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"Aim and Objects :

5. To maintain, construct, open own, run, manage libraries, schools, charitable institutions, Dispensaries and hospitals to attain these objects."

5) It is further argued that to run and manage dispensaries and hospitals for attaining the charitable objects of the trust is one of the main charitable activities carried out by the trust/assessee. It is therefore submitted that the earning from running the dispensary and hospital was entitled to be exempted Under Section 11 of the Act, because the said activity is incidental to the attainment of the objective of the trust. Hence, denial of the said exemption by the Ld. Assessing Officer and the learned CIT(A), while resorting to the provision of Sec 11(4A) is highly misplaced and is not legally sustainable.

(ii) and separate books of accounts are maintained by such trust or institutions in respect of such business.

Sub-section (4) of Section 11 states that for the purpose of Section 11 "property held under the trust" includes "business undertaking so held".

The crucial word in sub-section (4A) is "business" which has to be understood as per the meaning provided under Section 2(13) of the Act. The "business" in sub-section (4A) can mean any activity including any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce, or manufacture. A business undertaking of the trust may also be included as property held under the trust in view of the sub-section (4) of Section 11. But for getting the benefit of sub-section (1) of Section 11, the income derived from property held under the trust whether wholly or in part, must be used for charitable or religious purposes. Under sub-section (4A) of Section 11, income of any business of the trust in the nature of profit and gains of such business can be exempted under sub-section (1) of Section 11 only if two pre-conditions mentioned in the said sub-section are fulfilled. The first condition is that the business must be incidental to the attainment of objectives of the trust. While considering the scope of sub-section (4A) of Section 11 which came into effect by the Finance (No.2) Act 1991 w.e.f. 01.04.1992, in Assistant Commissioner of Income Tax Vs. Thanthi Trust, the Apex Court had noted that the substituted sub- section (4A) gave trust and institution a wider latitude than the earlier sub-section (4A). In the wide language of sub-section (4A), a trust is entitled to the benefit of Section 11, if it utilises the income of its business for the purpose of achieving its charitable objects. In this way, the trust is allowed to create a corpus by indulging in business activity to feed the charity. As the provision stands, all that is required for the business income of the trust or institutions to be exempted from the tax is that the business should be incidental to the attainment of the objectives of the trust or institution. A business whose income is utilised by the trust or the institution for the purpose of achieving the objectives of the trust or the institutions, is, surely, a business which is incidental to the attainment of the objectives of the trust. It was, thus, held that the substituted sub-section (4A) is more beneficial to a trust or institution than the original provision. It can, thus, be seen that sub-section (4A) of Section 11 presupposes a business venture of the trust or institution which is though independent to its main activity but incidental to the attainment of the objectives of the trust. The "business" as mentioned in the said sub-section can be an adventure or concern in the nature of trade, commerce or manufacture.

10) Thus, the question arises whether running of dispensary having a chemist shops selling medicines being run by the assessee/appellant trust is such business activity which is incidental to the attainment of its objectives.

11) As discussed earlier one of the main objective of the assessee trust and its establishment is to maintain and run the charitable institutions which includes dispensaries and hospitals to attain its objects. On perusal of the material on record and the order of the Ld. CIT(A) dated 22nd June, 2021, it becomes known that activity of running dispensaries is the main charitable object of the assessee. Assessee is a registered charitable trust and is running a 60 bed hospital in Navi Mumbai. The assessee is also having homeopathic dispensaries in Chembur, Mahim, Mulund, Santacruz and Vashi located in Mumbai and Navi Mumbai. The hospital is not a specialty hospital as it is catering to every section of the society. The five dispensaries are specializing in homeopathy. The medicine are not sold commercially and the rates are very low and cateres to the poor and middle class population of the area in which they are situated. The dispensaries are being operated since 1963 and in the past, the provision of section 11(4A) of the Act has not been applied in respect of income from dispensaries. In view of these facts and the discussion made above, we have no hesitation in concluding that running of dispensary and hospital is one of the main object of appellant/assessee it is such business activity which is incidental to attainment of objectives the trust. Thus, the first requirement of Section 11(4A), stands satisfied.

12) Regarding the second condition of maintaining separate books of accounts for claiming exemption Under Section 11(4A) of the Act, it is argued on behalf of the appellant that the appellant/assessee is maintaining separate books of accounts for its earning from the dispensaries and hospital and the said separate accounts was duly submitted before the Ld. AO as well as Ld. CIT(A) appeal but both of them has failed to notice that the said requirement is already fulfilled as per the requirement of Section 11(4A) of the Act. We have glanced through the paper books of the appellant and it is noticed that in the schedule B, Income and Expenditure account for the year ended on 31st March 2015, there is an auditor's report at page 1 which is containing the statement of account of the appellant from page no. 2 to page no. 15 of the paper book which clearly shows that the separate books of account has been maintained for hospital and dispensary income. The law referred and relied by Ld. AR on behalf of the appellant/assessee perfectly covers and applicable to the facts and circumstances of the present case. Nothing contrary to the said law or to the facts and circumstances on record has been brought by the revenue/respondent which may controvert the stand of the appeal that running of dispensary is one of the main charitable objective of the trust and separate book of account has also been maintained for the said business activity by the appellant. Thus, the appellant has fulfilled both the requirements of Section 11(4A) of the Act and is therefore, entitled to the exemption Under Section 11(1) of the Act. Hence, the order of the Ld. AO where income of Rs. 1,03,87,60/- has been added as business income from the dispensaries run in the premises of the hospital of the appellant is liable to be set aside to and the finding of the Ld. CIT(A)/ National Faceless Appellate Centre, is accordingly set aside to the effect that the income received from the dispensary is such income earned from the activity which is incidental to the attainment of the main object of the appellant trust and that separate books of accounts has been maintained by the appellant for the said activity. The findings returned by the Ld. CIT(A) is also held to be not legally sustainable and accordingly set aside.