M/s H.P. State Environment Protection & Pollution Control Board, Shimla V. ACIT, Shimla

CO 30/CHANDI/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8489 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Charitable institution; Retrospective amendment
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 835/CHD/2012 ASSESSMENT YEAR : 2009-10 A.C.I.T. SHIMLA V M/S HP STATE ENVIRONMENT PROTECTION & POLLUTION CONTROL BOARD, HIM PARIVESH PHASE III, NEW SHIMLA AAALH 0191 B CROSS-OBJECTIONS NO. 30/CHD/2012 ARISING OUT OF ITA NO. 835/CHD/2012 ASSESSMENT YEAR : 2009-10 M/S HP STATE ENVIRONMENT V A.C.I.T. SHIMLA PROTECTION & POLLUTION CONTROL BOARD, HIM PARIVESH PHASE III, NEW SHIMLA AAALH 0191 B (APPELLANT) (RESPONDENT) DEPARTMENT BY SMT. JYOTI KUMARI ASSESSEE BY: SHRI NITIN KUMAR DATE OF HEARING 11.4.2013 DATE OF PRONOUNCEMENT 16.4.2013 O R D E R PER T.R.SOOD, A.M ITA NO. 835/CHD/2012 REVENUES APPEAL THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A), SHIMLA DATED 10.5.2012. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 2 1 ON THE FACTS AND IN THE CIRCUMSTANCES, THE LD. C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 18,33 CRO RES ON ACCOUNT OF SURPLUS INCOME. 2 IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSEE FIELD A RETURN DECLARING INCOME OF RS. 57,14,022. THE ASSESSEE IS CONSTITUTED FOR A PERIOD OF THREE YEARS AND RENE WED FROM TIME TO TIME BY THE STATE GOVERNMENT UNDER THE WATE R PREVENTION AND CONTROL OF POLLUTION), ACT, 1974 WIT H THE MAIN OBJECT OF PERFORMING THE DELEGATED POWER AND FUNCTI ON TO PROVIDE FOR THE PREVENTION AND CONTROL OF WATER POL LUTION AND THE MAINTAINING OR RESTORING OF WHOLESOMENESS OF WA TER. 4. THE ASSESSING OFFICER NOTICED DURING THE ASSESSM ENT PROCEEDINGS THAT THE ASSESSEE HAD SHOWN GROSS RECEI PTS OF RS. 18,33,49,901/- WHICH INCLUDED FEE AND OTHER RECEIPT S, MISCELLANEOUS RECEIPTS AND INTEREST ON INVESTMENTS AND SHOWN EXCESS OF INCOME OVER EXPENDITURE OF RS. 13,52,87,7 64/-. IN THE COMPUTATION OF INCOME ATTACHED WITH THE RETURN OF INCOME, THE ASSESSEE HAD SHOWN INCOME OF RS. 57,14,022/- WH ICH IS ON ACCOUNT OF UNSPENT ACCUMULATED AMOUNT OF ASSESSMEN T YEAR 2003-04. IN THE COMPUTATION OF INCOME THE ASSESSEE HAD ADDED BACK THE AMOUNT OF INTEREST ACCRUED BUT NOT D UE F OR THE ASSESSMENT YEAR 2007-08, 2008-09 AND 2009-10. THUS THE GROSS RECEIPTS HAD BEEN WORKED OUT AT RS. 24,90,19, 804/- OUT OF WHICH RS. 2,40,62,138/- HAD BEEN SHOWN AS APPLIE D U/S 11(1)(A&B) APPLIED IN INDIA AS APPLICATION OF INC OME AND RS. 16,36,04,694/- U/S 11(2) AMOUNT ACCUMULATED FOR S PECIFIED PURPOSE INCOME SET APART FOR APPLICATION FOR THE OBJECTS OF 3 THE ASSESSEE BOARD RS. 57,14,022/- UNSPENT ACCUMULA TED FOR THE ASSESSMENT YEAR 2003-04 HAS BEEN SHOWN AS DEEME D INCOME U/S 11(3) OF THE INCOME-TAX ACT. 5. ON ENQUIRY IT WAS SUBMITTED THAT THE ASSESSEE BO ARD WAS GRANTED REGISTRATION U/S 12A OF THE ACT BY THE LD. CIT, SHIMLA WHICH WAS SUBSEQUENTLY WITHDRAWN. THE WITHDRAWAL O RDER WAS CHALLENGED BEFORE THE INCOME TAX APPELLATE TRIBUNAL IN APPEAL AND THE TRIBUNAL HAS ALLOWED THE APPEAL OF THE ASSE SSEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE S UBMISSIONS BY OBSERVING THAT THE REVENUE HAS FILED APPEAL AGAI NST THE ORDER OF THE TRIBUNAL BEFORE HON'BLE HIMACHAL PRADE SH HIGH COURT. THEREAFTER THE ASSESSING OFFICER DID NOT TR EAT THE ASSESSEE BOARD AS CHARITABLE INSTITUTE AND ACCORDIN GLY ADDED THE INTEREST ACCRUED FOR THREE YEARS AS WELL AS EXC ESS INCOME OVER EXPENSES AND ASSESSED THE INCOME OF THE ASSESS EE AT RS. 20,66,71,688/-. 6 ON APPEAL THE LD. CIT ALLOWED THE RELIEF ON THE B ASIS OF ORDER OF THE TRIBUNAL. 7 BEFORE US, THE LD. DR FOR THE REVENUE SUBMITTED T HAT THE ASSESSEE WAS CHARGING FEE FOR THE SERVICES RENDERED AND THEREFORE, THE ASSESSEE-BOARD CANNOT BE SAID TO BE EXISTING FOR CHARITABLE PURPOSES AS DEFINED IN SECTION 2(15) WHI CH HAS SPECIFICALLY PROVIDED THAT ANY OBJECT OF GENERAL PU BLIC UTILITY SHALL NOT BE A CHARITABLE AND IF IT INVOLVES CARRYI NG OF ANY ACTIVITY IN THE NATURE OF BUSINESS BY CHARGING CESS OR FEE. 4 8 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSE E SIMPLY SUBMITTED THAT THE ISSUE IS COVERED IN VIEW OF THE EARLIER ORDER OF THE TRIBUNAL. 9 AFTER HEARING BOTH THE PARTIES WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSES SEE IN ITA NO. 74/CHD/2009. WE FURTHER FIND THAT THROUGH PARA 12, THE TRIBUNAL HAS ALREADY HELD THAT DESPITE OF THE AMEND MENT IN SECTION 2(15) THE ASSESSEE IS REQUIRED TO BE TREATE D AS CHARITABLE INSTITUTE. PARA 12 OF THE ORDER READS A S UNDER:- NO DOUBT UNTIL THE ASSESSMENT YEAR 2009-2010 THE ASSESSEE BOARD WAS COVE RED ONLY BY THIS RESIDUARY CLAUSE OF DEFINITION OF CHARITABLE PURPOSES, BUT AS A RESULT OF THE RETROSPECTIVE AMENDMENT INTRODUCED BY THE FINANCE ACT, 2009, AS NEW CATEGORY OF ACTIVITY ENTI TLED TO BE TREATED AS CHARITABLE ACTIVITY U/S 2(15) HAS BEE N INTRODUCED WHICH EXTENDS THE DEFINITION OF CHARITAB LE PURPOSES TO PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHED, FOREST AND WILDLIFE) AND PRESERVATION OF MONUMENTS OF PLACES OF ARTISTIC OR HISTORIC INTERES T). IN OUR CONSIDERED VIEW, THE ASSESSEE IS NOW COVERED BY THIS SPECIFIC CATEGORY SET OUT U/S 2(15) AND THEREFORE, RESIDUARY CLAUSE DOES NOT COME INTO PLAY. IT IS ONL Y ELEMENTARY THAT A GENERAL PROVISIONS HAS TO GIVE WA Y TO THE SPECIFIC PROVISION, AS APTLY SUMMED UP IN THE M AXIM GENERALIA SPEIALBUS NON DEROGANT. IN THE CASE OF SOUGHT INDIA CORP PVT LTD V. SECRETARY, BOARD OF REVENUE ( 1964 SC 205 @ 215), HON'BLE SUPREME COURT HAS OBSERVED THAT, A SPECIAL PROVISION SHOULD BE GIVEN EFFECT TO THE EXTENT OF ITS SCOPE, LEAVING GENERAL PROVISIONS TO COVER THE CASES WHERE