COMMISSIONER OF INCOME TAX Vs. CHRISTIAN FELLOWSHIP HOSPITAL

JUDGEMENT

(1.) THIS is a reference application under Section 256(2) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, Jabalpur, for calling for a reference from the Income-tax Appellate Tribunal. A notice of this application was given to the other side. The following two questions have been framed by the Revenue :

(2.) THE brief facts giving rise to this application for reference are that the assessee is assessed to tax in the status of an association of persons. It is running a hospital, namely, Christian Fellowship Hospital, Rajnan-dgaon. THE Income-tax Officer assessed the total income of the assessee in respect of the assessment year 1978-79, at Rs. 1,43,327. THE assessee filed a return showing income from business of Rs, 73,355 and claimed exemption on the ground that the entire income was utilised for charitable and religious purposes in India. THE assessee claimed that income from tyre retreading business, agriculture and poultry farming, hire charges from the tractor are exempted as the same are the income of the hospital. THE assessee claimed that the entire income was exempt under Section 10(22A) of the Income-tax Act, 1961. THE Income-tax Officer rejected the contention raised by the assessee and since the variation of the income exceeded rupees one lakh, he forwarded the draft assessment order to the Inspecting Assistant Commissioner under Section 144B of the Act determining the total income of the assessee at Rs. 1,43,327. He, however, accepted the loss of the assessee in agriculture and allowed the same to be carried forward to be considered against the income from the same in the succeeding year. THE assessment was made by the Income-tax Officer on August 12, 1981.

(3.) WE need not to go into details of the matter. Suffice it to say that only two questions have been raised by the Revenue for our answer. So far as the first question whether the Commissioner of Income-tax under Section 263 of the Act has jurisdiction to interfere with the order which has been passed by the Inspecting Assistant Commissioner under Section 144B or not, is concerned, this question has already been answered by this court in the case of C1T v. Vithal Textiles [1989] 175 ITR 629 and in another case of CIT v. Dulichand Bhatia [1989] 175 ITR 634. Both these cases have taken into consideration the Explanation added to Section 263(1). In the newly inserted Explanation, it is clearly provided that for purposes of this sub-section, an order passed by the Assessing Officer shall include an order of assessment made on the basis of the directions issued by the Deputy Commissioner under Section 144A or Section 144B. Therefore, in view of this Explanation and the decisions of this court, this question already stands decided in favour of the Revenue.