DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW V. M/S U.P AWAS EVAM VIKAS PARISHAD, LUCKNOW

ITA 21/LKW/2019

AI Insights

The case involves multiple appeals related to the income tax assessments of U.P. Awas Evam Vikas Parishad for the assessment years 2007-08 and 2008-09. The primary legal issues revolved around the eligibility of the assessee for exemption under Section 11 of the Income Tax Act, the proper application of income, and the treatment of certain funds and receipts. The Tribunal considered various legal precedents and the specific provisions of the U.P. Awas Evam Vikas Parishad Adhiniyam, 1965, along with the O.M. dated 15.01.1998, which outlined the functions and financial management of the assessee. The Tribunal's decision emphasized the need for specificity in the purpose of accumulation under Section 11(2) and the proper routing of funds through the income and expenditure account.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38850 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Other Referred Cases: CIT vs. Nagpur Hotel Owners Association, CIT vs. Tata Steel Charitable Trust, DIT vs. Mitsui and Co. Environmental Trust, Bihar Agricultural Produce vs. CIT, Karnataka Urban Infrastructure Development Corporation, Mussoorie Dehradun Development Authority vs. Addl CIT, Ayodhya-Faizabad Development Authority vs. DCIT, Lucknow Development Authority vs. CIT, Indian Chamber of Commerce vs. CIT, West Bengal-2, CIT vs. M.CT Muthaiah Family Trust, Sir Sobha Singh Public Charitable Trust vs. ADIT (Exemption), Talaprolu Bapanaiah Vidya Dharma Nidhi Trust vs. CIT, CIT vs. U.P. Upbhokta Sahkari Sangh Limited, Delhi State Industrial Development Corporation vs. CIT, Adityapur Industrial Area Development Authority vs. Union of India, CIT vs. Hotel and Restaurant Association, CIT vs. Lucknow Development Authority & others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G.C. SHRIVASTAVA; SPECIAL COUNSEL; MAZHAR AKRAM
• Assessee Lawyers: SHWETA MITTAL
• Keywords: Set aside; Business income; Additional evidence; Retrospective amendment; Question of law; Capital receipt; Capital expenditure; Diversion of income; TDS; Charitable institution; Benefit of exemption
• Section: 143(3); 195; 154; 251; 11; 12AA; 153; 208; 205; 22; 12A; 13; 139; 274; 234B; 73; 12; 15; 10B; 20

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘B’ BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA Nos. 532 & 533/LKW/2014 A.Ys. 2007-08 & 2008-09 Income Tax Officer-2(3), Lucknow vs. U.P. Awas Evam Vikas Parishad, 104, Mahatma Gandhi Marg, Lucknow-226001 PAN:AAAJU0130A (Appellant) (Respondent) ITA Nos. 534 & 535/LKW/2014 A.Ys. 2007-08 & 2008-09 U.P. Housing & Development Board (Uttar Pradesh Awas Evam Vikas Parishad), 104, Mahatma Gandhi Marg, Lucknow vs. Income Tax Officer-2(3), Range-2, Lucknow PAN:AAAJU0130A (Appellant) (Respondent) ITA Nos. 21 & 22/LKW/2019 A.Ys. 2007-08 & 2008-09 Dy. Commissioner of Income tax (Exemptions), Lucknow vs. M/s U.P. Awas Evam Vikas Parishad, 104, Mahatma Gandhi Marg, Lucknow-226001 PAN:AAAJU0130A (Appellant) (Respondent) Assessee by: Ms. Shweta Mittal, C.A. Revenue by: Sh. G.C. Shrivastava, Special Counsel & Sh. Mazhar Akram, CIT (DR) Date of hearing: 24.02.2025 Date of pronouncement: 28.02.2025 ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 2 O R D E R PER BENCH: These six appeals pertaining to M/s U.P. Awas Vikas Parishad, Lucknow, for the assessment years 2007-08 and 2008-09 have been filed by the Department (in ITA Nos. 532 & 533/LKW/2014 and ITA Nos. 21 & 22/LKW/2019) and by the assessee (ITA Nos.534 & 535/LKW/2014). As the issues involved in all these appeals are common and they pertain to the same assessment years, therefore, for the sake of convenience, all these appeals are being taken up for disposal. The grounds of appeal in the various appeals are as under:- ITA No.532/LKW/2014 “1.1) The Ld. CIT (A) has erred in law and on facts of the case in directing the A.O. to compute the income in the manner specified in Section 11 taking into account information given in the audit report in form 10B. 1.2.) For doing so the Ld. CIT(A) erred in not appreciating the fact that the case was selected under scrutiny as per Board's Guidelines to examine the charitable activities. The institution may be registered u/s 12AA still they may not be eligible for exemption u/s 11 of the I.T. Act if the activities of the assessee are not found in accordance with the aim and objects of the assessee during the comprehensive scrutiny for the year under consideration. 2.) The Ld. CIT (A) has erred in deleting the addition made on account of VAMBAY Scheme Fund of Rs. 62,54,220/-. 3.) The Ld. CIT (A) has erred in deleting the addition made on account of advances of contracts of Rs. 14,26,40,652/-. 4.) Appellant craves leave to add or amend the ground of appeal, as stated above as and when need of doing so arises with the prior permission of the Hon'ble Bench. ITA No.533/LKW/2014 “1.1) 1.1) The Ld. CIT (A) has erred in law and on facts of the case in directing the A.O. to compute the income in the manner specified in Section 11 taking into account information given in the audit report in form 10 B. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 3 1.2.) For doing so the Ld. CIT(A) erred in not appreciating the fact that the case was selected under scrutiny as per Board's Guidelines to examine the charitable activities. The institution may be registered u/s 12AA still they may not be eligible for exemption u/s 11 of the I.T. Act if the activities of the assessee are not found in accordance with the aim and objects of the assessee during the comprehensive scrutiny for the year under consideration. 2.) The Ld. CIT (A) has erred in deleting the addition made on account of VAMBAY Scheme Fund of Rs 80,10,634/-. 3.) The Ld. CIT (A) has erred in deleting the addition made on account of advances of contracts of Rs 16,37,86,375/-. 4.) Appellant craves leave to add or amend the ground of appeal, as stated above as and when need of doing so arises with the prior permission of the Hon'ble Bench.” ITA No.534/LKW/2014 1. BECAUSE notice of accumulation dated 18.12.2009 in prescribed Form No. 10 as had been filed before the Assessing Officer during the course of regular assessment proceedings, met fully with the requirement of law relating thereto and view to the contrary as has been taken by the \"CIT(A)\" is wholly erroneous as being inconsistent with the facts of the case, material and information available on record and law applicable thereto. 2. BECAUSE the \"appellant\" did not have any right, title or interest of its own in the sums aggregating Rs. 14,31,41,898/-credited in \"Infrastructure Fund\", as the same stood diverted by over-riding title in favour of the State Government and consequently the \"CIT(A)\" should have held that the sums in question alongwith interest thereon were outside the ambit of assessment in the case of the \"appellant\". 3. BECAUSE the \"CIT(A) has erred in law and on facts in upholding the dis-allowance of - (a) Rs. 95,05,679: under the head \"legal expenses\", ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 4 (b) Rs. 13,89,061: under the head \"consultancy expenses\"; and (c) Rs. 24,01,104: under t the head \"rates and taxes\" as had been made in the assessment. 4. BECAUSE the amount of expenses claimed under the above mentioned heads were fully supported by proper bills and vouchers and the same were duly accounted for in the books of account which had been subjected to twin audits and no defect or discrepancy having been found and specified therein, the dis- allowance made / sustained by the authorities are wholly erroneous both on facts and in law. 5. BECAUSE without prejudice to the ground nos. 3 and 4 above, the dis allowances under the heads 'legal expenses', 'consultancy expenses' and 'rates & taxes' are much too high and highly excessive. 6. BECAUSE the authorities below have failed to appreciate that payments claimed under the head 'rates and taxes', are statutory payments made to various government authorities and therefore, the same being fully verifiable even from govt. record, deserve to be allowed. 7. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice to the extent stated in the foregoing grounds.” ITA No.535/LKW/2014 1. BECAUSE notice of accumulation dated 07.02.2014 in prescribed Form No. 10 as had been filed before the Id. first appellant authority during the course of appellate proceedings, met fully with the requirement of law relating thereto and view to the contrary as has been taken by the \"CIT(A)\" is wholly erroneous as being inconsistent with the facts of the case, material and information available on record, law applicable thereto and judicial precedents. 2. BECAUSE the \"appellant\" did not have any right, title or interest of its own in the sums aggregating Rs. 28,62,63,922/- credited in \"Infrastructure Fund\", as the same stood diverted by over-riding title in favour of the State Government and consequently ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 5 the \"CIT(A)\" should have held that the sums in question alongwith interest thereon were outside the ambit of assessment in the case of the \"appellant\". 3. BECAUSE the \"CIT(A) has erred in law and on facts in upholding the dis-allowance of Rs. 27,67,042/-being 25% of legal expenses as had been made in the assessment. 4. BECAUSE the amount of expenses claimed under the above mentioned head was fully supported by proper bills and vouchers and the same were duly accounted for in the books of account which had been subjected to twin audits and no defect or discrepancy having been found and specified therein, the dis-allowance made / sustained by the authorities are wholly erroneous both on facts and in law. 5. BECAUSE without prejudice to the ground nos. 3 and 4 above, the dis-allowance under the heads 'legal expenses', is much too high and highly excessive. 6. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice to the extent stated in the foregoing grounds.” ITA No.21/LKW/2019 1) Ld. CIT(A) has erred in law by directing the AO to compute the income as per direction given by the CIT(A)-1, Lucknow in the manner specified in section 11 of the Act taking into account information given in audit report in form 10B, ignoring the fact that the activities of the assessee are of commercial nature, therefore the assessee is hit by the amended proviso to section 2(15) of the Act, 1961 and second appeal on identical issue is already pending before Hon'ble ITAT, on a similar order passed by previous ld. CIT(A) in this very case. 2) Ld. CIT(A) has erred in law and facts in accepting/deciding the same issue, during the pendency before the Hon'ble ITAT, Lucknow Bench, Lucknow in appeal no. 532/Lkw/2014. 3) The order of Ld. CIT(A) be cancelled and the order of the A.O. be restored. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 6 4) Appellant craves leave to modify/amend or add any one or more grounds of appeal.” ITA No.22/LKW/2019 1) Ld. CIT(A) has erred in law by directing the AO to compute the income as per direction given by the CIT(A)-1, Lucknow in the manner specified in section 11 of the Act taking into account information given in audit report in form 10B, ignoring the fact that the activities of the assessee are of commercial nature, therefore the assessee is hit by the amended proviso to section 2(15) of the Act, 1961 and second appeal on identical issue is already pending before Hon'ble ITAT, on a similar order passed by previous ld. CIT(A) in this very case. 2) Ld. CIT(A) has erred in law and facts in accepting/deciding the same issue, during the pendency before the Hon'ble ITAT, Lucknow Bench, Lucknow in appeal no. 533/Lkw/2014. 3) The order of Ld. CIT(A) be cancelled and the order of the A.O. be restored. 4) Appellant craves leave to modify/amend or add any one or more grounds of appeal.” 2. In ITA No.532/Lkw/2014 and 533/Lkw/2014, the Department also subsequently filed additional grounds of appeals as under:- 1. That the Ld. CIT(A) erred in not considering the provision contained 13(8) inserted by the Financial Act of 2012 with retrospective effect from 01.04.2009. 2. That the Ld. CIT(A), erred in allowing exemption under section 11 of the Act, disregarding the provisions contained section 11(2) of the I.T. Act, 1961. 3. That the Ld. CIT(A) erred in not taking into account the provisions contained in section 15(1) (d) and (13(3) of the Act. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 7 4. That the Ld. CIT(A) erred in law and the facts in not dealing with specific items of additions made to the total income with reference to grounds on which such additions where made.” 2.1 In ITA No.534/Lkw/2014 and 535/Lkw/2014, the Assessee also subsequently filed additional grounds of appeals as under:- “1. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in confirming the addition made by the Ld. Assessing Officer on account of internal fund transfer which is kept in a separate bank account and is labeled as \"Revolving Fund\" considering such transfer to have been claimed as expense by Units.\" 3. The facts of the case are that the appellant was constituted by the Government of U.P. in terms of the provisions of section 3 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965. Section 15 in Chapter 3 of the Adhiniyam provides for the functions of the Parishad, which are also the objects of the assessee parishad. After abolition of section 10(20A) of the Act w.e.f. 1.04.2003, the assessee applied for registration under section 12AA of the Act, which was rejected by the Commissioner of Income Tax, Lucknow. Subsequently, in pursuance of directions by the ITAT, registration under section 12AA was granted to the appellant vide order dated 17.01.2006, w.e.f. 1.04.2003. In the assessment orders that were passed for the assessment years 2003-04, 2004-05, 2005-06 and 2006-07, the ld. AO denied the benefit of exemption under section 11 of the Income Tax Act, 1961 to the assessee authority. However, in subsequent appeals before the ld. CIT(A), the benefit of exemption under section 11 was allowed to the assessee and it was held that the income of the assessee was required to be computed as per section 11 of the Act. The matter of exemption under section 11 was also disputed by the Revenue for the assessment years 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15. However, the Hon’ble ITAT, vide its orders dated 8.06.2022, upheld ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 8 the exemption granted to the assessee vide the orders of the ld. CIT(A) and restored certain matter for re-examination back to the file of the ld. AO. 3.1 In the impugned assessment years (2007-08 and 2008-09), the ld. AO also assessed the income over expenditure as the income of the assessee and brought the same to tax. After making certain other additions, the income of the assessee was computed at Rs. 301,97,44,732/- for the assessment year 2007-08 and at Rs.225,45,17,400/- in the assessment year 2008-09. The ld. AO analyzed the functions and powers of the Board as laid down in section 15 of the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965 (hereinafter known as UPAEVPA, 1965) and came to the conclusion that a plain reading of the same revealed that they outlined the features of a housing scheme and emanated out of a consideration of a expediency rather than a concern for charity. The ld. AO compared the housing projects developed by private builders / developers with the activities of the Parishad and pointed out that the Parishad was charging a price for the common amenities and ambience, from the buyer/allottees of the said housing scheme. The ld. AO therefore, concluded that there was no mention of any set of objects in the UPAEVPA, 1965 which could be considered as charitable. Therefore, he rejected the contention of the assessee that it had charitable objects. He further observed that Chapter 2 of the UPAEVPA, 1965 was entitled, “establishment and conduct of business of the Board” which in itself implied that the assessee Board had been constituted for conducting business. It was further pointed out that the return of the assessee that had been filed with both Form 10B and at the same time alongwith Form 3CA, 3CB and Form 10CCB. The ld. AO observed that evidently the assessee had both claimed exemption under section 11 of the Act and also deduction under section 80IB(10) of the Act. Therefore, the assessee was asked to explain, why in view of the claim made under section 80IB(10), the income shown by it may not be taxed as business income. In response, the assessee submitted that the claim had ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 9 been made as a matter of abundant precaution, in case the assessment of income was made by disallowing the assessee the benefit of section 11. However, the ld. AO concluded from the claim of deduction under section 80IB, that the assessee was engaged in business activity and therefore, on these grounds, he held that the exemption under section 11 was not allowable. He also held that the claim of section 80IB was also not allowable firstly because the assessee had filed a return belatedly (for the A.Y. 2007-08) and not furnished details of commencement and completion of projects along with documentary evidences (for the A.Y. 2008-09). The ld. AO, thereafter proceeded to call for certain details regarding its income / expenses and asked the assessee to justify its claim of being engaged in charitable activities. Among the details called for, was the detail of deposits, work done along with centage chart for the same; income from community centers and guest houses, along with charges; details regarding how costing of property was done; details of auction sales done along with reserve price and fetched prices and details of properties allotted for charitable purposes or concessional rate, such as for hospitals, educational institutions, orphanages etc,. The assessee furnished some details, including the details of costing for houses constructed for Ashrayheen/ EWS, LIG, MIG, Vambay Scheme and others so as to prove that it did not have any profit motive and was essentially working for the welfare of the poor and lower income groups. It is also submitted that all the schemes were duly approved and sponsored by the Government of Uttar Pradesh. It was submitted that it was functioning entirely for the attainment of objectives as enshrined in the UPAEVPA, 1965 and that there had been no deviation in the activities conducted by the Parishad either in the past or present. However, the ld. AO recorded that the assessee did not furnish the complete details to the queries raised by him in either of the assessment years. The ld. AO conceded the fact that the assessee had been granted registration by the ld. CIT(A), on the directions of the ITAT, but held that the registration under section 12AA did not give a blanket exemption to the assessee under section 11 of the Act. He opined ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 10 that the institution may be registered under section 12AA and still not be liable for exemption under section 11 of the Act, on account of enquiries made by the ld. AO which showed that the activities of the said assessee were not charitable. The ld. AO observed that a large surplus has been generated from the sale of properties, interest had been taken on payment of installments which also included penal interest on all kinds of properties including sales made on, “Valmiki Ambedkar Yojna” which showed that the assessee Parishad was not functioning on charitable considerations but on commercial calculations. The ld. AO further observed that the assessee had received large receipts from “EMOs” relating to property details of which were given in Schedule 28 of the accounts, from which he concluded that for each and every aspect of work performed by them, the assessee parishad has been charging the allottees. Thus, from the same he concluded that the activities of the assessees had all the ingredients of a commercial venture in which there was no essence of charity. The ld. AO observed that the assessee was levying non- construction charges where construction was not carried out by the allottees on the plots within stipulated period, forfeiting amounts paid on cancellation of allotments / sale of properties and thereafter taking revival charges for properties that had been forfeited or were on the verge of forfeiture for non-payment of dues or defaults. So from all these observations, the ld. AO concluded that the assessee parishad was functioning like a commercial entity. The ld. AO also observed that the assessee had placed large amount of deposits in the bank and was earning interest from the same, which was not a charitable activity. Furthermore, the ld. AO observed that the assessee was performing works on behalf of various Governments, from which it was charging, “Centage” going up to 12.5%, which in the opinion of the ld. AO was as good as the margin of profit received by other contractors for similar work. He rejected the explanation of the assessee that the centage was charged to meet its administrative and establishment cost as the assessee did not furnish substantiating evidence in this regard. The ld. AO concluded ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 11 that this activity was entirely on commercial lines. The ld. AO also observed that the funds received for centage work were also deposited in FDRs, from which interest was earned by the assessee. He went on to observe that, from the costing details submitted by the assessee, apart from expenses claimed on land, civil work, material cost, work charge cost, a 12% supervision charged was also charged for each unit built and interest was charged for the period of construction. Furthermore, 2% of the cost of the unit was also taken from the allottees on account of maintenance. Calling for the details of auctioned properties, with regard to reserve price and price fetched, the ld. AO observed that the land had been sold to private builders/real estate developers and therefore, this activity went to show that the sales were not for any charitable consideration, but rather the utility had been extended to those persons who could afford it. He also observed that the assessee was receiving money from community centers and guest houses, but despite calling for the retail of such receipts, ownership of guest houses etc., none were furnished before him. For the A.Y. 2007-08, the ld. AO also observed that the assessee had shown excess of income over expenditure of Rs.270,94,55,118/- which was 47.29% of its total receipts. He observed that for claiming exemption under section 11, the assessee was obliged to file a Form 10 as per the provisions of section 11(2) of the Act along with the return of income, which the assessee had not done. However, during the course of proceedings, on 21.12.2009, the assessee submitted a statement showing working of income set apart for utilization, on the basis of a decision of the Board on 27.11.2009 that Form No.10 shall be furnished by the Finance Controller of the Parishad. Thereafter, Form 10 for the year was furnished on 23.12.2009. Since, Form 10 was filed after almost three years of the return having been filed, the ld. AO held that it was not maintainable and further he observed that no particular purpose had been stated in the Form 10, which was in contradiction to the intention of the Legislature while enacting the provisions contained in section 11(2) of the Income Tax Act. He, therefore, held that since there was no specific purpose for ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 12 which the accumulation could be treated as justified, Form No.10 was rejected and the exemption of the assessee under section 11 was also liable to be dismissed on account of inadequate application of receipts. 3.2 In both assessment years, the ld. Assessing Officer observed that certain receipts under the head, “infrastructure Fund” (Schedule 9A), Vambey Scheme fund and revolving fund (Schedule 9B) had not been included in the income and expenditure accounts prepared for the year. He asked the assessee to explain why the total receipts under these heads had not been included in the total income shown, as these were Revenue receipts and as the system of accounting being followed was, “cash”. In its response, the assessee submitted that as per the order of the State Government order dated 15.12.1998, the contention that receipts on account of infrastructure were the revenue receipts of the assessee were not correct. Only 10% of such receipts were the income of the assessee which has been truly taken into the income and expenditure account. It ws submitted that as per the order of the State Government, 2% additional stamp duty is collected on Registry of properties in the entire U.P. Of the total collection, the Awas Vikas Parishad, development authorities & nagar nigams were given one third each at the discretion of the State Government in terms of G.P. No.5080/9/Aa-1-1998 dated 15.12.1998. The ld. AO went through the said Government Order and noticed that in the same, a certain amount of collection made from different sources (as enumerated) would be used for construction of roads, drainages, sewer, light, water and beautification etc,. However, he noted that it was nowhere directed that one third would be given to other authorities and in the circumstances, he held that these were the revenue receipts of the assessee, charged from persons with whom transactions for sale of land / houses /shops etc., were made. As they were the assessee’s trading receipts and by all commercial tests, formed part of the income of the assessee, they ought to have been accounted for in the credit side of the income and expenditure account ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 13 and not crediting of such receipts in the income and expenditure account amounted to suppression of current income for the year. In the assessment year 2008-09, the ld. AO also pointed out that the assessee had shown expenses to have been made out of this fund but no details or evidence had been submitted before him regarding the expenditure out of this fund. Therefore, in both years, he decided to add back the aggregate amount of receipts in the infrastructure funds (Rs.14,31,41,898/- in A.Y. 2007-08 and Rs. 28,62,63,922/- in A.Y. 2008-09) to the income of the assessee. 4. On going through Schedule 9B of the balance-sheet relating to the Vambay Scheme Fund, the ld. AO observed that the receipts under this head were also not included in the income and expenditure account by the assessee but taken directly to the balance-sheet. The assessee was therefore, confronted with this and also required to furnish the complete details of the claim made in this regard. In response, it was submitted that under the Vambay (Valmiki Ambedkar Malin Basti Awas Yojna) Scheme, specific subsidy/grants or funds were received and for the purposes of construction of housing for the poorest of the poor. It was submitted that in the said years, funds had not been received and therefore, the interest on earlier funds had been credited to the fund and expenditure incurred from the same and refunds made to SUDA had been debited to the fund, which was not required to be rooted through the income and expenditure account. However, the ld. AO did not accept this explanation, he held that the funds ought to have been routed through the income and expenditure account and therefore, he made an addition of Rs.62,54,220/- in the assessment year 2007-08 and Rs.80,10,634/- in the assessment year 2008-09 for interest earned on these schemes but not reflected in the income and expenditure account. With regard to the revolving fund, contained in Schedule 9B (B) of the balance-sheet of the assessee, the ld. AO observed that in the assessment year 2007-08, the assessee had received Rs.49,57,000/- under this head and in the assessment year 2008-09, it had received Rs.78,71,904/- under this head. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 14 Again, the receipts under this head had not been included in the income and expenditure account. The assessee was confronted in this regard and it submitted that the revolving fund was created by the deduction of a certain sum of fund transferred to various units for the purposes of development etc., construction work. The assessee’s submissions were not found to be satisfactory as no details of these sources of funds along with documentary evidences were furnished. Therefore, the ld. AO added back these amounts to the income of the assessee. In Schedule 12, the assessee had shown advances to contractors and suppliers and Rs. 14,26,40,652/- for the assessment year 2006-07 and Rs.16,37,86,375/- for the assessment year 2008-09. The assessee was asked to submit confirmation of parties, in response to which it submitted that it was a U.P. Government Organization and such advances through contractors were given in the normal course of business. It requested more time to submit the details called for by the ld. AO, on the grounds that the advances were given by their various units located all across U.P. and it would take some time to collect the details thereof. However, the ld. AO noted that, despite a number of opportunities, nothing was furnished in this regard and therefore, he added back these amounts to the income of the assessee by disallowing the said expenditure. Furthermore, the ld. AO also observed payment of legal expenses and consultancy expenses, for which the assessee was required to submit the necessary details. However, as the assessee could not furnish the necessary details in the time frame provided by the ld. AO, the same were added back to the income of the assessee. The ld. AO also observed that a sum of Rs.24,01,104/- had been paid under the head rent, rates and taxes for the assessment year 2007-08. It was submitted that the same had been paid on account of house tax, water tax and other payments made to Nagar Nigam/Nagar Palikas at HQ as well as Unit level. However, as the details were not produced before the ld. AO, the expenses were disallowed. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 15 5. The ld. AO also observed that the assessee had claimed the status of Artificial Juridical Person (AJP) in the return of income filed. Hence, in view of the claimed status and the detailed discussion held on this issue in the assessment year 2003-04, the assessment was completed in the status of AJP. He held that the entire applicability of the provisions of section 11, 12, 12A, 12AA and 13 centered around the correct connotation of the word trust or institution. He speculated allowed as to whether any organization / undertaking / local authority whether owned by private individuals or by the Government, could assume the status of an institution and claim exemption merely on account of its engagement in pursuit of an object of public utility. Perusing the accounts of the assessee for the F.Ys. 2006-07 and 2007- 08, the ld. AO pointed out that there were no voluntary contributions or donations received by the assessee. The receipts were on account of sale of properties, interest received under various heads, centage charges received on deposit works and other misc. receipts – which could not be held to be voluntary contributions or donations. The ld. AO opined that if the activity of the Assessee Board of construction and providing housing accommodation for a price was to be accepted as a test for engagement in a charitable activity, then every builder and developer would have to be accepted as being engaged in the pursuit of charity. He observed that the assessee housing Board was not providing housing accommodation on charitable considerations, but charges sale consideration from its customers/buyers and also recovered the cost of funds invested in terms of premium and betterment charges. Thus, he held that the activities of the assessee have all the ingredients of a commercial venture. He held that charity could not carry a price tag and in the case of the applicant, the price was not symbolic or taken but was valid by commercial calculation. Therefore, there was no charity involved in the activities of the housing Board. The mere fact that the assessee was a housing Board and undertaking execution of housing schemes could not be viewed in isolation regardless of the commercial outlets of the whole endeavor. Since, the buyers / allottees in respect of ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 16 housing accommodation / sites had not only to pay the price determined and demanded by the assessee, but they also had to pay the expenses of stamp duty for transfer and registration of property in their names and since they also had to pay premium towards price appreciation of the property, betterment charges for value addition to the property, interest on differed or delayed payments, thus what was emerging was that the activity of the assessee was purely that of a commercial organization. Therefore, the ld. AO held that the surplus of the assessee was not incidental to its activities but was the desired outcome of its activities. He further commented that the exemption enjoyed under section 10(20) was a benefit conferred by the statute rather than a recognition of an element of charity in its activities. However, the consequent amendment in the provisions and disentitlement of the assessee from the benefit of exemption could not present the need for a new yardstick to re-valuate the fundamental nature of the assessee’s activities in order to invent the element of charity in them. Therefore, the ld. AO held that the statutory changes implied a legislative intent which could not be thwarted by giving assessee exemption under section 11. Relying upon the decision of the Hon’ble Supreme Court in the case of CIT, Kerela vs. Cochin Chambers of Commerce and Industries and Indian Chamber of Commerce vs. CIT, West Bengal-2, the ld. AO pointed out that the Constitution of the Uttar Pradesh Awas Evam Vikas Parishad did not bring into existence any institution to render charity. The Housing Board had neither any set of objectives which could be perceived to be charitable nor was the class of people to get benefited by its endeavour, identifiably defined. Buyers, allottees and lessees who had to pay a commercial consideration for what they got in return could not be classified as, “beneficiaries” as the consideration charged by the Board on purely commercial terms, was a negation of the concept of charity. Therefore, holding that the assessee was hit by the proviso of section 2(15) of the Act, he denied the exemption under section 11 to the assessee, and the income of the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 17 assessee parishad was assessed at Rs. 301,97,54,732/- for the assessment years 2007-08 and Rs. 225,35,17,400/- for the assessment year 2008-09. 6. Aggrieved by these assessment orders, the assessee filed appeals before the ld. CIT(A)-1, Lucknow. With regard to the issue of assessment of the assessee on the status of an AJP on the basis of the assessment for the assessment 2003-04, the ld. CIT(A) observed that the controversy about the status of the appellant had come up for consideration before his predecessor in earlier years, wherein it had been held that the assessee was an AOP. Therefore, without going into the various arguments of the ld. AR, he decided to follow the orders of the ld. CIT(A) for the assessment year 2003-04 wherein the assessee was assessed in the status of AOP. On the issue of granting of exemption under section 11 to the assessee after the registration of the Board under section 12AA of the Income Tax Act, the ld. CIT(A) once again relied upon the orders of his predecessor in the assessee’s own case in the assessment year 2003-04, wherein the ld. CIT(A) had held, that once the registration had been granted under section 12AA, after a detailed scrutiny of the objects of the trust, then the ld. AO was precluded from making further probe into its objects and activities so as to argue that it was not carrying out any charitable activity but rather was a business entity. The ld. CIT(A) had relied upon the decision of the Hon’ble Supreme Court in the case of ACIT vs. Surat City Gymkhana (2008) 300 ITR 214 (SC) for this proposition. Thus, the ld. CIT(A) had held that once the registration had been granted under section 12AA, the income of the assessee had to be computed as per section 11 and not any other head of income. He, therefore, held that the order of the ld. AO to do otherwise was against judicial propriety and therefore it could not be sustained. It was therefore held by the ld. CIT, that the ld. AO would have to restrict himself to the computation of income as provided under the scheme of section 11 and should thereafter only examine the application of income. Furthermore, once it had been held by the ITAT, that the objects were for, “general ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 18 public utility” then the ld. AO was bound by the grant of subsequent registration. The ld. CIT(A) also recorded the arguments of the ld. AR that the controversy with regard to eligibility of the assessee for registration under section 12AA had been settled by the Hon’ble High Court, Lucknow Bench, Lucknow in its favour, vide judgment dated 16.09.2013 and 27.09.2013 in Income Tax Appeal Nos.114/2010 and 16/2006. After consideration of such arguments, following the decision taken in earlier assessment years, the ld. CIT(A) decided to direct the AO to compute the income in the manner specified in section 11 taking into account the information given in the audit report in Form 10-B. Accordingly, this issue was decided in favour of the assessee. With regard to the issue of non-consideration of notice of accumulation in Form No.10, the ld. CIT(A) observed that at the time of filing of the return for assessment year 2007-08 and 2008-09, no notice for accumulation of income in the prescribed Form No.10 was furnished by the assessee. From Form No.10-B, the ld. AO had observed that the excess of income over expenditure in the assessment year 2007-08 was 47.29% and therefore, Form No.10 ought to have been filed. He took note of the submission of the assessee’s counsel that the Form No.10 was filed on 23.12.2009 prior to the completion of assessment and therefore, the assessee was seeking shelter under the decision of the Hon’ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association (2001) 247 ITR 201. He also took note of the observation of the ld. AO, that the Form No.10 did not specify the purpose for which the income was accumulated or set apart and the decision of the ld. AO to rely upon the case of DIT(Exemption) vs. Trustees of Singhania Charitable Trust, 199 ITR 819 (Calcutta). The ld. CIT(A) further took note of the plea of the ld. AR that the said case law, which had been relied upon by the ld. AO was not applicable to the facts of its case, because in that case, the trust was having multiple objects, while in the case of Parishad, the object was singular and therefore, the narration regarding purpose of accumulation appearing in the notice fully met the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 19 requirements of law. The assessee’s ld. counsel had placed the reliance on the following case laws namely:- i. Bharat Kalyan Pratisthan vs. DIT(Exemption) (2008) 299 ITR 406 (Del). ii. DIT vs. Mitsui and Co. Environmental Trust (2008) 303 ITR 111. In consideration of this issue, the ld. CIT(A) held that as per the judgment of the Hon’ble Supreme Court in the case of Nagpur Hotel Owners Association (supra), the notice of accumulation was required to be furnished before the completion of assessment. Since in the assessment year 2007-08, the Form No. 10 had been furnished before the completion of assessment, the ld. AO was required to take it into consideration while working the income of the trust in the manner provided under section 11 of the Act. With regard to the view that the Form No.10 stated that the income amounting to Rs.168.13 Crores would be accumulated and set apart for utilization in the next five years to attain the objects of the Parishad as enshrined in the UPAEVPA, 1965, the ld. CIT(A) held that it was necessary that the assessee must specify in the notice, the concrete nature of the purpose for which the accumulation was being made. He observed that the generality of the objects could not take the place of specificity of the need for accumulation and therefore in his view, simply writing the objects, which were 21 in number, would not satisfy the requirement of specification for the purposes as required by section 11(2). Placing reliance on the following decisions: a. Cotton Textile Export Promotion Council vs. 1st ITO 4 ITD 642. b. Karnal Improvement Trust vs. ACIT, 16 taxman.com 63 (ITAT-Del). c. CIT vs. M.CT Muthaiah Family Trust, 245 ITR 400 (Madras). d. Sir Sobha Singh Public Charitable Trust vs. ADIT (Exemption) 79 ITD 1 (Del). the ld. CIT(A) held that in the case of the assessee, the purpose of accumulation of setting apart the income to attain the objects showed a lack of ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 20 application of mind and specificity as prescribed in section 11(2) of the Act. He, therefore, held that if the contention of the assessee were to be accepted, it would make the provision of section 11(3A) redundant. He noted that the assessee had failed to give specific details as provided in item no. 2 and 3 of Form No.10. Furthermore, he noted that the original Form No. 10-B furnished with the return had contained a note that there is no income accumulated or set apart for specified purposes under section 11(2). Thus, he held that the assessee had failed to meet the requirements of section 11(2)(a) of the Act and therefore, since no purpose had been expounded in Form No.10, it was not entitled to the benefit of accumulation. In the assessment year 2008-09, the ld. CIT(A) further observed that the Form No.10 was filed on 7.02.2014, during the appellate proceedings. As per the judgment of the Hon’ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association, 247 ITR 201, the notice of accumulation was required to be furnished before the completion of assessment. He also rejected the plea of the assessee to treat the Form No.10 as additional evidence in view of the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Mayur Foundation, 274 ITR 562, on account of the fact that the period of five years as mentioned in section 11(2)(A) had already expired on 31.03.2012. He, therefore, held that the assessee could not put the clock back to utilize the accumulated or set apart income for the purpose specified by the notice in writing. Placing reliance on the judgment of Hon’ble Kerela High Court in the case of Rural Employment and Welfare Society vs. Asstt. DIT 144 taxman 93 (Kerela), he declined to consider the Form No.10 dated 7.02.2014, filed on 10.02.2014 as a notice of accumulation. In this year also, he observed that there was no specificity of reasons cited in the Form No. 10 and therefore, even otherwise, the assessee was not eligible for the benefits of accumulation as it had also not met the provisions of section 11(2)(b) of the Act. Therefore, the ld. CIT(A) in both years rejected the plea of the assessee for accumulation of income. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 21 7. The ld. CIT(A) thereafter, proceeded to decide the issue of the infrastructure fund. Perusing the G.O. dated 15.12.1998, to which the infrastructure fund owed its origin, he observed that as per the said G.O., part of the income of the assessee from a few sources was taken to the infrastructure fund and not to general pool and perusal of Schedule 28 and 29 of the annual accounts showed that 90% of the charges such as conversion charges, map charges, free hold charges, water charges, malva charges, compounding charges, supervision charges, misc. receipts have been transferred to the infrastructure fund. He observed that as per the Government Order, the account was to be in the name of the assessee, however the expenditure would be made as authorized by a committee for the purpose and on construction of roads, drainage, sewer, street light, water supply, beautification etc,. He noted that the assessee was allowed to collect the fees and charges directly and part of the fees or charges was credited to the infrastructure account. Thus, he held that the infrastructure fund was not a separate fund independent of the assessee. The Government Order only talked of a designated bank account in which a fixed portion of the receipts would be deposited and out of which expenses would be incurred with the approval of an empowered committee. He observed that all the receipts form part of normal receipts of the assessee and the expenses incurred were also normal expenses. He further observed that the role of the committee was of a regulatory nature which only acted in furtherance of fulfilment of the assessee’s objects. There was no difference between the other receipts collected by the assessee and that credited in the infrastructure fund. He, therefore, observed that the Government Order did not create overriding title in favour of the State Government at the source of collection of the alleged fees / charges. The ld. CIT(A) further observed that under similar circumstances in the following judgments, the receipts had been held to be taxable as income of the assessee. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 22 a. Mussoorie Dehradun Development Authority vs. Addl CIT 143 TTJ 395 (ITAT- Del). b. CIT vs. DTTDC Ltd. 2006 taxman 504 Delhi. Therefore, looking to the facts and circumstances of the case and the aforesaid decisions, the ld. CIT(A) held that the credits in the infrastructure funds and its utilization formed part of the computation of the income of the Parishad and the principle of diversion of income by overriding title, which the assessee had claimed on the strength of the decision of the Hon’ble Allahabad High Court in the case of Jit and Pal X-ray Pvt. Ltd. vs. CIT 267 ITR 370, was not applicable to the instant case. He, therefore, confirmed the additions on account of the infrastructure fund that was made by the ld. AO. However, he directed the ld. AO allow the expenses made out of the said infrastructure fund as per Schedule 9A of the annual accounts, as application of income after verification of Form 10-B. 8. Coming to the issue of Vambay Fund, the ld. CIT(A) considered the arguments of the assessee that the same was conceptualized under the poverty elevation for urban poor scheme formulated by the Government and the assessee had been receiving grants from the State Urban Development Agency (SUDA) for utilization in a specified manner and unutilized funds were to be deposited into the bank. He further considered the submission that the interest on such deposits also partakes the character of the grant, therefore, the sum although collected by the assessee was diverted through overriding title in favour of SUDA only and was meant for being utilized as per its policy. The ld. CIT held that in the Vambay Fund, the grants were given by the State Urban Development Agency (SUDA) for poverty eradication for the urban poor. Since, the grants received were credited in a separate account and utilized as per the guidelines issued by the State Urban Development Agency (SUDA), he agreed with the contention put forth by the ld. AR that the grant had been received for a particular purpose and could not be taxed as ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 23 there was no element of profit in such grant. Placing his reliance on the following decisions: a. CIT vs. U.P. Upbhokta Sahkari Sangh Limited 288 ITR 106 (All) b. Bihar Agricultural Produce vs. CIT, 205 taxman 378 (Patna) c. Karnataka Urban Infrastructure Development Corporation 315 ITR 301 The ld. CIT(A) held that the grant and interest which have been taxed by the ld. AO were meant for specific projects and had been spent for meeting the expenses of these projects and hence these amounts were not taxable. He further held that since the expenses incurred by the assessee during the years under consideration under the Vambay Scheme were more than the receipts, there was no surplus which could be brought to tax. He, therefore, deleted the additions made by the ld. AO in this regard. 9. On the issue of revolving fund, the ld. CIT(A) observed after seeing the G.O. dated 11.07.2005 that the principle of diversion of income by overriding title, as argued by the ld. AR was not applicable as the sums credited to the said fund, as it merely represented appropriation of income in the hands of the assessee. He noted that .5% of the remittances made by headquarters to the units were retained by the headquarters under the fund. The fact of the retaining the amount was intimated to the concerned unit by the finance division and the concerned unit claimed it as an expenditure on relevant projects. The ld. CIT(A) held that the units claiming the money so retained under revolving fund as expenses, was not in consonance with accounting policy. In view of the same, he confirmed the additions made by the ld. AO on account of revolving fund and rejected this ground of appeal filed by the assessee. On the issue of claim of advances to contractors, the ld. CIT(A) held that the amounts represented advance payments made to contractors, which were neither receipts nor expenses in the hands of the assessee as no deduction in ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 24 respect of the same had been claimed. He, therefore, held that the sum in question could not be taxed as the income of the assessee and therefore, he directed that it be excluded from the computation of income in both assessment years. On the issue of claim of expenses under the head legal expenses, considering the submissions laid down by the ld. AR that payments were entered in the books of accounts which have been maintained on day to day basis and in regular course of activities carried out by the assessee after deducting tax at source wherever necessary, he observed that the assessee had neither furnished the details before the ld. AO nor before him, even though, number of opportunities was provided to the assessee in this regard. Therefore, the ld. CIT(A) held that the ld. AO had given cogent reasons for making the said disallowance and he did not find any reason to interfere with the same. He, therefore, decided these grounds against the assessee in both assessment years. On the issue of rent, rates and taxes in the assessment year 2007-08, the ld. CIT(A) again observed that the assessee had not furnished details before him also during the course of appeals and therefore, he declined to entertain the claim and accordingly he confirmed the addition made by the ld. AO. On the issue of deduction under section 80IB(10), since the ground was not pressed by the ld. AR, the ld. CIT(A) dismissed the same as not pressed. On the claim of TDS, the ld. CIT(A) directed the ld. AO to verify the TDS and grant the benefit to the assessee as per law. On the issue of charging of interest under section 234A, 234B and 234C, holding that the charging of interest was mandatory, he rejected the plea of the assessee but directed the ld. AO to allow the consequential relief that would arise as a result of the decisions made in the appeal. In this manner, both the appeals of the assessee were partly allowed. 10. Aggrieved by these orders of the ld. CIT(A), both the Department and the assessee have come in appeal before us vide their respective Appeal Nos. 532 and 533 in the case of the Department and Appeal Nos. 534 and 535 in the case of the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 25 assessee. Even while the Department moved an appeal against the orders of the ld. CIT(A) on issues that we shall discuss later, the ld. AO was called upon to give appeal effect to the orders of the ld. CIT(A). In his orders, under section 143(3) r.w.s. 251 of the I.T. Act dated 6.08.2014, while vacating the additions deleted by the ld. CIT(A), the ld. AO continued to assess the income on the basis of the computation made by his predecessor and accordingly, the income of the assessee was determined at Rs.278,58,93,903/-for the assessment year 2007-08 and at Rs.206,83,75,346/- for the assessment year 2008-09, by denying the exemption under section 11. Aggrieved by these orders giving appeal effect to the decision of the ld. CIT(A), the assessee again went before the ld. CIT(A) and challenged the appeal effect. It was submitted that the assessee had been denied the exemption under section 11 of the Act by the ld. AO who had treated the surplus of income over expenditure as the income of the assessee. Aggrieved by such decision, the assessee had preferred an appeal before the ld. CIT(A)-1, Lucknow, who while partly allowing the said appeal, had held that the assessee was eligible for exemption under section 11 and had directed to ld. AO to compute the income in the manner specified in section 11, taking into account information given in the audit report in Form No. 10-B. However, while re-computing the income to give effect to the directions of the ld. CIT(A)1-Lucknow, the ld. AO did not make the computation as per the provisions of section 11 of the Act. The ld. CIT(A)4 -Lucknow, observed that his predecessor had dealt with the issue in his order dated 10.03.2014 and had given a direction to the ld. AO to compute income the in the manner specified in section 11. The ld. CIT(A) thereafter called for a remand report from the ld. AO, in which it was submitted that in view of the judgment in the case of Jammu Development Authority, confirmed by the Hon’ble Supreme Court, the ld. AO was justified in denying the exemption under section 11 of the Act. The ld. CIT(A)-4, Lucknow, thereafter again directed the ld. AO to compute the income of the assessee as per the direction given by the CIT(A)-1, Lucknow, in the manner specified in section 11 of the Act, taking into account the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 26 information given in audit report in Form 10-B. The Revenue is aggrieved at these directions issued by the CIT(A)-4, Lucknow in his orders against the assessments under section 143(3) r.w.s. 251, dated 15.11.2018 and has accordingly come in appeal before us, submitting that the directions issued by the ld. CIT(A) were incorrect as they ignored the fact that the activities of the assessee were of commercial nature and therefore, the assessee is hit by the amended proviso to section 2(15) of the Act, 1961 and a second appeal was pending before the ITAT on a similar order passed by the previous ld. CIT(A) in this very case. The Revenue prayed that the orders of the ld. CIT(A) may cancelled. This is how six appeals came to be pending before us on the same set of assessment orders pertaining to the assessment years 2007-08. 11. Shri. G.C. Shrivastava, ld. Special Counsel appearing on behalf of the Revenue in ITA Nos. 532 & 533/Lkw/2014 and ITA Nos.21 & 22/Lkw/2019 drew our attention to drew our attention to the additional grounds of appeal filed on 5.02.2020 and pointed out that Ground No.1 of these additional grounds namely non consideration of the provisions contained in section 13(8) was not being pressed in view of the fact that the proviso to section 2(15) had been issued with effect from 1.04.2009 and therefore were not relevant for this assessment year .Thereafter, drawing our attention to the order of the ld. CIT(A) dated 10.03.2014, he pointed out that since the ld. CIT(A) had held that the assessee was eligible for exemption under section 11, he should have considered the findings of the ld. AO with regard to violation of section 11(2), violation of section 13(1)(d) and violation of section 13(3). The ld. Special Counsel submitted that these were legal issues that were germane to determining the amount of taxable income in the hands of the assessee and therefore the direction of the ld. CIT(A) to compute the income in the manner provided under section 11 without taking a decision on the violation of section 11(2) violation of section 13(1)(d) and violation of section 13(3), rendered the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 27 orders of the ld. CIT(A) as bad in law, because the ld. CIT(A) could not have passed an order that an institution was charitable in nature, without insisting on the compliance to the essential conditions of eligibility for exemption as prescribed in sections 11, 12 and 13 of the Income Tax Act, 1961. The ld. Special Counsel drew our attention to the violation of section 11(2), which was highlighted in pages 17, 18 and 19 of the AO’s order dated 30.12.2009 wherein the ld. AO had recorded the fact that even the resolution authorizing the Finance Controller to furnish the Form No.10 had been passed on 17.11.2009 i.e. nearly over two years after the due date of the filing of the return and the Form 10 for the year had been furnished on 23.12.2009 (18.12.2009), for which the Resolution had been shown to have been passed on 17.11.2009 only. The ld. Special Counsel pointed out that this belated resolution and delayed filing of Form 10, showed that no decision had been taken on time and how the funds had been utilized in the interim period was also not clear. He submitted that the law did not allow for this kind of belated resolution and delayed filing. The ld. Special Counsel also pointed out that the Resolution that had been passed was for a non-specific purpose. He quoted from the provisions of section 11(2) of the Act and also read out from the relevant portion of Explanation 1 to section 11(1), in which it was stated that if in the previous year, the income applied to charitable or religious purpose in India falls short of 85% of the income derived during that year by any amount, then so much of the income which falls short of 85% of the income derived in the year may, at the option of the person in receipt of the income, which was to be exercised in writing before the expiry of time allowed under sub section (1) of section 139 for furnishing the return of income, be deemed to the income applied to such purposes during the previous year in which the income was derived and the income so deemed to have been applied, shall not be taken into account in calculating the amount of applied to such purposes. He further went on to point out that from reading of section 11(2), that where 85% of the income referred to in Clause (a) or (b) of sub section (1) read with the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 28 explanation to that sub section was not applied, or was not deemed to have been applied to charitable or religious purposes in India during the previous year, but was accumulated or set apart for future application, such income so accumulated would not be included in the total income of the previous year, only if such person specified notice in writing to the ld. AO in the prescribed manner, the purpose for which the income was being accumulated or set apart and the period for which the income was being accumulated or set apart and also the manner in which the money that had been set apart was invested or deposited (in the forms or modes specified in sub section 5). Ld. Special Counsel also invited our attention to the provisions of section 11(3) which stated that any income referred to in sub section 2 which is applied for purposes other than charitable or religious purposes or ceases to be accumulated or set apart for application within the period referred to in section 11(2)(a), shall be deemed to be the income of such person in the previous year in which it is so applied or ceases to be so accumulated or set apart or ceases to remain so invested or deposited as the case may be, of the previous year immediately following the expiry of the five year period. Thus, relying upon these sub sections, the ld. Special Counsel pointed out, that the ld. CIT(A) after having reversed the order of the ld. AO, ought to have gone into the question as to whether the other conditions provided in section 11 stood fulfilled or not. He submitted that a bare reading of the provisions contained in section 11(2) and 11(3) shows that the surplus generated during the previous year will not get exemption unless, it is accumulated or set apart in the manner as provided in Form 10 which must state:- i. The purpose for which the income is being accumulated. ii. The period for which it is accumulated (which could not exceed five years). iii. How the money so accumulated is invested or deposited in a specified note. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 29 iv. A statement to this effect is furnished before the due date of filing of the return. The ld. Special Counsel pointed out that this was the law and the ld. CIT(A) had not looked into it. He submitted that the assessee had not utilized the amounts that was set apart in earlier years and became due for application during the year under consideration. He further submitted that by stating that whatever has been spent was out of accumulated amount of earlier years and current years surplus is available for being set apart for future years, the respondent was seeking to enlarge the scope of section 11(2), as if it is a facility for carrying on the accumulations in perpetuity and utilize it as a rolling fund. The law was very specific that the amounts so set apart ought to be spent during the given period and for the purpose for which it was set apart. No such material was available on record to justify the claim of the assessee. The ld. Special Counsel further submitted that perusal of the copy of Form No.10 filed for assessment year 2007-08, showed that the purpose for the accumulation of income was very vague and general in nature, whereas the law required that the purpose of accumulation ought to be specific, or else the whole purpose of enacting a provision gets defeated. Ld. Special Counsel further argued, that the accumulation of surplus had been swelling over the years, which further indicated that the amounts accumulated earlier and due for application this year, had not been spent and thus they would be deemed to be income chargeable to tax under section 11(2) of the Act. The provisions of section 11(3) also provided that the amount accumulated under section 11(2) had to be invested and remain invested in specified mode till it was spent. There was nothing to suggest that the amount that was set apart earlier and due for application in this year were withdrawn out of the investment in prescribed modes. The ld. Special Counsel invited our attention to the decision of the Hon’ble Allahabad High Court in CIT-1, Lucknow vs. Lucknow Development Authority (2014) 265 CTR 433 (Allahabad) , in ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 30 which the assessee was also a party, wherein the Hon’ble High Court had held that the registration under section 12A could not be treated as conclusive and it was always open to revenue authorities while processing the return of income of assessees registered under section 12A, to examine the claim of the assessees under sections 11 to 13 and give such treatment to those institutions, as were warranted by the facts of the case. Furthermore, the Court had held that the authorities were always at liberty to cancel the registration under section 12AA(3). Thus the ld. Special Counsel pointed out, that it was established law that examination of accounts of the assessee authority from year to year was mandatory before granting of exemption to the assessee in that year. He, therefore, submitted that this matter could be sent back to the ld. AO for examination on the facts of the case. With regard to Ground No. 3 of the additional ground of appeal, the ld. Special Counsel argued that the ld. AO had to examine from year to year as to whether amounts that had been accumulated by the assessee had been invested in the specified modes and the ld. CIT while allowing the exemption under section 11 had omitted to consider that the ld. AO had not looked into this aspect at the time of assessment, in view of his belief that the assessee was hit by the proviso to section 2(15) and therefore, not eligible for exemption. Therefore, the ld. Special Counsel submitted that the matter could be restored back to the file of the ld. AO to examine this issue prior to the grant of exemption to the assessee. 12. With regard to Ground No.4 of the additional grounds of appeal, the ld. Special Counsel pointed out that the ld. AO had specifically asked the assessee to as to whether any benefit had been conferred to persons mentioned under section 13(3) of the Act. This information had not been furnished by the assessee. The ld. Special Counsel pointed out that the provisions of section 13(1) of the Act stated that nothing contained in section 11 shall operate so as to exempt any income if any part of such income or property of the institution had been applied or used directly ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 31 or indirectly for the benefit of any of the persons referred to in section 13(3). The ld. Special Counsel pointed out that by virtue of Finance Act, 1972, the Manager of the institution by whatever named called was also a person referred to in section 13(3) and any benefit given to such persons would disentitle the institution to the benefit of exemption. The ld. Special Counsel pointed out that when the additional grounds filed by the Revenue came for consideration an opportunity was allowed to the respondent by the Hon’ble Bench to provide relevant details whether any benefit had passed on to the employees, particularly to the Managers or their relatives. As per the information available on record, it was seen that by way of a general circular, the respondent had given 5% concession on the total price of land/flats allotted to all its employees including senior employees. Thus, a benefit was being given to the employees and more particularly, the Manager and their relatives. Ld. Special Counsel pointed out that though the Adhiniyam, 1965 under which the respondent was created, did not give any such benefit to all the employees including those occupying managerial positions, registration amount in respect of these employees was being reduced. The ld. AO had called for specific information but the same had not been furnished. Disclosure regarding the same had not been made in the accounts and complete information in this regard was not being furnished to the Revenue. The ld. Special Counsel placed reliance on the decision of the Hon’ble Andhra Pradesh High Court in the case of Talaprolu Bapanaiah Vidya Dharma Nidhi Trust vs. CIT (1987) 167 ITR 482 (AP); Hon’ble Allahabad High Court in the case of CIT-2, Lucknow vs. Awadh Educational Society in ITA No.142 of 2007; DIT vs. Maruti Centre for Excellence (2012) 208 taxman 236 (Delhi) and Buddha Vikas Samiti vs. CIT-1, Patna (2011) 199 taxman 395. He went on to submit that it had been held by the Hon’ble Allahabad High Court in the respondent’s own case in M/s U.P. Awas Evam Vikas Parishad in ITA No.114 of 2010 dated 16.09.2013 that it was always open to Revenue authorities to examine the claim under sections 11 and 13, and give such treatment to the institution as was warranted by the facts of the case. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 32 The ld. Special Counsel pointed out that in view of the fact that the assessee was clearly in violation of section 13(3) of the Act, it was not eligible to be granted the exemption under section 11 and the ld. CIT(A) had overlooked this mandatory provision before directing that the exemption be granted to the assessee. On this account therefore, the ld. Special Counsel argued that the matter should be restored to the file of the ld. AO for examination of these issues before the examination under section 11 could be granted to the assessee. Furthermore, discussing the issue of additional ground nos. 2, 3 and 4 that have been preferred by the Revenue in its appeal, the ld. Special Counsel pointed out that in its order dated 8.06.2022 for the assessment years 2009-10 to 2014-15, this ground had been allowed by the Hon’ble Tribunal for statistical purposes. He therefore, once again prayed that the matter may be sent back on examination on these issues. Reverting to the regular grounds of appeal the Ld Special counsel argued that the examination of the activities of the assessee parishad showed that its activities were not charitable and therefore the assessee deserved to be denied the exemption. He also submitted about the Vambay scheme, that the amounts had to be routed through the income and expenditure account and the CIT was in error in deleting the addition. Regarding appeal number 21 and 22 of 2019, the learned Special counsel submitted that he was not pressing that part of ground number 1, relating to the reference to the amended proviso to clause 2(15), but continued to press that the CIT could not have given the directions that he did because the activities of the assessee were of a commercial nature . 13. In response to the said arguments, Smt. Shweta Mittal, C.A. (hereinafter referred to as the ld. AR) appeared on behalf of the assessee submitted that section 13(3) did not arise in the case of the assessee, as it did not emanate out of the orders of the ld. AO or the ld. CIT(A). Furthermore, she submitted that the issue was covered by the order of the Hon’ble ITAT in their order dated in ITA Nos.630 & 631/Lkw/2016, ITA Nos. 23 & 24/Lkw/2017, ITA Nos.164 & 165/Lkw/2017 and ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 33 ITA Nos.210 & 211/Lkw/2017 for the assessment years 2009-10, 2010-11, 2011- 12, 2012-13, 2013-14 and 2014-15. It was submitted that the Hon’ble ITAT while dealing with the matter had distinguished the case of the assessee from the cases cited by the ld. Special Counsel by relying upon the case of CIT vs Tata Steel Charitable Trust 73 taxman 98 (Pat).On the issue of section 11(2) that had been raised by the ld. Special Counsel, the ld. AR submitted that accumulation of income under section 11(2) was the ground of the assessee and not that of the Department and therefore, the Department could not raise this issue in the course of this appeal. She submitted that a revised computation had been made during the course of assessment and therefore, it was admissible. The ld. AO did not entertain Form No.10 that had been filed prior to completion of assessment (for the A.Y. 2007-08) and the ld. AO was clearly in error on account of the judgment of the Hon’ble Supreme Court in the case of Nagpur Hotels Owners Association 247 ITR 201(SC). Ld AR also pointed out that prior to the amendment to section 11(2) wef 1.04.2016, there was no time limit of the nature referred to by Ld Special Counsel. With regard to the submissions of the ld. Special Counsel that the purpose for the accumulation had not been specified and were general, the ld. AR submitted that the object of the Parishad was singular and therefore, the accumulation of income for fulfilling the objects of the Parishad were very much in accordance with the law. The ld. AR further submitted that the U.P. Awas Evam Vikas Parishad, functioned under the ages of the UPAEVPA, 1965 and all expenses were to be made according to the Act. The Parishad could not be equated to some private charitable trust having multiple objects. Regarding the observation of the ld. CIT(A) that the accumulation should not be for the generality of the objects of the trust, it was submitted that the objects were defined in section 15 and had not changed and all the objects were charitable in nature. The ld. AR further submitted that the decision of the Hon’ble Delhi High Court in the case of Hotels and Restaurants Association (2003) 132 Taxman 76 (Delhi) supported the stance of the Parishad. On the issue of section 13(1)(d), she ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 34 pointed out, that from the financial statement it was apparent that the surplus was invested in specified modes and hence there was no violation of section 13(1)(d). 14. Coming to the points raised by the assessee in its appeal nos. 534 and 535, the ld. AR pointed out that on the issue of infrastructure fund in the assessment years 2005-06, 2006-07 and 2009-10 to 2017-18, the Tribunal had decided the issue in favour of the assessee, relying upon the judgment of Hon’ble Allahabad High Court in the case of CIT-1, Lucknow vs. Lucknow Development Authority & others dated 16.09.2013, in which the Assessee was also a party . She submitted that the case of Mussoorie Dehradun Development Authority would not apply to the facts of the assessee’s case, because unlike the U.P. Awas Evam Vikas Parishad, the MDDA did not have exemption. When queried as to how that could affect the question of overriding title, she submitted that it was because in a case of an exempted institution, the amounts received for specific purposes could be carried to the corpus. Furthermore, she submitted that the Revenue had not raised any specific ground on the issue of infrastructure fund and in subsequent years, i.e. in assessment year 2022-23, no addition had been made on the issue of infrastructure fund and the returned income of the assessee had been accepted at Nil. Subsequently the Learned AR also placed reliance on two more judgments i.e. that of the ITAT Amritsar Bench in the case of Jalandhar Development Authority vs. DCIT in ITA Nos. 377 to 379/Asr/2023 where the external development charges collected by that assessee on the directions of the State Government collected and spent as per the provisions of the Punjab Apartment and Property Regulation Act, 1995 had been held to be only in the custody of the Urban Development Authority and accordingly, the additions made by the ld. AO by treating such funds as assessable in the hands of that assessee had been deleted. The ld. AR also placed reliance on the judgment of the Hon’ble Chandigarh Bench of the Tribunal in the case of Improvement Trust Sungrur vs. ACIT (Exemption), Circle, Chandigarh in ITA No. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 35 273/CHD/2020 where the Hon’ble Bench had held that neither the second proviso to section 2(15) or section 13(8) were applicable to the assessee’s case and therefore, the aggregate receipts of the assessee trust from its activities of sale of plots, flats and commercial booths and also its income earned from non- construction fee, transfer fee, penal interest and compounding fee etc., were held to be entitled for exemption under section 11. On the issue of legal and consultancy fees and rent, rates and taxes, the ld. AR submitted that the books of the assessee Parishad were audited by the C&AG and they were being maintained manually at various places. Therefore, it was difficult for the assessee to compile the details in a short period. However, if the Bench were to give directions and allow for reasonable time, then these could be produced before the necessary authorities to justify the expenses. On the issue of Vambay Fund, the ld. AR pointed out that no addition had been made on this issue by the Revenue from the assessment year 2010-11 onwards and therefore, since the Revenue had accepted the contention of the assessee, that it did not constitute the fund of the assessee, the additions made in this regard deserved to be deleted. Referring to the additional ground by her in appeal no. 534 and 535/Lkw/2014, on the issue of revolving fund, the ld. AR pointed out that the revolving fund was related to certain percentage of the fund which was retained by the head office from transfer to the units and it was put in the balance-sheet for taking care of expenses that the head office was incurring on behalf of the units. Furthermore, she submitted that when the amount was spent, it was routed through the income and expenditure account. Therefore, there was no basis for making the addition on this account in the hands of the assessee. With regard to advances to contractors, the ld. AR submitted that the same had not been routed through the income and expenditure account as they did not represent either receipts or expenditures. The matter was open to verification if desired and there was no basis for making any addition on account of such advances because they were a regular business practice and there was no requirement for them to be routed through the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 36 income and expenditure account. Finally regarding appeal numbers 21 and 22 of 2019 , the Ld AR submitted that the appeal against the orders of the learned CIT(A) was not maintainable , because the CIT(A)4 Lucknow had only asked the AO to give the appeal effect in the manner directed by the Ld CIT(A) 1 Lucknow in his earlier order, which the AO was bound to do in any case and had done later . Hence appeal could not lie against this direction. 15. Exercising his right of reply the ld. Special Counsel pointed out that there was a difference between the accounts of a Commercial Organization and the accounts of a charitable trust. In the case of a charitable trust, it was not income and expenditure which had to be considered but, receipts and expenditure. All the receipts had to necessarily be accounted for in the return of income. With regard to the disallowance on account of the infrastructure fund, the Vambay Scheme and the Revolving fund, the ld. AO had given specific findings as to why he was making the disallowances. The ld. Special Counsel questioned the assessee’s line of argument that because of certain government instructions, it could carry the funds directly to the balance-sheet. He submitted that if the assessee had chosen to be a charitable institution, it had to follow the accounting regime of a charitable institution that was prescribed in section 11 of the Act and the residual amount had to be charged to tax if 85% of the amount so received had not been spent towards charitable purpose. He drew our attention to section 11(1) of the Act to point out that it was only that amount of income that was exempt from taxation that was applied for charitable purposes. If it was not applied then there was no exemption allowable. The ld. Special Counsel stated that money coming to the assessee institution had to form part of the receipts and after application, the residual had to be brought to tax. The assessee could not be heard to say that certain funds could be kept aside while making the computation under section 11. The ld. Special Counsel submitted that the Revenue had not imposed the accounting regime of section 11 upon the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 37 assessee. The assessee had chosen the accounting regime of section 11, therefore, having opted for the exemption, the assessee had to draw up its accounts in accordance with the accounting regime of section 11 and could not keep any funds aside of this. All receipts and expenditures had to be necessarily rooted through the income and expenditure account. With regard to the assessee’s reliance upon the case of Hotel and Restaurants Association(supra) ld. Special Counsel pointed out that the said case had been taken up as a question of admission. The Hon’ble Delhi High Court did not admit the question, as there was a concurrent finding of the lower authorities. Therefore, he argued that these findings could not be read into the orders of the Hon’ble High Court on the issue of section 11(2). Arguing on the issue of Form No. 10, the ld. Special Counsel argued that matters that had to be examined was whether the application was genuine or not? Whether the funds have been applied for specified purposes? Because the allowability was based on application of income. On the issue of infrastructure fund, Vambay fund and revolving fund, the ld. Special Counsel stated that what the ld. AO had done was to make a disallowance and add back the funds. He conceded that disallowance was not the proper way to proceed in the matter, but argued that the fund was to be utilized in the manner given and should be routed through the income and expenditure account. 16. In response to these submissions, the ld. AR reiterated that the funds did not belong to the authority, they were being kept by the Parishad in fiduciary capacity and therefore, they were being kept separately. 17. Sh. Mazhar Akram, ld. CIT DR, representing department in ITA Nos.534 & 535/Lkw/2014, pointed out that the judgment of the Amritsar Bench in the case of Jalandhar Development Authority that had been cited by the ld AR , was based on the judgment of the Punjab and Haryana in the case of Pr. CIT vs. Punjab Police Housing Corporation Limited as reported in 195 DTR 150 P & H wherein it had ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 38 been held that interest on grants received by the State Government could not be treated as income of the assessee. However, the ld. CIT DR argued that it had been pointed out by the Hon’ble Patna High Court in the case of Bihar Police Building Construction Corporation Private Limited vs. Pr. CIT (2023) (09) PAT CK 0020 that circulars of the State Government providing for deduction of grants in successive years to the extent of interest earned from the grants of early years, could not regulate the taxability under the Income Tax Act and if the interest was brought to tax in the hands of the assessee corporation, then the assessee corporation could request the Government not to deduct the amounts paid as income tax from grants of subsequent years, but the circular issued by the State Government regulating the business / transaction between the Government and its corporation could not have any effect on the taxability of the interest income which is deemed to be income from other sources in the hands of the assessee. The ld. CIT DR submitted that the said judgment could therefore not be a proper precedent to determine the question before the Tribunal in this present matter. With regard to the Infrastructure reserve fund being diverted by overriding title, he drew reference to the fact that the decision of the Hon’ble Bench of the Tribunal in the case of Mussoorie Dehradun Development Authority, that had been referred to by the Ld CIT(A) in his order had since been confirmed by the Hon’ble Nainital High Court in the case of Mussoorie Dehradun Development Authority and in that case, the Hon’ble Nainital High Court had pointed out that since the Development Authority was a separate entity that was capable of suing and being sued, could manage and had its own funds and since the funds could not be diverted away from the authority till the time of its dissolution, there was no diversion of income by overriding title and furthermore, since there were similar provisions that existed in the UPAEVPA, 1965, the decision of the ITAT Amritsar in the case of Jalandhar Development Authority Fund would have no application to the issue. Rather in view of similar provisions in the U.P.U.P.D.A, 1973 and UPAEVPA, 1965, the judgment of the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 39 Hon’ble Uttarakhand High Court in the case of MDDA was the proper precedent to follow in the matter. With regard to the Judgment of the Chandigarh Bench of the Tribunal in Improvement Trust Sungrur in ITA No. 273/CHD/2020, the ld. CIT DR submitted that in the said order, the ITAT had quoted from the case of Ahmedabad Urban Development Authority in para 83 of its order and that said paragraph itself recorded the fact that the conclusions arrived at in that judgment did not preclude the authorities from scrutinizing the accounts of the assessee’s from year to year to determine whether the assessee’s were indulging in activities that amounted to, ‘Trade Commerce or Business and if so whether the threshold limit as laid down in proviso to section 2(15) had been breached. Thus, the said judgment did not preclude the ld. AO in the present case from examining the same, which he had done. Responding to the Learned AR’s Submission that the Form 10 filed by the assessee met the requirements of the law, Ld CIT(DR) pointed to the judgment of the Hon Supreme Court in the case of Commissioner of Customs (Import) vs Dilip Kumar and Company (2018) 95 taxmann.com327 (SC) to point out that an exemption provision had to be strictly interpreted and benefit of any ambiguity had to be given to the Revenue. He pointed out that the language of Section 11(2) clearly stated that the purpose for accumulation had to be specified and mere reference to the objects of the society did not fulfil the requirements of a valid intimation in Form 10. He therefore prayed that the CIT(Appeals) order be upheld on the issues of denial of accumulation and routing of Infrastructure fund through Income and Expenditure account. On the other issues raised by the assessee, he submitted that the matter could be restored to the AO for examination of details. 18. We have duly considered the facts and circumstances of the case, heard the rival parties and gone through the material placed on record. The question of whether development authorities and statutory corporations like the assessee, indulged in promoting housing and planned development can be regarded as a ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 40 body indulged in objects of, “general public utility” is no longer res integra after the decision of the Hon’ble Supreme Court in the case of ACIT (Exemption) vs. Ahmedabad Development Authority (2022) 143 taxman.com 278 (SC), wherein the Court the in para 190 of the said order and judgment has held that bodies which carry out statutory functions and whose income was eligible to be considered for exemption under section 10(20A) prior to 1.04.2003, but thereafter ceased to enjoy that benefit after deletion of that provision, are not ipso facto precluded from claiming benefit as a GPU category charity under section 11 r.w.s. 2(15) of the Act. The Hon’ble Court further held that statutory corporations, Boards, authorities, commissions etc., by whatever named called in the fields of housing development, town planning, industrial development sector etc., were involved in the objects of, “general public utility” and therefore were entitled to be considered as charities in the GPU categories. The Hon’ble Supreme Court also held that such statutory corporations, Boards, trusts, authorities may be involved in both promoting public objects and also in the course of pursuing their objects, be involved or engaged in activities in the nature of trade, commerce or business but the determinative test consider whether such bodies were GPU charities were whether they advanced any GPU object; while carrying on such activities to achieve such objects, what was the purpose for which such public GPU was set up – whether it was for furthering the development of a charitable object or for carrying on trade, commerce or business. Among the reasons cited by the ld. Assessing Officer for denial of exemption to the assessee were the observations that the assessee was generating income from the activities of the disposing of the plots, flats, shops and commercial complexes with the definite motive of profit and not charitable purposes as such profit was not incidental for by-product of the activity of the appellant, but was its main predominant purpose and there was no application of income for any charitable purpose under the terms of the object. It has also been argued that the levy of betterment charges, upon occupants of a development project and the auctioning of ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 41 properties by the Development Authority constitute activities in the nature of trade, commerce and business and because the sum total of the earnings from these activities exceeds the maximum amount permissible under section 2(15) of the Act, 1961, the assessee is not entitled for deduction. Many of these issues have been addressed by the Hon’ble Supreme Court in the case of ACIT (Exemption) vs. Ahmedabad Urban Development Authority (supra). In paragraph 140 of its order, the Hon’ble Supreme Court quoted from its earlier order in the case of New Delhi Municipal Corporation vs. State of Punjab (1979) 7 SCC 339, wherein the Hon’ble Court had held that unless an activity in the nature of trade and business is carried out with a profit motive, it would not be a trade or business contemplated by Clause ii of Article 289. By way of example, it had been highlighted that mere sale of Government properties, movable or immovable or granting of leases and licenses in respect of its properties, does not amount to carrying on trade or business. Only where a trade or business is carried out with a profit motive – or any property is used or occupied for the purpose of carrying out such trade or business that the proviso or for that matter Clause ii of Article 289 would be attracted. From the said judgment, the Hon’ble Supreme Court observed in AUDA (supra), that the crucial and determinative element in the venture, is whether the performance of a function is actuated by a profit motive. It thereafter proceeded to examine the true meaning of the expressions, ‘fee, cess or consideration’ and held that if a fee or cess or such consideration was collected for the purpose of an activity, by a State Department or entity, which is set up by a statute, its mandate to collect such amounts cannot be treated as consideration towards trade or business. It held that statutory Boards and authorities who are mandated to develop housing, industrial and other states including development of residential housing at reasonable or subsidized cost, which might entail charging higher amounts from some section of beneficiaries to cross subsidize the main activity, cannot be characterized as engaging in business. The character of, ‘State’ and such ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 42 corporations or bodies set up under specific laws would therefore, not mean that the amounts are, ‘fee’ or, ‘cess’ to provide some commercial or business service. Further in paragraph 176, after considering the fact that statutory powers and corporations have to recover the cost of providing essential goods and service s in public interest and also fund large scale development and maintain public property, which entailed recovering charges or fees, interest and also receiving interest for holding deposits ,the Hon’ble Court held that the mere fact that these bodies have to charge amounts towards supplying of goods and articles or rendering services (including maintenance of roads, parks etc.,) ought not to be characterized as, ‘commercial receipts’ the rational for such exclusion would be that if such rates, fees, tariffs etc., determined by statutes and collected for essential services were included in the overall income as receipts as part of trade, commerce or business, the quantitative limit of 20% imposed by the second proviso to section 2(15) would be attracted thereby negating the essential general public utility object and thus driving up the costs to be borne by the ultimate user or consumer which is the general public. In paragraph 190 while laying out the determinative tests to consider when whether such statutory bodies are GPU category charities, the Hon’ble Supreme Court had also pointed out that rendition of service or providing any article or goods by such Boards, authority, corporation etc., on cost or nominal markup basis would not ipso facto be activities in the nature of business, trade or commerce or service in relation to such business, trade or commerce. It further held that where the controlling instrument, particularly a statute, imposes certain responsibilities or duties upon the concerned body, such as fixation of rates on predetermined statutory basis, or based on a formula regulated by law, or rules having the force of law. Per se, the recovery of such charges, fees, interest etc., cannot be characterized as fee, cess or other consideration for engaging in activities in the nature of trade, commerce or business or for providing services in relation thereto. . ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 43 19. Thus, the issues raised by the ld. AO that the activities of the assessee Parishad carried on as per its objects laid down in section 15 of U.P. Awas Evam Vikas Parishad Adhiniyam, 1965 were not charitable activities do not hold any water after this decision of the Hon’ble Supreme Court which categorically states that statutory bodies engaged in housing development, town planning etc., are involved in objects of, “general public utility” and therefore are entitled to be considered as a charities in the GPU category. We also observe that even earlier, the Hon Allahabad High Court, in its orders in the case of Lucknow Development authority and others dated 16.09.2013, in which the assessee was one of the parties, had held that the objects of the assessee society were admittedly charitable and that it was entitled to the benefit of registration under section 12AA. Therefore, once the objects and functions of the assessee parishad have been held to be charitable by the jurisdictional High Court and not challenged or overturned by way of appeal to the Hon Supreme Court, we hold that it is not open for the assessing officer to contend that such objects are not charitable on the grounds that certain activities of the assessee parishad yielded surplus. Furthermore, we find that the ld. CIT(A) had held in his order that once the registration had been granted under section 12AA, the income of the assessee had to be computed as per section 11 and not under any other head of income. We do not find any infirmity in this line of reasoning. For this reason, we hold that the Ld CIT(A) was perfectly justified in directing the assessing officer to compute the income of the assessee parishad in the manner provided under section 11, with reference to the information contained in Form 10B and accordingly ground no.1.1 and 1.2 of the original grounds of appeal are dismissed. We also take note of the submission of the ld. Special counsel that in view of the fact that the proviso to section 2(15) and section 13(8) came into effect from 1.04.2009, he was not pressing additional ground no 1 of the appeal. Accordingly, the same is dismissed as not pressed. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 44 20. The ld. Special Counsel has also argued that the ld. CIT(A) , while directing that exemption be allowed under section 11 , did not consider the findings of the AO with respect to section 11(2), section 13(1)(d) and section 13(3). He has pointed out that once the ld. CIT(A) had held that the income of the assessee should be computed in the manner specified in section 11, taking into account information given in the audit report in Form No.10B, he should also have directed the ld. AO to look into the conditions that were required to be fulfilled for grant of exemption under section 11 i.e. the ld. AO ought to have been empowered to examine any possible violations of section 11(2), 13(1)(d) and 13(3), before being compelled to grant the exemption under section 11. In consideration of these arguments, we find that the issue before the ld. CIT(A) was whether, once registration had been granted under section 12AA, could the ld. AO hold that the assessee was a business entity and its income was to be computed as business profit under sections 28 to 44. It was in this context that the ld. CIT(A) held that once an, “institution” or “trust” had been granted registration under section 12AA, its income had to be assessed in the manner laid in section 11and there was no other head of income under which it could be assessed. Thus, he concluded that the computation made by the ld. AO was against the provisions of law and judicial propriety, which could not be sustained. The ld. CIT(A) held that the ld. AO had to restrict himself to the computation of income as provided under section 11 and thereafter he should examine the application of income. We observed that any controversy regarding the eligibility of the assessee for registration under section 12AA of the Act, had already been settled by the Hon’ble Allahabad High Court, Lucknow Bench in favour of the assessee vide its judgments dated 16.09.2013 and 27.09.2013 in ITA Nos. 114/2010 and 16/2006. Therefore, in our opinion, the ld. CIT(A) was perfectly correct in directing the ld. AO to compute the income as per the provisions of section 11. That was not a direction to the ld. AO to grant exemption to the assessee under section 11, but rather a direction to compute the income in a particular manner and examine the application ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 45 of income. As such, these directions would not have precluded the ld. AO from examining possible violations of section 11(2), 13(1)(d) or 13(3) while determining the eligibility for exemption under section 11. Therefore, we are of the opinion that the additional grounds of appeal that have been filed, are based upon an incorrect reading of the meaning and import of the order of the ld. CIT(A). We further observe that the ld. CIT(A), even while directing the ld. AO to compute the income in the manner laid down under section 11, declined to allow the assessee the benefit of accumulation under section 11(2) in either assessment year because of (i) its failure to specify the purpose for accumulation in assessment year 2007-08 and (ii) its failure to file Form No.10 before the completion before the completion of assessment and also to specify purpose of accumulation in the said form in the assessment year 2008-09. Thus, the ld. CIT(A) has not overlooked the provisions of section 11(2), while directing the ld. AO to compute the income in the manner provided under section 11. Accordingly, additional ground number 2 does not seem to fit with the facts of the case and therefore it is also dismissed. This brings us to additional ground number 3 ie that the Ld CIT(A) has not considered whether the money of the parishad was being invested in the specified modes or not. In this context, we observe that there were no fetters on the ld assessing officer in examining this issue in the course of original assessment or even when the matter was sent back for computing the income in the manner provided under section 11. We notice that even while the Assessing Officer was primarily focused on trying to demonstrate that the activities of the assessee parishad were not charitable, he still found time to go through the accounts to observe that the assessee had applied less than 85% of its receipts during the year and was therefore required to file an application for accumulation of income. Thus, we see no reason why he could not have examined this aspect also. Be that as it may, the Ld AR has very correctly pointed out that an examination of the final accounts itself reveals that the funds are invested in the specified modes. Moreover, we note that as per the provisions of ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 46 section 58(2) the UPAEVA 1965, the Parishad is obliged by law to keep its funds in the State Bank of India or with the previous approval of the UP Government, in in the UP Cooperative Bank or in a Scheduled bank or in Securities prescribed in section 20 of the Indian Trusts Act 1882. All these, to our mind, constitute valid modes of investment under section 11(5) of the Income Tax Act and therefore in our opinion, there is no occasion to allow the Revenue a further opportunity in this regard. Therefore the third additional ground of appeal is also dismissed. With regard to the issue of possible violation of section 13(3) of the Income Tax Act on account of discount given to employees of the parishad on the valuation of allotted properties and also on account of the reservation provided to them in the allotment of properties, on account of the U.P. Government order dated17.12.1999, we are in agreement with the ld. AR, that the said issue does not arise out of the orders of assessment or out of the orders of the ld. CIT(A) and we cannot agree with the Ld. Special Counsel that the Ld. AO had asked pointed queries in this regard which had not been answered by the assessee, as the same is not revealed by the assessment orders. Be that as it may, the ld. Special Counsel has pointed out that this is a pure legal issue and therefore, can be raised at the present stage of the proceedings. After considering the submissions made by the ld. Special Counsel and considering the decision of the Hon’ble Supreme Court in the case of National Thermal Power Corporation Ltd Vs CIT (1998) 229 ITR 383 (SC) the ground is admitted for adjudication. However, it is observed that the issue has already been decided in favour of the assessee by the Hon’ble ITAT in ITA Nos.630 & 631/Lkw/2016, ITA Nos. 23 & 24/Lkw/2017, ITA Nos.164 & 165/Lkw/2017 and ITA Nos.210 & 211/Lkw/2017 for the assessment years 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15. Furthermore, we have ourselves considered this issue in depth while deciding the case of Ayodhya-Faizabad Development Authority in ITA Nos.518, 519 & 520/Lkw/2018 and ITA Nos. 143, 144 & 145/Lkw/2021 wherein in our order dated 31.01.2025 in para 41as under: ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 47 “41. It is also seen that in the assessment year 2015-16, the ld. Assessing Officer has observed that the assessee violated the provisions of section 13 of the Act by allowing some rebate towards employees and reservation of some plots for its employees. The ld. CIT(A) while considering the matter in his orders has pointed out to the judgments of Hon’ble Patna High Court in the case of Buddha Vikas Samiti vs. CIT 199 taxman 395 Patna and the Hon’ble Supreme Court in the case of Noida Entrepreneurs Association vs. Noida & Others in WP (Civil) No. 150 of 1997. In consideration of their orders, we find that the Hon’ble Lucknow Bench of the ITAT has dealt with this issue in its order of Lucknow Development Authority, dated 10.03.2022 in ITA Nos. 185, 186, 163, 164, 439/Lkw/2019, wherein after going through the provisions of sub section (3) of section 13, it has found that the list of persons mentioned in sub section (3) does not contain employees as a category. The ld. AO and the ld. CIT(A) have held that the employees are, ‘managers’ as per Clause (d) of sub section (3) of section 13 however, the Lucknow Bench has referred to the decision of the Hon’ble Patna High Court in the case of CIT vs. Tata Steel Charitable Trust 78 taxman 98 (Pat) dated 7.01.1993 in which the Hon’ble High Court had held that the employees of the author of the trust do not fall in the specified category of persons referred to in section 13(3) of the Act. In the said judgment, the Hon’ble Patna High Court had held that “as regards, the second condition, it seems that even if a trust has been created wholly for charitable purposes, when subsequently it is found that its income either ensures or is used or applied directly or indirectly for the benefit of any person specified under sub-section (3) of section 13, then such trust becomes disentitled to claim any exemption under section 11. But the list of such persons as contained under section 13(3) does not include the employees of the author of the trust. The employees of the author of the trust do not fall within the specified categories of persons referred to in section 13(3). Even section 13(3)(d), which includes any relative of the author, can have no application in the case of the employees of the author because 'relative' means a person connected by birth or marriage with another person. The person having any other relationship pursuant to a contract like that of employer and employee cannot be said to be a relative. Therefore, the application of part of the income of the trust for the benefit of the employees of TISCO and their relatives could not disentitle the trust from claiming exemption, under section 11(1)(a).\" The Hon’ble Lucknow Bench, thereafter, distinguished the case laws relied upon by the Revenue among which one was that of Noida Entrepreneurs Association, which has also been relied upon by the ld. CIT(A) in this case. The Hon’ble Lucknow Bench held that the said case law was not applicable to the facts of the appellant authority because in the case of Noida Entrepreneurs Association, a CBI enquiry had been enquiry had been conducted into gross violation of the funds of the assessee which was not there in the case of Lucknow Development Authority, therefore, the said case law could not be applied to the facts of the assessee’s case. We are in complete agreement with the view expressed by our ld. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 48 Brothers on the aforesaid matter as pointed out by the Hon’ble Patna High Court in CIT vs. Tata Steel Charitable Trust (supra), the employees of the development authority do not fall in the specified category of persons referred to in section 13(3) of the Act. The decision of the Hon’ble Supreme Court in the case of Noida Entrepreneurs Association vs. Noida & Others (supra), would also not apply because the said judgment related to passing of colourable orders by the CEO to favour himself and certain contractors. The rebate and reservation allowed to the employees of the appellate authority, are not on account of any colourable exercise of power by the Managers of the authority, but on account of implementation of a Government Order, hence the facts of the case being entirely different, the case of Noida Entrepreneurs Association vs. Noida & Others (supra) cannot be relied upon to withdraw the exemption from the assessee authority. Similarly, it is observed that in the case of Buddha Vikas Samiti vs. CIT (supra), the appellant had utilized the form and organization of the trust to confer benefits on members of the family who were the trustees in violation of the parameters of the Act and the objectives of the trust whereas the instant case, the concessions have been allowed to the employees as a part of Government policy. Hence, there cannot be any comparison between the two situations. Moreover, looking in detail through the said Government Order which has been scanned and reproduced by the ld. Assessing Officer in the assessment order for the said assessment year, it is observed that the reservation of plots is not confined to the employee of the development authorities but is provided to them among many other categories such as Scheduled Castes, Scheduled Tribes, Other Backward Classes, MPs, MLAs, Freedom Fighter, Government Employees, Defense Services Employees above 50 years of age, handicapped persons, ex-serviceman and their dependents, employees of U.P. Housing Board, Water Board, Municipal Corporation etc,. Therefore, the said Government Order must be viewed as a social welfare measure for a broad category of citizens and not as an order to confer benefit on the employees of the authority in violation of the provisions of section 13(3) of the Act. Furthermore, the said Government Order, in fact, shows that the process of allotment and pricing of land to be based on social rather than commercial consideration, which would further buttress the argument that the objective of such sale is not the maximization of profit. Hence, we are not able to agree with the ld. CIT(A) or the ld. Assessing Officer that the exemption to the development authority should be denied on this account.” Therefore, in view of our findings in the case of Ayodhya-Faizabad Development Authority and also following the judgment of the ITAT in ITA Nos. 518, 519 & 520/Lkw/2018 and ITA Nos. 143, 144 & 145/Lkw/2021, this additional ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 49 ground of appeal filed by the Department is dismissed. Accordingly all four additional grounds filed by the revenue in Appeal numbers 532 & 533 of 2014 , stand dismissed. 21. To revert to the original grounds of appeal filed by the Revenue against the deletion of the addition made on account of the Vambay Scheme Fund of Rs.80,10,634/-, we observed that in this case, the grants were received from the State Urban Development Authority (SUDA) for the construction of low-cost housing for the urban poor. The grants that were received, were credited in a separate account and utilized as per the guidelines issued by the SUDA. The ld. CIT(A) has held, by relying upon the decision in CIT vs. U.P. Upbhokta Sahkari Sangh Limited, 288 ITR 106 (All) and Bihar Agriculture Produce vs. CIT, 205 taxman 378 (Pat) that grants that have been received for a particular purpose cannot be taxed as there is no element of profit in such grant. We are in agreement with the views of the ld. CIT(A). In our orders in ITA Nos. 518, 519 & 520/Lkw/2018 and ITA Nos. 143, 144 & 145/Lkw/2021 in the case of Ayodhya-Faizabad Development Authority, while discussing the addition on account of receipts shown in the, “tourism development grant U.P.”, we have held in para 49 of the said order as under:- “49. The issue of addition of Rs 8,68,50,000/- on account of receipts shown in the 'Tourism Development Grant UP', in the assessment year 2012-13, is a matter that is somewhat similar to that of the Infrastructure Development and Reserve Fund. Here too, the assessee carried this amount directly to the balance sheet on the grounds that the funds belonged to the State Government and had been given to it to implement tourism projects in the city of Ayodhya. It had also submitted that the addition was unfair, because it had spent more than the amount received and finally it had contended that if they were held to be the receipts of the assessee authority, then they were capital receipts which were not income within the meaning of section 2(24). In view of our detailed reasoning given on the issue of Infrastructure Development and Reserve fund, where we have observed that since the authority is an independent entity having its own funds and further that, as per the provisions of section 20 of the U.P.U.P.D.A. 1973, all Grants received by the authority also constitute its funds and, the power to divert the funds to the state Govt only arises upon dissolution of the authority under Section 58 of U.P.U.P.D.A. 1973, we hold that the funds ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 50 received by way of tourism grant are the funds of the authority and not the state Govt. However we agree with the assessee, that before any portion of the same could be held to be its income and added to surplus, the expenditures incurred against the same have to be have to be allowed as application against that receipt. However, we also note the assessee’s submissions that the grants were received from the state Govt for setting up certain specific tourism projects in Ayodhya & Faizabad. If true, that would make them capital receipts, which are not income as per section 2(24) and therefore the funds would form part of the corpus, whether specifically mentioned or not. In the case of CIT Vs. Gujarat Safai Kamdar Vikas Nigam (supra), citied by the learned Counsel for the assessee, the grants were received by the assessee-trust from the Government of Gujarat under a scheme envisaged for implementation of certain Government programs and although it was not expressly made clear that the grants were being made available to form the corpus of the Trust and to be applied for such purpose, it was held by the Hon’ble Gujarat High Court after considering the entire purport of the scheme that the grants made available to the assessee-trust for implementing the scheme in a particular manner cannot be treated as income of the assessee-trust. In our opinion, the ratio of this decision of Hon’ble Gujarat High Court is equally apply to the facts of present case, since the grants have been received for execution of certain specific projects and creation of facilities for development of tourism. Therefore, they cannot be added back to the assessees income and must be held to be part of the corpus. Thus there is no necessity to route these grants through the Income & expenditure account. Accordingly ground number 5 of assessment year 2012-13 is held to be allowed.” Furthermore, it is observed that in the case of Karnataka Urban Infrastructure Development Corporation 315 ITR 301, the interest received on the bank deposits of grants received for specific purposes which are credited back to the same fund cannot be regarded as the income of the assessee authority. Therefore, we uphold the decision of the ld. CIT(A) to delete the additions made by the ld. AO on account of the Vambay Fund and consequently this ground of department’s appeal is dismissed. With regard to the third ground of appeal raised by the Revenue in its original grounds, we uphold the deletion of the addition of account of advances of contracts. We observe that the advances did not represented expenditure that have been routed through the income and expenditure account and therefore, were never claimed as application of income. In these circumstances, ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 51 the question of their disallowance an addition back to the surplus of the assessee does not arise. The action of the ld. CIT(A) in deleting such additions is therefore, upheld. Thus all the original grounds in both these appeals also stand dismissed and consequently the Departmental appeals in ITA no 532 & 533 /Lkw/2014 stand dismissed. 22. We shall now, take up the assessee’s appeal n ITA Nos. 534 & 535/Lkw/2014. The first ground of appeal that has been preferred by the assessee is against the denial of benefit of accumulation under section 11(2) on account of the fact that Form No.10 was not filed before the due date of the filing of the return, even though the same had been filed before the completion of assessment (in assessment year 2007-08) and as per the decision of the Hon’ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association (2001) 114 taxman 255 (SC), the intimation required under section 11(2) had to be filed before the ld. AO completed the assessment because it was only such requirement that was mandatory. The Ld AR has also pointed out that the mandate that the form 10 should be filed before the due date of filing of return was introduced later and the only requirement at the time was that it must be filed before the assessing officer, which the assessee had done in 2007-08.It has also been argued that the ld. CIT(A) erred in rejecting the notice for accumulation that was duly filed on time on the ground that same was nonspecific, ignoring the decision of the Hon’ble Delhi High Court in CIT vs. Hotel and Restaurant Association (2003) 132 taxman 76 (Delhi), wherein the Hon’ble High Court had held that plurality of purposes for accumulation is not precluded and since both the appellate authorities below had recorded a finding that the income was sought to be accumulated by the assessee to achieve the objects for which the assessee was incorporated and none of these objects were outside charitable purposes, the Hon’ble High Court had declined to entertain the appeal of the Department on this account. On the other hand, the ld. Special Counsel ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 52 has pointed out that the issue in Hotels and Restaurant Association essentially pertained to the admission of the case and the observations of the Hon’ble High Court could not be read as its order on the issue of section 11(2). The ld. Special Counsel has also argued that even the resolution was not passed before the due date of filing of the return and therefore, there is no information on record as to how the funds were invested during the interim period between the filing of the return and the submission of the statement in Form 10 during the course of assessment. 23. We have duly considered these facts. It is observed that the act was amended with effect from 1.04.2016 and it was only vide such amendment that the condition of filing of the statement in form 10, prior to the due date of filing of return under section 139 (1) was introduced into the Act vide clause (c). Prior to that the only conditions were that the notice should be given to the assessing officer in the prescribed format, specifying the purpose for which the income was being accumulated, the period for which it was being accumulated (which couldn’t exceed five years) and that this accumulated money should be invested in one of the modes specified in section 11(5). However as per Rule 17(2) of the Income tax Rules ,the notice in Form 10 had to be filed before the due date of filing of return under section 139(1). However, the Hon’ble Courts have held that the statutory requirements would be fulfilled if such notice of accumulation were before the ld. AO at the time that the ld. AO did the assessment. In the instant case, it is seen that the notice of accumulation was submitted to the ld. AO before the completion of assessment Thus the Ld CIT (a) has correctly applied the Judgments in the case of Nagpur Hotel Owners Association (supra) and in giving relief to the assessee in this regard. It is a fact that the resolution by the Board was not passed before the due date of the filing of the return but to our mind, the Resolution of the Board is only to demonstrate the decision of the Managers of the trust/institution to accumulate the funds for a particular purpose. Even if it was passed at a later date and information is provided ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 53 to the ld. AO regarding such accumulation, before the completion of assessment, then going by the observation of the Hon’ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association (supra), such Form 10 was to be considered. As regards, the other contention of the ld. AR, that the Resolution passed by the Board and the notice under section 10, which stated that that the income was being accumulated to meet the objects of the Parishad as enshrined in section 15 of the adhiniyam, fully met the requirements of law, as the object of the Parishad was one, we are unable to agree with the same. We observe that section 15 of the U.P. Awas Evam Vikas Parishad Adhiniyam, 1965, which contains the functions of the Board (and which are also its objects) contain a wide variety of objects for which the Parishad is required to function and which are 21 in number. These vary from framing and executing housing projects; to providing technical advice for and scrutinizing projects under Centrally assisted or State Government assisted schemes ; to manage properties belonging to the State Government; to organizing and running workshops and ; running stores for manufacturing and stock piling of building materials; to regulating building operations; to improving and clearing slums ; to providing roads, electricity, sanitation, water supply and other civic amenities; to raising loans from markets, grants and loans from State and Central Government and; to give grants and loans to local authorities, public corporations, housing cooperative societies and other persons for any of the purposes for which it functions. Besides this, the Parishad is also empowered to make examination or survey of any property and contribute to the cost of surveys made by any local authority. The Learned AR has submitted that all these objects are interrelated. However, to our mind, a plain reading of these functions do not show that the objects were of a singular or of a uniform nature, that could justify the quoting of general or global purposes for accumulation. To our mind, such a notice does not fulfil the mandatory condition of specifying the purpose for accumulation given in section 11(2)(a). ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 54 24. We observe that the facts of the assessee’s case and the arguments presented by the learned AR in furtherance of its’ claim are quite similar to the case of DIT(Exemption) vs. Trustees of Singhania Charitable Trust 199 ITR 819 (Cal), as many of the facts in that case resemble that of the assessee parishad. In that case, the assessee, a public charitable trust had claimed exemption under section 11 for assessment year 1984-85, including for accumulation under section 11(2), for which purpose it had filed Form No.10. In the said form, as purposes of accumulation of income, the assessee had listed all the charitable objects for which it was created. These were 16 in number. The resolution passed by the Board of Trustees of the trust was to the effect that the balance of unapplied income of the year was to be accumulated and / or set apart for application to any one or more of the objects of the trust as set out in Item Nos. (I)to(XVI) under paragraph 1 of the deed of the trust. The assessment was completed allowing the exemption under section 11, including accumulation under section 11(2). Subsequently, the ld. Commissioner revised the case under section 263. According to him, section 11(2) contemplated only specific or concrete purposes and since those were not specified by the assessee, the assessment order was erroneous and prejudicial to the interest of revenue. Accordingly, the assessment was set aside. On appeal to the Tribunal, the Tribunal held, that on an examination of the scheme of the Act, since a plurality of charitable purpose was not ruled out, no objection could possibly be taken to the assessee listing out all its objects in Form No.10. It held that it had complied with the provisions of the Act and disagreed with the findings of the Commissioner. Before the Hon’ble Calcutta High Court, it was contended on behalf of the assessee that one purpose of accumulation was interlinked with the other and therefore, the mention of all the purposes did not make any difference and satisfied the requirements of section 11(2). However, the Hon’ble Calcutta High Court observed that the Tribunal’s decision overlooked the scheme relating to accumulation of income for particular future use. It held that while accumulation under section 11(1) could be ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 55 taken for the broad purposes of the trust as a whole, which is why the statute did not require an assessee to state to specify the purpose, long term accumulation was only permissible under sub section (2) and that could only be for a definite and concrete purpose or purposes. The Hon’ble High Court held that the assessee had sought permission to accumulate for the objects as enshrined in the trust deed in a blanket or global manner which, in its view, was definitely not in the contemplation of section 11(2), when it was construed in its setting. The Hon’ble High Court held that accepting the assessee’s contention that saving and accumulation of income for future application was for the purposes of the trust under widest terms so as to embrace the entirety of the objects clause of the trust deed, would render the requirement of specification for the purposes of acquisition in that sub section, redundant. The Hon’ble High Court further observed that when section 11(2) required the specification of the purpose, it did so with the objective of calling an assessee to state some specific purpose, out of the multiple purposes for which the trust stood; had it not been so, there would not have been any mandate for such specification since, in any case, a charitable trust could, in no circumstances, apply its income, whether current or accumulated, for any purpose other than the objects for which it stood. The very fact that the statute required the purpose of accumulation to be stated, implied that such a purpose be a concrete one, an itemized purpose for a purpose instrumental or ancillary for the implementation of its object or objects. The very requirement or purpose predicated that the purpose must have an individuality. The Hon’ble High Court further observed that it was not necessary that the assessee had to mention only one specific object; there could be setting apart and accumulation of income for more objects than one, but whatever the objects or purposes might be, the assessee must specify in the notice, the concrete nature of the purposes for which the application was being made. Plurality of purposes of accumulation may not be precluded, but it must depend on the exact and precise purposes for which the accumulation was intended; generality of the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 56 objects of the trust could not take the place of the specificity of the need for accumulation. According to the Hon’ble High Court, the provision of section 11(2) was a concession provision to enable a charitable trust to meet the contingency, where the fulfilment of any project within its object or objects, needed heavy outlay calling for accumulation to a mass sufficient money to implement it and, therefore, specification of purpose, as required by section 11(2), admitted of no amount of vagueness about such purposes. The facts of the assessee’s case are exactly similar to the facts in the case of DIT(Exemption) vs. Trustees of Singhania and Charitable Trust (supra). In this case also, the assessee has filed the Form 10, in which it has given notice of accumulation for the generality of the objects of the functions of the parishad as enshrined in section 15 of the U.P.A.E.V.P.A. 1965. The ld. AR has submitted that the functions (which are 21 in number) are all inter-related and because the assessee parishad cannot spend any money outside of its objects, it is fully compliant with the requirements of section 11(2) of the Act. 25. Another decision upon which the Ld CIT(A) has relied in order to deny the benefit of accumulation under section 11(2) to the assessee, is that of the Delhi Tribunal in the case of Sir Sobha Singh Public Charitable Trust vs Assistant Director of Income Tax (Exemption)79 ITD 1(Del). In this case there was a difference of opinion between the members as to whether that assessee was eligible for accumulation in the given facts of that case and the matter had to be referred to a third member. However, both Members were unanimous in their understanding that specificity was required in the notice in Form 10 for compliance to the provisions of section 11(2). Para 5, of the order written by the Accountant member is worth reproducing in this regard. In the said para it was held as under “5. We have carefully considered the rival submissions, gone through the material placed on record to which our specific attention was drawn and the decisions cited on both sides. As per the provisions of section 11 of the Act, the income applied for charitable or religious purposes is not taxable. This is subject ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 57 to certain conditions laid down therein. The income so applied is to be for the purposes or objects the trust has. The Trust is allowed to accumulate part of its income both under section 11(1)(a) as well under section 11(2) of the Act. Under section 11(1)(a) or (b) accumulation is to be 25% of the income and under section 11 (2) it is to be 75% of unapplied income as referred to, in clause (a) or clause (b) of sub-section (1), read with the Explanation therein. In case of former, the accumulation is for a short period i.e., not beyond the year next succeeding and in case of latter, it can be for 10 years. While in case of former, no conditions are prescribed under the Act, in case of latter, the person has to specify both the purpose as well the period for which the income is to be accumulated. Further the money so accumulated or set apart is to be invested or deposited in forms or modes as specified in sub-section (5) of section 11 of the Act. Rule 17 of Income Tax Rules prescribes the notice as mentioned in sub-section (2) of section 11 of the Act. Form No. 10 prescribes the format of a notice to be given to the prescribed authority conveying the intention and purposes for which the income is to be accumulated or set apart. The aforesaid format makes a reference to the resolution passed by the Trustees to accumulate the surplus funds. Space has also been provided for indicating purposes/objects for which accumulation is sought. From the aforesaid format it is clear that the setting apart of the income could be for more than one purpose. As per language used in clause (b) of sub-section (2) of section 11, the purpose for which the income is being accumulated or set apart has to be specific. The expression specific as commonly understood is something which is contrary to what is general and vague. As per the meaning given in the Random House Dictionary of the English language (the Unbridged Edition), the expression 'specific connotes having a special application explicit, or definite, to state one's specific purpose as against this, the expression general has been defined as 'pertaining to all persons or things belonging to the group or category...... common to most prevalent or usual. not limited to one class, field, product, service ete. Thus, the purpose has to be a definite and precise one. The expression 'specific' has to be read in the context and the text in which it has been used. Since the same has been used in the context of purpose, the same has to be definite and concrete one in distinction to general or vague one. At the same time, it could not be for all the purposes as given in the Trust Deed which would make the provisions of sub-section (2) of section 11 as meaningless. As held in the case of Trustees of Singhania Charitable Trust (supra), the requirement of specification of purpose predicates that the purpose must have an individuality. The aforesaid interpretation also stands to reason when seen in the back-ground that the Legislature in its wisdom has provided for accumulation of surplus funds to the Trust, both under sections 11(1)(a) or (b) and 11(2) of the Act. There is both a distinction and the purpose behind the aforesaid two provisions. While in case of section 11(1)(a) of the Act, the accumulation could be for such purposes (not specific) it is not so under section 11(2) of the Act. The Trust must communicate in specific terms the purpose or purposes for which it wants to accumulate or set apart the income. The ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 58 concession as allowed in the Act is perhaps to meet a contingency where the fulfilment of a project requires heavy outlay and calls for accumulation of funds, as observed in the case of Singhania Charitable Trust. The language of section which is clear and unambiguous could not be interpreted in any other manner than what has been conveyed in case of Trustees of Singhania Charitable Trust (supra).” 25. Thus it has been clearly brought out in the judgments of Trustees of Singhania Charitable Trust and Sir Sobha Singh Public Charitable Trust that the language of section 11(2)(a) as it stood at the time, mandates that the notice under section 10 be specific about the purpose for which the income was being accumulated and a reference to the objects of the trust as the purpose for accumulation, would not meet the requirements of the said section. It is however true, that the Courts are divided on this issue. While the views of the Hon’ble Calcutta High Court in the case of DIT(Exemption) vs. Trustees of Singhania Charitable Trust(supra) have been followed by the Hon’ble Madras High Court in the case of CIT vs. M.CT Mutthaiah Chettiar Family Trust 245 ITR 400, some other Hon’ble High Courts like the Hon’ble Delhi High Court in the case of CIT vs. Hotel and Restaurants Association 261 ITR 190 have held , while refusing to admit Revenue’s appeal, that plurality of purpose of accumulation was not precluded, the purpose or purposes to be specified could not have been beyond the objects of the trust and Revenue had not come to a finding that any of the objects of the assessee-company were not for charitable purposes. The concurrent findings by the lower authorities were findings of fact and they gave no rise to questions of law. Both these judgments had been followed by various other courts and Tribunals. The decision of the Hon’ble Delhi High Court has been followed in subsequent decisions of the Hon’ble Delhi High Court in Bharat Kalyan Pratisthan vs. DIT(Exemption) 299 ITR 406 (Del),DIT vs. Mitsui and Co. Environmental Trust 303 ITR 111 (Del) and Bharat Krishak Samaj vs. DDIT(Exemption) 306 ITR 153 (Del). The ld. Special Counsel has pointed out that the judgment of the Hon’ble Delhi High Court in the case of CIT vs. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 59 Hotel and Restaurant Association cannot constitute a valid precedent because it related to the question of an admission of a case, which was rejected on the basis of concurrent findings of lower authorities and therefore, could not be read as an exposition of law on the issue of section 11(2). Be that as it may, the fact remains that the said decision has been followed by subsequent orders of the Hon’ble Delhi High Court, as narrated above. However, as the Ld CIT(DR) has pointed out, the Constitution Bench Of the Supreme Court in the case of Commissioner of Customs (Import) Mumbai vs. Dilip Kumar & Company (2018) 95 taxman.com 327 (SC)has held, that exemption provisions have to be strictly applied and whenever there was an ambiguity in the exemption clause or notification, which was subject to strict interpretation, the benefit of such ambiguity could not be claimed by the assessee, it must be interpreted in favour of the Revenue and the burden of proving the applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. Section 11(2) is not a charging section. Rather it is a section which confers an exemption from tax on the fulfilment of certain conditions. Hence it is to be strictly applied. Therefore considering the decision in CC(I)Mumbai vs Dilip Kumar & others (Supra), where in section 11(2)(a), it is written that the person is required to specify the purpose for which the income is being accumulated or set apart, the views in support of such interpretation, as expressed in Singhania Charitable Trust and Sir Sobha Singh Public Charitable trust regarding the requirement of specificity in the notice in Form 10, must be upheld. 26. It is however, pertinent to mention that the Hon Supreme Court in the said judgment of Dilip Kumar, has clarified that, in the said case, they were only concerned with a situation where there was an ambiguity in the exemption notification or the exemption clause. However, with regard to the question of whether a person claiming exemption, was required to comply with the procedure ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 60 strictly to avail the benefit, the Hon’ble Supreme Court, referred to its own earlier judgment in the case of CCE vs. Hari Chand Shri Gopal (2011) 1 SCC 236 in which case, the Constitution Bench had held that, if exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed a fulfilled exactly, though at times, some latitude can be shown, if there is failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption. The Constitution Bench in that case , then considered the doctrine of substantial compliance and held in paragraph 33 and 34 of its order as under:- “33. A fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. 34. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the \"substance\" or \"essence\" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the \"essence\" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance with those factors which are considered as essential.” ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 61 Thus considering that that there is no ambiguity in the wordings of section 11(2),the only question left to be determined is whether stating of specific purposes for accumulation in form 10, as provided in section 11(2), was a mandatory or directory condition to claim the benefit of accumulation. If the nature of compliance was mandatory, then it would have to be exactly complied with as laid down by the Hon’ble Supreme Court in the case CCE vs. Hari Chand Shri Gopal (supra) but if it was directory then some leeway could be offered, by noting that the assessee had substantially complied with its provisions by filing a Form 10 stating the general purpose for accumulation. We believe the answer to this question lies in the provisions of section 11(3A). Section 11(3A) of the Act reads that, where due to circumstances beyond the control of a person in receipt of income, which has been invested or deposited in accordance with the provisions of clause (b) of sub section (2), cannot be applied for the purpose for which it was accumulated or set apart, the ld. AO may, on an application made to him in this behalf, allow such person to apply such income for such other charitable or religious purpose in India, as is specified in the application by such person and is in conformity with the objects of the Trust and thereupon, the provisions of sub section 3 will apply, as if the purpose specified by such a person in the application under this sub section, were a purpose specified in the notice given to the ld. AO under clause (a) of sub section (2). Thus, from a plain reading of section 11(3A), it becomes clear that specificity of purpose is mandatorily required as per the provisions of section 11(2), failing which, section 11(3A) would be rendered otiose. No provision of the Act can, in our opinion, be interpreted in such a manner, so as to render a related provision as otiose. Therefore, in view of the specific provisions contained in section 11(3A) which point out that, if the assessee who has accumulated the income for a particular purpose cannot spend it for that purpose, he can spend it on any other purpose within its objects, with the permission of the ld. AO, and then such other purpose would be treated as the purpose given in Form No.10 submitted under Rule 17 and section 11 (2)(a) as the ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 62 purpose of accumulation, makes it clear that the said provision could not be operable, if the arguments of the assessee were accepted that the notice of accumulation for the general objectives of trust were compliant with the requirement of section 11(2). In the circumstances, after considering the provisions of section 11(2)(a) and section and section 11(3A), we are inclined to agree with the ld. CIT(A), that the assessee cannot be allowed the benefit of accumulation on the basis of such a loosely worded notice under section 11(2), that does not enable the ld. AO to subsequently examine whether the purposes for which the amount was accumulated, was actually utilized for such purposes. Therefore, the decision of the Ld CIT(appeals) on this account for the assessment year 2007-08 is accordingly upheld and ground no 1 of the assessee’s appeal is accordingly dismissed. 27. With regard to similar ground taken in assessment year 2008-09, we observe that in this year, the assessee has not filed the Form No. 10 in the course of assessment proceedings but filed the same in the course of the appeal proceedings. Thus, even taking into account the observations of the Hon’ble Supreme Court in CIT vs. Nagpur Hotel Owners Association (supra), these grounds were not before the ld. AO at the time of completing the assessment and in such circumstances, the Hon’ble Supreme Court had declined to allow the information to be supplied subsequent to the completion of assessment holding that to allow so would mean that the assessment would have to be reopened and the act did not contemplate such reopening. Hence, the Hon’ble Supreme Court had overturned the judgments of the Tribunal and the Hon’ble High Court which allowed the notice to be considered even though it was not filed before the completion of assessment. The assessee had cited the Judgment of the Hon Gujarat High Court in Mayur Foundation (supra) to point out that in that case the Hon High Court had held that assessment proceedings did not end with the assessment order but continued till the time the appeal was decided by the Tribunal because the assessing officer would have to give effect to ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 63 the orders of the Tribunal. However, the Ld CIT(A) had held that in this particular case the five-year period, which was the outside limit for accumulation, had already passed and therefore the notice which was being filed before him as additional evidence could not be entertained. In consideration of this matter, we are of the view that any application for additional evidence has to be accompanied by an explanation as to why that evidence could not be placed before the assessing officer. No such explanation has been placed before us or narrated in the order of the Ld CIT(A). Moreover, since the outside limit for utilization of accumulated income had already lapsed and a notice of accumulation cannot be given for regularization of funds already utilized in a particular manner, in our opinion, the case would squarely be covered by the decision of the Hon Supreme Court in Nagpur Hotel Owners association (supra). We therefore find no infirmity in the orders of the ld. CIT(A) in refusing to entertain the Form No.10 sought to be filed before him as additional evidence and consequently, in refusing to allow the accumulation of income under section 11(2) is held to be justified. Accordingly, ground no 1 of the appeal is dismissed for assessment year 2008-09 also. 28. Ground No.2 of the assessee’s appeal in both assessment years relates to the decision of the ld. AO and the ld. CIT(A) to direct that sums credited in the, “infrastructure fund” be included in the receipts of the assessee. The assessee has argued that it had no right, title or interest in the sums credited to this fund as the same stood diverted by overriding title in favour of the State Government and therefore, the ld. CIT(A) should have held that the sums in question alongwith the interest thereon were outside the ambit of assessment in the case of the assessee. We have considered the various arguments brought between us by the rival parties and have also considered this issue in our orders in the case of Ayodhya Faizabad Development Authority in ITA Nos. 518, 519 & 520/Lkw/2018 and ITA Nos. 143, ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 64 144 & 145/Lkw/2021 for the A.Ys. 2012-13, 2014-15 & 2015-16 & A.Ys. 2016-17, 2017-18 & 2018-19 wherein in paragraph nos. 44 to 48, we have held as under:- “44. With regard to Ground Nos. 4 of assessment years 2012-13 and 2014- 15 and ground number 5 of Assessment year 2015-16, relating to the addition made by the learned Assessing Officer on the issue of Infrastructure Development Reserve Fund (IDRF), in view of the arguments presented by the learned AR and refuted by the learned CIT (D.R) on the subject, it is imperative to decide whether there was an exposition of law that created a binding precedent on the issue, in the order of the Hon'ble Allahabad High Court in the case of CIT vs. Lucknow Development Authority & others (2013) 38 taxman.com 246 Allahabad. It is an established principle of law, that a decision of a Court is to be ascertained from the questions involved in the case and the judgment rendered with respect to the same. The Hon’ble Supreme Court in the case of CIT vs. Sun Engineering (P) Ltd., ITD 198 ITR 197 SC, held that a decision could not be interpreted out of the context to the questions of law which were raised before it. The Hon’ble Court held as under:- “Such an interpretation would be reading that judgment totally out of context in which the questions arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings.” The Learned CIT(DR) has also invited out attention to the orders of the Hon Supreme Court in Union of India vs. Dhanwanti Devi and Ors in 1996 Supp. (5) S.C.R. 32 for the proposition that a decision is only an authority for what it actually decides and it is the essence of the decision which constitutes its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. He has also invited our attention to the order of the Hon Supreme Court in State of U.P. and Another vs. Synthetics and Chemicals Limited and Another (1992) 87 STC 289 , for the proposition that an order passed sub silentio does not constitute a declaration of law .Perusal of the order in Lucknow Development Authority & others (supra), in the light of these orders of the Hon Supreme Court, shows that the questions of law that were raised before the Hon'ble High Court and answered by it in the said order, ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 65 related to the eligibility of the assessee authority for exemption under section 12 of the Income Tax Act and grant of registration by the Tribunal under section 12AA of the Income Tax Act. The third question related to the reopening of the case when there was still time to issue notice under section 143(2). After considering the rival arguments presented before it, the Hon'ble High Court rendered its decision, that the authority had objects which were admittedly charitable in nature and the mere selling of some products at a profit would not ipso facto hit the assessee, by applying the proviso section 2(15), so as to deny exemption under section 11. The intentions of the assessee and the manner in which the activities of the charitable trust were undertaken were highly relevant to decide the issue of applicability of the proviso of section 2(15) and there was no material or evidence brought on record by Revenue, to suggest that the assessee was conducting its affairs on commercial lines with a motive to earn profit. Therefore, the Hon'ble High Court held that the proviso to section 2(15) was not applicable to the facts and circumstances of the case and the assessee was entitled to exemption provided under section 11, for the relevant assessment years. In para 29 of the said order, the Hon'ble High Court also observed that the authority had been maintaining an Infrastructure Development and Reserve Fund (IDRF) as per the notification dated 15.01.1998 and the money transferred to this fund was to be utilized for the purpose of the project, as specified by a committee constituted by the State Government and the same could not be treated as belonging to the authority or making the receipt taxable in the hands of the authority. The Hon'ble High Court expressed its view that, for this reason also, it appears that the funds of the authority were utilized for general utility. From our study of this judgment and order, it is fairly clear that the nature of or title over the Infrastructure Development and Reserve Fund (IDRF), was not a question of law presented to the Hon'ble Court for decision. Furthermore, the order does not show that any arguments were presented before the Hon'ble Court with regard to the nature of and title over the Infrastructure Development and Reserve Fund (IDRF). Thus, it is quite clear that the judgment and order of the Hon'ble Court in the aforesaid case, primarily related to the eligibility of the assessee authority for exemption under section 11 and the correctness or otherwise of the Tribunal’s decision, to order its registration under section 12AA. It’s judgment with regard to these issues is reflected in the paragraphs 18 to 28 and specifically in paragraphs 26 to 28 and it appears, that the observation made in para 29 of the said order with relation to the Infrastructure Development and Reserve Fund (IDRF), was also with a view to demonstrate that the funds of the authority were utilized for general utility, in support of the decision that was being rendered by the Hon'ble Court. Therefore, while we have the greatest regard for the views expressed by their Lordships, we are inclined to agree with the learned CIT D.R. that the reference to ownership of the Infrastructure and Development Reserve Fund (IDRF) in para 29 of the said order, cannot be treated as an exposition of law having binding precedent, that would preclude us from looking into this question after ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 66 considering the arguments on the issue, but was only an observation in support of the actual decision rendered by the Hon’ble Court. 45. The ld. AR had also submitted that a number of decisions rendered by various Benches of the ITAT in the cases of Lucknow Development Authority, Varanasi Development Authority and Meerut Development Authority had followed this judgment. However, we observe that the various benches have not considered the issue on its merits, but have merely accepted the arguments of the assessees in those cases, that they were bound by the observations of the Hon’ble Allahabad High Court in para 29 of their order. With regard to the judgment of the ITAT Amritsar Bench in the case of Jalandhar Development Authority (supra), we observe that the same is distinguishable, because in that case, the External Development Charges (EDC) were collected by that assessee on the basis of various notifications issued by the Government of Punjab and the same could not be spent without the previous permission of the Government of Punjab, which is different from the case of the assessee because the charges from which the Infrastructure Development and Reserve Fund (IDRF) was constituted, were collected by the Ayodhya Development Authority, as per the powers assigned to it under the U.P.U.P.D.A. 1973 and even the committee constituted by the State Government was only to ensure, that funds so constituted were spent in a targeted manner, on certain objects of the assessee authority that were already enshrined in U.P.U.P.D.A. 1973. Furthermore, it is observed that the decision by the ITAT Amritsar Bench in the case of Jalandhar Development Authority (supra) was given after considering the provisions of the Punjab Apartment and Property Regulation Act, 1995, and the ld. AR has not brought any material on record, to show us that the provisions of the Punjab Apartment and Property Regulation Act, 1995 were para materia to the U.P.U.P.D.A. 1973. Furthermore, it is also seen that the judgment by the ITAT Amritsar Bench, was delivered following the judgment of the Hon’ble Punjab and Haryana High Court in the case of Punjab Police Housing Corporation Limited(supra), which related to taxability of interest on bank deposit made out of unutilized government grants, which in our view is a different issue altogether and with regard to which there is a contrary decision by the Hon’ble Patna High Court in the case of Bihar Police Building Construction Corporation(supra), which in turn, has been delivered on the basis of the findings of the Hon’ble Supreme Court in Tuticorin Alkali Chemicals and Fertilizers Ltd v. CIT (1997) 6 SCC 117. Therefore, the only judgment the ownership of the Infrastructure Development and Reserve Fund (IDRF), among the decisions cited by the learned AR is the judgment of the Hon’ble Delhi Bench in the case of Saharanpur Development Authority. Here too, we observe that the basic question before the Hon’ble Delhi Bench was whether, if the principal amount (of the Infrastructure Development and Reserve Fund) had not been brought to tax by the ld. AO, whether the interest from the investment of such principal, could be brought to tax by him. It is true that the Hon’ble Delhi Bench held in the course of that order, that the said Infrastructure Development and ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 67 Reserve Fund (IDRF) did not belong to the assessee but to the State Government, but it did so by relying on the judgments of the Hon’ble Delhi High Court in the case of Delhi State Industrial Development Corporation (supra) and the ITAT Bangalore in Karnataka Urban Infrastructure Development and Finance Corporation (supra). While doing so, the Delhi Bench did not delve into the provisions of the U.P.U.P.D.A. 1973 and therefore, its judgment was rendered without reference to the same. Nor did the said judgment look into the status of the assessee as an independent entity, possibly because that issue was never before them. Subsequently, the same Member who authored the judgment in the case of Saharanpur Development Authority, had occasion to consider the nature and title over the Infrastructure Development and Reserve Fund (IDRF), while authoring the judgment in the case of Mussoorie Dehradun Development Authority vs. Additional CIT, Dehradun in ITA Nos. 830/Del/2010 and 853/Del/2011. We observe that the ITAT Delhi Bench has analyzed the judgment in Karnataka Urban Infrastructure Development and Finance Corporation in great detail and rendered a different finding with regard to the ownership over the infrastructure fund, on account of conjoint reading of the O.M. dated 15.01.1998 viz. a viz., the provision of the Uttar Pradesh Urban Planning & Development Act, 1973 and after consideration of the status of the assessee as an independent entity. The Bench had rendered the finding that since the assessee was not a State and since it was performing activities of its own, which was not the case in Karnataka State Industrial Development Corporation, which was essentially implementing certain Central and State Governments projects, the facts of that case would not help the assessee. 46. Ongoing through the judgment of the Delhi Bench in the case of Mussoorie Dehradun Development Authority, we find that the Hon’ble Bench has duly considered both the O.M. dated 15.01.1998 issued by the U.P. Government and the provisions of the U.P.U.P.D.A. 1973. After a conjoint reading of both these provisions, it has held that authority had been given to the assessee for collecting certain fees and charges in the process of its functioning and according to section 20 of the U.P.U.P.D.A. 1973, the assessee could retain the funds collected by it under the Act. Thus, the powers to collect the funds were already in existence under section 20 of the Act and it had to credit the fees and charges collected by it, to its own funds, which were to be applied to the fulfillment of the assessee’s object. The ld. Bench observed, that going through the office memorandum, would reveal that paragraph 1 of the said O.M. contemplates that the “income” of the development authorities described in Clause 5 of the said memorandum, would not be deposited in an ordinary pool, but would be deposited in a separate account, which would be used exclusively for residential infrastructure. Thus, it held that the provisions of the said memorandum itself showed that firstly, the fees and charges collected by the assessee in Clause 5 of the memorandum, would be the income of the development authority but it would not be deposited in the ordinary pool, rather it would be earmarked to ensure the development of residential infrastructure. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 68 It therefore held, that the memorandum only provided a regulatory mechanism for incurring the expenses and carving out a preferential area within the assessee’s objects. The Hon’ble Bench had observed, that the arguments of the assessee demonstrating that the infrastructure funds were a separate entity independent of the assessee, were a fiction and there was nothing in the memorandum to this effect. The memorandum only spoke of a designated bank account in which a fixed portion of the assessee’s receipts would be deposited and out of which, expenses would be incurred in a preferred area of the assessee’s objects, with an approval of an empowered committee. The Hon’ble Bench observed, that all these receipts formed part of the normal receipts of the assessee and that the committee referred to in the memorandum as well as in the Act, was not alien to the assessee (possibly because other than the Chairman, all others were also involved in the management of the authority). Thus, the Hon’ble Bench held, that the empowered committee was only concerned with giving approval for specific items of work to be done by the assessee, and not for the administration of funds. The funds formed part of the assessee’s balance- sheet and were audited in the course of audit of its own accounts. Therefore, there was no separate entity called infrastructure fund, but just a bank account which was designated for channelizing a portion of the assessee’s receipts, for the fulfilment of a preferential area of the assessee’s deposit. 47. On consideration of the various judgments presented before us by both parties, it is important to consider the fact that the judgment and order of the Delhi Bench in the case of Mussoorie Dehradun Development Authority (supra), is the only judgment where a detailed analysis had been conducted of the said O.M. dated 15.01.1998 along with the provisions of the U.P.U.P.D.A. 1973. It may be important for us at this stage, to consider some of these provisions of the U.P.U.P.D.A. 1973 which have been referred to by the Hon’ble Delhi Bench in the case of Mussoorie Dehradun Development Authority (supra). Section 20 of the Act (U.P.U.P.D.A. 1973) states, that the authority shall have and would maintain its own fund, to which would be credited all the monies received by the authority from the State Government, by way of grants, loans, advances or otherwise; all monies borrowed by the authority from the State Government from sources other than the State Government by way of loans and debentures; all fees, tolls and charges received by the authority under the Act; all monies received by the authority from the disposal of lands, buildings and other properties, movable and immovable and all monies received by the authority by way of rents and profits, or in any other manner from any other source. Sub Section 20(2) states that that fund shall be applied towards meeting the expenses incurred by the authority, in the administration of this act and for no other purpose. Section 41 of the Act relates to control by the State Government and empowers the State Government to issue such directions to the authority from time to time, as may be necessary, for the efficient administration of the Act and it states, that if there is any dispute between the authority and the State Government with regard to the exercise of its powers and discharge of its functions by the authority, then ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 69 the decision of the State Government on such dispute shall be final. Thus, the provisions of the U.P.U.P.D.A. 1973 as laid out above makes it quite clear that all the money received by the authority from the State Government, from loans, from its earnings or from any source, would constitute the funds of the Authority. Furthermore, the provisions of section 41 allow the State Government to issue directions to the authority for the effective administration of the Act. A conjoint reading of these two provisions, make it abundantly clear that the O.M. dated 15.01.1998, which arises out of the powers of the State Government under section 41 of the U.P.U.P.D.A. 1973, cannot divert the title to the funds of the authority to the State Government, but rather has to be viewed as directions to the authority, for efficient administration of the Act, in accordance with the objects of the authority. This interpretation is further reinforced by the judgment of the Hon’ble Uttarakhand High Court in the case of Mussoorie Dehradun Development Authority in ITA Nos.5 & 6 of 2012 which were filed in appeal against the aforesaid order of the Hon’ble Delhi Bench in ITA No. 830/Del/2010 and ITA No.853/Del/2011. The Hon’ble Uttarakhand High Court, while taking note of the dispute observed, that in the case of Adityapur Industrial Area Development Authority vs. Union of India (2006) 153 taxman 107 (SC), a question had arisen regarding interpretation of article 289 of the Constitution of India as well as section 17 of the Bihar Industrial Area Development Authority Act, 1974.The Hon’ble Supreme Court had held, that the income of the authority constituted under the said Act was its own income and that the authority managed its own funds. It had its own assets and liabilities. It could be sued and could sue in its own name and since it was an authority constituted under an act of the Legislature of the State, it had a distinct legal personality, being a body corporate, as distinct from the State. The Hon’ble Supreme Court further clarified, that section 17 of the said Act, stated that only upon its dissolution, would the funds, assets and liabilities of the authority, devolve upon the State Government. It accordingly stated, that therefore before its dissolution, its assets, funds and liabilities were its own. For this reason, it held that it was futile to contend that the income of the authority was the income of the State Government, even though the authority was constituted under an Act, enacted by the State Legislature, by issuance of a notification by the Government thereunder. Accordingly, basing itself on this judgment of the Hon’ble Supreme Court, the Hon’ble Uttarakhand High Court dismissed two questions of law raised by Mussoorie Dehradun Development Authority relating to Article 289 and whether the collection of levies by statutory authorities in the nature of fees, charges, tax etc. imposed by the State through an enactment (U.P.U.P.D.A. 1973) can be said to be income of such authority. Thereafter, it compared the provisions of section 17 of the Bihar Industrial Area Development Authority Act, 1974, with the corresponding provision in the Uttar Pradesh Urban Planning and Development Act, 1973, i.e. section 58 and pointed out that both the provisions were effectively para materia in substance. The Hon’ble High Court thereafter pointed out, that since the Mussoorie Dehradun Development Authority, also constituted under the Uttar Pradesh Urban Planning and ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 70 Development Act, 1973, was a separate entity which was distinct from the State, having its own legal identity, as a cooperate body which could sue or be sued in its name and having its own assets and liabilities, it was only when the State Government decides that the purpose of the development authority had been achieved and there was no need for continuance of such an authority, then upon dissolution of that authority the income, assets and liabilities of the authority would vest with the State Government and not before. It, therefore, held that in deference of the orders of the Hon’ble Supreme Court in the case of Adityapur Industrial Area Development Authority (supra), any fees collected for infrastructure development by the development authority, would be treated as the income of the authority and the expenses incurred by the authority for the purposes of infrastructure development would be deductible from its’ income. What emerges from the said order, is that the funds of the authority, which are defined vide section 20 of the U.P.U.P.D.A. 1973 cannot devolve or be diverted to the State Government, prior to the dissolution of the authority as envisaged in section 58 and therefore, to view the O.M. dated 15.01.1998, as diverting the funds of the authority to the State Government, is not maintainable in view of the express provisions of the Uttar Pradesh Urban Planning and Development Act, 1973. In fact, as has been clearly pointed out by the ld. CIT DR in his arguments and by the Delhi Bench of the Tribunal, is that Clause 1 of the said O.M., itself refers to the deposit of, ‘income of the development authorities described in Clause 5’ to be deposited in a separate account for residential infrastructure. The fact that the State Government has deep and pervasive administrative control over the authority is established and is, in fact, one of the grounds on which the assessee has been held eligible to be regarded as a general-purpose utility, having charitable objects, that are not for profit. Therefore, the O.M. dated 15.01.1998 has to be viewed in the context of the powers of supervision enjoyed by the State Government under the U.P.U.P.D.A. 1973 for the better administration of the Act, and not as creating any diversion of income by overriding title, as has been contended by the assessee and the ld. AR in their submissions before us, because the State Government did not have the power to divert the income under the Act prior to the dissolution of the authority. For this reason, the Judgments cited by the assessee claiming diversion of income, ie Imperial Chemicals and Jit & Pal X Ray, will have no application to the facts of the assessee’s case. Therefore, after analysis of the various legal pronouncements, the provisions of the U.P.U.P.D.A. 1973 and the O.M. dated 15.01.1998, the plea that the assessee did not have any right, title or interest over the said infrastructure fund and that it was merely a Nodal agency for implementing the projects of the State Government, is fit to be rejected. The Learned AR has pointed to some inconsistencies in the order of the Delhi Bench and also pointed out that the Adityapur Development Authority ( whose case was followed by the Hon High Court) was seeking exemption under another section as also the fact that one of the items of receipt ie stamp duty was collected by the state Govt, but to our mind those arguments are not material because the specific provision of the U.P.U.P.D.A. 1973 render diversion of ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 71 income to the state prior to the dissolution of the authority as an impossibility and the Govt Order dated 15.01.1998 could not be read as being issued for a purpose that was vires of the Act. It could only be read as issued under section 41 of the U.P.U.P.D.A. 1973 for better administration of the Act by channelizing some portion of the funds to certain preferential areas of the assessee’s objects and nothing more. Therefore, following the Judgment of Hon. Uttarakhand High Court in Mussoorie Dehradun Development Authority (Supra), we hold that the Infrastructure Development and Reserve Fund is also the fund of the Assessee authority and liable to be considered in its hands. Needless to say, before any part of the same is considered as income of the authority, the expenditure made out of the same has to be considered as application towards the objects of the assessee authority (as the assessing Officer has already done). 48. The ld. AR has also made an alternative argument against routing this amount through the income and expenditure account, pointing out that because of the effect of the OM, the receipts to the fund were capital receipts and were therefore to be considered as accretion to the corpus of the Authority rather than its income. We observe that the receipts listed the OM dated 15.01.1998 are not voluntary contributions with specific directions, within the meaning of section 11 (1)(d) of the Act, but it is also noted that the OM dated 15.01.1998, issued under section 41 of the UPUPDA 1973, earmarks certain portion of receipts to the infrastructure fund for capital expenditure and the Hon. Supreme Court has held, in the case of Padmaraje. R. Kadambande vs CIT 62 Taxman 456(1992), that it is settled law, that in order to find out whether a receipt is a capital receipt or a revenue receipt, one has to see what it is in the hands of the receiver and not its nature in the hands of the payer. In other words, the nature of the receipt is determined entirely by its character in the hands of the receiver and the source from which the payment is made has no bearing on the question. Therefore, we deem it appropriate to restore this matter back to the file of the assessing officer to analyze the nature of the receipts with reference to the OM dated 15.01.1998, and thereafter take an appropriate decision on the quantum that is required to be routed through the Income and Expenditure account. Ground number 4 of assessment year 2012-13 & 2014-15 and Ground number 5 of assessment year 2015-16 is accordingly partly allowed.” 29. Ongoing through the Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965, we find that section 58(1), section 92(2) and section 93 of the U.P. Awas Evam Vikas Parishad Adhiniyam are, effectively & in substance, para materia to sections 20, 41 and 58 of the U.P.U.P.D.A. 1973 therefore, our findings with regard to the nature of and title to the infrastructure fund created by the Government O.M. dated 15.01.1998, in the case of Ayodhya Faizabad Development Authority, would hold ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 72 good for the Uttar Pradesh Awas Evam Vikas Parishad also. In the circumstances, we deem it appropriate to restore this matter back to the file of the ld. AO to analyze the nature of the receipts with reference to the O.M. dated 15.01.1998 and therefore take an appropriate decision on the quantum that is required to be routed through the income and expenditure account. Furthermore, in respect of amounts that are required to be routed through the income and expenditure account, we direct that the ld. AO may allow credit for corresponding expenses. Ground No.2 for both assessment years 2007-08 and 2008-09 are accordingly partly allowed, as above. 30. Ground No. 3 & 4 of the assessee’s appeal for the assessment years 2007-08 and 2008-09 pertained to the disallowance of certain expenditures claimed by the assessee under the head legal expenses, consultancy expenses and rates and taxes, on account of the fact that the assessee had not submitted the requisite details before either the ld. AO or the ld. CIT(A). The assessee has submitted that the amount of expenses claimed under the above-mentioned heads were fully supported by proper bills and vouchers and the same were duly accounted for in the books of accounts, which had been subjected to twin audits and no defects or discrepancies had been found or specified therein. It has also been submitted by the ld. AR, that because the expenditure was incurred by various units of the assessee parishad, which were located in different parts of U.P., it was difficult to collate and present the details as desired by the ld. AO, within the limited time frame allowed to it. After considering these arguments, we deem it appropriate to restore the matter back to the file of the ld. AO, with a direction to the assessee to present the necessary evidences in support of these expenditures to the ld. AO, so that the ld. AO may consider the same afresh and take a fresh decision in the matter.Thus Ground number 3 in both assessment years is allowed for statistical purposes .As we have restored these grounds back to the file of the ld. AO therefore, ground nos.5 and 6 of the assessee’s appeal in assessment year 2007-08 and ground no.5 of the assessee’s ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 73 appeal in assessment year 2008-09 are infructuous and are accordingly dismissed as such. Ground Nos. 7 of assessment year 2007-08 and ground no.6 of assessment year 2008-09 are general in nature and do not require a decision. 31. The assessee has also preferred an additional ground in both assessment years, ie the disallowance made by the learned CIT in respect of the revolving fund. We have duly considered the arguments of the learned AR and perused the concerned Govt Order . It appears that this revolving fund was created so that advertisements with relations to various projects (for the purposes of sale and allotment ) could be issued centrally by the Parishad, while the units would only take out advertisements with relation to awarding of tenders etc. Therefore a portion of the amounts being remitted to them for projects (.5%)were being retained at head office and every- time an advertisement was issued in respect of a project, by the head office, it would be billed to that project by the concerned unit. Also this fund was being generated by levy of a fee of (.25%) of the allotment cost upon the allottee. Thus in our view, there ought to be no occasion of bringing this amount to tax in the hands of the assessee. This is because the fee generated for advertising account would presumably be included in the income of the assessee parishad, while the expenditure being booked by the units, would presumably be consolidated into the expenditure account of the assessee parishad. The Ld CIT(A) has confirmed this addition because the assessee could not demonstrate as to where this fund came from and how expenditure from it was recorded in the accounts of the assessee. We therefore, restore this matter to the file of the assessing officer so that the assessee may explain how the fund was generated and how expenditures were recorded so that there is no apprehension of double claim of application. In the circumstances, these additional grounds of appeal are allowed for statistical purposes. Accordingly, the assessee’s appeals in ITA no 534 & 535/Lkw/2014 are partly allowed. ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 74 32. We shall now turn our attention to the Department’s appeal in ITA Nos.21 & 22/Lkw/2019. In both the years in question, the Revenue is in appeal against the decision of the ld. CIT(A)-4, Lucknow directing the ld. AO to compute the income of the assessee as per the direction given by the ld. CIT(A)-1, Lucknow, in the manner specified in section 11(1) of the Act, taking into account information given in the audit report in Form No.10B. It appears that on going through the orders under section 251 r.w.s. 143(3) of the Act that while giving appeal effect, while the ld. AO granted the relief allowed vide CIT(Appeal’s) order dated 10.03.2014 on account of the specific additions that had been made by him, he merely subtracted this amount from the income already assessed by him previous to the passing of the appeal order dated 10.03.2014. Thus, the balance of the additions that had been made by him were retained in the orders giving appeal effect to the orders of the ld. CIT(A). The assessee again went in appeal to the ld. CIT(A) stating that the appeal effect had not been given properly appreciating his orders and the ld. CIT(A) ,called for a remand report in the matter, in which it was submitted that the earlier decision of the Ld. CIT(A) was not maintainable in view of the dismissal of the SLP in Jammu Development Authority by the Hon Supreme Court. Thereafter, the CIT(A) reiterated the findings given by his predecessor and asked the ld. AO to given the appeal effect accordingly. It is seen that on 26.02.2019, the ld. AO has passed orders under section 154 of the I.T. Act rectifying the earlier order dated 2.01.2019 and subsequently allowed the relief to the assessee under section 11. It is also seen from the grounds that the Department is of the opinion that that the grounds that the relief granted by the ld. CIT(A) was initially incorrect because the ld. CIT(A) had failed to consider that the activities of the assessee were of commercial nature and the assessee was hit by the amended proviso to section 2(15) of the Act and identical issue on the same matter was pending before the ITAT for the same assessment year. We observe that that the ld. Special Counsel has not pressed additional ground no. 1 and we have dismissed original grounds no.1.1 and 1.2 in ITA Nos. 532 & 533/LKW/2014 ITA Nos. 534 & 535/LKW/2014 ITA Nos. 21 & 22/LKW/2019 U.P. Awas Evam Vikas Parishad 75 the ITA Nos.532 & 533/Lkw/2014.Thus the grounds cited in ITA Nos. 21 & 22/Lkw/2019 are no longer maintainable in view of these developments, and therefore, they are fit to be dismissed as not maintainable. Furthermore, in view of the decisions of the Hon Supreme Court in DCIT vs Ahmedabad Urban Development Authority & Others (supra) and the decision of the Hon Allahabad High Court in the case of CIT vs. Lucknow Development Authority and others (supra), these grounds are also fit to be dismissed on the merits. Therefore, both the appeals ie ITA no 21 & 22/Lkw/2019 are dismissed. 33. In the result ITA Nos.532 & 533/Lkw/2014 and ITA Nos. 21 & 22/Lkw/2019 of the Department are dismissed, while ITA Nos.534 & 535/Lkw/2014 of the assessee are partly allowed. Order pronounced on 28.02.2025 under Rule 34(4) of the ITAT Rules, 1963. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28/02/2025 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR , ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. "