SPECIFIC PROVISIONS DO NOT APPLY. A SPECIAL PROVISION THUS NORMALLY EXCLUDES THE OPERAT ION OF GENERAL PROVISIONS, AND THE SAID PRINCIPLE WILL HAV E APPLICATION HERE AS WELL. THE ASSESSEE BEING COVERE D BY THE SPECIFIC CLAUSE SET OUT ABOVE, AND THE RESIDUAR Y CLAUSE NO LONGER BEING APPLICABLE, THE PROVISO TO S ECTION 2(15) DOES NOT COME INTO PLAY AT ALL. THEREFORE, IT IS WHOLLY IMMATERIAL AS TO WHETHER OR NOT THE ASSESSEE WAS RENDERING A SERVICE TO THE TRADE COMMERCE OR BUSINE SS. GIVEN HE PRESENT LEGAL POSITION AND ON THE FACTS OF THE PRESENT CASE, EVEN THIS OBJECTION TAKEN BY THE LD. COMMISSIONER IS WHOLLY IRRELEVANT. FOLLOWING THE ABOVE ORDER, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND UPHELD THE ORDER OF THE LD. CIT(A) . 5 10 APPEAL OF THE REVENUE IS DISMISSED. CROSS-OBJECTIONS NO. 30/CHD/2012 11 FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE- BOARD IN THIS CROSS-OBJECTIONS. 1 THE LD. CIT(A) HAS RIGHTLY ALLOWED RELIEF ON THE BASIS OF THE ORDER DATED 28.8.2009 OF THE HON'BLE ITAT BE NCH IN RESPONDENTS CASE ITA NO. 74/CHD/2009 WHICH WAS IGNORED BY THE ASSESSING OFFICER WH8LE MAKING ASSESSMENT U/S 143(3). THE ASSESSING OFFICER IS HOLDING BACK THE REFUND, EVEN AFTER THE ORDER OF THE LD. CIT(A) GIVING NECESSARY RELIEFS TO THE ASSESSING OFFICER MERELY ON THE GROUND THAT THE DEPARTMENT HAS FILED APPEAL AGAINST THE DECISION OF HON'BLE ITAT, CHANDIGARH BENCH WHEREIN THE REGISTRA TION U/S12AA HAS BEEN RESTORED AND CONSEQUENT RELIEFS HA VE BEEN ALLOWED. 12 GROUND NO. 1 THIS IS BASICALLY IN SUPPORT OF T HE ORDER OF LD. CIT WHICH WE HAVE UPHELD WHILE ADJUDICATING THE REVENUES APPEAL IN ABOVE NOTED PARAS AND THEREFORE, THIS CRO SS- OBJECTION HAS BECOME INFRUCTUOUS AND ACCORDINGLY T HE SAME IS DISMISSED AS INFRUCTUOUS. 13. GROUND NO. 2 THOUGH NOT MANY ARGUMENTS WERE M ADE BY BOTH THE PARTIES AND THIS ISSUE DOES NOT PERTAIN TO ANY PARTICULAR ACTION OF THE ASSESSING OFFICER UNDER A PARTICULAR PROVISION OF THE ACT. THEREFORE, THE TRIBUNAL NORMA LLY SPEAKING CAN NOT ADJUDICATE THIS ISSUE. HOWEVER, AT THE SAM E TIME, IT IS TO BE NOTED THAT THE REVENUE HAS NO RIGHT TO WITHHO LD THE REFUND OF THE ASSESSEE SIMPLY BECAUSE THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE TRIBUNAL. THE REVENUE IS REQUI RED TO GIVE EFFECT TO THE ORDERS PASSED BY THE TRIBUNAL AND IF SAME ARE REVERSED BY THE HON'BLE HIMACHAL PRADESH HIGH COURT THEN APPEAL EFFECT CAN BE GIVEN AGAIN, THEREFORE, THE RE VENUE SHOULD 6 NOT HOLD BACK THE REFUND BECAUSE THE SAME IS NOT PE RMISSIBLE UNDER LAW. 14 CROSS-OBJECTIONS OF THE ASSESSEE IS PARTLY ALLOW ED. 15 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND THE CROSS-OBJECTIONS OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 16.4.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16 .4.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR