Hyderabad Urban Development Authority, renamed as: Hyderabad Metropolitan Development Authority, Hyderabad V. Director of Income-Tax(Exemptions), Hyderabad

ITA 1633/HYD/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3195 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-02-2016
• Assessment Year: misc
• Appeal Filed On: 31-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MYTHILI RANI
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution; Non compliance
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1633/HYD/2012 HYDERABAD URBAN DEVELOPMENT AUTHORITY, RENAMED AS HYDERABAD METROPOLITAN DEVELOPMENT AUTHORITY, HYDERABAD. PAN AAALH0058D VS. THE DIRECTOR OF INCOME TAX, (EXEMPTIONS), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S . RAMA RAO FOR REVENUE : SMT. K. MYTHILI RANI DATE OF HEARING : 11 .02.2016 DATE OF PRO NOUNCEMENT : 17 .02.2016 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL PREFERRED BY ASSESSEE IS AGAINST THE ORDER OF THE DIT(E) DATED 20.09.2007. ORIGINALL Y THE APPEAL WAS HEARD AND DISPOSED OF BY THE ITAT VIDE O RDER DATED 24.10.2013 ON THE REASON OF LIMITATION AS THE APPEAL WAS FILED LATE BY 1804 DAYS ON 30.10.2012. T HIS ORDER OF THE TRIBUNAL WAS APPROVED BY THE HONBLE JURISDICTIONAL HIGH COURT BUT ULTIMATELY THE HONBL E SUPREME COURT IN CIVIL APPEAL NO.8904 OF 2015 HAS CONDONED THE DELAY AND RESTORED THE APPEAL TO THE F ILE OF 2 ITA.NO.1633/HYD/2012 HUDA RENAMED AS HMDA), HYDERABAD. THE ITAT TO DECIDE THE SAME ON MERITS. ACCORDINGLY, THE APPEAL IS POSTED FOR HEARING. 2. LD. COUNSEL FOR THE ASSESSEE, MR. S. RAMA RAO, REITERATING THE SUBMISSIONS MADE BEFORE THE DI T(E) AND EXPLAINING HOW THE AUTHORITY WAS CREATED BY THE STATE GOVERNMENT TO DISCHARGE SOVEREIGN AND REGULAT ORY FUNCTIONS OF THE STATE GOVERNMENT AND EXPLAINED THA T IT WAS INCORPORATED FOR THE PURPOSE OF GENERAL PUBLIC UTILITY WHICH IS A CHARITABLE ACTIVITY. IT WAS FURTHER SUBM ITTED THAT ASSESSEE WAS ENJOYING EXEMPTION FOR A LONG PER IOD OF 27 YEARS TILL THE EXEMPTION WAS WITHDRAWN BY THE FI NANCE ACT, 2002 WITH EFFECT FROM THE A.Y. 2003-04 AND CONSEQUENT TO THE AMENDMENT BROUGHT SUBSEQUENTLY TO PROVISIONS OF SECTION 10(20A), ASSESSEE FILED AN AP PLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT BUT THE LD. DIT(E) REJECTED THE APPLICATION. IT WAS SUBMITTED T HAT FURNISHING OF ACCOUNT BOOKS AND VOUCHERS ETC., OF T HE GOVERNMENT ORGANISATION HAS ITS LIMITATIONS, BUT AS SESSEE HAD FURNISHED VARIOUS FINANCIAL STATEMENTS, AS THE RETURNS FOR A.YS. 2003-04, 2004-05 AND 2005-06 WERE ALREADY FILED BEFORE THE ITAT AUTHORITIES. IT WAS F URTHER SUBMITTED THAT ASSESSEE FULFILLED ALL THE CONDITION S FOR GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT AND HOW THE DIT DIRECTION IN CLAIMING EXEMPTION UNDER SECTION 36(1)(XII) WOULD NOT SERVE PURPOSE. AFTER EXPLAINING ASSESSEES ACTIVITIES, THE PURPOSE FOR W HICH IT IS CREATED AND THE ROLE IT HAS PLAYED IN URBAN DEVELOP MENT, LD. COUNSEL FAIRLY SUBMITTED THAT THE MERITS OF THE 3 ITA.NO.1633/HYD/2012 HUDA RENAMED AS HMDA), HYDERABAD. ASSESSEES ACTIVITIES HAVE NOT BEEN EXAMINED BY THE LD. DIT(E) AND HE HAS NO OBJECTION IF THE MATTER IS REM ITTED TO THE DIT(E) FOR EXAMINING THE ISSUE ON MERITS. HE FU RTHER SUBMITTED THAT VARIOUS JUDICIAL PRINCIPLES SUPPORT THE ASSESSEES CONTENTIONS AS TO WHY IT SHOULD BE TREAT ED AS A CHARITABLE ORGANISATION AND ALSO PLACED ON RECORD T HE PROCEEDINGS OF THE CIT-I, VISAKHAPATNAM DATED 31.07.2006 IN THE CASE OF VISAKHAPATNAM URBAN DEVELOPMENT AUTHORITY (VUDA) WHICH WAS ALSO CONSTITUTED BY THE SAME ACT. IT WAS SUBMITTED THAT IN ORDER TO CONSIDER VARIOUS OBJECTIONS RAISED BY THE DIT(E) IN THE ORDER AND ALSO TO EXAMINE VARIOUS OBJECTS AN D THE PURPOSE FOR WHICH THE AUTHORITY WAS CREATED, THE IS SUE CAN BE REMITTED TO THE DIT(E). 3. THE LD. CIT-D.R. HOWEVER, WHILE REITERATING ORDER OF THE LD. DIT(E) FAIRLY ADMITTED THAT MERITS OF THE ASSESSEES CONTENTIONS HAVE NOT BEEN EXAMINED BY TH E DIT(E). 4. AS CAN BE SEEN FROM THE ORDER OF DIT(E) HE HAS NOT EXAMINED THE ISSUE ON MERITS AND REJECTED T HE SAME ON NON COMPLIANCE TO VARIOUS POINTS RAISED IN SHOW CAUSE LETTER. AS BOTH THE PARTIES FAIRLY ADMITTED T HAT THE CONTENTIONS OF ASSESSEE REQUIRE RE-EXAMINATION BY T HE DIT(E), IN THE INTEREST OF JUSTICE WE CANCEL THE OR DER OF THE DIT(E) DATED 20.09.2007 AND RESTORE THE ISSUE OF REGISTRATION UNDER SECTION 12AA OF THE I.T. ACT, TO THE FILE OF DIT(E) FOR CONSIDERATION AFRESH. NEEDLESS TO SAY THAT 4 ITA.NO.1633/HYD/2012 HUDA RENAMED AS HMDA), HYDERABAD. ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY TO SUPPORT THE CONTENTIONS INCLUDING VARIOUS CASE LAWS PLACED BEF ORE US IN SUPPORT AND AFTER EXAMINING THE CONTENTIONS AND THE RELEVANT CASE LAW AS APPLICABLE, THE DIT(E) MAY CON SIDER GRANT OF REGISTRATION OF THE ASSESSEE ON MERITS. WI TH THESE OBSERVATIONS, THE IMPUGNED ORDER OF THE DIT(E) IS S ET ASIDE AND THE ISSUE OF REGISTRATION IS RESTORED TO THE FILE OF DIT(E) FOR FRESH CONSIDERATION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.0 2.2016. SD/- SD/- (SMT. P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 17 TH FEBRUARY, 2016 VBP/- COPY TO 1. HYDERABAD URBAN DEVELOPMENT AUTHORITY, RENAMED AS HYDERABAD METROPOLITAN DEVELOPMENT AUTHORITY, HYDERABAD. C/O. MR. S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, H.NO.3-6-643, ST.NO.9, HIMAYATNAGAR, HYDERABAD 500 029. 2. THE DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3. DY. DIRECTOR OF INCOME TAX (EXEMPTION), HYDERABAD 4. D.R. IT AT B BENCH, HYDERABAD 5. GUARD FILE