Dy. Commissioner of Income Tax (Exem.), Lucknow V. M/s Varanasi Development Authority, Varanasi (U.P.)

ITA 380/LKW/2015

• Counselvise Citation: 38023714 RSA 2015
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D K MITTAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.380/LKW/2015 ASSESSMENT YEAR: 2011 12 DCIT (EXEMPTIONS), LUCKNOW VS M/S VARANASI DEVELOPMENT AUTHORITY, PANNA LAL PARK, KUTCHAHRY, VARANASI. PAN:AAATV6811A (APPELLANT) (RESPONDENT) ASSESSEE BY SRI D. K. MITTAL, C.A. REVENUE BY SMT. JYOTI VERMA, SR. DR DATE OF HEARING 29/07/2015 DATE OF PRONOUNCEMENT 2 8 /08/2015 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT (A) VARANASI DATED 30.06.2015 FOR A.Y. 2011 12. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN RESTORING THE EXEMPTION U/S 11 OF THE ACT IN CASE OF ASSESSEE, WHICH WAS EARLIER DENIED BY THE ASSESSING OFFICER. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTI FIED IN ALLOWING THE RELIEF OF RS.380,00,813/ - TO THE ASSESSEE. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN NOT ACCEPTING THE STAND OF THE REVENUE THAT THE ASSESSEE IS CARRYING ON THE ACTIVITIES OF TR ADE, COMMERCE AND BUSINESS AND IS AS SUCH HIT BY THE PROVISIONS TO SECTION 2 (15) OF THE ACT. 2 3. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER AND DRAWN OUR ATTENTION TO THE PROVISIONS OF SECTION 11 (4) AND 11 (4A ) OF THE ACT. LEARNED AR OF TH E ASSESSEE SUPPORTED THE ORDER OF CIT (A). HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. LUCKNOW DEVELOPMENT AUTHORITY AS REPORTED IN 265 CTR 433. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IN THE CASE OF CIT VS. LUCKNOW DEVELOPMENT AUTHORITY (SUPRA), THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IS ON THIS BASIS THAT THERE IS NO MATERIAL/EVIDENCE BROUGHT ON RECORD BY THE REVENUE WHICH MAY SUGGEST THAT THE ASSESSEE WAS CONDUCTING ITS AF FAIRS ON COMMERCIAL LINE WITH THE MOTIVE TO EARN PROFIT. IT WAS HELD THAT UNDER THESE FACTS, THE PROVISO TO SECTION 2 (15) IS NOT APPLICABLE. NOW WE EXAMINE THE FACTS OF THE PRESENT CASE TO FIND OUT AS TO WHETHER THE REVENUE HAS BROUGHT ON RECORD ANY MATER IAL/EVIDENCE WHICH MAY SUGGEST THAT THE ASSESSEE WAS CONDUCTING ITS AFFAIRS ON COMMERCIAL LINE WITH THE MOTIVE TO EARN PROFIT. WHEN WE DO SO, WE FIND THAT ON PAGE 4 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE A.O. THAT ON DISSOLUTION OF THE ASSESSEE AUTHOR ITY, ALL PROPERTIES, FUNDS AND DUES WHICH ARE VESTED IN OR REALIZABLE BY THE AUTHORITY SHALL VEST IN OR BE REALISABLE BY THE STATE GOVERNMENT AND THEREFORE, THE FUNDS GENERATED DURING SO CALLED CHARITABLE PURPOSE PERIOD MAY BE UTILIZED FOR THE PURPOSE OF T HE BUSINESS. ON PAGE 5 OF THE ASSESSMENT ORDER, THERE IS A CHART OF THE INCOME OF THE ASSESSEE FROM VARIOUS SOURCES AND AS PER THE SAME, REALISATION FROM ALLOTTED PROPERTIES IS ONLY RS. 480.45 LACS AND INTEREST INCOME IS OF RS. 458.24 LACS PLUS RS. 232.25 LACS AND OTHER RECEIPTS RS. 665.62 LACS. IN THIS MANNER, AS AGAINST REALISATION FROM ALLOTTED PROPERTIES OF ONLY RS. 480.45 LACS, INTEREST INCOME AND OTHER RECEIPTS IS RS. 1356.11 LACS. IN VIEW OF THESE FACTS, THE A.O. CAME TO THE CONCLUSION THAT THE RECEI PTS OF THE ASSESSEE ARE COMMERCIAL IN NATURE. UNDER THESE FACTS, IN OUR CONSIDERED OPINION, THE JUDGMENT OF 3 HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. LUCKNOW DEVELOPMENT AUTHORITY (SUPRA) CANNOT BE MADE APPLICABLE IN THE FACTS OF THE PRE SENT CASE. LEARNED CIT (A) HAS SIMPLY FOLLOWED THIS JUDGMENT WITHOUT EXAMINING THIS ASPECT THAT THE FACTS IN THE PRESENT CASE ARE TALLYING O R N O T WITH THE FACTS IN THE CASE OF CIT VS. LUCKNOW DEVELOPMENT AUTHORITY (SUPRA). THEREFORE, WE FEEL IT PROPER THAT THIS I SSUE SHOULD GO BACK TO CIT (A) FOR A FRESH DECISION AFTER EXAMINING THIS ASPECT THAT THE FACTS IN THE PRESENT CASE ARE TALLYING WITH THE FACTS IN THE CASE OF CIT VS. LUCKNOW DEVELOPMENT AUTHORITY (SUPRA) OR NOT. WE, THEREFORE, SET ASIDE THE ORDER OF CIT ( A) AND RESTORE THE ENTIRE MATTER BACK TO HIM FOR A FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 /08/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR