DEPUTY COMMISSIONER OF INCOME TAX (E), JAPUR V. M/S URBAN IPROVEMENT TRUST, Jaipur

ITA 289/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3670 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DHK
• Assessee Lawyers: PRAKUL KHURANA
• Keywords: Question of law; Benefit of exemption

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 289/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. THE DCIT (EXEMPTION) JAIPUR. CUKE VS. M/S. URBAN IMPROVEMENT TRUST, UIT BUILDING, NEAR CAD CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAALU 0110 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI PRAKUL KHURANA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19.06.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21/06/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 18 TH DECEMBER, 2017 OF LD. CIT (A)-3, JAIPUR FOR THE ASSESSMENT Y EAR 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT (APPEALS) ERRED IN ALLOWING BENEFIT OF SECTION 10(20) OF THE ACT, BY RELYING UPON ORDER OF HONBLE HIGH COURT OF RAJASTHAN, JAIPUR IN THE CASE OF UIT, KOTA IN DBIT NO. 73/2011 AND 357/2011 DATED 25.07.2017, IN SPITE OF THE FACTS TH AT INCOME OF UIT IS NOT EXEMPT AFTER INSERTION OF EXPLANATION 10 (20) BY THE FINANCE ACT, 2002 W.E.F. 01.04.2003. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) ERRED IN ALLOWING BENEFIT OF SECTION 10(20) OF THE ACT, BY RELYING UPON THE DECISION OF HONBLE HIGH C OURTS IN THE 2 ITA NO. 289/JP/2018 URBAN IMPROVEMENT TRUST, KOTA. CASE OF UIT, KOTA IN DBIT NO. 73/2011 & 357/2011 DA TED 25.07.2017 WHICH HAS NOT REACHED ITS FINALITY. (C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LD. CIT (APPEALS) HAS ERRED IN IGNORING THE FACTS THAT ASSE SSEE FAILED TO MAINTAIN ITS BOOKS OF ACCOUNTS AS WELL AS GETTING A UDIT OF THE SAME IN ACCORDANCE TO THE PROVISION OF SECTION 12(A )(1)(B) OF THE ACT. (D) ANY OTHER QUESTION OF LAW AS DEEMED FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE MAY ALSO BE FRAMED BEFORE THE HONBLE TRIBUNAL IN THE INTEREST OF JUSTICE. 2. THE ASSESSEE IS AN URBAN IMPROVEMENT TRUST FORME D BY GOVERNMENT OF RAJASTHAN UNDER THE RAJASTHAN IMPROVEMENT ACT, 1959 WITH THE PURPOSE OF CARRYING OUT THE IMPROVEMENT OF URBAN AREA IN THE CITY OF KO TA. THE AO DENIED THE BENEFIT OF EXEMPTION UNDER SECTION 10(20) OF THE IT ACT WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3). THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND SUBMITTED THAT FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 THIS TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING THAT T HE ASSESSEE TRUST IS COVERED WITHIN THE EXEMPTION UNDER SECTION 10(20). THE HON BLE JURISDICTIONAL HIGH COURT IN DBIT APPEAL NO. 73/2011 AND 357/2011 VIDE JUDGMENT DATED 25.07.2017 HAS UPHELD THE ORDER OF THE TRIBUNAL AND DISMISSED THE APPEAL FILED BY THE REVENUE. THUS THE ASSESSEE CLAIMED THAT AFTER THE OMISSION OF SEC TION 10(20A) BY FINANCE ACT, 2002 WITH EFFECT FROM 01.04.2003 THE ASSESSEE IS EL IGIBLE FOR EXEMPTION UNDER SECTION 10(20) OF THE IT ACT. THE LD. CIT (A) ACCE PTED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN ASSESSEES OWN CASE IN PARA 5.3 AS UNDER :- 3 ITA NO. 289/JP/2018 URBAN IMPROVEMENT TRUST, KOTA. 5.3. I HAVE CAREFULLY CONSIDERED THE OBSERVATION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER; SUBMISSI ON FILED BY THE A/R OF THE APPELLANT AND CITED CASE LAWS. I FIND THAT IN THE APPELLANT OWN CASE THE HONOURABLE RAJASTHAN HIGH COURT VIDE D.B.T .T.A. 73/2011 AND 357/2011 DATED 25/07/2017 HELD THAT THE APPELL ANT TRUST IS A LOCAL AUTHORITY ELIGIBLE FOR EXEMPTION UNDER SECTION 10(2 0) OF THE I.T. ACT. THEREFORE FOLLOWING THE ABOVE DECISION, THE ASSESSI NG OFFICER IS DIRECTED TO ALLOW THE EXEMPTION U/S 10(20) OF THE I .T. ACT. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED. 3. WE HAVE HEARD THE LD. D/R AND THE LD. A/R AND CO NSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT TH E HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE VIDE JUDGMENT DATED 25 TH JUNE, 2017 IN DBIT APPEAL NOS. 73/2011 AND 357/2011 HAS HELD IN PARA 15 TO 19 AS U NDER :- 15. IT IS TRUE THAT THE FUNCTIONS WHICH ARE CARRIE D OUT BY THE ASSESSEE ARE STATUTORY FUNCTIONS AND CARRY ON FOR T HE BENEFIT OF THE STATE GOVERNMENT FOR URBAN DEVELOPMENT THERE FORE, IN OUR CONSIDERED OPINION, THE FUNCTIONS CARRIED OUT B Y THE AUTHORITY IS A SUPREME FUNCTION AND FALL WITHIN THE ACTIVITY OF THE STATE GOVERNMENT. 16. IN THAT VIEW OF THE MATTER, THE JUDGMENTS WHICH ARE STRONGLY RELIED UPON BY COUNSEL FOR THE DEPARTMENT ARE OF NO HELP IN THE FACTS OF THE CASE AS THE CASE RELIED UP ON BY THE DEPARTMENT WAS IN RESPECT OF INDUSTRIAL CORPORATION WHICH WAS UNDER THE STATUTE FOR THE PURPOSE OF MAKING PROFIT. THE FEES AND OTHER CHARGES WHICH ARE COVERED ARE STATUTORILY FOR THE DEVELOPMENT OF THE URBAN AREA. IN THAT VIEW OF THE MATTER, THE JUDGMENT WHICH SOUGHT TO BE RELIED UPON BY THE COUN SEL FOR THE RESPONDENTS, IN OR CONSIDERED OPINION, WOULD BE OF IMPORTANCE 4 ITA NO. 289/JP/2018 URBAN IMPROVEMENT TRUST, KOTA. AND THE FUNCTIONS WHICH ARE CARRIED OUT BY THE ASSE SSEE IS STATUTORY FUNCTION. IN OUR CONSIDERED OPINION, UNDE R CLAUSE- 10(20) & SUB-CLAUSE (3) MUNICIPAL COMMITTEE AND DIS TRICT BOARD ARE LEGAL ENTITY ENTRUSTED THE FUNCTION OF THE GOVE RNMENT WITHIN THE CONTROL OR MANAGEMENT OF THE MUNICIPAL OR LOCAL AUTHORITY AND WILL TRY TO HELD THE ASSESSEE. 17. IN THAT VIEW OF THE MATTER, THE RELIANCE PLACED BY COUNSEL FOR THE DEPARTMENT REGARDING 10(20) AND EXPLANATION A WILL NOT MAKE ANY DIFFERENCE. TAKING INTO CONSIDERATION INCOME OF AUTHORITY IS UNDER CONSTITUTION OF INDIA VIDE ORDER ENACTED EITHER FOR THE PURPOSE OF DEALING WITH OR SETTING U P THE HOUSING SCHEME FOR THE PURPOSE OF PLANNING AND DEVE LOPMENT OF THE IMPROVEMENT OF THE CITIES, TOWN AND VILLAGES OR BOTH FOR WHICH THE AUTHORITY ARE CREATED TO CARRY OUT THE FU NCTION OF STATE WHICH ARE SOVEREIGN WHEREAS THE URBAN DEVELOP MENT AND CALCULATION OF DEVELOPMENT CHARGES WILL FALL UN DER THE DEVELOPMENT CHARGES. 18. IN THAT VIEW OF THE MATTER, DELETION OF 20A WIL L NOT MAKE DIFFERENCE IN CASE OF ASSESSEE. IN OUR CONSIDERED O PINION, CLAUSE-3 WILL COME IN THE HELP OF THE ASSESSEE. IN THAT VIEW OF THE MATTER, WE ARE CONSIDERED OPINION, THAT THE AUT HORITY ASSESSEE IS A LOCAL AUTHORITY FOR THE PURPOSE OF CA RRYING OUT OF THE IMPROVEMENT AND DEVELOPMENT FUNCTION OF THE STA TE. 19. IN THAT VIEW OF THE MATTER, THE ISSUE IS REQUIR ED TO BE ANSWERED IN FAVOUR OF THE ASSESSEE AGAINST THE DEPA RTMENT. IN VIEW OF THE ANSWER, OTHER ISSUES ARE BECOME ACADEMI C, THEREFORE, WE ARE NOT DECIDING THOSE ISSUE. ACCORDINGLY, BY FOLLOWING THE DECISION OF HONBLE J URISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE, WE HOLD THAT THE ASSESSEE IS E LIGIBLE FOR BENEFIT UNDER SECTION 10(20) OF THE IT ACT BEING A LOCAL AUTHORITY FOR CA RRYING OUT THE IMPROVEMENT AND DEVELOPMENT FUNCTIONS OF THE STATE. HENCE WE DO NO T FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF LD. CIT (A). 5 ITA NO. 289/JP/2018 URBAN IMPROVEMENT TRUST, KOTA. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21/06/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 21/06/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT (EXEMPTION), JAIPUR. 2. THE RESPONDENT M/S. URBAN IMPROVEMENT TRUST, KO TA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 289/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 289/JP/2018 URBAN IMPROVEMENT TRUST, KOTA.