DCIT (Exemptions), Chandigarh V. Patiala Improvement Trust, Patiala

ITA 120/CHANDI/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5032 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 13-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: ASHOK KUMAR GOEL
• Keywords: Charitable institution; Question of law
• Section: 12A; 12AA; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.120/CHD/2017 ASSESSMENT YEAR: 2012-13 THE DCIT VS. PATIALA IMPROVEMENT TRUST, CIRCLE-1 (EXEMPTIONS), CHOTTI BARADARI CHANDIGARH PATIALA PAN NO. AAAJI0034L (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHOK KUMAR GOEL REVENUE BY : SH. RAVI SARANGAL DATE OF HEARING : 22/06/2017 DATE OF PRONOUNCEMENT : 13/07/2017 ORDER PER B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. CIT(A), PATIALA DT. 17/11/2016 ON THE FOLLOWING GRO UNDS: (I) WHETHER THE CIT(A) HAS ERRED IN LAW BY NOT CONSIDER ING THE SCOPE OF PROVISION TO SECTION 2(15) OF THE ACT, WHILE DECIDING THE CASES. (II) WHETHER THE CIT(A) HAS ERRED IN LAW IN DRAWING A CO ROLLARY FROM CIRCULAR NO. 11 OF 2008 OF CBDT WHERE THE SAID CIRCULAR WHILE CLARIFYING THE I SSUE HAD EXPRESSLY INDICATED THAT ENTITIES CLAIMING CHARITY UNDER SECTION 2(15) SHOUL D ESCHEW ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS? (III) WHETHER THE CIT(A) HAS ERRED IN LAW BY IGNORING THE RATIOS LAID IN THE CASES OF PUDA AND JDA BY ITAT AMRITSAR AND ITAT AMRITSAR RESPECTIVELY (TO THE EXTENT IMPROVEMENT TRUSTS CARRYOUT LAND DEVELOPMENT IN A SIMILAR MANNER AS DE VELOPMENT AUTHORITIES DO? (IV) WHETHER THE CIT(A) HAS ERRED IN LAW IN NOT ACKNOWLE DGING THAT PERFORMING STATUTORY FUNCTIONS DOES NOT ABSOLVE A GOVERNMENT CREATED AUT HORITY FROM PAYING TAXES? (V) WHETHER THE CIT(A) HAS ERRED IN LAW IN TOTALLY IGNO RING THE RATIO LAID IN THE CASE OF JAMMU DEVELOPMENT AUTHORITY EVEN WHEN THE DEPARTMENT HAD PLACED HEAVY RELIANCE ON THE SAME DURING THE COURSE OF HEARINGS? (VI) THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROU NDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. 2. GROUND NO. 4 IS THEORETICAL IN NATURE AND HAS NO T DEALT WITH. 3. GROUND NO. 6 IS GENERAL IN NATURE HENCE NEEDS NO ADJUDICATION. 4. GROUND NO. 1, 2, 3 & 5 ARE DEALT TOGETHER. 2 5. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT I S AN ARTIFICIAL JURIDICAL PERSON HAVING INCOME FROM PLANNING & DEVELOPMENT OF CITIES AND THE SAME WAS SHOWN 3S INCOME FROM OTHER SOURCES. THE APPELLANT HAS PEE N GRANTED REGISTRATION U/S 12AA OF THE I.T. ACT BY THE COMMISSIONER OF INCOME TAX, PATIALA VIDE ORDER F. NO. CIT/PTA/TECH/12AA/2005-06 DATED 30/03/2006. DURING THE COURSE OF ASSESSMENT PROCEEDING, ASSESSING OFFICER OBSERVED THAT THE APP ELLANT WAS CARRYING ON BUSINESS OF SALE & PURCHASE OF RESIDENTIAL HOUSES, CONSTRUCTION OF MUTLI-STOREYED HOUSES, SALE OF RESIDENTIAL PLOTS AND COMMERCIAL PL OTS BY AUCTION. IT EARNED HUGE NET PROFIT OF RS. 24,65,05,026.77 DURING THE YEAR U NDER CONSIDERATION, WHICH IS IN THE NATURE OF TRADE, COMMERCE AND BUSINESS, BUT IS NOT COVERED WITHIN THE MEANING OF THE EXPRESSION 'THE ADVANCEMENT OF ANY O THER OBJECT OF GENERAL PUBLIC UTILITY' U/S 2(15) OF THE INCOME TAX ACT, 19 61. HOWEVER, THE APPELLANT TRUST HAS STATED DURING ASSESSMENT PROCEEDINGS THAT IT WA S NOT CARRYING ON ANY BUSINESS ACTIVITY BUT THE OBJECT OF TRUST WAS PLANN ING, DEVELOPMENT AND IMPROVEMENT OF CITY. 6. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE CONTENTION OF THE ASSESSEE WAS NOT CORRECT IN VIEW OF OMISSION OF SECTION 10(20A) OF THE INCOM E TAX ACT, BY THE FINANCE ACT, 2002, W.E.F 01/04/2003 AND BY WAY OF AMENDMENT OF SEC. 2(15) OF THE INCOME TAX ACT, 1961 BY THE FINANCE ACT, 200 8 & 2010 W.E.F 01/04/2009 I.E A.Y. 2009-10. DURING THE ASSESSMENT PROCEEDINGS, TH E AO NOTED THAT THE REGISTRATION U/S 12AA EARLIER GRANTED WAS WITHDRAWN BY THE COMMISSIONER OF INCOME TAX, PATIALA VIDE THEIR ORDER F. NO. CIT/PPP TA/TECH/12AA/2005-06/24 DATED 13/10/2014. IN VIEW OF THIS, THE AO DENIED TH E DEDUCTION U/S 11 AND TREATED NET PROFIT OF RS. 24,65,05,026.77 EARNED BY THE ASSESSEE AS TAXABLE, DURING THE YEAR UNDER CONSIDERATION. 6. THE LD. CIT(A) HAS DELETED THE ADDITION BASED ON THE JUDGMENT OF COORDINATE BENCH OF ITAT CHANDIGARH IN ITA NO. 1135 /CHD/2014 DT. 17/06/2016 IN ASSESSEES OWN CASE FOR AY 2011-12. 3 7. BEFORE US DURING THE HEARING THE LD. DR SUBMITTE D THAT THE ONLY ISSUE RAISED BY THE REVENUE THROUGH ITS VARIOUS GRO UNDS OF APPEAL LISTED AT SR.NOS. (I) TO (VI) IS THAT THE LD CIT (A) HAS ERRE D IN TREATING THE ASSESSEE AS COVERED BY SECTION 2(15) OF THE ACT AND THEREBY EXT ENDING THE BENEFITS OF SECTION 11 TO THE ASSESSEE. IT WAS SUBMITTED THAT T HE LD CIT(A) HAS SIMPLY RELIED ON THE DECISION OF HON'BLE ITAT CHANDIGARH IN THE C ASE OF THE ASSESSEE FOR AY.2011-12 IN ITA NO.L77/CHD/2016 DATED 13 06.2016. THE LD CIT(A) HAS NOT DISCUSSED AND/OR DISTINGUISHED CASE LAWS ON THE SAM E OF FACTS AS THAT OF THE ASSESSEE RELIED BY THE LD AO WHILE HOLDING THAT THE ASSESSEE IS NOT COVERED U/S 2(15) AND HENCE ITS INCOME IS TAXABLE AND NOT EXEMP T U/S 11 OF THE ACT. 8. THE LD.DR ARGUED THAT THE HON'BLE ITAT HAS FOLL OWED ITS OWN ORDER IN THE CASE OF THE ASSESSEE FOR A.YS.2009-10 AND 2010-11 W HEREIN THE HON'BLE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE RELYING ON THE ORDER OF HON'BLE ITAT AMRITSAR IN THE CASE OF HOSHAIRPUR IMPROVEMENT TRUS T VS ITO (ITA NO.496/ASR/2013). HE FURTHER CONTENDED THAT THE HON 'BLE ITAT CHANDIGARH WHILE RELYING ON THE DECISION OF HON'BLE ITAT AMRIT SAR IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST (SUPRA) DID NOT FOLLOW ITS OWN DE CISION IN THE CASES OF HOUSING BOARD HARYANA VS CIT (ITA NO 1200/CHD/2004) DATED 3 0.05.2014 AND KHANNA IMPROVEMENT TRUST VS CIT (ITA NO. 406/CHD/2013) DAT ED 26.11 2014 IN THESE CASES THE HON'BLE ITAT HAS DECIDED THE ISSUE IN FAV OUR OF THE REVENUE HOLDING THAT HOUSING BOARD HARYANA AND KHANNA IMPROVEMENT T RUST ARE NOT COVERED BY THE DEFINITION OF CHARITABLE ORGANIZATION AS PROVID ED U/S 2(15) W.E.F. 01 04.2009. WHILE DECIDING THE ISSUE IN FAVOUR OF THE REVENUE, THE HON'BLE ITAT HAS RELIED ON THE DECISION OF HON'BLE ITAT AMRITSAR IN THE CASE O F JAMMU DEVELOPMENT AUTHORITY(JDA) WHICH HAS SUBSEQUENTLY BEEN UPHELD B Y HONBLE J&K HIGH COURT AND BY HONBLE SUPREME DECISIONS, AS DISCUSSED SUPR A, THE HONBLE ITAT HAS RELIED ON THE DECISION OF J&K HIGH COURT IN THE CAS E OF JDA WHICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE HONBLE SUPREME COURT . 4 9. LD. AR RELIED ON THE ORDER OF THE LD. CIT (A) AN D THE ORDER IN HIS OWN CASE. IN THE COURSE OF HEARING ON 07.06 2017, THE LD AR S UBMITTED THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F TRIBUNE TRUST (2016) 76 TAXMANN.COM 363 (P&H). IN THIS CASE THE HON'BLE HIGH COURT HAS DECIDED THE ISSUE OF APPLICABILITY OF SECTION 2(15) IN FAVOUR O F IMPROVEMENT TRUST , MOGA THE HON'BLE HIGH COURT HAS ALSO CONSIDERED THE DECISION OF HON'BLE J&K HIGH COURT IN THE CASE JDA AND HAS TRIED TO DISTINGUISH IT BY HOLDING THAT: 'THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT FOR T HE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/APPEL LANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERAL PUBLIC UTI LITY. THE JUDGMENT WAS, THEREFORE, BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FO R THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUE STION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO UNDERSTAND HOW THI S ORDER CAN POSSIBLY BE RELIED UPON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED THEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPE CIAL LEAVE PETITION FILED AGAINST THAT ORDER IS, THEREFORE, OF NO ASSISTANCE TO THE REVENU E EITHER.' HON'BLE HIGH COURT OF PUNJAB & HARYANA HIGH COURT V IDE ORDER DT. 23/12/2016 IN CASE OF CIT(E), CHANDIGARH VS. M/S IMPROVEMENT TRUS T, MOGA HELD AS UNDER: 73. THE TRIBUNAL ALSO RIGHTLY HELD THAT AN OBJECT O F GENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THE 66 OF 74 ITA-62-2015 AND IT A 147-2016 - 67 - ACTIVITIES TO BE FUNDED OR SUBSIDIZED BY THE STATE. SO LONG AS THE O BJECTS FALL WITHIN THE AMBIT OF THE WORDS 'OBJECT OF GENERAL PUBLIC UTILITY', IT IS SUFFICIENT. THE ACHIEVEMENTS OF THOSE OBJECTS DO NOT HAVE TO BE AS A RESULT OF STAT E FUNDING OR STATE SUBSIDY. THE TRIBUNAL ACCORDINGLY RIGHTLY HELD THAT THE AUTHORIT IES WERE NOT JUSTIFIED IN DENYING THE BENEFIT OF SECTION 11 AND HOLDING THAT THE ASSE SSEE WAS NOT COVERED BY THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL P UBLIC UTILITY' IN SECTION 2(15). THE TRIBUNAL, THEREFORE, RIGHTLY DIRECTED TH E ASSESSING OFFICER TO DELETE DISALLOWANCE OF EXEMPTION. 74. IT CANNOT POSSIBLY BE SUGGESTED THAT THE GOVERN MENT OF PUNJAB FORMED THE TRUSTS UNDER THE PUNJAB TOWN IMPROVEMENT ACT, 1922 BECAUSE IT WANTED TO CARRY ON THE BUSINESS AS COLONIZERS OR DEVELOPERS UNDER T HE MASK OF THE CATEGORY 'OBJECTS OF GENERAL PUBLIC UTILITY'. 75. SECTION 28(2)(III) OF THE PUNJAB TOWN IMPROVEME NT ACT, 1922 PERMITS A SCHEME UNDER THIS ACT TO PROVIDE INTER- ALIA FOR THE DISPO SAL OF THE LAND VESTED IN OR ACQUIRED BY THE TRUST INCLUDING BY LEASE, SALE AND EXCHANGE THEREOF. THIS, HOWEVER, IS NOT THE PREDOMINANT ACTIVITY OR RESPONS IBILITY OF THE TRUST. NOR FOR THIS ASSESSEE IS MAKING PROFITS FROM THIS ACTIVITY ITS P REDOMINANT MOTIVE. 76. THE POWER OF THE ASSESSEE TO DISPOSE OF LAND CO NFERRED BY SECTION 28(2)(III) IS NOT AN ABSOLUTE OR INDEPENDENT POWER. IT IS CONFERR ED UPON THE ASSESSEE IN THE DISCHARGE OF ITS STATUTORY DUTIES IMPOSED ON IT BY THE PTI ACT OF FRAMING SCHEMES. SUB SECTION (1) OF SECTION 28 ENTITLES THE ASSESSEE TO COMBINE THE VARIOUS SCHEMES REFERRED TO IN CHAPTER-IV. SUB SECTION (2) STIPULATES THAT THE SCHEME 67 OF 74 ITA-62-2015 AND ITA 147-2016 - 68 - UNDER THE ACT MAY PROVIDE FOR A VARIETY OF THINGS INCLUDING THE DISPOSAL OF LAND BELONGING TO THE ASSESSEE. THIS POWER IS, THEREFORE, IN FURTHERANCE OF, CONNECTED WITH AND IN RELATION TO A SCHEME IN CHAPTER-IV. IT IS NOT AN ABSOLUTE POWER INDEPENDENT OF AND UNCONNECTED WITH THE ASSESSEE'S STATUTORY FUNCTIONS UNDER THE PTI AC T. 5 77. THE PREDOMINANT ACTIVITY OF AND THE PURPOSE FOR THE ESTABLISHMENT OF THE ASSESSEE IS SUMMED UP IN TWO WORDS 'TOWN IMPROVEMEN T' IN THE TITLE 'PUNJAB TOWN IMPROVEMENT ACT, 1922'. THE PREAMBLE IS TITLED 'AN ACT FOR THE IMPROVEMENT OF CERTAIN AREAS'. THE PREAMBLE STATES 'WHEREAS IT IS EXPEDIENT TO MAKE PROVISION FOR THE IMPROVEMENT AND EXPANSION OF TOWNS IN PUNJAB'. THE ACT IN GENERAL AND CHAPTER-IV THEREOF IN PARTICULAR INDICATES THE REAS ON FOR AND THE BASIS OF THE ESTABLISHMENT OF THE TRUST. ALMOST EVERY SECTION IN THE CHAPTER INDICATES CLEARLY THAT THE TRUST IS ESTABLISHED FOR THE PURPOSE OF 'A DVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY'. THIS IS THE PREDOMINANT PU RPOSE OF THE TRUST. 78. THE LANGUAGE OF THE PROVISIONS OF THE ACT ARE S ELF EXPLANATORY IN THIS REGARD. THE TRUST MUST DEAL WITH THE BUILDINGS UNFIT FOR HU MAN HABITATION, THE DANGER CAUSED OR LIKELY TO BE CAUSED TO THE HEALTH OF THE INHABITANTS OF THE AREA ON ACCOUNT OF THE CONGESTED CONDITIONS OF STREETS OR B UILDINGS OR WANT OF LIGHT, AIR, VENTILATION OR PROPER CONVENIENCES IN AN AREA AND S ANITARY DEFECTS. THE TRUST IS REQUIRED TO FRAME THE STREET SCHEMES TO LAY OUT NEW STREETS, THOROUGHFARES AND OPEN SPACES OR ALTER EXISTING STREETS WHENEVER IT A PPEARS TO THE TRUST THAT IT IS NECESSARY TO DO SO FOR THE PURPOSE OF PROVIDING BUI LDING SITES OR REMEDYING 68 OF 74 ITA-62-2015 AND ITA 147-2016 - 69 - DEFECTIVE VE NTILATION OR CREATING NEW OR IMPROVING EXISTING MEANS OF COMMUNICATION AND FACIL ITIES FOR TRAFFIC. 79. THE TRUST MUST ALSO PREPARE DEVELOPMENT SCHEMES . THIS DUTY CONTAINED IN SECTION 24 IS NOT AKIN TO THAT OF A PRIVATE DEVE LOPER OR A COLONIZER AS WRONGLY SUGGESTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE DEVELOPMENT SCHEME UNDER SECTION 24 IS PREPARED FOR THE PURPOSE OF DEVELOPMENT OF A LOCALITY. SUB SECTION (2) OF SECTI ON 24 PROVIDES THAT THE TRUST MAY IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AN D FOR THE PUBLIC ADVANTAGE TO PROMOTE AND CONTROL THE DEVELOPMENT OF AND TO PROVI DE FOR THE EXPANSION OF A MUNICIPALITY IN ANY LOCALITY ADJACENT THERETO WITHI N THE LOCAL AREA OF SUCH TRUST PREPARE 'AN EXPANSION SCHEME'. THE DEVELOPMENT SCHE ME, THEREFORE, IS FOR THE PUBLIC PURPOSE OF DEVELOPMENT OF ANY LOCALITY AND A N EXPANSION SCHEME IS ALSO PREPARED WHEN IT IS EXPEDIENT AND FOR THE PUBLIC AD VANTAGE AS OPPOSED TO A MERE PERSONAL ADVANTAGE AS IN THE CASE OF PRIVATE D EVELOPERS OR THE COLONIZERS. THE TWO CANNOT POSSIBLY BE COMPARED. THESE SCHEMES DO NOT CONTEMPLATE MERE DEVELOPMENT OF THE PLOTS AND THE CONSTRUCTION OF TH E PREMISES FOR SALE. THE TRUST MUST UNDER THE ACT ADOPT A HOLISTIC APPROACH FOR TH E BETTERMENT AND ADVANTAGE OF THE ENTIRE AREA WITHIN ITS JURISDICTION. 80. SECTION 25 WHICH PROVIDES FOR A HOUSING ACCOMMO DATION SCHEME TO BE FRAMED IS SIMILAR. THE TRUST IS REQUIRED TO FRAME S UCH A SCHEME IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AND FOR THE PUBLIC ADVANTAGE T O PROVIDE HOUSING ACCOMMODATION FOR ANY CLASS OF INHABITANTS WITHIN I TS LOCAL AREA. THE TRUST IS, THEREFORE, TO BE MOTIVATED NOT BY PERSONAL BUT BY P UBLIC BENEFIT. SUCH ACTIVITIES CLEARLY FALL 69 OF 74 ITA-62-2015 AND ITA 147-2016 - 70 - WITHIN THE LAST CATEGORY OF CASES IN THE PROVISO TO SECTION 2(15) AS IT STOOD A T THE RELEVANT TIME, NAMELY, 'ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY '. 81. IT CAN HARDLY BE SUGGESTED THAT THE GOVERNMENT OF PUNJAB ESTABLISHED THE ASSESSEE'S TRUST AND CONFERRED UPON IT PUBLIC RESPO NSIBILITIES AND DUTIES OF THE NATURE SPECIFIED IN THE PTI ACT AS A CAMOUFLAGE FOR ITS COMMERCIAL, TRADE AND BUSINESS VENTURES. THE CREATION AND INCORPORATION O F THE TRUST UNDER SECTION 3 IS FOR A PUBLIC PURPOSE. WE HAVE NO DOUBT WHATSOEVER THAT THE ACTIVITIES OF THE TRUST FALL WITHIN THE MEANING OF THE WORDS 'CHARITABLE PURPOSE ' IN SECTION 2(15). 82. WHETHER THE MANDATE OF THE ACT IS FOLLOWED BY S UCH A TRUST IS A DIFFERENT MATTER. THE FACTS IN THAT REGARD ARE RELEVANT IN EX AMINING WHETHER THE ACTIVITIES OF THE TRUST OF A GIVEN YEAR ENTITLED IT TO THE BENEFI T OF THE INCOME TAX ACT. MERE PROFIT MAKING ON ACCOUNT OF CERTAIN INCIDENTAL OR A NCILLARY ACTIVITIES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONS TITUTED UNDER THE PTI ACT IS LIKELY TO MAKE PROFIT ON ACCOUNT OF ITS COMMERCIAL OR BUSINES S ACTIVITIES SUCH AS WHEN IT ACTS PURSUANT TO THE POWER UNDER SECTION 28(2)(III) BY DISPOSING OFF ITS LANDS. THAT, HOWEVER, DOES NOT TAKE IT OUT OF THE DEFINITION OF 'CHARITABLE PURPOSE' IN SECTION 2(15). AS WE HELD EARLIER, TRADE, COMMERCE AND BUSI NESS IN SECTION 2(15) MUST BE SUCH AS TO INVOLVE AN ELEMENT OF PROFIT. PROFIT, HO WEVER, IS NOT THE PREDOMINANT MOTIVE OF SUCH TRUSTS. IN OUR VIEW CONSIDERING THE NATURE OF THE ACT, SELLING OF PLOTS AND PREMISES BY THE TRUST IS ONLY INCIDENTAL AND AN CILLARY TO ITS MAIN PURPOSE WHICH AT THE COST OF REPETITION IS 'TOWN IMPROVEMENT' IN 70 OF 74 ITA-62-2015 AND ITA 147- 2016 - 71 -ALMOST EVERY RESPECT. EVEN WHERE THE PLO TS ARE DEVELOPED AND PREMISES ARE CONSTRUCTED AND SOLD AT THE MARKET PRI CE, THE ACTIVITY IS NOT 6 COMMERCIAL OR BUSINESS VENTURE PER SE BUT ONE NECES SITATED ON ACCOUNT OF THE IMPLEMENTATION OF THE PROVISIONS OF THE TRUST THROU GH STATUTORY SCHEMES. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIRE MENTS AND NOT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO T HE MAIN OBJECT OF THE TRUST. 83. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT INDICATED ANY FACTS WHICH INDICATE THAT THE ASSESSEE DEVIATED FROM THIS PRINC IPLE. HE HAS MERELY REFERRED THE EXTENT OF PROFIT MAKING ACTIVITIES WITHOUT CORRELAT ING THE SAME TO THE OTHER ACTIVITIES OF THE TRUST. IN OUR VIEW, THEREFORE, TH E ORDER OF THE TRIBUNAL MUST BE UPHELD. 84. MR. GOEL RELIED UPON THE JUDGMENT OF THE HIGH C OURT OF JAMMU & KASHMIR IN JAMMU DEVELOPMENT AUTHORITY V. UNION OF INDIA AND A NOTHER ITA NO. 164 OF 2012. THE DIVISION BENCH DISMISSED THE APPEAL WITH THE FO LLOWING ORDER:- '1. THE INSTANT APPEAL UNDER SECTION 260-A OF THE I NCOME TAX ACT, 1961 (FOR BREVITY, THE ACT) IS DIRECTED AGAINST ORDER DATED 1 4.06.2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR, UPHOLDING THE ORD ER WITHDRAWING THE STATUS OF CHARITABLE INSTITUTION GIVEN TO THE APPELLANT- ASSE SSEE UNDER SECTION 12AA(1)(B)(I)OF THE ACT. THE TRIBUNAL HAS REACHED A CATEGORICAL CONCLUSION THAT THE ASSESSEE-JAMMU DEVELOPMENT AUTHORITY CANNOT BE REGARDED AS AN INSTITUTION OR TRUST WHICH MAY HAVE BEEN SET UP TO ACHIEVE THE OBJECTS ENUMERATED UNDER SECTION 2 OF THE ACT PARTICULARLY IN VIEW OF THE ADDITION OF FIRST AND SECOND PROVISO MADE BY THE FINANCE ACT, 2008 W. E.F. 01.04.2009 TO SECTION 12AA OF THE ACT. THERE ARE FINDINGS OF FACT THAT TH E ASSESSEE-APPELLANT HAS NOT BEEN ACTING TO ADVANCE ANY OF THE OBJECT CONCERNING GENERAL PUBLIC UTILITY. EVEN OTHERWISE THE PROVISO WHICH HAS BEEN ADDED BY THE F INANCE ACT, 2008 W.E.F. 01.04.2009 STIPULATES THAT THE ADVANCEMENT OF ANY O THER OBJECT OF THE GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS OR A CESS OR FEE OF ANY OTHER CONSIDERATION. 2. WE FIND THAT NO QUESTION OF LAW MUCH LESS A SUBS TANTIAL QUESTION OF LAW WOULD EMERGE FROM THE IMPUGNED ORDER OF THE INCOME TAX AP PELLATE TRIBUNAL WARRANTING ADMISSION OF THE APPEAL. THE APPEAL IS W HOLLY WITHOUT MERIT AND IS THUS LIABLE TO BE DISMISSED. 3. FOR THE REASONS AFOREMENTIONED, THIS APPEAL FAIL S AND SAME IS DISMISSED ALONGWITH CONNECTED APPLICATION(S).' THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT F OR THE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/ APPELLANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERA L PUBLIC UTILITY. THE JUDGMENT WAS, THEREFORE, BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FOR THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTIO N OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO UNDERSTAND HOW THIS ORDER CAN POSSIBLY BE RELIED UP ON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED T HEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPECIAL LEAVE PETIT ION FILED AGAINST THAT ORDER IS, THEREFORE, OF NO ASSISTANCE TO THE REVENUE EITHER. 86. THE ASSESSEE, NAMELY, MOGA IMPROVEMENT TRUST IS UNDOUBTEDLY AN AUTHORITY CONSTITUTED IN INDIA. IT IS ALSO CONSTITUTED BY OR UNDER A LAW, NAMELY, THE PUNJAB TOWN IMPROVEMENT ACT, 1922. FURTHER, IT IS ENGAGED FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODAT ION. IT IS ALSO CONSTITUTED FOR THE PURPOSE OF PLANNING, DEVELOPMENT OF IMPROVEMENT OF CITIES, TOWNS AND VILLAGES OR FOR BOTH AS IS EVIDENT FROM SECTIONS 22 TO 28 OF THE PTI ACT QUOTED ABOVE. THE APPELLANTS, WOULD, THEREFORE, UNDOUBTEDL Y HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A). THE ASSESSEE WOULD NOT HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A) UPON ITS OMISSION BY THE FINANCE ACT, 2002 WITH EFFECT FROM 01.04.2003. SECTION 10(20A) OF THE ACT DID NOT CONTAIN ANY OTHER REQUIREMENT. IT WAS WIDER THAN SECTION 2(15). HOWEVER, SECTION 2(15) AND THE CORRESPONDING SECTIO NS INCLUDING SECTIONS 11, 12, 12A AND 12AA ARE INDEPENDENT OF SECTION 10( 20A) OF THE ACT. UPON THE OMISSION OF SECTION 10(20A), THE PROVISIONS OF THE OTHER SECTIONS WERE NOT AFFECTED. THEY REMAINED INTACT. AN ASSESSEE COULD H AVE BEEN ENTITLED TO THE PROVISIONS OF SECTION 10(20A) AND THE OTHER PROVISI ONS SIMULTANEOUSLY. THE OMISSION 7 OF ONE, HOWEVER, DOES NOT AFFECT THE VALIDITY OR TH E EXISTENCE OF THE OTHERS. THE TWO PROVISIONS ARE DISTINCT AND INDEPENDENT OF EACH OTHER. THUS THE OMISSION OF SECTION 10(20A) DID NOT AFFECT THE RIGHTS OF THE PARTIES CLAIMING THE BENEFIT OF SECTIONS 2(15), 11, 12, 12A AND 12AA OF THE ACT. 12. FOLLOWING THE SAME WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND DECIDING THE IDENTICAL ISSUE IN FAVOUR O F THE ASSESSEE THE DEPARTMENTAL APPEAL STANDS DISMISSED. 13. IN THE RESULT, APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 13/07/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR