Jagannatha Shetty, J.:—
The question referred by the Income-tax Appellate Tribunal, Bangalore Bench is:
“Whether on the facts and in the circumstances of the case, the income of the trust was exempt under Section 10(22A) of the Act?”
2. The assessee-trust was constituted by a deed dated March 17, 1973. The object of the trust, among others, was to provide medical relief to the needy. In furtherance of that object, the assessee established a dispensary in a rented building and incurred an expenditure to the extent of Rs. 21,953/- for the year 1974-1975. The assessee claimed exemption of that sum from assessment, but the I.T.O rejected that claim under Section 11 of the I.T Act 1961. The Appellate Assistant Commissioner, however, accepted the claim of the assessee and allowed deduction not under Section 11, but under Section 10(22A) of the Act.
3. The Department went up in appeal before the Tribunal contending that the assessee could not be given the benefit of Section 10(22A) since it applies only to hospitals with facilities for patients' admission and treatment and not for dispensaries where patients come and go without being admitted for treatment. The Tribunal accepted that contention and allowed the appeal. It held that since the assessee had just a dispensary it was not entitled to the exemption under Section 10(22A) of the Act.
Section 10(22A) of the Act reads:
“10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included.
(22A): “any income of a hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or persons requiring medical attention or rehabilitation, existing solely for philanthrophic purposes and not for purposes of profit.”
4. The Section not only refers to the income of ‘a hospital’ but also of ‘other institution’ as well. The ‘other institution’ has not been defined but that expression has been well Understood in legal parlance. It means an establishment, organisation or association for the promotion of some objects like religious, charitable, educational etc. Same meaning has been given in the Webster's New International Dictionary and Oxford Dictionary. Generally it is understood to mean an undertaking formed to promote some definite purpose, especially, one of public or general utility. In the context in which ‘other institution’ occurring in Section 10(22A), it must mean an organisation or undertaking established solely for philanthropic purposes and to cater to the needs of persons suffering from illness or treatment of persons during convalescence or requiring rehabilitation.
5. According to the Tribunal, the hospital and other institution referred to under Section 10(22A) must be alike and both must have beds for treatment of inpatients and the dispensary without such facilities cannot fall under Section 10(22A).
6. It seems to us that the view taken by the Tribunal appears to be incorrect. The Tribunal has put a narrow construction on the words “the reception and treatment of persons……..” used in Section 10(22A). These words do not necessarily mean that the patients must be admitted and treated as inpatients as in the hospitals or there must be facilities for such treatment in the institution so as to claim the benefit of Section 10(22A). In our opinion, an institution may not have any facility for treatment of inpatients and yet it could qualify for the benefit of Section 10(22A) provided it exists fortreatment of persons solely for philanthropic purposes. An institution with facilities for diagnosis and treatment of patients cannot be denied the benefit of Section 10(22A) of the Act solely on the ground that there is no facility for treating inpatients.
7. But there has been no investigation by any one of the authorities below, as to the nature of the service rendered in the dispensary established by the assessee. In the absence of any finding whether the dispensary could be considered as ‘institution’ in the light of the principles stated by us, it is not possible to answer the question. We, therefore, decline to answer the question. The Tribunal may now dispose of the matter in the light of the observations made and in accordance with law.