In a big relied to Baba Ramdev’s Patanjali Yogpeeth, the Delhi bench of Income Tax Appellate Tribunal (ITAT) has allowed exemption status under section 11 and 12 of the Income Tax Act.
While the answering questions Whether the Yoga a form of ‘Medical Relief’ and Whether the Propagation of Yoga constitutes imparting of education, the Tribunal bench noted that, The definition of term ‘medical’ clearly provides that the ‘art of healing any disease’ constitutes medical relief and the same need not be restricted to conventional methods of treatment. Yoga, thus, as a system of medicine, has been successful in curing various dreadful diseases and providing relief to the sufferings of people. Thus, it undoubtedly qualifies as a form of ‘medical relief’ as provided in section 2(15) of the Income Tax Act.
The ITAT also observed that, “any form of educational activity involving imparting of systematic training in order to develop the knowledge, skill, mind and character of students, is to be regarded as `education’ covered under section 2(15) of the Income Tax Act”.
The ITAT also held that corpus donations aggregating to Rs 43.98 crores received by assessee, predominantly for construction of cottages under its Vanprasth Ashram Scheme, were capital receipts not liable to Income Tax. Such donations included land donated, whose market value was pegged by Income Tax authorities at Rs 65 lakh. In its order, the ITAT pointed out that “Corpus donations are not taxable, even in circumstances where the trust is not eligible for Income Tax exemption”.
In the case of the assessee, the predominant objects of the trust are to provide practical and theoretical training in the field of yoga, which would ultimately provide medical relief to the society at large. In pursuance of the said objective, the assessee trust has imparted yoga education by means of organising yog shivirs/ camps across the country on daily/weekly/monthly basis in a systemized/ organized manner in order to provide medical relief to people who cannot afford modern medical method or have been subjected to ill effects of modern medicine. Such Yoga education was given in the shivirs/ camps by Yoga Gurus.
While allowing the appeal of Patanjali Yogpeeth, the bench observe that, “income in the form of acquisition of fixed assets and other capital expenditure incurred solely for the purpose of fulfillment of its charitable objectives during the year should be considered as application of income for charitable purposes. Besides, the explanation of the assessee to meet out the small irregularities shown in the books of account maintained by the assessee, which are based on special audit report, cannot be out-rightly ignored especially when it is not the case of the Revenue that the out-come of it was utilized somewhere else rather than on the objects of the assessee”.
The ITAT also agreed with the submissions made by the trust and observed that certain inferences by the I-T authorities such as provision of benefits to certain persons or receipt of anonymous donations were made without fully appreciating the facts.