Ahmedabad Foundry and Engineering Cluster, Ahmedabad V. DIT (Exemp.), Ahmedabad

ITA 186/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9025 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-03-2017
• Assessment Year: 2014-2015
• Appeal Filed On: 20-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.186/AHD/2014 AHMEDABAD FOUNDRY AND ENGINEERING CLUSTER, LAL BUNGLOW, AMRUT INDUSTRIAL ESTATE, OPP. WATER TANK, DUDHESHWAR, AHMEDABAD APPELLANT VS. DIRECTOR OF INCOME-TAX (EXEMPTION), 2 ND FLOOR, VASANT NATURE VIEW BUILDING, ASHRAM ROAD, AHMEDABAD RESPONDENT PAN: AAICA7560J /BY ASSESSEE : SHRI S. N. DIVATIA, A.R. /BY REVENUE : SHRI JAGADISH, SR. D.R. /DATE OF HEARING : 09.03.2017 /DATE OF PRONOUNCEMENT : 10.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL ARISES AGAINST DIT (E)S ORD ER DATED 18.12.2013, IN FILE NO. DIT(E)/AHD/12AA/171/2013-14/132, REFUSI NG ITS REGISTRATION SOUGHT U/S.12AA OF THE INCOME TAX ACT, 1961; IN SHO RT THE ACT. ITA NO. 186/AHD/2014 (AHMEDABAD FOUNDRY & ENGINEERI NG CLUSTER VS. DIT(E)) - 2 - 2. THIS ASSESSEE IS A SECTION 25 COMPANY. IT FIL ED FOR SECTION 12AA REGISTRATION. THE DIT(E) SOUGHT FOR ITS OBJECTS PA RTICULAR. THE ASSESSEES MAIN OBJECT CLAUSE INTER ALIA READ AS UNDER: TO PROMOTE AND DEVELOP, PLAN, SURVEY, DESIGN, STUD Y, CONCEIVE, EVALUATE AND TO CARRY OUT ALL STEPS, PROCESS, TECHNIQUES AND METHODS FOR SETTING AND DEVELOPING UP OF ALL TYPES OF INFRASTRUCTURE FACILITIES FOR THE BENE FIT OF MEMBERS ENGAGED OR INTENDING TO ENGAGE IN THE ACTIVITIES PE RTAINING TO FOUNDRY AND ENGINEERING IN AHMEDABAD AND TO SET UP FOUNDRY PARK AND TO PROMOTE AND TO FACILITATE THE ACTIVITIES OF FOUNDRY IN LOCALIZED M ANNER WITH NO PROFIT MOTIVE. 3. WE NOTICE THAT THE DIT(E) OBSERVED IN VIEW OF T HE ABOVE EXTRACTED CLAUSE THAT THE ASSESSEE AIMED TO BENEFIT ITS MEMBE RS ONLY. HE WAS THUS OF A VIEW THAT IT WAS MORE IN THE NATURE OF A MUTUAL COM PANY OF FOUNDRY AND ENGINEERING INDUSTRIES WHOSE BENEFITS WOULD NOT BE GOING TO PUBLIC AT LARGE SINCE ITS ACTIVITIES DID NOT COME UNDER THE GENERA L PUBLIC UTILITY ENSHRINED U/S.2(15) OF THE ACT. ALL THIS LEAVES THE ASSESSEE AGGRIEVED. 4. WE HAVE HEARD BOTH THE PARTIES REITERATING THEIR RESPECTIVE STANDS. CASE FILE PERUSED. WE NOTICE FIRST OF ALL THAT ASSESSEE S OBJECTS AT PAGE 14 OF THE PAPER BOOK CLEARLY STIPULATE THAT NO PORTION OF ITS INCOME WOULD BE TRANSFERRED; DIRECTLY OR INDIRECTLY, TO ITS MEMBERS BY WAY OF DIVIDEND, BONUS OR OTHERWISE. IT IS FURTHER EVIDENT THAT THE VERY PAGE AT THE END CONTAINS ASSESSEES DISSOLUTION CLAUSE STATING THAT ITS ASSE TS OR PROPERTY WOULD NOT BE DISTRIBUTED AMONGST ITS MEMBERS BUT THE SAME SHALL BE TRANSFERRED OR GIVEN TO SUCH OTHER COMPANY HAVING SIMILAR OBJECTS. ALL THI S MAKES IT CLEAR THAT NEITHER THE ASSESSEES INCOME OR ITS ASSETS BEFORE OR AFTER ITS DISSOLUTION ARE INTENDED TO BE ENJOYED BY ITS MEMBERS. SHRI DIVATI A QUOTES BEFORE US A CO- ORDINATE BENCH DECISION IN ITA NO.2654/AHD/2014 KAL OL GIDC INDUSTRIES ASSOCIATION VS. CIT, GANDHINAGAR DECIDED ON 01.09.2 016 GRANTING A SIMILAR ITA NO. 186/AHD/2014 (AHMEDABAD FOUNDRY & ENGINEERI NG CLUSTER VS. DIT(E)) - 3 - SECTION 12AA REGISTRATION AFTER CONCLUDING THAT THE SAID ASSESSEES PRINCIPAL OBJECTIVE WAS TO SET UP ANTI-POLLUTION MEASURES WHO SE REGISTRATION STOOD DENIED ON SIMILAR ANALOGY TO BE GRANTING BENEFIT TO MEMBERS ONLY. THIS CO- ORDINATE BENCH FURTHER DISTINGUISHES THE CASE LAW O F MADHAVRAO SCINDIA ENCLAVE RESIDENT WELFARE SOCIETY VS. CIT 52 SOT 125 (AS RELIED UPON BY THE DIT(E) IN THE INSTANT CASE AS WELL) AFTER HOLDING T HAT THERE WAS NO PUBLIC CAUSE TO BE SERVED IN SAID ASSESSEES CASE. YET AN OTHER CO-ORDINATE BENCH IN INDIAN ICE CREAM MANUFACTURERS ASSOCIATION VS. DIT (E) ITA NO.2279/AHD/2014 DECIDED ON 29.04.2015 ALSO APPEARS TO HAVE ADOPTED THE SAME REASONING IN ACCEPTING IDENTICAL SECTION 12AA REGISTRATION CLAIM AFTER CONSIDERING HONBLE APEX COURTS JUDGMENT IN ADDL.C IT VS. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION 121 ITR 1(SC) AND A S WELL AS IN CASE OF GUJARAT STATE PLASTIC MANUFACTURERS ASSOCIATION VS . CIT 150 CTR 97 (GUJ). LEARNED DEPARTMENTAL REPRESENTATIVE INVITES OUR ATT ENTION TO ANOTHER CO- ORDINATE BENCH DECISION IN PANOLI INDUSTRIAL INFRAS TRUCTURE PROJECTS LTD. VS. CIT ITA NO.469/AHD/2014 DENYING SECTION 12AA REGIST RATION ON THE VERY ANALOGY THAT THE REAL BENEFITS OF THE CHARITABLE AC TIVITY IN QUESTION WERE INTENDED FOR THE BENEFIT OF MEMBERS ONLY. WE HOWEV ER NOTICE THAT THE SAID ASSESSEES OBJECT CLAUSES WHICH FORM THE FOUNDATION OF SECTION 12AA REGISTRATION CLAIM ARE NOT ON A SIMILAR FOOTING AS FACTS OF THE INSTANT CASE WHEREIN THERE IS CLEAR CUT STIPULATION THAT ASSESSE ES INCOME BEFORE OR AFTER DISSOLUTION WOULD IN NO MANNER DEVOLVE UPON ITS MEM BER. WE THUS DISTINGUISH THE SAID CASE LAW AS WELL. IT IS ACCOR DINGLY CONCLUDED THAT THE ASSESSEES PRINCIPAL OBJECT SEEKING TO PROMOTE AND DEVELOP, PLAN, SURVEY, DESIGN , STUDY, CONCEIVE, EVALUATE AND TO CARRY OUT ALL STEPS, PROCESS, TECHNIQUES AND METHOD FOR SETTING AND DEVELOPING UP OF ALL TYPES OF INFRASTRUCTURE FACILITIES COMES WELL WITHIN GENERAL PUBLIC UTILITY LIMB OF SECTION 2(15) OF THE ACT. WE ACCORDINGLY ACCEPT AS SESSEES SOLE SUBSTANTIVE ITA NO. 186/AHD/2014 (AHMEDABAD FOUNDRY & ENGINEERI NG CLUSTER VS. DIT(E)) - 4 - GROUND. LEARNED DIT(E), AHMEDABAD IS DIRECTED TO G RANT IT SECTION 12AA REGISTRATION IN QUESTION. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 10 TH DAY OF MARCH, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 10/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0