DCIT, Chandigarh V. M/s Improvment Trust Sangrur, Sangrur

ITA 294/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6801 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 20-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G K DHAL
• Assessee Lawyers: Y K SUD
• Keywords: Charitable institution; Question of law
• Section: 12A; 12AA; 147; 28; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, A CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 294 TO 296/CHD/2016 ASSESSMENT YEARS: 2011-12, 2012-13 & 2007-08 THE DCIT, VS. M/S IMPROVEMENT TRUST, CIRCLE-1 (EXEMPTIONS), SANGRUR CHANDIGARH PAN NO. AAATI6009F (APPELLANT) (RESPONDENT) & C.O. NOS. 16 TO 18/CHD/2016 ASSESSMENT YEARS: 2011-12, 2012-13 & 2007-08 M/S IMPROVEMENT TRUST, VS. THE DCIT, SANGRUR CIRCLE -1 (EXEMPTIONS) CHANDIGARH PAN NO. AAATI6009F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. G.K. DHAL RESPONDENT BY : SH. Y.K. SUD DATE OF HEARING : 25.09.2017 DATE OF PRONOUNCEMENT : 28.09.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS PREFERRED BY THE REVENU E AND CROSS OBJECTIONS BY THE ASSESSEE RESPECTIVELY ARE AGAIN ST THE COMMON ORDER 2 OF THE COMMISSIONER OF INCOME TAX (APPEALS), [HEREI NAFTER REFERRED TO AS CIT(A)], PATIALA DATED 12.01.2016. 2. SINCE THE ISSUES RAISED IN THESE APPEALS AND CRO SS OBJECTIONS ARE IDENTICAL AND INTER-RELATED, THEREFORE, FOR THE SAK E OF CONVENIENCE, THESE APPEALS AND CROSS OBJECTIONS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER. THE FACTS AND FIGURES, FOR THE SAKE OF CONVENIENCE HAVE BEEN TAKEN FROM ITA NO. 295/CHD/20 16 FOR ASSESSMENT YEAR 2012-13. 3. THE REVENUE IN ITS APPEALS HAS RAISED THE FOLLOW ING IDENTICAL GROUNDS: 1. THAT THE ORDER OF LD. CIT(A) IS DEFECTIVE BOTH IN LAW AND FACTS OF THE CASE. 2. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AS TH E AMENDMENT IN SECTION 2(15) IS EFFECTIVE W.E.F. 1.4.2009 AND THE ASSESSMENT IN THIS CASE HAS BEEN COMPLETED CONSIDERING THE ACTIVITIES OF ASSESSEE WHICH ARE NOT ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. 3. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW BY IGNORING THE RATIO LAID IN THE CASE SO PUDA AND JDA (TO THE EXTENT IMPROVEMENT TRUSTS CARRY OUT LAND DEVELOPMENT IN A SIMILAR MANNER AS DEVELOPMENT AUTHORITIES DO) 4. WHEREAS THE ASSESSEE HAS RAISED THE FOLLOWING ID ENTICAL CROSS OBJECTIONS FOR ALL THE ASSESSMENT YEARS UNDER CONSI DERATION:- 3 1. THAT THE CIT(A) WAS NOT JUSTIFIED TO TREAT GROUN D NO.1 AS GENERAL GROUND AND NOT GIVING ANY FINDING ON THE SAME. 2. THAT THE CIT(A) FAILED TO APPRECIATE THAT GROUND NO.1 WAS A SPECIFIC CHALLENGE TO THE REOPENING OF THE ASSESSMENT U/S 147/148 AND THEREFOR, HE WAS DUTY BOUND TO DECIDE THE GROUND RAISED BY THE ASSESSEE. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN ARTIFICIAL JURIDICAL PERSON HAVING INCOME FROM PLANNING, DEVEL OPMENT AND IMPROVEMENT OF CITIES AND THE SAME WAS SHOWN AS INC OME FROM OTHER SOURCES. THE ASSESSEE HAS BEEN GRANTED REGISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASS ESSEE FILED ITS RETURNS OF INCOME FOR THE RELEVANT YEARS UNDER CONSIDERATIO N DECLARING NIL INCOME, CLAIMING WHOLE OF THE PROFITS EARNED DURING THE RELEVANT YEARS AS EXEMPT. HOWEVER, LATER ON THE ASSESSMENT WAS RE OPENED U/S 147 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING , ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS CARRYING ON BUSINESS OF SALE & PURCHASE OF RESIDENTIAL HOUSES, MULTI-STOREYED HOUSES, AND C OMMERCIAL PLOTS BY AUCTION. IT EARNED HUGE NET PROFIT OF RS. 3,36,90,5 39/- DURING THE YEAR UNDER CONSIDERATION, WHICH WAS IN THE NATURE OF TRA DE, COMMERCE AND BUSINESS, AND DID NOT FALL WITHIN THE MEANING OF TH E EXPRESSION 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY' U/S 2(15) OF THE INCOME TAX ACT, 1961. HOWEVER, THE ASSESSEE TRU ST STATED DURING ASSESSMENT PROCEEDINGS THAT IT WAS NOT CARRYING ON ANY BUSINESS ACTIVITY 4 BUT THE OBJECT OF TRUST WAS PLANNING, DEVELOPMENT A ND IMPROVEMENT OF CITY. 6. THE ASSESSING OFFICER OBSERVED THAT THE CONTENT ION OF THE ASSESSEE WAS NOT CORRECT IN VIEW OF AMENDMENT TO SECTION 2(1 5) OF THE INCOME TAX ACT, BY THE FINANCE ACT, 2008 W.E.F 01/04/2009 I.E. ASSESSMENT YEAR 2009-10 AND ALSO IN VIEW OF THE FACT THAT THE BUSINESS ACTIVITIES CARRIED OUT FOR SALE OF RESIDENTIAL PLOTS / HOUSES & COMMERCIAL PLOTS / COMPLEX BY AUCTION AND CHARGING OF HUGE FEES FROM T HE CLIENTS IN THE NATURE OF COMPOUNDING FEE OF RS. 99,439/- MAP FEE OF RS. 5,67,606/-, TRANSFER FEES OF RS. 9.42,130/-, LATE CONSTRUCTI ON FEE OF RS. 30,49,343/-, MISC. INCOME OF RS. 34,097/- AND INTER EST INCOME OF RS. 22,72,676/- ETC. 7. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITIONS SO MADE BY THE AO HOLDING THAT THE ENTIRE ISSUE WAS COVERED BY THE D ECISION OF THE ITAT CHANDIGARH, BENCH, CHANDIGARH IN THE CASE OF THE AS SESSEE ITSELF FOR ASSESSMENT YEAR 2010-11, ITA NO. 987/CHD/2014 DATED 14.12.2015 WHEREIN RELIEF HAS BEEN ALLOWED TO THE ASSESSEE. B EING AGGRIEVED BY SAID DECISION OF THE CIT(A), THE REVENUE HAS COME I N APPEAL BEFORE US. 8. WE HAVE HEARD THE RIVAL CONTENTIONS. AT THE OUT SET, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ISSUE IS NOW SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE COMMON ORDER OF THE H ONBLE 5 JURISDICTIONAL PUNJAB & HARYANA HIGH COURT PASSED I N THE CASES OF TRIBUNE TRUST V. COMMISSIONER OF INCOME-TAX, CHAND IGARH ( ITA NO.62 OF 2015); AND CIT (E), CHANDIGARH VS. IMPROV EMENT TRUST, MOGA (ITA NO. 147 OF 2016) REPORTED IN [2016] 76 TAXMANN.COM 363 (PUNJAB & HARYANA). THE LD. DR HAS ALSO FAIRLY ADMI TTED THAT THE ISSUE, PRESENTLY, IS SQUARELY COVERED BY THE AFORESAID DEC ISION OF THE HIGH COURT. 9. WE HAVE GONE THROUGH THE DECISION OF THE HONBL E HIGH COURT PASSED IN THE CASE OF CIT (E), CHANDIGARH VS. IMPR OVEMENT TRUST, MOGA REPORTED IN [2016] 76 TAXMANN.COM 363 (PUNJA B & HARYANA) (SUPRA). THE HONBLE HIGH COURT WHILE DECIDING THE IDENTICAL ISSUE IN THE CASE OF IMPROVEMENT TRUST, MOGA (SUPRA) HAS O BSERVED THAT WHERE ASSESSEE-TRUST, INCORPORATED UNDER SECTION 3 OF PUN JAB TOWN IMPROVEMENT ACT, 1962, WAS ENGAGED IN PROVIDING SER VICES FOR IMPROVEMENT AND EXPANSION OF CIVIC FACILITIES AND E NHANCEMENT OF QUALITY OF LIFE, SAID ACTIVITIES WOULD FALL WITHIN MEANING OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AS SPECIFIED UNDER SECTION 2(15). THAT IT CANNOT POSSIBLY BE SUGGESTED THAT THE GOVERNMENT OF PUNJAB FORMED THE TRUSTS UNDER THE PUNJAB TOWN IMPROVEMENT ACT, 1922 BECAUSE IT WANTED TO CARRY ON THE BUSINESS AS COLONIZERS OR DEVELOPER S UNDER THE MASK OF THE CATEGORY 'OBJECTS OF GENERAL PUBLIC UTILITY. ME RE PROFIT MAKING ON ACCOUNT OF CERTAIN INCIDENTAL OR ANCILLARY ACTIVITI ES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONSTITU TED UNDER THE PUNJAB 6 TOWN IMPROVEMENT ACT IS LIKELY TO MAKE PROFIT ON A CCOUNT OF ITS COMMERCIAL OR BUSINESS ACTIVITIES SUCH AS WHEN IT A CTS PURSUANT TO THE POWER UNDER SECTION 28(2)(III) BY DISPOSING OFF ITS LANDS. THAT, HOWEVER, DOES NOT TAKE IT OUT OF THE DEFINITION OF 'CHARITAB LE PURPOSE' IN SECTION 2(15). PROFIT IS NOT THE PREDOMINANT MOTIVE OF SUCH TRUSTS. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIRE MENTS AND NOT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO T HE MAIN OBJECT OF THE TRUST. THE RELEVANT PART OF THE DECISION OF THE HON BLE HIGH COURT IS REPRODUCED AS UNDER: 72. THE TRIBUNAL RIGHTLY REJECTED THE CONTENTION THAT TO FALL WITHIN THE AMBIT OF THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' THE TRUST MUST NECESSARILY BE INVOLVED ONL Y IN IMPLEMENTING POVERTY ALLEVIATION PROGRAMS OR DOING OTHER ACTS OF CHARITY. IT IS SUFFICIENT IF IT DOES PRECISELY WHAT THE LAST CATEG ORY IN SECTION 2(15) STATES NAMELY BEING INVOLVED IN ACTIVITIES FOR THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY. THEY INCLUDE A PR OPER SYSTEMATIC DEVELOPMENT OF CERTAIN AREAS. THESE ACTIVITIES ARE BY VIRTUE OF THE PTI ACT UNDERTAKEN BY THIS ASSESSEE. 73. THE TRIBUNAL ALSO RIGHTLY HELD THAT AN OBJECT OF G ENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THE ACTIVITIES TO BE F UNDED OR SUBSIDIZED BY THE STATE. SO LONG AS THE OBJECTS FALL WITHIN THE A MBIT OF THE WORDS 'OBJECT OF GENERAL PUBLIC UTILITY', IT IS SUFFICIENT. THE A CHIEVEMENTS OF THOSE OBJECTS DO NOT HAVE TO BE AS A RESULT OF STATE FUND ING OR STATE SUBSIDY. THE TRIBUNAL ACCORDINGLY RIGHTLY HELD THAT THE AUTH ORITIES WERE NOT JUSTIFIED IN DENYING THE BENEFIT OF SECTION 11 AND HOLDING THAT THE ASSESSEE WAS NOT COVERED BY THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' IN SECTION 2(15). THE TR IBUNAL, THEREFORE, RIGHTLY DIRECTED THE ASSESSING OFFICER TO DELETE DI SALLOWANCE OF EXEMPTION. 74. IT CANNOT POSSIBLY BE SUGGESTED THAT THE GOVERNMEN T OF PUNJAB FORMED THE TRUSTS UNDER THE PUNJAB TOWN IMPROVEMENT ACT, 1922 BECAUSE IT WANTED TO CARRY ON THE BUSINESS AS COLONIZERS OR DEVELOPERS UNDER THE MASK OF THE CATEGORY 'OBJECTS OF GENERAL PUBLIC UTI LITY'. 75. SECTION 28(2)(III) OF THE PUNJAB TOWN IMPROVEMENT ACT, 1922 PERMITS 7 A SCHEME UNDER THIS ACT TO PROVIDE INTER ALIA FOR T HE DISPOSAL OF THE LAND VESTED IN OR ACQUIRED BY THE TRUST INCLUDING BY LEA SE, SALE AND EXCHANGE THEREOF. THIS, HOWEVER, IS NOT THE PREDOMINANT ACTI VITY OR RESPONSIBILITY OF THE TRUST. NOR FOR THIS ASSESSEE IS MAKING PROFI TS FROM THIS ACTIVITY ITS PREDOMINANT MOTIVE. 76. THE POWER OF THE ASSESSEE TO DISPOSE OF LAND CONFE RRED BY SECTION 28(2)(III) IS NOT AN ABSOLUTE OR INDEPENDENT POWER. IT IS CONFERRED UPON THE ASSESSEE IN THE DISCHARGE OF ITS STATUTORY DUTI ES IMPOSED ON IT BY THE PTI ACT OF FRAMING SCHEMES. SUB-SECTION (1) OF SECT ION 28 ENTITLES THE ASSESSEE TO COMBINE THE VARIOUS SCHEMES REFERRED TO IN CHAPTER-IV. SUB- SECTION (2) STIPULATES THAT THE SCHEME UNDER THE AC T MAY PROVIDE FOR A VARIETY OF THINGS INCLUDING THE DISPOSAL OF LAND BE LONGING TO THE ASSESSEE. THIS POWER IS, THEREFORE, IN FURTHERANCE OF, CONNEC TED WITH AND IN RELATION TO A SCHEME IN CHAPTER-IV. IT IS NOT AN AB SOLUTE POWER INDEPENDENT OF AND UNCONNECTED WITH THE ASSESSEE'S STATUTORY FUNCTIONS UNDER THE PTI ACT. 77. THE PREDOMINANT ACTIVITY OF AND THE PURPOSE FOR TH E ESTABLISHMENT OF THE ASSESSEE IS SUMMED UP IN TWO WORDS 'TOWN IMPROV EMENT' IN THE TITLE 'PUNJAB TOWN IMPROVEMENT ACT, 1922'. THE PREAMBLE I S TITLED 'AN ACT FOR THE IMPROVEMENT OF CERTAIN AREAS'. THE PREAMBLE STATES 'WHEREAS IT IS EXPEDIENT TO MAKE PROVISION FOR THE IMPROVEMENT AND EXPANSION OF TOWNS IN PUNJAB'. THE ACT IN GENERAL AND CHAPTER-IV THEREOF IN PARTICULAR INDICATES THE REASON FOR AND THE BASIS O F THE ESTABLISHMENT OF THE TRUST. ALMOST EVERY SECTION IN THE CHAPTER INDI CATES CLEARLY THAT THE TRUST IS ESTABLISHED FOR THE PURPOSE OF 'ADVANCEMEN T OF THE OBJECT OF GENERAL PUBLIC UTILITY'. THIS IS THE PREDOMINANT PU RPOSE OF THE TRUST. 78. THE LANGUAGE OF THE PROVISIONS OF THE ACT ARE SELF -EXPLANATORY IN THIS REGARD. THE TRUST MUST DEAL WITH THE BUILDINGS UNFI T FOR HUMAN HABITATION, THE DANGER CAUSED OR LIKELY TO BE CAUSED TO THE HEA LTH OF THE INHABITANTS OF THE AREA ON ACCOUNT OF THE CONGESTED CONDITIONS OF STREETS OR BUILDINGS OR WANT OF LIGHT, AIR, VENTILATION OR PROPER CONVEN IENCES IN AN AREA AND SANITARY DEFECTS. THE TRUST IS REQUIRED TO FRAME TH E STREET SCHEMES TO LAY OUT NEW STREETS, THOROUGHFARES AND OPEN SPACES OR A LTER EXISTING STREETS WHENEVER IT APPEARS TO THE TRUST THAT IT IS NECESSA RY TO DO SO FOR THE PURPOSE OF PROVIDING BUILDING SITES OR REMEDYING DE FECTIVE VENTILATION OR CREATING NEW OR IMPROVING EXISTING MEANS OF COMMUNI CATION AND FACILITIES FOR TRAFFIC. 79. THE TRUST MUST ALSO PREPARE DEVELOPMENT SCHEMES. T HIS DUTY CONTAINED IN SECTION 24 IS NOT AKIN TO THAT OF A PR IVATE DEVELOPER OR A COLONIZER AS WRONGLY SUGGESTED BY THE ASSESSING OFF ICER AND CONFIRMED BY THE CIT(A). THE DEVELOPMENT SCHEME UNDER SECTION 24 IS PREPARED FOR THE PURPOSE OF DEVELOPMENT OF A LOCALITY. SUB-SECTI ON (2) OF SECTION 24 8 PROVIDES THAT THE TRUST MAY IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AND FOR THE PUBLIC ADVANTAGE TO PROMOTE AND CONTROL THE DEVELOPMENT OF AND TO PROVIDE FOR THE EXPANSION OF A MUNICIPALITY IN A NY LOCALITY ADJACENT THERETO WITHIN THE LOCAL AREA OF SUCH TRUST PREPARE 'AN EXPANSION SCHEME'. THE DEVELOPMENT SCHEME, THEREFORE, IS FOR THE PUBLIC PURPOSE OF DEVELOPMENT OF ANY LOCALITY AND AN EXPANSION SCH EME IS ALSO PREPARED WHEN IT IS EXPEDIENT AND FOR THE PUBLIC ADVANTAGE A S OPPOSED TO A MERE PERSONAL ADVANTAGE AS IN THE CASE OF PRIVATE DEVELO PERS OR THE COLONIZERS. THE TWO CANNOT POSSIBLY BE COMPARED. TH ESE SCHEMES DO NOT CONTEMPLATE MERE DEVELOPMENT OF THE PLOTS AND THE C ONSTRUCTION OF THE PREMISES FOR SALE. THE TRUST MUST UNDER THE ACT ADO PT A HOLISTIC APPROACH FOR THE BETTERMENT AND ADVANTAGE OF THE ENTIRE AREA WITHIN ITS JURISDICTION. 80. SECTION 25 WHICH PROVIDES FOR A HOUSING ACCOMMODAT ION SCHEME TO BE FRAMED IS SIMILAR. THE TRUST IS REQUIRED TO FRAM E SUCH A SCHEME IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AND FOR THE PUB LIC ADVANTAGE TO PROVIDE HOUSING ACCOMMODATION FOR ANY CLASS OF INHABITANTS WITHIN ITS LOCAL AREA. THE TRUST IS, THEREFORE, TO BE MOTIVATED NOT BY PERSONAL BUT BY PUBLIC BENEFIT. SUCH ACTIVITIES CLEARLY FALL WITHIN THE LAST CATEGORY OF CASES IN THE PROVISO TO SECTION 2(15) AS IT STOOD A T THE RELEVANT TIME, NAMELY, 'ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY'. 81. IT CAN HARDLY BE SUGGESTED THAT THE GOVERNMENT OF PUNJAB ESTABLISHED THE ASSESSEE'S TRUST AND CONFERRED UPON IT PUBLIC R ESPONSIBILITIES AND DUTIES OF THE NATURE SPECIFIED IN THE PTI ACT AS A CAMOUFLAGE FOR ITS COMMERCIAL, TRADE AND BUSINESS VENTURES. THE CREATI ON AND INCORPORATION OF THE TRUST UNDER SECTION 3 IS FOR A PUBLIC PURPOSE. WE HAVE NO DOUBT WHATSOEVER THAT THE ACTIVITIES OF THE TRUST FALL WITHIN THE MEANING OF THE WORDS 'CHARITABLE PURPOSE' IN SECTIO N 2(15). 82. WHETHER THE MANDATE OF THE ACT IS FOLLOWED BY SUCH A TRUST IS A DIFFERENT MATTER. THE FACTS IN THAT REGARD ARE RELE VANT IN EXAMINING WHETHER THE ACTIVITIES OF THE TRUST OF A GIVEN YEAR ENTITLED IT TO THE BENEFIT OF THE INCOME TAX ACT. MERE PROFIT MAKING ON ACCOUN T OF CERTAIN INCIDENTAL OR ANCILLARY ACTIVITIES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONSTITUTED UNDER THE PTI ACT IS LIKELY TO MAKE PROFIT ON ACCOUNT OF ITS COMMERCIAL OR BUSINESS ACT IVITIES SUCH AS WHEN IT ACTS PURSUANT TO THE POWER UNDER SECTION 28(2)(I II) BY DISPOSING OFF ITS LANDS. THAT, HOWEVER, DOES NOT TAKE IT OUT OF THE D EFINITION OF 'CHARITABLE PURPOSE' IN SECTION 2(15). AS WE HELD EARLIER, TRAD E, COMMERCE AND BUSINESS IN SECTION 2(15) MUST BE SUCH AS TO INVOLV E AN ELEMENT OF PROFIT. PROFIT, HOWEVER, IS NOT THE PREDOMINANT MOTIVE OF S UCH TRUSTS. IN OUR VIEW CONSIDERING THE NATURE OF THE ACT, SELLING OF PLOTS AND PREMISES BY THE TRUST IS ONLY INCIDENTAL AND ANCILLARY TO ITS MAIN PURPOSE WHICH AT THE 9 COST OF REPETITION IS 'TOWN IMPROVEMENT' IN ALMOST EVERY RESPECT. EVEN WHERE THE PLOTS ARE DEVELOPED AND PREMISES ARE CONS TRUCTED AND SOLD AT THE MARKET PRICE, THE ACTIVITY IS NOT COMMERCIAL OR BUSINESS VENTURE PER SE BUT ONE NECESSITATED ON ACCOUNT OF THE IMPLEMENT ATION OF THE PROVISIONS OF THE TRUST THROUGH STATUTORY SCHEMES. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIREMENTS AND N OT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO THE MAIN OBJ ECT OF THE TRUST. 83. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT INDICATED ANY FACTS WHICH INDICATE THAT THE ASSESSEE DEVIATED FROM THIS PRINCIPLE. HE HAS MERELY REFERRED THE EXTENT OF PROFIT-MAKING ACTIVIT IES WITHOUT CORRELATING THE SAME TO THE OTHER ACTIVITIES OF THE TRUST. IN O UR VIEW, THEREFORE, THE ORDER OF THE TRIBUNAL MUST BE UPHELD. 84. MR. GOEL RELIED UPON THE JUDGMENT OF THE HIGH COUR T OF JAMMU & KASHMIR IN JAMMU DEVELOPMENT AUTHORITY V. UNION OF INDIA [IT APPEAL NO. 164 OF 2012]. THE DIVISION BENCH DISMISSED THE APPEAL WITH THE FOLLOWING ORDER: 1. THE INSTANT APPEAL UNDER SECTION 260-A OF THE INCOM E-TAX ACT, 1961 (FOR BREVITY, THE ACT) IS DIRECTED AGAINST ORDER DATED 1 4.06.2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR, UPHOLDING THE ORDER WITHDRAWING THE STATUS OF CHARITABLE INSTITUTION GIVEN TO THE A PPELLANT-ASSESSEE UNDER SECTION 12AA(1)(B)(I) OF THE ACT. THE TRIBUNAL HAS REACHED A CATEGORICAL CONCLUSION THAT THE ASSESSEE-JAMMU DEVELOPMENT AUTH ORITY CANNOT BE REGARDED AS AN INSTITUTION OR TRUST WHICH MAY HAVE BEEN SET UP TO ACHIEVE THE OBJECTS ENUMERATED UNDER SECTION 2 OF THE ACT PARTI CULARLY IN VIEW OF THE ADDITION OF FIRST AND SECOND PROVISO MADE BY THE FI NANCE ACT, 2008 W.E.F. 01.04.2009 TO SECTION 12AA OF THE ACT. THERE ARE FI NDINGS OF FACT THAT THE ASSESSEE-APPELLANT HAS NOT BEEN ACTING TO ADVANCE A NY OF THE OBJECT CONCERNING GENERAL PUBLIC UTILITY. EVEN OTHERWISE T HE PROVISO WHICH HAS BEEN ADDED BY THE FINANCE ACT, 2008 W.E.F. 01.04.2009 ST IPULATES THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF THE GENERAL PUBL IC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES CARRYING ON OF A NY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS OR A CE SS OR FEE OF ANY OTHER CONSIDERATION. 2. WE FIND THAT NO QUESTION OF LAW MUCH LESS A SUBSTAN TIAL QUESTION OF LAW WOULD EMERGE FROM THE IMPUGNED ORDER OF THE INCOME TAX AP PELLATE TRIBUNAL WARRANTING ADMISSION OF THE APPEAL. THE APPEAL IS W HOLLY WITHOUT MERIT AND IS THUS LIABLE TO BE DISMISSED. 3. FOR THE REASONS AFOREMENTIONED, THIS APPEAL FAILS A ND SAME IS DISMISSED ALONGWITH CONNECTED APPLICATION(S).' 10 THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT F OR THE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THA T THE ASSESSEE/APPELLANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERAL PUBLIC UTILITY. THE JUDGM ENT WAS, THEREFORE, BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FO R THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTION OF LAW MUCH LE SS A SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE ORDER OF THE TRIBU NAL. IT IS DIFFICULT TO UNDERSTAND HOW THIS ORDER CAN POSSIBLY BE RELIED UPON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORD ER IMPUGNED THEREIN IS BASED ON THE FACTS OF THAT CASE. THE DIS MISSAL OF THE SPECIAL LEAVE PETITION FILED AGAINST THAT ORDER IS, THEREFO RE, OF NO ASSISTANCE TO THE REVENUE EITHER. 85. MR. GOEL THEN RELIED UPON SECTION 10(20A) OF THE I NCOME-TAX ACT, 1961 WHICH WAS OMITTED BY THE FINANCE ACT, 2002 WIT H EFFECT FROM 01.04.2003. PRIOR TO ITS OMISSION SECTION 10(20A) O F THE ACT READ AS UNDER: ' INCOMES NOT INCLUDED IN TOTAL INCOME. 10 . IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE INCLUDED .' (20A) : ANY INCOME OF AN AUTHORITY CONSTITUTED IN INDIA B Y OR UNDER ANY LAW ENACTED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLA NNING, DEVELOPMENT OF IMPROVEMENT OF CITIES, TOWN AND VILLAGES, OR FOR BOTH,' 86. THE ASSESSEE, NAMELY, MOGA IMPROVEMENT TRUST IS UN DOUBTEDLY AN AUTHORITY CONSTITUTED IN INDIA. IT IS ALSO CONSTITU TED BY OR UNDER A LAW, NAMELY, THE PUNJAB TOWN IMPROVEMENT ACT, 1922. FURT HER, IT IS ENGAGED FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION. IT IS ALSO CONSTITUTED FOR THE PURPO SE OF PLANNING, DEVELOPMENT OF IMPROVEMENT OF CITIES, TOWNS AND VIL LAGES OR FOR BOTH AS IS EVIDENT FROM SECTIONS 22 TO 28 OF THE PTI ACT QU OTED ABOVE. THE APPELLANTS, WOULD, THEREFORE, UNDOUBTEDLY HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A). THE ASSESSEE WOULD NOT HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A) UPON ITS OMISSION BY THE FINANCE ACT, 2002 WITH EFFECT FROM 01.04.2003. SECTION 10(20A) OF THE ACT DID NOT CONTAIN ANY OTHER REQUIREMENT. IT WAS WIDER THAN SECTION 2( 15). HOWEVER, SECTION 2(15) AND THE CORRESPONDING SECTIO NS INCLUDING SECTIONS 11, 12, 12A AND 12AA ARE INDEPENDENT OF SE CTION 10(20A) OF THE ACT. UPON THE OMISSION OF SECTION 10(20A), THE PROV ISIONS OF THE OTHER SECTIONS WERE NOT AFFECTED. THEY REMAINED INTACT. A N ASSESSEE COULD HAVE BEEN ENTITLED TO THE PROVISIONS OF SECTION 10(20A) AND THE OTHER 11 PROVISIONS SIMULTANEOUSLY. THE OMISSION OF ONE, HOW EVER, DOES NOT AFFECT THE VALIDITY OR THE EXISTENCE OF THE OTHERS. THE TW O PROVISIONS ARE DISTINCT AND INDEPENDENT OF EACH OTHER. THUS THE OMISSION OF SECTION 10(20A) DID NOT AFFECT THE RIGHTS OF THE PARTIES CLAIMING THE B ENEFIT OF SECTIONS 2(15), 11, 12, 12A AND 12AA OF THE ACT. 87. IN THE CIRCUMSTANCES, THE QUESTIONS OF LAW RAISED IN ITA NO.62 OF 2015 ARE ANSWERED IN FAVOUR OF THE REVENUE AND AGAI NST THE ASSESSEE AND THE QUESTION OF LAW RAISED IN ITA NO. 147 OF 20 16 IS ANSWERED IN FAVOUR OF THE ASSESSEE. 10. SINCE THE ASSESSEE TRUST HAS ALSO BEEN ESTABLISHE D UNDER THE PUNJAB TOWN IMPROVEMENT ACT, 1922 AND THE ACTIVITIES CARRI ED OUT BY THE ASSESSEE ARE IDENTICAL AS IN THE CASE OF IMPROVEME NT TRUST, MOGA (SUPRA), HENCE, THE AFORESAID DECISION OF THE HONB LE HIGH COURT IS SQUARELY APPLICABLE TO THE CAPTIONED APPEALS. IN TH E LIGHT OF AFORESAID THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT THE CAPTIONED APPEALS OF THE REVENUE ARE HEREBY DISMISSED. CROSS OBJECTIONS: 11. THE CROSS OBJECTIONS FILED BY THE ASSESSEE A RE BARRED BY LIMITATION FOR A DELAY OF ONE DAY. TAKING INTO CONSIDERATION T HE SHORTNESS OF THE DELAY PERIOD, THE DELAY IN FILING THE CROSS-OBJECTI ONS IS HEREBY CONDONED. 12. THE ASSESSEE HAS CONTESTED THE VALIDITY OF THE REOPENING OF THE ASSESSMENTS U/S 147 OF THE ACT. SINCE WE HAVE HELD THAT THE ISSUE ON MERITS IS COVERED BY THE DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE IMPROVEMENT TRUST, MOGA (SUPRA ), HENCE THE LEGAL 12 ISSUE RELATING TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT IS RENDERED ACADEMIC IN NATURE AND IS NOT NECESSARY TO BE ADJUDICATED AT THIS STAGE. THE CROSS OBJECTIONS FILED BY THE ASSES SEE ARE, THEREFORE, DISMISSED HAVING BECOME INFRUCTUOUS, WITH LIBERTY T O THE ASSESSEE TO RAISE THE ISSUE IF, SO NECESSITATED AT ANY STAGE. 13. IN THE RESULT THE APPEALS OF THE REVENUE AS WEL L CROSS OBJECTIONS OF THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29.08.2017 SD/- SD/- (MS. ANNAPURNA GUPTA) (SANJAY GA RG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28. 09.2017 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR