DCIT, EXEMPTION CIRCLE, GHAZIABAD V. HAPUR PILUKHUWA DEVELOPMENT AUTHORITY, HAPUR

ITA 3102/DEL/2025

AI Insights

The case revolves around the appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had allowed the Hapur Pilukhuwa Development Authority's appeal for the assessment year 2016-17. The primary issue was whether the activities of the Hapur Pilukhuwa Development Authority, which included development and sale of properties, qualified as charitable activities under the amended provisions of Section 2(15) of the Income Tax Act, 1961. The Tribunal referenced several precedents, including decisions in similar cases involving other development authorities, which supported the view that such activities could be considered charitable. The Tribunal dismissed the Revenue's appeal, affirming the lower appellate authority's decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786383 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 09-05-2025
• Other Referred Cases: DCIT vs. Meerut Development Authority, DCIT vs. Kanpur Development Authority, Ahmedabad Urban Development Authority (AUDU) of the Hon'ble Supreme Court
• Laws Referred To: U.P. Urban Planning and Development Act, 1973, Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: KAPIL GEOL; RETURNING
• Keywords: Rule of consistency; Benefit of exemption
• Section: 11

Judgement Text

" 1 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘C’ NEW DELHI) BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 3102/Del/2025 (A.Y. 2016-17) DCIT CGO-2, Hapur Chungi, Ghaziabad, Uttar Pradesh Vs Hapur Pilukhuwa Development Authority, PreetVihar, Delhi road, Hapur, Uttar Pradesh PAN: AAALH0051L Appellant Respondent Assessee by Dr. Kapil Geol, Adv Revenue by Sh. Om Prakash, Sr. DR Date of Hearing 17/09/2025 Date of Pronouncement 28/10/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Revenue against the Order of the Commissioner of Income Tax, (Appeal) (Ld. CIT(A) /ADDL/JCIT(A)-8, Delhi order dated 14/02/2025 pertaining to Assessment Year 2016-17. 2. Brief facts of the case are that, the Assessee is an authority constituted under the U.P. Urban Planning and Development Act, 1973 for the purpose of planning, development or improvement of cities, towns and villages, within the notified area of Hapur. Return of Income for the assessment year under consideration was filed by the appellant on 14.10.2016 at an income of Rs. NIL (Loss of Rs. 5,88,74,151/-) claiming benefit of section 11 of the Act. The case of the Assessee was selected for Printed from counselvise.com 2 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa scrutiny. The assessment proceedings were concluded vide assessment order dated 28.12.2018 at a loss of Rs 5,88,74,151/- wherein benefit of section 11 of the Act was denied by the A.O. as per the amended provisions of section 2(15) of the Income Tax Act, 1961 ('Act' for short) vide order dated 28/12/2018. As against the assessment order dated 28/12/2018, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 14/02/2025 allowed the Appeal of the Assessee. Aggrieved by the order of the Ld. CIT(A) 14/02/2025, the Revenue preferred the present Appeal. 3. The Ld. Department's Representative submitted that the Ld. CIT(A) has failed to appreciate correct fact that the Assessee is engaged dominantly in the activity of development and sale of properties and the aggregate value of receipts from the activities referred to in the first proviso of Section 2 (15) of the Act. Therefore, the Ld. CIT(A) committed error in allowing the Appeal of the Assessee, thus sought for allowing the Appeal. 4. Per contra, the Ld. Assessee's Representative submitted that the issue regarding in the present Appeal is squarely covered in Assessee’s own case for Assessment Year 2014-15 in ITA No. 4691/Del/2024 vide order dated 25/06/2025, wherein the issue involved in the present Printed from counselvise.com 3 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa Appeal has been decided in favour of the Assessee. Thus, the Ld. Assessee's Representative sought for dismissal of the Revenue. 5. We have heard both the parties and perused the material available on record. The Co-ordinate Bench of the Tribunal in Assessee’s own case, while allowing the Appeal of the Assessee for Assessment Year 2014-15 in ITA No. 4691/Del/2024, vide order dated 25/06/2025 held as under:- “4. We have heard both the parties and perused the records. At the time of hearing, ld. Counsel for the assessee submitted that on the first issue viz. activity of assessee/ development authority u/s 2(15) of the Act is concerned, this issue is squarely covered by the decision of the Tribunal in assessee’s own case in ITA No. 4125/Del/2017 vide order dated 04.02.2022 relevant to assessment year 2012-13 wherein, the Tribunal relied upon the earlier decision in assessee’s own case in ITA No. 1384 to 1386/2016 dated 6.6.2018 for assessment years 2009-10 to 2011-12, which 4 has been approved by the Hon’ble High Court. It is further submitted that recently in two decisions of the Coordinate Bench the present issue is fully covered by the decision of the ITAT, Delhi ‘E’ Bench in the case of DCIT vs. Meerut Development Authority ITA no. 1657/Del/2018 (AY 2014-15 ) vide order dated 27.01.2025 and also covered in another case of ‘C’ Bench, ITAT Delhi in the case of DCIT vs. Kanpur Development Authority in ITA No. 1655/Del/2018 dated 12.03.2025. In these cases being similar type of organization under the same Act, the issue was decided in assessee’s favour after considering the decision in the case of Ahmedabad Urban Development Authority (AUDU) of the Hon’ble Supreme Court viz. 449 ITR 1 & 449 ITR 389. 5. As regards second issue relating to amount credited to infrastructure development fund is concerned, it is submitted that the same issue is also covered by the decision of the Tribunal in assessee’s own case in ITA No. 4125/Del/2017 vide order dated 04.02.2022 relevant to assessment year 2012-13. It is further submitted that recently in two decisions of the Coordinate Bench this issue is fully covered i.e. ITAT, Delhi ‘E’ Bench in the case of DCIT vs. Meerut Development Authority ITA no. 1657/Del/2018 AY 2014-15 vide order dated 27.01.2025 and in another case of ‘C’ Bench, ITAT Delhi in the case of DCIT vs. Kanpur Development Authority in ITA No. 1655/Del/2018 dated 12.03.2025. Thus, it is submitted that respectfully following the aforesaid precedents, the appeal of the assessee may be allowed. 6. The aforesaid factual position has not been controverted by the ld. DR for the Revenue, but he has supported he order passed by the Ld. CIT(A). Printed from counselvise.com 4 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa 7. We have heard both the parties and perused the records. As regards the issue of activity of assessee/ development authority u/s 2(15) of the Act is concerned, we note that this issue is squarely covered by the decision of the Tribunal in assessee’s own case in ITA No. 4125/Del/2017 vide order dated 04.02.2022 relevant to assessment year 2012-13 wherein, the Tribunal relied upon the earlier decision in assessee’s own case in ITA No. 1384 to 1386/2016 dated 6.6.2018 for assessment years 2009-10 to 2011-12, which has been approved by the Hon’ble High Court. The relevant findings of the Tribunal in its order dated 04.02.2022 are as under:- “8. At the very outset, Id. AR for the assessee contended that this issue is covered in favour of the assessee by virtue of the order passed by the Tribunal in assessee's own case for A.Y. 2009-10 to 2011-12 and also covered by the decision rendered by Hon'ble High Court of Allahabad in assessee's own case (ITA No. 657 of 2007). Learned AR for the assessee also laid emphasis on the principle of consistency, as this issue for the earlier years has been successively decided in favour of the assessee. This factual position has not been controverted by Id. DR for the Revenue, but he has supported the order passed by Id. CIT(A). 9. We have perused the order dated 06.06.2018 passed by the coordinate Bench of the Tribunal in assessee's own case for the assessment years 2009-10 to 2011-12 in ITA No. 1384 to 1386/2016, which is on identical issue. Coordinate Bench of Tribunal by relying upon the decision dated 21.04.2017 rendered by Hon'ble Allahabad High Court in the case of CIT vs. Yamuna Expressway Industrial Development Authority and another decision dated 04.01.2018 rendered by coordinate Bench of Tribunal in the case of Moradabad Development Authority vs. ACIT (Exemption) in ITA No. 6 4631 & 4632/Del/2007, decided the issue in favour of the assessee by returning following findings:- “3. We have heard both the sides and perused the relevant material on record. The Hon'ble Jurisdictional High Court in CIT vs.Yamuna Expressway Industrial Development Authority, vide judgment delivered on 21.4.2021, has decided similar issue in assessee's favour. The Delhi Bench of the Tribunal in Moradabad Development Authority vs. ACIT (Exemption), vide order dated 4.1.2018 in ITA No. 4631 and 4632/Del/2017, dealt with the case of an Authority working in the same way as the assessee in question and held that the benefit of exemption under section 11 cannot be denied. In reaching this conclusion, the Tribunal considered the relevant judgments on the point and eventually held that the case is covered by the judgment of Hon'ble Jurisdictional High Court in the case of Yamuna Express way Industrial Development Authority (supra). A copy of such order has been placed on record in which the relevant discussion has been made from pages 2 to 7 of the order. Since the facts and circumstances of the instant case are mutatis mutandis similar to those as considered and decided by the Hon’ble Jurisdictional High Court in the case of Yamuna Expressway Industrial Development Authority (supra) and the Tribunal in Moradabad Printed from counselvise.com 5 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa Development Authority (supra), we uphold the impugned order in deciding this issue in assessee’s favour. This ground is not allowed.” 10. In view of what has been discussed above and following the decision rendered by Hon’ble High Court in assessee’s own case and decision rendered by coordinate bench of Tribunal, we are of the considered view that now the issue is no longer res integra, as it has already been held that “there is no good reason for holding that Statutory bodies could not be treated as 7 charitable within the meaning of section 2(15) of the Act, as its object is to provide shelter to the homeless people. 11. So there being no material/evidence on record supporting the case of the Revenue to reach the conclusion that the assessee was conducting its affairs on commercial lines with the profit earning motive and as such the proviso to section 2(15) of the Act is not attracted in this case and the assessee was entitled to exemption provided u/s. 11 of the Act. Moreover, no cogent reason or distinguishable facts have been brought on record by the Revenue if the year under consideration is different from earlier years, i.e., A.Yrs. 2009-10 to 2011-12, which have already been decided in favour of the assessee. So, in these circumstances, the Revenue authorities are required to follow the \"principle of consistency\", as has been laid down by Hon'ble Supreme Court in the case of RadhasoamiSatsang vs. CIT (1992) 193 ITR 321 (SC). Consequently, grounds Nos. 1 to 4 are decided in favour of the assessee.” 7.1 In view of above, and respectfully following the aforesaid precedents, we are of the considered view that now the issue is no longer res integra, as it has already been held that there is no good reason for holding that Statutory bodies could not be treated as charitable within the meaning of section 2(15) of the Act, as its object is to provide shelter to the homeless people and thus the proviso to section 2(15) of the Act is not attracted in this case and the assessee was entitled to exemption provided u/s. 11 of the Act. Therefore, this ground of appeal is decided in favour of the assessee.” 6. In view of the above, we find no error or infirmity in the order of the Ld. CIT(A) in allowing the Appeal of the Assessee. Finding no merits in the grounds of Appeal of the Revenue, we dismiss the Appeal filed by the Revenue. Order pronounced in the open court on 28th October, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 28.10.2025 Printed from counselvise.com 6 ITA No. 3102/Del/2025 DCIT Vs. Hapur Pilukhuwa R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "