The ACIT(Exemptions), Circle-1, Ahmedabad V. Gujarat Housing Board, Ahmedabad

ITA 307/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6547 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Charitable institution; Question of law
• Section: 12AA; 191; 13; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 307/AHD/2019 (ASSESSMENT YEAR: 2014-15) ACIT(E) CIRCLE-1, AHMEDABAD VS. GUJARAT HOUSING BOARD VIJAYNAGAR, PRAGATINAGAR, NARANPURA, AHMEDABAD- 380013 [PAN NO. AAALG0206E] ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY : SHRI SANJEEV JAIN, CIT DR ASSESSEE BY : SHRI SANJAY R. SHAH, AR DATE OF HEARING 01.09.2021 DATE OF PRONOUNCEMENT 07.09.2021 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.12.2018 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS)-4, AHMEDABAD ARISING OUT OF THE ORDER DATED 14.12.2016 PASSED BY THE ACIT (EXEMPTIONS), CIRCLE 1, AHMEDABAD UNDER SECTION 1 43(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT ) FOR THE ASSESSMENT YEAR (A.Y.) 2014-15 WHEREBY AND WHEREUNDER THE DEDUCTION /EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT HAS BEEN ALLOWED BY TH E LD. CIT(A) APPLYING THE PROVISION OF SECTION 2(15) OF THE ACT. 2. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN ASSESSEES OWN CASE FOR A.Y. 2012-13. IT WAS FURTH ER BEEN MENTIONED THAT ITA NO.307/AHD/2019 ACIT VS. GUJARAT HOUSING BOARD ASST.YEAR 2014-15 - 2 - THE APPEAL PREFERRED BY THE REVENUE AGAINST THE ORD ER PASSED BY THE LD. TRIBUNAL ON 16.11.2018 IN ITA NO. 3297/AHD/2016 FOR A.Y. 2012-13 BEFORE THE HONBLE JURISDICTIONAL HIGH COURT HAS BE EN DISMISSED. THE COPY OF BOTH THE ORDERS PASSED BY THE COORDINATE BENCH A ND THE JURISDICTIONAL HIGH COURT DISMISSING THE APPEAL PREFERRED BY THE R EVENUE HAVE BEEN SUBMITTED BEFORE US BY THE LD. AR. 3. THE LD. DR WITH ALL HIS FAIRNESS HAS NOT OBJECTE D TO SUCH ADMITTED POSITION OF THE MATTER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY THE RESPECTIVE PARTIES AND WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVA ILABLE ON RECORD, PARTICULARLY THE ORDER PASSED BY THE COORDINATE BEN CH IN ITA NO. 3297/AHD/2016 FOR A.Y. 2012-13 IN ASSESSEES OWN CA SE THE RELEVANT PORTION WHEREOF IS AS FOLLOWS:- 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE BEFORE US IS A TRUST CONSTITUTED, BY GOVERNMENT OF GUJARAT, U NDER THE GUJARAT HOUSING BOARD ACT, 1961. IT IS FORMED BY THE STATE GOVERNMENT SO AS TO DEAL WITH, AND SATISFY, THE HOUSING ACCOMMODATION NEEDS OF GENERAL PUBLIC - PAR TICULARLY WITH A VIEW TO PROVIDE SHELTER TO ECONOMICALLY WEAKER SECTIONS OF SOCIETY. THE TRUST IS REGISTERED UNDER SECTION 12AA OF THE ACT. THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 28.03.2013, CLAIMING EXEMPTION OF RS. 11,23,37,661/- UNDER SECT ION 11. DURING THE COURSE OF ENSURING SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSES SING OFFICER NOTED THAT, SINCE ITS INCEPTION, THE ASSESSEE HAD CONSTRUCTED 1,76,830 DW ELLING UNITS, INCLUDING 23,364 SLUM CLEARANCE AND INTEGRATED HOUSING SCHEME UNITS, 49,083 ECONOMICALLY WEAKER SECTION UNITS, 55,656 LOWER INCOME GROUP UNITS, 42, 191 MIDDLE INCOME GROUP UNITS, AND 6,271 HIGH INCOME GROUP UNITS. THE ASSES SING OFFICER WAS OF THE VIEW THAT 'HOUSES CONSTRUCTED BY THE GUJARAT HOUSING BOA RD ARE SOLD TO ALL TYPES OF INCOME GROUPS, INCLUDING THE HIGH NET WORTH INDIVID UALS AND LARGE CHUNK OF MIDDLE INCOME GROUP'. THE ASSESSING OFFICER WAS OF THE VIE W THAT SUCH AN ACTIVITY PURSUED BY THE ASSESSEE CANNOT BE TREATED AS A CHARITABLE A CTIVITY. HE REFERRED TO, AND RELIED UPON, DECISIONS OF THIS TRIBUNAL IN THE CASES OF JA LANDHAR DEVELOPMENT AUTHORITY VS. CIT [(2010) 35 SOT 15 (ASR)L, PUNJAB URBAN PLANNING & DEVELOPMENT AUTHORITY VS. CIT [(2006) 156 TAXMAN 37 (MAG)], JAMMU DEVELOPMENT AUTHORITY VS. CIT [(2012) 23 TAXMANN.COM 343 (ASR)L AND ENTERTAINMENT SOCIETY OF GOA VS. CIT [(2013) 34 TAXMANN.COM 210 (PANJIM)]. HE WAS THUS OF THE VIEW AS FOLLOWS:- ITA NO.307/AHD/2019 ACIT VS. GUJARAT HOUSING BOARD ASST.YEAR 2014-15 - 3 - '6. THUS, THE SUBMISSION OF THE ASSESSEE THAT, THE ASSESSEE IS CARRYING ON THE SAME NATURE OF ACTIVITY AND SAME NATURE OF INCOME AND TH EREFORE, THE INCOME SHOULD BE COMPUTED AS PER PROVISIONS OF SECTION 11 TO 13 OF T HE I.T ACT IS NOT ACCEPTABLE SINCE IT IS CLEARLY EVIDENT THAT THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF EARNING PROFIT FROM SALE OF PLOTS/LAND, CHARGING VARIOUS FEES FOR RENDE RING SERVICES TO THE GENERAL PUBLIC. THE SUBMISSION OF THE ASSESSEE IS NOT RELEVANT SINC E THE INCOME EARNED IS BUSINESS INCOME AND THE APPLICATION OF THE SAID INCOME IS IR RELEVANT IN VIEW OF THE FIRST PROVISO TO SECTION 2(15) OF THE IT ACT WHICH IS AS UNDER: - PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYIN G ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING ANY SERVICE IIN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, O R RETENTION, OF THE INCOME FROM SUCH ACTIVITY: [PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS [TWENTY FIVE LAKHS RUPEES] OR LESS IN THE PREVIOUS YEAR;] THEREFORE, AS DISCUSSED IN PRECEDING PARAS, THE ASS ESSEE IS NOT EARNING OUT ANY CHARITABLE ACTIVITY AND IS SQUARELY COVERED BY THE PROVISO 1 & 2 OF THE SECTION 2(15) OF THE LT. ACT.' 10. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEAR ING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO HOLD THAT THE AUTHORIT IES BELOW WERE IN ERROR IN INVOKING PROVISION TO SECTION 2(15) AND DECLINING THE BENEFI T OF SECTION 11 TO THE ASSESSEE. WE SEE NO POINT IN REMITTING THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION DE NOVO, IN THE LIGHT OF THE ABOVE LEGA L POSITION- AS WAS THE DECISION OF THE COORDINATE BENCH IN IMMEDIATELY PRECEDING ASSES SMENT YEAR, SINCE ALL THE RELATED FACTS ARE ON RECORD AND, UNLIKE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, IT IS NOT A CASE OF EX PARTE BEST JUDGMENT ASSESSMENT ORD ER. SUCH AN EXERCISE WILL UNNECESSARILY DELAY THE MATTER REACHING FINALLY. I N ANY CASE, NO SPECIFIC POINTS, ON WHICH FURTHER EXAMINATION IS REQUIRED, WERE POINTED OUT TO US. THE GRIEVANCES OF THE ASSESSEE ARE THUS UPHELD AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE BENEFITS OF EXEMPTION UNDER SECTION 11 TO THE ASSESSEE. THE AS SESSEE GETS THE RELIEF ACCORDINGLY. 6. WE HAVE FURTHER PERUSED THE ORDER PASSED BY THE JURISDICTIONAL HIGH COURT PASSED IN THE APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER DATED 16.11.2018 PASSED BY THE COORDINATE BENCH IN FAVOUR OF THE ASSESSEE WHEREBY AND WHEREUNDER THE SAID APPEAL HAS BEEN DIS MISSED WITH THE FOLLOWING OBSERVATION:- 4. IT ALSO APPEARS THAT WITH RESPECT TO GUJARAT HO USING BOARD ITSELF ON THE VERY SAME PROPOSED QUESTION OF LAW, A COORDINATE BENCH O F THIS COURT DISMISSED THE APPEAL RELYING ON THE DECISION OF THIS COURT IN THE MATTER OF AUDA. IT IS BROUGHT TO ITA NO.307/AHD/2019 ACIT VS. GUJARAT HOUSING BOARD ASST.YEAR 2014-15 - 4 - OUR NOTICE THAT THE ISSUE IS NOW PENDING BEFORE THE SUPREME COURT. WE MAY QUOTE THE ORDER PASSED IN TAX APPEAL NO.752 OF 2018 IN THE CA SE OF COMMISSIONER OF INCOME TAX (EXEMPTION) VS. GUJARAT HOUSING BOARD, DECIDED ON 02.07.2018: '[2.0] HEARD MRS. MAUNA BHATT, LEARNED ADVOCATE APP EARING ON BEHALF OF THE REVENUE. AT THE OUTSET, IT IS REQUIRED TO BE NOTED THAT AS SUCH BY THE IMPUGNED ORDER AND AFTER HAVING NOTED THE DECISIONS OF THIS COURT IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY VS. ACIT (EXEMPTION) IN ITA N O.423 TO 425 OF 2016 DATED 02/05/2017 AND CIT VS. GUJARAT INDUSTRIAL DEVELOPME NT CORPORATION REPORTED IN (2017) 83 TAXMANN.COM 366 (GUJARAT), LEARNED TRIBUN AL HAS RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONCLUDE THE I SSUE DE NOVO. NO QUESTION OF LAW ARISES. WE DO NOT PROPOSE TO INTERFERE WITH THE IMP UGNED ORDER OF REMAND. ON THE BASIS OF THE MATERIAL ON RECORD, WHICH MAY BE BEFOR E THE LEARNED ASSESSING OFFICER, THE ASSESSING OFFICER MAY CONSIDER THE APPLICABILIT Y OF THE AFORESAID TWO DECISIONS VIS--VIS THE ACTIVITIES BEING CARRIED OUT BY THE A SSESSEE. UNDER THE CIRCUMSTANCES, PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDINGLY DISMISSED. 7. IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES RESP ECTFULLY RELYING UPON THE ORDER PASSED BY THE COORDINATE BENCH WHICH WAS FURTHER AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT WE FIND NO AMBIGUITY IN THE ORDER PASSED BY THE LD. CIT(A) IN ALLOWING BENEFIT OF DED UCTION UNDER SECTION 11 & 12 OF THE ACT IN THE APPEAL PREFERRED BY THE ASSE SSEE. HENCE, THE APPEAL PREFERRED BEFORE US BY REVENUE FOUND TO BE DEVOID O F ANY MERIT AND, THUS, DISMISSED. 8. IN THE RESULT, THE APPEAL PREFERRED BY THE REVEN UE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07/09/2021 SD/- SD/- (PRADIP KUMAR KEDIA) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/09/2021 TANMAY, SR. PS TRUE COPY ITA NO.307/AHD/2019 ACIT VS. GUJARAT HOUSING BOARD ASST.YEAR 2014-15 - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 01.09.2021 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.09.2021 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 06.09.2021 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .09.2021 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 07 .09.2021 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 08.09.2021 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER