A hospital not to be regarded as charitable if it gives treatment for few poor patients while collecting fees from patients who can afford

A hospital not to be regarded as charitable if it gives treatment for few poor patients while collecting fees from patients who can afford

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A hospital not to be regarded as charitable if it gives treatment for few poor patients while collecting fees from patients who can afford

Charitable trusts and institutions are on the radar of the income tax authorities. So is the case with judiciary.
There are lot of judgment which may adversely affect even the genuine charitable trust.
Here is one by Madras High Court as under:
HIGH COURT OF MADRAS
Institute of Franciscan Missionaries of Mary
v.
Commissioner, Coimbatore City Municipal Corporation
C. SARAVANAN, J.
W.P.NO.1639 OF 2020
W.M.P.NOS.1913 & 1914 OF 2020
MARCH  14, 2022
Xavier Arul Raj, Sr. Counsel for the Petitioner. S. Saravanan for the Respondent.
Short Overview of the case:
• The act of the petitioner giving free treatment for few poor and needy patients while collecting fees for giving treatment to those patients who can afford is not sufficient to hold the petitioner Charitable Institution/Hospital.
 Few acts of benevolence and charity should not be construed in such a manner to label such a person as a Charitable Institution.
• Merely because the petitioner is having certain out reach programmes which may be charitable in nature or that a section of patients are given free treatment would not automatically render the petitioner a charitable hospital.
 It would not mean that an exemption from payment of property tax can allowed to the petitioner.
• Further, under the Section 135 of the Companies Act, 2013 and the provisions of Companies Act, 1956, the companies enjoying the profits were/are required to contribute for public cause as Corporate Social Responsibility (CSR).
The amount that has to be spent towards Corporate Social Responsibility is out of profits.
 However, that does not make such company as a “Charitable Institution”?.

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