said ground. 9. The ld. CIT DR had submitted that the decision of the CIT(A) was based on the written submission filed by the AO where the assessee had relied upon the agreement of Dr. Navin Bhamari of MAX Super specialty Hospital and on the basis of that it was concluded by the ld. CIT(A) that the remuneration paid to Dr. Ravi Shankar Dal....
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....awn to the assessment order based for the A.Y. 2010-11 where the similar payment of Rs. 36.15 lakh was allowed by the revenue collected for an amount of Rs. 2,39,60,000/-. It was submitted that the present appeal filed by the Revenue without any basis and the ld. AR relied upon the following judgment: 1. CIT(Exemption vs. Bhola Ram Educational Society , (SC) 2019 ITL 59 2. Pratap WahiniSamaj Kalyan vs. Dept. of Income Tax, ITA No. 301/Agra/2012 3. Pratap WahiniSamaj Kalyan vs. Dept. of Income Tax, ITA No. 242/Agra/2011 4. PNR Society for Society for Relief & Rehabilitation of the Disabled Trust vs. The DDIT (Exemption), ITA No.2729/Ahd/2010 5. Indicula Trust Society vs. CIT (Exemption) ITA No.1216/Del/2013 6. Modern School Society vs. CIT (Exemption) ITA No.1118/JP/2016 7. CIT Exemption (Pune) vs. Sh. Balaji Society (High Court Mumbai) 8. Rock Church Ministries vs. DDIT (E) II, ITAT Hyd. ITA No.463/Hyd/2010 9. ACIT vs. Mahima Shiksha Samiti, ITL 346: (2017) 185 TTJ 425 10. CIT vs. 21st Society of Immaculate Conception (Mad. H.C.) 11. Lokmanya Tilak JankalyanShikshan Sanstha Vs. ACIT, Nagpur, 2017 ITL 2688 12. ITO vs. Virendra Singh Memorial Shiksha Samiti (L....
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....bill on the inflated amount. 12. In our view, the fees of the doctor is not only determined by the college from which he had passed out but also dependent upon a. with whom Dr. has done the internship b. his seniority c. competence d. Expertise e. qualification and f. Ability to give results in complicated and difficult cases g. Further, the fees is also determined based on the establishment and equipment on which the doctors is working h. The time involved in the procedure/surgery i. locality where the hospital and working center is situated. 12.1 In the present case, the AO has brought on record the comparable instances of the GajrajaChikitsaMahavidhyalay and Chirayu Medical College on record but failed to bring on record expertise , qualification any other factors like seniority competence ,experience, qualification etc. 12.2 The AO has further failed to bring on record the revenue collected by these hospital or a period of three years and what was a salary paid to these doctors. Further AO failed to bring on record whether salary paid to these doctors as mentioned in order were in which proportion to revenue collected by the hospital or not. 12.3 The Gover....