Gujarat Housing Board(GHB), Ahmedabad V. The D.D.I.T.(Exemption), Ahmedabad

ITA 1224/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6271 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Charitable institution
• Section: 144; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER GUJARAT HOUSING BOARD (GHB), PRAGTINAGAR, NARANPURA, AHMEDABAD - 380013 PAN: AAALG0206E (APPELLANT) VS DDIT(EXEMPTION), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI O.P. SHARMA, CIT - D.R. ASSESSEE BY: SHRI VIJAY RANJAN, A.R. DATE OF HEARING : 09 - 11 - 2017 DATE OF PRONOUNCEMENT : 23 - 01 - 2018 / ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER: - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12, ARISES FROM ORDER OF THE CIT(A) - 9, AHMEDABAD DATED 09 - 03 - 2016, IN PROCEEDINGS UNDER SECTION 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1224/AHD/2016 ASSESSMENT YEAR 2011 - 12 I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 2 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. CIT(A) HAS ERRED IN NOT HOLDING THAT THE ORDER PASSED BY THE A.O. U/S. 144 OF THE I. T. ACT IS BAD IN LAW AND LIABLE TO BE QUASHED. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE LEARNED ASSESSING OFFICER'S ACTION (IN THE ASSESSMENT ORDER PASSED U/S. 144 IMPUGNED BEFORE HIM) OF DENYING EXEMPTION TO THE APPELLANT'S INCOME U/S. 11 OF THE INCOME - TAX ACT, 1961 AS CLAIMED IN THE APPELLANT'S RETURN, ON THE GROUND THAT THE APPELLANT'S CASE ATTRACTED THE FIRST PROVISO TO SECTION 2(15) AND IN TURN, SUB - SEC TION (8) OF SECTION 13. 3. WITHOUT PREJUDICE TO THE ABOVE, IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 12,83,35,161 TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. A LL THE GROUNDS OF APPEAL ARE INTER - CONNECTED, THEREFORE, THEY ARE DECIDED TOGETHER FOR THE CONVENIENCE. 3. IN THIS CASE, ASSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME OF RS. - 28854639/ - AFTER CLAIMING DEDUCTION OF RS. 307689800/ - FOR EXPENSES U/S. 11 OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 26 TH SEPTEMBER, 2012. DURING THE COURSE OF ASSESSMENT PROCEEDINGS NEITHER ANYBODY HAS ATTENDED BEFORE THE ASSESSING OFFICER NOR FURNISHED TH E REQUIRED DETAILS BEFORE THE ASSESSING OFFICER. IT IS APPARENT FROM THE RECORD THAT ASSESSEE HAS BEEN GIVEN A NUMBER OF OPPORTUNITIES AS STATED IN PARA 3 OF THE ASSESSMENT ORDER WHICH IS REPRODUCED AS UNDER: - SR NO. DATE OF ISSUE OF NOTICE/LETTER DATE OF HEARING REMARKS 1 23/08/2012 04/09/2012 NOTICE U/S. 143(2) OF THE I.T. ACT. NOT RESPONDED 2 26/09/2012 30/10/2012 NOTICE U/S. 143(2) OF THE I.T. ACT. NOT RESPONDED 3 13/12/2013 26/12/2013 NOTICE U/S. 143(1) OF THE I.T. ACT. NOT RESPONDED 4 02/01/2014 16/01/2014 LETTER FOR HEARING. NOT RESPONDED 5 19/02/2014 24/02/2014 FINAL OPPORTUNITY ISSUED AND I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 3 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) SERVED ON 21/02/2014 FOR HEARING. NOT RESPONDED 6 05/03/2014 11/03/2014 FINAL OPPORTUNITY ISSUED AND SERVED ON 05/03/2014 FOR HEARING. NOT RESPO NDED CONSEQUENTLY, THE ASSES SING OFFICER HAS PASSED EX - PARTE ORDER U/S. 144 OF THE ACT STATING THAT NO EVIDENCE HAS BEEN PROVIDED BY THE ASSESSEE TO SUBSTANTIATE THE CLAIM FOR THE PURPOSE OF TRUST, THEREFORE, ASSESSING OFFICER HAS NOT ALLOWED THE EXEMPTION U/S. 11(1)(A) AND SECTION 11(2) OF THE ACT. 4. DISSATISFIED WITH ORDER OF THE ASSESSING OFFICER, THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE HAS FURNISHED THE DETAILS FIRST TIME VIDE LETTER DATED 16 TH SEPTEMBER, 2014 ALONG WITH PAPER BOOKS. THEREAFTER, THE LD. CIT(A) HAS CALLED REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS REPORTED IN INTERIM REMAND REPORT THAT ALL THE NOTICES WERE DULY SERVED ON THE ASSESSEE WITHIN DUE TIME AND THE ASSESSEE HAS NOT MADE ANY COMPLIANCE. THE ASSESSING OFFICER HAS AL SO REPORTED IN THE REMAND REPORT THAT CONTENTION OF THE ASSESSEE THAT IT IS NOT COVERED BY AMENDED DEFINITION OF SECTION 2(15) OF THE ACT IS WITHOUT MERIT. THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE ARE OBJECT OF GENERAL PUBLIC UTILITY WHICH IS IN THE NATU RE OF TRADE, COMMERCE AND BUSINESS AND IS COVERED BY THE FIRST PROVISO TO SECTION 2(15) OF THE ACT. THE ASSESSING OFFICER HAS STATED IN THE REMAND REPORT THAT THE BENEFIT OF SECTION 11 AND 12 OF THE ACT IS NOT AVAILABLE TO THE ASSESSEE IN THE LIGHT OF SEC TION 13(8) OF THE ACT. THE LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT AND SUBMISSION OF THE ASSSESSEE STATED THAT THE DEFINITION OF CHARITABLE PURPOSE IN SECTION 2(15) HAS ORIGINALLY ENACTED WAS LIMITED BY THE EXPRESSION ANY OTHER I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 4 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) OBJECTN OF GENERAL P UBLIC UTILITY NOT INVOLVING CARRYING ON ANY ACTIVITY OR PROFIT. HE HAS ALSO STATED THAT MAJOR CHANGES IN LAW CAME THROUGH FINANCE ACT 2002 W.E.F. 01 - 04 - 2003. FOR ALL THESE AMENDMENTS, THE LAW MAKERS CATEGORICALLY DE - RECOGNIZED THE PRINCIPLE THAT OPERATES LIKE GUJARAT HOUSING BOARD SHOULD NOT ENJOY BLANKET EXEMPTION MERELY BECAUSE THEY WERE CONNECTED AS INSTRUMENTS OF THE STATE GOVERNMENT OR WERE ENACTED FOR PUBLIC PURPOSE. HE HAS ALSO STATED THAT THE OBJECT OF THE PREAMBLE OF SECTION 3, SECTION 24 AND SE CTION 25 OF THE GUJARAT HOUSING BOARD ACT REFLECTS THAT THE OBJECT OF THE GUJARAT HOUSING BOARD APPEARS TO BE ESSENTIALLY TO FRAME AND EXECUTE HOUSING SCHEME IN THE URBAN AREA AS PER THE GUJARAT HOUSING BOARD ACT WHICH PROVIDED ACCOMMODATION FOR ANY CLASS OF INHABITANT IN THE SCHEME LIKE HIG (HIGHER INCOME GROUP), MIG (MIDDLE INCOME GROUP), LIG (LOWER INCOME GROUP) AND EWS (ECONOMICALLY WEAKER SECTION). THE LD. CIT(A) HAS ALSO PLACED RELIANCE ON A NUMBER OF JUDICIAL PRONOUNCEMENTS AND STATED THAT FINDINGS OF THESE JUDICIAL PRONOUNCEMENTS ARE SQUARELY APPLICABLE TO GUJARAT HOUSING BOARD AS PER THE NATURE OF ACTIVITY UNDERTAKEN BY THE GUJARAT HOUSING BOARD. THE LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE FACTS AS REPORTED IN HIS DETAILED FINDINGS AND FACT S REPORTED IN REMAND REPORT OF THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS. 12,83,35,161/ - AS AGAINST GROSS DISALLOWANCE MADE BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLAT E PROCEEDINGS BEFORE US THE LD. COUNSEL HAS SUBMITTED PAPER BOOKS CONTAINING DETAILS OF WRITTEN SUBMISSION MADE BEFORE THE LD. CIT(A), COPY OF ACKNOWLEDGEMENT RETURN, COPY OF GUJARAT HOUSING BOARD ACT ETC. AND ALSO COPIES OF JUDICIAL PRONOUNCEMENTS RELIED BY HIM. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS ALSO STATED THAT HE HAS NOT PRESSED GROUND I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 5 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) NO. 1 OF APPEAL FILED BY THE ASSESSEE. HE HAS CONTENDED THAT LD. CIT(A) HAS ERRED IN DENYING EXEMPTION TO THE ASSESSEE U/S. 11 OF THE ACT ON THE GROUND THAT ASSESSEE S CASE IS COVERED UNDER FIRST PROVISO OF SECTION 2(15) AND IN TURN SUB - SECTION 8 OF SECTION 13. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LD. CIT(A) HAS PASSED DETAILED AND SPEAKING ORDE R WITH THE REBUTTAL OF ASSESSEE S ARGUMENTS. BOTH THE LD. COUNSEL AND LD. DEPARTMENTAL REPRESENTATIVE HAVE GIVEN WRITTEN SUBMISSIONS AND COMMENTS ON THE DIFFERENT ISSUES RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON CAREFULLY. WE OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER THE ASSESSEE FAILED TO MAKE ANY COMPLIANCE. CONSEQUENTLY, THE ASSESSING OFFICER HAS FINALIZED THE ASSESSMENT EX - PARTE U/S. 1 44 OF THE ACT AND DENIED THE DEDUCTION CLAIMED BY THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE HAD MADE ITS FIRST SUBMISSION BEFORE THE LD. CIT(A) ALONG WITH PAPER BOOKS. THE LD. CIT(A) HAS CALLED A REMAND REPORT FROM THE ASSESSING OFFICER AND AFTER CONSIDER ING THE REMAND REPORT AND SUBMISSION OF THE ASSESSEE STATED THAT IT HAS RIGHTLY BEEN HELD BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE PROVISO TO SECTION 2 SUB - SEC TION 15 OF THE ACT. WE FURTHER OBSERVED THAT LD. CIT(A) HAS PLACED RELIANCE ON A NUMBER OF JUDICIAL PRONOUNCEMENTS BY STATING THAT FINDINGS OF THOSE JUDICIAL PRONOUNCEMENTS ARE SQUARELY APPLICABLE TO THE FACTS AND ACTIVITIES CARRIED OUT BY THE ASSESSEE. IN THIS CONNECTION, WE FIND THAT WHILE DECIDING THE IMPUGNED ISSUE, THE LD. CIT(A) HAS PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 6 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) (I) CHARTED ACCOUNTANT OF INDIA VS. DCIT(EXEMPTION) 245 CTR 541 (II) ITAT AMRITSAR IN THE CASE OF JALADHAR DEVELOPMENT AUTHORITY ITA NO. 562/2008 (III) ITAT COCHIN IN THE CASE OF GREATER COCHIN DEVELOPMENT AUTHORITY VS. JOINT DIRECTOR (IV) ITAT HYDERABAD IN THE CASE OF A.P. HOUSING BOARD VS. DIRECTOR OF INDIA TAX (EXEMPTION) HYDERABAD TRIBUNAL ITA NO. 110/HDY/2008 WE HAVE NOTED THAT THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER ON 09 - 03 - 2016 WHEN THE FOLLOWING TWO JUDICIAL PRONOUNCEMENTS OF THE HON BLE JURISDICTIONAL HIGH COURT ON THE RELATED ISSUE WERE NOT PRONOUNCED. (I) AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. ACIT (EXEMPTION) VIVE IT A NO. 423 TO 425 OF 2016 DATED 02/05/2017 (II) COMMISSIONER OF INCOME TAX VS. GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (2017) 83 TAXMANN.COM 366 (GUJARAT) IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY, THE ASSESSEE SOCIETY WAS CONSTITUTED UNDER GUJARAT TOWN PLANNING AND URBAN DEVELOPMENT ACT, 1976 TO UNDERTAKE PREPARATION AND EXECUTION OF TOWN PLANNING SCHEME AND TO EXECUTE WORKS IN CONNECTION WITH SUPPLY OF WATER, DISPOSAL OF SEWERAGE AND PROVISION OF OTHER SERVICES AND AMENITIES AND THE HON BLE GUJAR AT HIGH COURT HELD IT COULD BE SAID TO BE PROVIDING GENERAL PUBLIC UTILITY SERVICES WITHIN MEANING OF SECTION 2(15) AND THUS ITS CLAIM OF EXEMPTION OF INCOME UNDER SECTION 11 WAS TO BE ALLOWED. SIMILARLY, THE CASE OF GIDC WAS ALSO DECIDED BY THE HON BLE G UJARAT HIGH COURT IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE CITED JUDICIAL PRONOUNCEMENTS OF TH E JURISDICTIONAL HIGH COURT, SUBSEQUENTLY TO THE ORDER OF THE LD. CIT(A), IT IS IMPERATIVE TO EXAMINE THE ACTUALITY OF THE OPERATIONS OF THE ASSESSEE, AND I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 7 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) OPP OSITE MATERIAL AND RECORDS ETC. IN THE LIGHT OF THE PRINCIPALS LAID DOWN IN JUDICIAL PRONOUNCEMENTS. WE OBSERVED THAT ABOVE EXERCISE REQUIRED THOROUGH EXAMINATION OF PRIMARY LEVEL RECORD MATERIAL AND ACTIVITIES PERFORMED BY THE ASSESSEE ACCORDINGLY AS PER OUR CONSIDERED OPINION IT WILL BE MORE APPROPRIATE TO RESTORE THE IMPUGNED ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONCLUDE THE SAME DE - NOVO AFTER KEEPING IN VIEW THE EQUITY AND OBJECTIVITY OF THE CASE. WE ARE OF THE VIEW THAT RESTORING THIS CASE TO THE LD. CIT(A) INS T EAD OF ASSESSING OFFICER WILL INCREASE THE LITIGATION WORK AT MULTISTAGE LEVEL FIRST AT THE LEVEL OF CIT(A) THEN AGAIN IN THE FORM OF REMAND REPORT AT THE LEVEL OF ASSESSING OFFICE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE RESTORE THE IMPUGNED ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AS DIRECTED ABOVE AFTER AFFORDING ADEQUATE OPPORTUNITIES TO THE ASSESSEE. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 23 - 01 - 201 8 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 23 /01/2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 1224/AHD/2016 A.Y. 2011 - 12 PAGE NO 8 GUJARAT HOUSING BOARD (GHB) VS. DDIT(EXEMPTION) BY ORDER/ , / ,