Meerut Development Authority, Meerut V. CIT, Meerut

ITA 2783/DEL/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0378 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIYUSH SONKAR
• Assessee Lawyers: V K GOEL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT A ND SHRI RAJPAL YADAV, JUDICIAL MEMBER I.T.A NO. 2783/DEL/09 ASSTT. YEAR 2007-08 MEERUT DEVELOPMENT AUTHORITY, VIKAS MARG, CIVIL LINES, MEERUT. VS. COMMISSIONER OF INCOME TAX, MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V.K. GOEL, ADVOCATE RESPONDENT BY: SHRI PIYUSH SONKAR, SR. DR ORDER PER RAJPAL YADAV, JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX, MEERUT, DATED 26.3.200 9, PASSED U/S 12AA (3) OF THE INCOME TAX ACT. THE GROUNDS OF APPE AL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE I TAT RULES. THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF ASSESSEE IS THAT LD. COMMISSIONER HAS ERRED IN WITH DRAWING THE REGISTRATION GRANTED U/S 12A OF THE INCOME TAX ACT. ITA NO. 2783/DEL/09 ASSTT. YEAR 2007-08 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A DEVELOPMENT AUTHORITY WHICH WAS CONSTITUTED BY THE GOVT. OF UT TAR PRADESH BY ISSUING A GAZETTE NOTIFICATION ON 3 RD NOVEMBER, 1976. IT WAS CONSTITUTED UNDER SUB SECTION (7) OF SECTION 4 OF UTTAR PRADESH URBAN PLANNING AND DEVELOPMENT ACT 1973. THE LD. COMMISSIONER AFTER TA KING COGNIZANCE OF THE PROVISO APPENDED TO SECTION 2 (15) OF THE IN COME TAX ACT BY FINANCE ACT 2008, WAS OF THE VIEW THAT APPELLANT IS ENGAGED IN PROCUREMENT AND SALE OF LAND ON COMMERCIAL PRINCIP LES, WHICH IS DEFINITELY AN ACTIVITY IN THE NATURE OF TRADE. THER EFORE, IT IS NOT ENTITLED FOR CONTINUATION OF REGISTRATION U/S 12A OF THE INCOME TAX ACT. HE WITHDREW THE REGISTRATION W.E.F. 1 ST APRIL, 2008. 3. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE HA VE GONE THROUGH THE RECORD CAREFULLY. THE PROVISO TO SECTION 2 (15) OF THE ACT WAS ADDED BY WAY OF FINANCE ACT AT 2008. IT HAS BEEN MADE APP LICABLE W.E.F. 1 ST APRIL,. 2009. THE DEFINITION OF CHARITABLE PURPOSE ALONG WITH PROVISO PROVIDED IN SECTION 2(15) READ AS UNDER :- (15) CHARITABLE PURPOSE INCLUDES RELIEF OF THE PO OR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY A CTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, FOR A CESS OR FEE OR ITA NO. 2783/DEL/09 ASSTT. YEAR 2007-08 3 ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY:] [ PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGR EGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THE REIN IS TEN LAKH RUPEES OR LESS IN THE PREVIOUS YEAR;] 4. THE PROVISO IS APPLICABLE W.E.F 1 ST APRIL, 2009. THE LD. COMMISSIONER HAS ERRED IN WITHDRAWING THE REGISTRAT ION W.E.F. 1 ST APRIL, 2008. THE PROVISO FOR THAT PERIOD IS NOT APPLICABLE . THEREFORE, LD. COMMISSIONER HAS NO POWER TO WITHDRAW THE REGISTRAT ION ON THE STRENGTH OF THIS PROVISO. WITHOUT GOING INTO THE MERITS WHET HER ASSESSEE IS INVOLVED IN COMMERCIAL ACTIVITY OR NOT, ITS ACTIVIT IES ARE OF CHARITABLE OR NOT, WE ARE OF THE VIEW THAT IN THE ABSENCE OF THIS PROVISO FOR THIS PERIOD THE REGISTRATION COULD HAVE NOT BEEN WITHDRAWN. THE ORDER OF LD. COMMISSIONER IS NOT SUSTAINABLE. THEREFORE, WE QUAS H THE ORDER OF LD. COMMISSIONER. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 11.2.2011. SD/- [G.E.VEERABHADRAPPA] [RAJPAL YADAV] VICE PRESIDENT JUDICIAL MEMBER DATED: 11.2.2011 VEENA ITA NO. 2783/DEL/09 ASSTT. YEAR 2007-08 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT