The Dy. CIT (Exemptions), Circle-1, Ahmedabad V. Gandhinagar Urban Development Auhority (GUDA), Gandhinagar,

ITA 1561/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8937 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-12-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Charitable institution; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 142(1); 12AA; 143(2); 13; 147; 27; 148; 12; 11

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A [CONDUCTED THROUGH VIRTUAL COURT] BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 1560 AND 1561/AHD/2017 WITH CROSS OBJECTION NO.05 AND 06/AHD/2019 / ASSESSMENT YEAR: 2009-10 AND 2010-11 DY.CIT (EXEMPTIONS) CIR.1 AHMEDABAD. VS GANDHINAGAR URBAN DEVELOPMENT AUTHORITY, 4 TH FLOOR, UDYOG BHAVAN SECTOR 11, GANDHINAGAR 382 011. PAN : AAALG 0922 K / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI VIRENDRA OJHA, CIT-DR ASSESSEE BY : SHRI MEHUL K. PATEL, AR / DATE OF HEARING : 29/07/2020 /DATE OF PRONOUNCEMENT : 31/07/2020 O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: REVENUE IS IN APPEAL AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-9, AHMEDAB AD DATED 27.4.2017 PASSED FOR THE ASSTT.YEARS 2009-10 AND 2010-11 RESP ECTIVELY. ON RECEIPT OF NOTICE IN REVENUES APPEALS, THE ASSESSEE HAS FI LED CROSS OBJECTION BEARING CO NO.5 AND 6/AHD/2019. FOR THE SAKE OF CO NVENIENCE, WE DISPOSE OF ALL APPEALS BY THIS COMMON ORDER. ITA NO.1560 & 1561/AHD/2017 WITH COS - 2 - 2. REGISTRY HAS POINTED OUT THAT THE COS. FILED BY THE ASSESSEES ARE TIME BARRED BY 212 DAYS. IN ORDER TO EXPLAIN THE D ELAY IN FILING THE CROSS OBJECTIONS, THE ASSESSEE HAS FILED APPLICATION AS W ELL AS AFFIDAVITS OF SHRI SHANTILAL ODHAVJIBHAI PATEL, ACCOUNTS OFFICER OF TH E ASSESSEE-AUTHORITY. THE APPLICATION OF THE ASSESSEE READ AS UNDER: THE ABOVE-NAMED ASSESSEE IS A TRUST ENGAGED IN URB AN DEVELOPMENT ACTIVITY AS PER THE GOVERNMENT REGULATIONS. THE ASS ESSEE IS GETTING THE EXEMPTION U/S 11 OF THE ACT SINCE YEARS. EVEN IN TH E YEAR UNDER CONSIDERATION, THE ASSESSEE WAS GRANTED THE EXEMPTI ON U/S 11 IN THE ORIGINAL ASSESSMENT FRAMED U/S 143(3) OF THE ACT. HO WEVER, LATER ON THE ASSESSMENT WAS RE-OPENED U/S 147 OF THE ACT AND THE SAID EXEMPTION WAS DENIED BY THE AO IN THE ORDER PASSED U/S 143(3) RWS 147 OF THE ACT. 2. IN THE APPEAL BEFORE CIT(A), THE LEARNED CIT(A) D ECIDED THE LEGAL GROUND REGARDING THE VALIDITY OF RE-OPENING IN FAVO UR OF THE ASSESSEE AND HELD THE ASSESSMENT TO BE NULL AND VOID AB-INITIO. HOWEVER, ON MERITS, IT IS HELD BY THE LEARNED CIT (A) THAT THE ASSESSEE IS NOT ENTITLED TO THE EXEMPTION U/S 11 OF THE ACT. 3. THE SAID ORDER WAS RECEIVED BY THE ACCOUNTS OFFI CER OF THE ASSESSEE, SHRI SHANTILAL ODHAVJI PATEL WHO IS NOT CONVERSANT WITH INCOME TAX MATTERS, AND HE REMAINED UNDER THE BONAFIDE IMPRESS ION THAT SINCE THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE ON ISSU E OF RE-OPENING, THERE IS NO NECESSITY TO TAKE ANY FURTHER ACTION BY THE ASSE SSEE, AND HENCE, HE DID NOT INFORM ANYONE ABOUT THE ORDER. 4. THE DEPARTMENT FILED APPEAL BEFORE HON'BLE ITAT AND IT WAS FIXED FOR FIRST HEARING ON 31/01/2019. AT THAT TIME, WHEN THE RELEVANT PAPERS WERE HANDED TO SHRI MEHUL.K. PATEL, ADVOCATE AT AHMEDABA D, IT WAS REALIZED AND ADVISED THAT THE ASSESSEE NEEDS TO FILE CROSS O BJECTION ON THE MERITS OF THE APPEAL AND IT WAS IMMEDIATELY DRAFTED AND FILED BEFORE HON'BLE ITAT ON 05/02/2019, RESULTING IN A DELAY OF 212 DAYS. 5. IN THE ABOVE CIRCUMSTANCES THE DELAY HAS ARISEN- 7 SUE TO BONAFIDE REASONS AS STATED ABOVE AND IN THE INTEREST OF JUST ICE THE DELAY MAY KINDLY BE CONDONED AND THE CROSS OBJECTION MAY KINDLY BE D ECIDED ON MERITS AND OBLIGE. ITA NO.1560 & 1561/AHD/2017 WITH COS - 3 - 6. SEPARATE AFFIDAVIT OF CONCERNED ACCOUNTS OFFICER IS ENCLOSED HEREWITH. 3. THE LD.DR, ON THE OTHER HAND, SUBMITTED THAT IN THE APPLICATION NO REASONS ARE DISCERNIBLE WHICH PREVENTED THE ASSESSE E FROM FILING THE COS AGAINST THE ORDERS OF THE LD.CIT(A). 4. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESS EE SUBMITTED THAT SINCE THE LD.CIT(A) HAS QUASHED REASSESSMENT PROCEE DINGS, THEREFORE, AUTHORITY THOUGHT THAT THERE IS NO NEED TO AGITATE THE MATTER ON MERIT. BUT WHEN THE REVENUE HAS FILED APPEALS AND THE CONC ERNED OFFICER SOUGHT CONSULTATION WITH TAX EXPERTS, THEN IT WAS A DVISED THAT CROSS OBJECTION SHOULD BE FILED. IN THAT PROCESS, THE CO HAS BECOME DELAYED. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD. SUB-SECTION 5 OF SECTION 253 CONTEMPLATES THAT THE TRIBUNAL MAY ADMIT AN APPEAL OR PERMIT FILING OF MEMORANDUM OF C ROSS-OBJECTIONS AFTER EXPIRY OF RELEVANT PERIOD, IF IT IS SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. TH IS EXPRESSION SUFFICIENT CAUSE EMPLOYED IN THE SECTION HAS ALSO BEEN USED IDENTICALLY IN SUB-SECTION 3 OF SECTION 249 OF INCOME TAX ACT, WHICH PROVIDES POWERS TO THE LD.COMMISSIONER TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE COMMISSIONER. SIMILARLY, IT HAS BEEN U SED IN SECTION 5 OF INDIAN LIMITATION ACT, 1963. WHENEVER INTERPRETATI ON AND CONSTRUCTION OF THIS EXPRESSION HAS FALLEN FOR CONSIDERATION BEF ORE HONBLE HIGH COURT AS WELL AS BEFORE THE HONBLE SUPREME COURT, THEN, HONBLE COURT WERE UNANIMOUS IN THEIR CONCLUSION THAT THIS EXPRES SION IS TO BE USED LIBERALLY. WE MAY MAKE REFERENCE TO THE FOLLOWING OBSERVATIONS OF THE ITA NO.1560 & 1561/AHD/2017 WITH COS - 4 - HONBLE SUPREME COURT FROM THE DECISION IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS, 1987 AIR 1353 : 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THA T CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY , EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL C OMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGH T IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MA LA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5. SIMILARLY, WE WOULD LIKE TO MAKE REFERENCE TO AU THORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). IT READS AS UNDER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL RE MEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIM ITATION FIXES A LIFE- SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE L EGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER RE VISIT. DURING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO ITA NO.1560 & 1561/AHD/2017 WITH COS - 5 - SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A L IFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN T HE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENE RAL WELFARE THAT A PERIOD BE PUTT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PR ESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS CO URT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIM ITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUB STANTIAL JUSTICE VIDE SHAKUNTALA DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND STATE OF WEST BENGAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPAL ITY [AIR 1972 SC 749]. IT MUST BE REMEMBERED THAT IN EVERY CASE OF D ELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. T HAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION T O THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOU LD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELA Y THE COULD SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST B E BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHE N COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT TH E COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS LOSS. 6. WE DO NOT DEEM IT NECESSARY TO RE-CITE OR RECAPI TULATE THE PROPOSITION LAID DOWN IN OTHER DECISIONS. IT IS SU FFICE TO SAY THAT THE HONBLE COURTS ARE UNANIMOUS IN THEIR APPROACH TO P ROPOUND THAT WHENEVER THE REASONS ASSIGNED BY AN APPLICANT FOR E XPLAINING THE DELAY, THEN SUCH REASONS ARE TO BE CONSTRUED WITH A JUSTIC E ORIENTED APPROACH. 7. AFTER GOING THROUGH THE EXPLANATION GIVEN BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS BEEN PREVENTED BY SUFFICIENT REASONS FOR ITA NO.1560 & 1561/AHD/2017 WITH COS - 6 - NOT COMING TO THE TRIBUNAL WELL IN TIME. IT IS PER TINENT TO OBSERVE THAT SINCE RE-ASSESSMENT ORDERS WERE QUASHED BY THE LD.C IT(A), THEREFORE, IT WAS THOUGHT THAT THERE IS NO NEED TO CHALLENGE THES E ORDERS IN FURTHER APPEAL. HOWEVER, WHEN THE DISCUSSION FOR PREPARING ARGUMENTS ON REVENUES APPEALS WAS MADE, THEN THE LD.COUNSEL FOR THE ASSESSEE HAS ADVISED FOR FILING CROSS OBJECTIONS ON MERITS. HE WAS OF THE OPINION THAT IF ON THE PRELIMINARY ISSUE ORDERS OF THE LD.CIT(A) ARE SET ASIDE, THEN THE ASSESSEE WOULD BE REMEDILESS AND THIS ISSUE ON MERI T WOULD BE CONSTRUED AS DECIDED AGAINST THE ASSESSEE. AFTER T HIS CONSULTATION, THE CO HAS BEEN FILED. TO OUR MIND, THERE IS NO DELIBE RATE ATTEMPT AT THE END OF THE ASSESSEE TO DELAY THE CHALLENGE TO THE O RDERS OF THE CIT(A) ON MERIT. THE ASSESSEE WILL NOT GAIN ANYTHING BY DELA YING THE FILING OF THE COS. OR BY MAKING CHALLENGE TO THE ORDER OF THE CIT (A). THUS, IT COULD NOT BE SEEN AS A DELAY STRATEGY RATHER IT HAPPENED ON ACCOUNT OF BONA FIDE MISTAKE. THEREFORE, WE ALLOW APPLICATION FOR CONDO NATION OF DELAY AND PROCEED TO DECIDE THE COS ON MERIT ALONG THE APPEAL OF THE REVENUE. 8. FIRST WE TAKE THE APPEAL OF THE REVENUE FOR ASST T.YEAR 2009-10. 9. THOUGH THE REVENUE HAS TAKEN FOUR GROUNDS OF APP EAL, THE GRIEVANCES PLEADED IN THIS FOUR GROUNDS REVOLVE ARO UND A SINGLE ISSUE VIZ. THE LD.CIT(A) HAS ERRED IN QUASHING THE RE-ASS ESSMENT ORDER. 10. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN ENTITY ESTABLISHED BY THE GOVERNMENT OF GUJARAT UNDER TOWN PLANNING ACT. IT ENGAGED IN THE DEVELOPMENT OF URBAN AREAS IN GANDHINAGAR, CAPITAL CITY OF GUJARAT WHICH IS IN THE NATURE OF ADVANCEMENT OF GENERAL PU BLIC UTILITY. ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTIO N 12AA. IT FILED ITS ITA NO.1560 & 1561/AHD/2017 WITH COS - 7 - RETURN OF INCOME ON 30.9.2009 DECLARING INCOME AT R S.NIL. THE SAID RETURN WAS FINALIZED UNDER SECTION 143(3) OF THE IN COME TAX ACT BY ACCEPTING THE RETURNED INCOME. THEREAFTER, AO OBSE RVED THAT NATURE OF WORK CARRIED OUT BY THE ASSESSEE FALL OUT OF THE PU RVIEW OF AMENDED PROVISION OF SECTION 2(15) OF THE ACT. HE SERVED A NOTICE UNDER SECTION 148 OF THE ACT ON 28.3.2014 UPON THE ASSESSEE FOR R EOPENING OF THE ASSESSMENT FOR THE REASONS THAT SINCE ACTIVITIES OF THE ASSESSEE FALLS OUTSIDE THE SCOPE OF THE SECTION 2(15) OF THE ACT, ITS ACTIVITIES CANNOT BE SAID TO BE CHARITABLE, AND WOULD NOT BE ELIGIBLE FOR ANY EXEMPTION UNDER SECTION 11 OF THE ACT. THE REASONS RECORDED BY THE AO FOR ISSUANCE OF NOTICE DATED 28.3.2014 READS AS UNDER: REASONS RECORDED FOR ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT, 1961 THE ASSESSEE AOP, GANDHINAGAR URBAN DEVELOPMENT AUTHO RITY FILED ITS RETURN OF INCOME FOR A.Y. 2010-11 ON 05.10.2010 DECL ARING TOTAL INCOME OF NIL. THE CASE WAS FINALIZED U/S 143(3) ON 15.03.2013 ACCEPTING THE RETURNED INCOME. THE ASSESSEE IS ENGAGED IN DEVELOPMENT OF U RBAN AREAS M GANDHINAGAR, WHICH IS ADVANCEMENT OF OBJECTS OF PUBLIC UTILITY. SCRUTINY OF THE ASSESSMENT RECORDS REVEALED THAT THE ASSESSEE HAD OBTAINED REG ISTRATION U/S 12AA OF THE OF THE ACT W.E.F. 01.04.2002 AND HAS BEEN CLAIMING EXEM PTION U/S 11 OF THE / ACT. IT IS APPARENT FROM THE ABOVE THAT THE ASSESSEE EAR NED INCOME BY RENDERING SERVICES FOR FEE OR-CONSIDERATION. HENCE, THE ACTIVITIES OF THE ASSESSEE CANNOT HE TREATED AS 'CHARITABLE ACTIVITIES' AND AC CORDINGLY THE ASSESSEE WILL NOT BE ELIGIBLE FOR ANY EXEMPTION U/S 11- OF THE ACT. I HAVE THEREFORE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX TO THE AB OVE EXTENT HAD ESCAPED ASSESSMENT FOR THE ABOVE FOR A.Y. 2009-10 WITHIN THE MEANING OF SECTION 147 OF THE ACT. I, THEREFORE ISSUE. NOTICE U/S. 148 OF THE I.T. ACT, 1961. SD/- [KAMLESH MAKWANA] DATE:-28/03/2014 DEPUTY COM MISSIONER OF INCOME TAX PLACE:- GANDHINAGAR GANDHINAGAR CIRCLE, GAN DHINAGAR. ITA NO.1560 & 1561/AHD/2017 WITH COS - 8 - 11. IT WAS EXPLAINED BY THE ASSESSEE THAT ASSESSEE IS A GOVERNMENT OF GUJARATS STATUTORY BODY SET UP FOR THE PURPOSE OF DEVELOPING THE GANDHINAGAR URBAN AREA IN CONTROLLED AND DISCIPLINE D MANNER; THAT INCOME OF THE ASSESSEE IS MAINLY GRANTS GOVERNMENTS , AND FEES FIXED BY THE GOVERNMENT, WHICH ARE UTILIZED FOR DEVELOPMENT OF VARIOUS PUBLIC WELFARE PROJECTS, WHICH ARE NOT IN RELATION TO TRAD E, COMMERCE OR BUSINESS, AS OBSERVED BY THE AO; THAT ALL THE ACTIV ITIES CONTROLLED AND MANAGED BY THE GOVERNMENT AND THERE IS NO PROFIT MO TIVE. THEREFORE, THE CLAIM OF THE ASSESSEE FALLS WITHIN THE PARAMETE R OF SECTION 2(15), AND THE PROPOSED DENIAL EXEMPTION UNDER SECTION 11 BY T HE AO BE DROPPED. THE ASSESSEE ALSO RELIED UPON VARIOUS JUDICIAL PRON OUNCEMENTS TO SUPPORT ITS CASE. HOWEVER, THE EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR FROM THE ASSESSING OFFICER, AND THE AO STOOD BY HIS OBSERVATION THAT ASSESSEE WAS NOT CARRYING OUT ANY CHARITABLE A CTIVITY, AND THEREFORE HIT BY PROVISO 1 AND 2 OF THE SECTION 2(15) OF THE ACT. ACCORDINGLY, HE DENIED EXEMPTION CLAIMED BY THE ASSESSEE. AGAINST THIS ORDER OF THE AO, ASSESSEE WENT IN APPEAL BEFORE THE LD.FIRST APP ELLATE AUTHORITY. BEFORE THELD.CIT(A) IT WAS CONTENDED BY THE ASSESSE E THAT THE REOPENING OF THE ASSESSMENT IS BAD IN LAW AS THE AO HAS NOT F OUND ANY FRESH MATERIAL TO COME TO A FORM A BELIEF THAT THE INCOME HAS ESCAPED THE ASSESSMENT. THE LD.AO WAS IN POSSESSION OF ALL THE INFORMATION WITH REGARD TO THE ACTIVITIES OF THE ASSESSEE VIZ. DETA ILS OF ITS ACTIVITIES, OBJECTS OF THE ASSESSEE, NATURE OF SERVICES RENDERED AND FE ES RECEIVED BY THE ASSESSEE, AND COPIES OF FINAL ACCOUNTS. THE AO WAS MERELY TRYING TO REVIEW OF HIS OWN ORDER RATHER THAN REASSESSMENT OF ITS INCOME OF THE BASIS OF ANY MATERIAL, WHICH WAS NOT PERMISSIBLE IN LAW. ASSESSEE HAS ITA NO.1560 & 1561/AHD/2017 WITH COS - 9 - FURNISHED ALL THE NECESSARY DETAILS AND BOOKS OF AC COUNTS FULLY AND TRULY DURING THE ASSESSMENT PROCEEDINGS, AND THERE WAS NO REASON TO HOLD THAT INCOME OF THE ASSESSEE HAS BEEN ESCAPED SO AS TO VA LID REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. IT WAS FURTHER CONTENDED THAT MERELY DUE TO CHANGE OF OPINION ON THE PART OF THE AO, ORIGINAL ASSESSMENT CANNOT BE REOPENED. THE LD.CIT(A) AFTE R GOING THROUGH THE EXPLANATION OF THE ASSESSEE AND ALL MATERIAL ON REC ORD HELD THAT THE REASSESSMENT ORDER WAS BASED ON THE MATERIAL AVAILA BLE TO THE AO DURING THE ORIGINAL ASSESSMENT. NO FRESH MATERIAL WAS WITH THE AO SO AS TO ATTRACT THE PROVISIONS OF SECTION 147/148 OF THE ACT, AND THAT THE RE- ASSESSMENT PROCEEDINGS WAS INITIATED MERELY ON THE BASIS OF SAME SET OF FACTS WHICH WERE OTHERWISE AVAILABLE DURING THE ORI GINAL ASSESSMENT, AND SUCH REASSESSMENT WAS BAD IN LAW, AND ACCORDING LY, REASSESSMENT ORDER WAS NULLIFIED. AGGRIEVED BY THE ORDER OF TH E LD.CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL FOR BOTH THE ASSES SMENT YEARS. 12. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.DR SUBMITTED THAT NOTICE UNDER SECTION 148 WAS ISSUED WITHIN FOUR YEARS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, BENEFIT OF PROVISION A PPENDED TO SECTION 147 IS NOT AVAILABLE TO THE ASSESSEE. IN THE PRESE NT CASE, THE AO CAN REOPEN THE ASSESSMENT, IF HE WAS SATISFIED THAT INC OME HAS ESCAPED ASSESSMENT. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS MADE UNDER SECTIO N 143(3) OF THE ACT. THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES. NO NEW THING/FACT WAS WITNESSED OR COME TO THE NOTICE OF THE AO. THE REFORE, MERELY ON THE BASIS OF CHANGE OF OPINION, HE HAS REOPENED THE ASS ESSMENT. THE LD.FIRST ITA NO.1560 & 1561/AHD/2017 WITH COS - 10 - APPELLATE AUTHORITY HAS DULY TAKEN NOTE OF THIS FAC T IN HIS ORDER. ON DUE CONSIDERATION OF ALL THE ABOVE FACTS, WE ARE OF THE VIEW THAT THE LD.AO HAS SIMPLY GONE THOUGH THE RECORD ALREADY AVAILABLE TO HIM ON THE BASIS OF WHICH A SCRUTINY ASSESSMENT FRAMED UNDER SECTION 143(3). THEREFORE, ON THE ABOVE REASONING ASSESSMENT CANNOT BE REOPENE D. THE LD.CIT(A) HAS PROPERLY APPRECIATED THE FACTS OF THE ASSESSEE S CASE. HE OBSERVED THAT THE LD.AO HIMSELF RECORDED A FINDING THAT AFTE R DISCUSSION AND FROM THE DATA MADE AVAILABLE DURING THE COURSE OF HEARIN G NOTHING ADVERSE HAS BEEN FOUND. ALL THE INFORMATION CALLED UNDER S ECTION 142(1) OF THE ACT RELATING TO THE IMPORTANT ACTIVITIES, INCOME CL AIMED UNDER SECTION 11 OF THE ACT WERE SUBMITTED AS WELL AS BOOKS OF ACCOU NTS SUPPORTED BY BILLS AND VOUCHERS WERE PRODUCED BEFORE THE AO FOR VERIFICATION. HE FURTHER RECORDED A FINDING THAT ASSESSEE HAS PRODUC ED ALL THE REQUIRED DETAILS BEFORE THE AO DURING THE ORIGINAL ASSESSMEN T PROCEEDINGS IN RESPONSE TO THE NOTICE UNDER SECTION 142(1) AND ALS O REPLY GIVEN BY THE ASSESSEE IN THE ORIGINAL ASSESSMENT. EVEN IN THE R EASONS RECORDED IN THE NOTICE UNDER SECTION 148, THERE WAS NO MENTION OF A DVERSE FACTS BEING COME TO THE LIGHT IN ORDER TO REOPEN THE ORIGINAL A SSESSMENT, NOR ANY INFORMATION OR FRESH EVIDENCE IN THE POSSESSION OF THE AO. ON GOING THROUGH THE RECORD AND THE ORDERS OF THE AO IT IS C LEAR THAT THE ASSESSMENT WAS REOPENED MERELY ON THE BASIS OF SAME SET OF FACTS, WHICH WERE ALREADY AVAILABLE ON RECORD. THEREFORE, THE L D.CIT(A) HAS RIGHTLY HELD THAT ACTION OF THE AO IN REOPENING OF THE ASSE SSMENT IS WRONG AND NULL AND VOID. WE DO NOT ANY INFIRMITY IN THE ORD ER OF THE LD.CIT(A) ON THIS ISSUE, WHICH IS UPHELD. ITA NO.1560 & 1561/AHD/2017 WITH COS - 11 - 13. AS FAR AS FACTS AND CIRCUMSTANCES FOR THE ASSTT .YEAR 2010-11 ARE CONCERNED, THEY ARE IDENTICAL. SIMILAR SET OF REAS ONS ARE RECORDED BY THE AO. COPY OF WHICH IS AVAILABLE ON PAGE NO.7 OF THE PAPER BOOK FILED BY THE ASSESSEE ALONG WITH COS. WE HAVE PERUSED THE R EASONS RECORDED BY THE AO AND WE ARE OF THE VIEW THAT THESE ARE VERBAT IM SAME AS THAT OF THE ASSTT.YEAR 2009-10. THE FINDING OF THE CIT(A) IS ALSO IDENTICAL IN THE ASSTT.YEAR 2010-11. THUS, CONSIDERING PARITY OF AL L THE FACTS IN THE REASONS AS WELL AS FINDING OF THE LD.CIT(A), WE DO NOT WISH TO REPRODUCE THE REASONS FOR THE SAKE OF BREVITY AND REPETITION. FOLLOWING OUR FINDING FOR THE ASSTT.YEAR 2009-10 (SUPRA), WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE FOR THE ASSTT.YEAR 2010-11 AL SO. 14. SO FAR AS ISSUE AGITATED IN COS ARE CONCERNED T HE ASSESSEE HAS PLEADED THAT THE ASSESSEE DESERVES TO BE GIVEN BENE FIT OF SECTION 11 AND 12 BEING A CHARITABLE INSTITUTION. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ASPECT HAS BEEN CONSIDERED BY T HE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSTT.YEAR 2011-12, AND THE APPEAL OF THE ASSESSEE BEARING ITA NO.3621/AHD/2015 HAS BEEN ALLO WED BY THE TRIBUNAL. COPY OF THE ORDER HAS BEEN PLACED ON PAG E NO.13 TO 17 OF THE PAPER BOOK. THE LD.DR WAS UNABLE TO CONTROVERT THI S CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 15. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. THE DISCUSSION MADE BY THE TRIBU NAL IN THE ASSTT.YEAR 2011-12 VIDE ORDER DATED 23.7.2019 IN THE ASSESSEE S OWN CASE CITED SUPRA READS AS UNDER: 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECL ARING LOSS OF RS. 24,320 WAS FILED ON 30TH SEP, 2011. THE CASE WAS SELECTED UNDE R SCRUTINY BY ISSUING OF ITA NO.1560 & 1561/AHD/2017 WITH COS - 12 - NOTICE U/S. 143(2) OF THE ACT ON 10TH SEP, 2012. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE MAIN OBJECTIVE OF THE ASSESSEE WAS PLANNED AND CONTROLLED DEVELOPMENT FOR THE ENTIRE URBAN DEVELOPMENT AREA WHICH WAS OF THE NATURE OF ADVANCE MENT OF OBJECT OF PUBLIC UTILITY. THEREFORE, ASSESSEE WAS SHOW CAUSED TO EXP LAIN WHY NOT THE EXEMPTION CLAIMED U/S. 11 OF THE IT ACT SHOULD BE DENIED AND W HY NOT THE PROVISO TO SECTION 2(15) OF THE ACT SHOULD BE APPLIED IN TH E CASE OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT IT IS A AUTHORITY ESTABLISH ED BY THE GOVERNMENT OF GUJARAT U/S. 27 OF THE GUJARAT TOWN PLANNING ACT WIT H AN OBJECT TO DEVELOP GANDHINAGAR URBAN AREA IN CONTROLLED AND DISCIPLINE D MANNER. THE SOURCE OF INCOME OF THE AUTHORITY WAS MAINLY GRANTS EITHER FR OM GOVERNMENT OF GUJARAT OR CENTRAL GOVERNMENT AND VARIOUS KINDS OF LEVIES I N THE FORM OF FEES AS FIXED BY THE GOVERNMENT AT APPROVED RATE. THE FUNDS ARE U SED FOR DEVELOPMENT OF VARIOUS PUBLIC PROJECTS AND OTHER PUBLIC DETAIL IS ALSO THE BENEFICIARIES. THE SUBMISSION OF THE ASSESSEE ALONG WITH THE JUDICIAL PRONOUNCEMENTS HAS BEEN REPORTED AT PAGE NO. 7 TO 12 OF THE ASSESSMENT ORDE R. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE. THE A SSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS CARRYING OUT ACTIVITIES OF PROVIDING INFRASTRUCTURAL FACILITIES TO THE PUBLIC AND TAKING VARIOUS FEES LI KE BETTERMENT CHARGES, DEVELOPMENT CHARGES WHICH WAS I.T.A NO. 3621/AHD/2015 A.Y. 2011-12 PAGE NO 3 GANDHINAGAR URBAN DEVELOPMENT AUTHORITY VS. DC IT IN THE NATURE OF ADVANCEMENT OF GENERAL PUBLIC UTILITY. THE ASSESSIN G OFFICER HAS STATED THAT ASSESSEE BEING URBAN DEVELOPMENT AUTHORITY CHARGES VARIOUS TYPES OF FEES FROM THE PUBLIC FOR PROVIDING CERTAIN AMENITIES LIKE ROA DS, BRIDGES ETC. WHICH WAS RECOVERED FROM THE BENEFICIARIES WHO GET BENEFIT OU T OF DEVELOPMENT OF SUCH COMMON INFRASTRUCTURE. THE ASSESSING OFFICER CONCLU DED THAT ASSESSEE'S ACTIVITIES WERE OUT OF THE PURVIEW OF PROVISIONS OF SECTION 2(15) OF THE ACT, THEREFORE, ITS INCOME WAS CALCULATED AS A NORMAL BU SINESS INCOME AND NO DEDUCTION U/S. 11 AND 12 WERE ALLOWED TO IT. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL HAS CONTENDED THAT CO-ORDINATE BENCH OF THE ITAT AHMEDAB AD HAS ADJUDICATED THE IDENTICAL ISSUE ON SIMILAR FACT IN THE CASE OF THE VODADARA URBAN DEVELOPMENT AUTHORITY VS. ITO VIDE ITA NO. 2751/AHD/2014 DATED 28- 01-2019 IN FAVOUR OF THE ASSESSEE, AFTER FOLLOWING THE DECISION OF HO N'BLE JURISDICTIONAL HIGH COURT OF GUJARAT ON IDENTICAL ISSUE AND FACT IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. ACIT 396 ITR 323 (GUJARAT) A ND CIT VS. GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (2017) TAXMAN.CO M 366 (GUJ). ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORT ED THE ORDER OF LOWER AUTHORITIES AND COULD NOT CONTRADICT THE AFORESAID SUBMISSION OF THE LD. COUNSEL. ITA NO.1560 & 1561/AHD/2017 WITH COS - 13 - 6. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE H AVE GONE THROUGH THE AFORESAID JURISDICTIONAL PRONOUNCEMENTS REFERRED BY THE LD. COUNSEL AND IT IS GANDHINAGAR URBAN DEVELOPMENT AUTHORITY VS. DCIT NOTICED THAT AFTER FOLLOWING THE DECISION OF HON'BLE GUJARAT HIGH COUR T IN THE CASES OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. ACIT 396 ITR 323 (GUJARAT) AND CIT VS. GUJARAT INDUSTRIAL DEVELOPMENT CORPORAT ION (2017) TAXMAN.COM 366 (GUJ) THE CO-ORDINATE BENCH OF THE ITAT HAS ADJUD ICATED THE SIMILAR ISSUE ON IDENTICAL FACT IN THE CASE OF THE VODADARA URBAN DEVELOPMENT AUTHORITY VS. ITO VIDE ITA NO. 2751/AHD/2014 DATED 28-01-2019 WHERE IN THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED. RELEVANT PART OF DECISIO N OF CO-ORDINATE BENCH IS REPRODUCED AS UNDER:- '4. WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED T HE RELEVANT MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN SIMILAR SET OF FACTS THE JURISDICTIONAL HIGH COURT PASSED THE ORDERS IN THE CASE OF URBAN D EVELOPMENT AUTHORITY-VS-ACIT, WHERE IT WAS HELD AS FOLLOWS: 'HELD, THAT THE OBJECT AND PURPOSE OF PERMITTING TH E AUTHORITY TO SELL THE PLOTS TO A MAXIMUM EXTENT OF 15% OF THE TO TAL AREA, WAS TO MEET THE EXPENDITURE FOR PROVIDING INFRASTRUCTUR AL FACILITIES LIKE GARDENS, ROADS, LIGHTING, WATER SUPPLY, DRAINA GE SYSTEM, ETC. THE REASONS FOR SELLING THE PLOTS BY HOLDING PUBLIC AUCTION WERE; (A) TO AVOID ANY FURTHER ALLEGATION OF FAVORITISM AN D NEPOTISM AND (B) SO THAT THE MAXIMUM MARKET PRICE COULD BE FETCHE D, WHICH COULD BE USED FOR THE DEVELOPMENT OF THE URBAN DEVE LOPMENT AREA. CONSIDERING THE FACT THAT THE ASSESSEE WAS A STATUT ORY BODY, AN AUTHORITY CONSTITUTED UNDER THE PROVISIONS OF THE ACT , TO CARRY OUT THE OBJECT AND PURPOSE OF TOWN PLANNING ACT AND COLLECTED REGULATORY FEES FOR THE OBJECT OF THE ACTS, NO SERVI CES WERE RENDERED TO ANY PARTICULAR TRADE, COMMERCE OR BUSIN ESS; AND WHATEVER INCOME WAS EARNED BY THE ASSESSEE EVEN WHI LE SELLING THE PLOTS (TO THE EXTENT OF 15% OF THE TOTAL AREA C OVERED UNDER THE TOWN PLANNING SCHEME) WAS REQUIRED TO BE USED ONLY F OR THE PURPOSE TO CARRY OUT THE OBJECT AND PURPOSE OF THE TOWN PLANNING ACT AND TO MEET THE EXPENDITURE OF PROVIDIN G GENERAL UTILITY SERVICE TO THE PUBLIC SUCH AS ELECTRICITY, ROAD, DRAINAGE, WATER ETC. AND THE ENTIRE CONTROL WAS WITH THE STAT E GOVERNMENT AND ACCOUNTS WERE ALSO SUBJECTED TO AUDIT AND THERE WAS NO ELEMENT OF PROFITEERING AT ALL. THE ACTIVITIES OF T HE ASSESSEE COULD NOT BE SAID TO BE IN THE NATURE OF TRADE, COMMERCE AND BUSINESS AND THEREFORE, THE PROVISO TO SECTION 2(15) OF THE AC T WAS NOT APPLICABLE SO FAR AS THE ASSESSEE WAS CONCERNED. TH EREFORE, THE ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 .' APART FROM THAT CIT-VS.-GUJARAT INDUSTRIAL DEVELOPM ENT CORPORATION, WHEREIN IT WAS HELD AS FOLLOWS: ITA NO.1560 & 1561/AHD/2017 WITH COS - 14 - 'SECTION 2(15), READ WITH SECTION 11, OF THE INCOME -TAX ACT, 1961 - CHARITABLE PURPOSE (OBJECTS OF GENERAL PUBLIC UTILI TY) - ASSESSMENT YEAR 2009-10 - WHETHER WHERE ASSESSEE - CORPORATION WAS CONSTITUTED UNDER GUJARAT INDUSTRIAL DEVELOPMENT ACT, 1962, FOR PURPOS E OF SECURING AND ASSISTING RAPID AND ORDERLY ESTABLISHMENT AND ORGAN IZATION OF INDUSTRIAL AREAS AND INDUSTRIAL ESTATES IN STATE OF GUJARAT, A ND FOR PURPOSE OF ESTABLISHING COMMERCIAL CENTERS IN CONNECTION WITH ESTABLISHMENT AND ORGANIZATION OF SUCH INDUSTRIES IT COULD NOT BE SAI D THAT ACTIVITIES CARRIED OUT BY ASSESSEE WERE EITHER IN NATURE OF TRADE, COM MERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION SO AS TO A TTRACT PROVISO TO SECTION 2(15) AND SAME COULD BE SAID TO BE FOR C HARITABLE PURPOSE AND, CONSEQUENTLY,. ASSESSEE WAS ENTITLED TO EXEMPTION UN DER SECTION 11- HELD, YES (PARAS 15 AND 17)[IN FAVOUR OF ASSESSEE]' 5. WE FIND THAT THE OBJECT OF THE ASSESSEE IS SIMIL AR TO THAT OF THE CORPORATION BEFORE THE JURISDICTIONAL HIGH COURT AND ON THE SIMILAR SET OF FACTS THE APPEAL WAS ALLOWED IN FAVOUR OF THE AS SESSEE HENCE RELYING UPON THE SAME WE ALLOW THE CLAIM OF THE ASSESSEE AN D THE DISALLOWANCE OF EXEMPTION AS CLAIMED BY THE ASSESSEE U/S 11 OF THE ACT TO THE TUNE OF RS.70,73,005/- IS HEREBY QUASHED AND ADDITION MADE THEREON IS THUS DELETED.' RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH AS ABOVE ON SIMILAR ISSUE AND IDENTICAL FACTS, THE CLAIM OF THE ASSESSE E IS ALLOWED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 16. THERE IS NO DISPARITY ON FACTS. IN THE ORIGINA L ASSESSMENT ORDERS, THE AO HAS ALSO ALLOWED BENEFIT OF SECTIONS 11 AND 12 TO THE ASSESSEE. THESE ORDERS HAVE BEEN REOPENED BY THE AO BY ISSUAN CE NOTICE UNDER SECTION 148 OF THE ACT. WE HAVE NOTICED THE ABOVE FACTS WHILE DEALING WITH THE ISSUES IN THE APPEAL OF REVENUE ON THE MER IT OF REOPENING. THE INCOME OF THE ASSESSEE WAS DETERMINED AT NIL IN THE ORIGINAL ASSESSMENT ORDERS FOR BOTH THE YEARS. CONSIDERING THE ORDER O F CO-ORDINATE BENCH IN THE ASSTT.YEAR 2011-12 (SUPRA), WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO BENEFIT OF SECTIONS 11 AND 12, AND THER EFORE, THE ISSUE ON MERIT ALSO DESERVES TO BE DECIDED IN FAVOUR OF THE ASSESS EE. CONSIDERING THE ITA NO.1560 & 1561/AHD/2017 WITH COS - 15 - ABOVE, WE DISMISS THE APPEALS OF THE REVENUE AND AL LOW CROSS OBJECTIONS FILED BY THE ASSESSEE IN BOTH THE YEARS. 16. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED, AND CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2020. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT