Delhi HC Admits Appeal Against ITAT Ruling Holding That Propagation Of Yoga By Patanjali Qualifies As ‘Medical Relief’ [Read Order]

A Delhi High Court division bench of Justice S Ravindra Bhat and Justice Sanjeev Sachdeva has admitted an appeal filed in Commissioner of Income Tax- Exemption vs Patanjali Yogpeeth (Nyas). The present appeal has been filed against the ITAT ruling holding propagation of yoga qualified as ‘medical relief’.

In the instant case, the respondent assessee, a registered charitable trust, is teaching yoga through various camps and other modes. The assessment officer and the Commissioner of Income Tax took the view that the activities of the respondent assessee does not qualify as medical relief as yoga education, howsoever disseminated i.e. by camps, specific schools or courses, etc. would address only a section of the population, which may be of benefit for specific ailments. They found that propagation of yoga does not give medical relief and, thus, does not fall under the definition ‘charitable purpose’ defined under section 2(15) of the Income Tax Act, 1961, and it falls in the residuary category of ‘advancement of any other object of general public utility’.

On appeal, ITAT dismissed the ruling of the authorities below. On analysis, ITAT observed that yoga conferred positive relief to ailments such as asthma, migraine, hypertension, stress, etc. and promoted wellness and well-being generally. ITAT further ruled that impart of yoga training through well-structured yoga camps besides falling under the category of medical relief also falls under the category of imparting education and is not hit by the proviso to section 2(15) of the I-T Act.

Section 2(15) of the I-T Act defines the term ‘charitable purpose’ to include relief of the poor, education, yoga, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. The proviso to Section 2(15) provides that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed 20% of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year.

The main contention of the revenue before the high court was that the activities of the respondent assessee can be only brought within the fold of an organization covered by Section 2(15) of the I-T Act, to the extent that its activities extend to providing services of general public utility.

Dismissing the contentions of the revenue, the high court held that, “Having regard to the observations, the Court is of the opinion that the mere inclusion of yoga specifically w.e.f. 01.04.2016 did not per se imply that it came to be included as a specific charitable category on the same lines as education, medical relief, relief to the poor, etc but that dissemination of yoga or vedic philosophy or the practice of yoga or education with respect to yoga was well within the larger term “medical relief”. This Court is of the opinion that no substantial question of law arises on this aspect.”
At present, the high court has admitted the appeal to hear other questions of law with respect to the appeal and has issued notice to the respondent assessee.

Read the Order Here