Uttarakhand Civil Aviation Development Authority, V. Commissioner of Income Tax (Exemption), Lucknow

ITA 383/LKW/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1060 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-03-2018
• Assessment Year: misc
• Appeal Filed On: 22-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 383/LKW/2016 ASSESSMENT YEAR: N.A. UTTARAKHAND CIVIL AVIATION DEVELOPMENT AUTHORIT Y SAHASTRADHARA HELIPAD MUSSOORIE BYPASS ROAD DEHRADUN V. CIT (EXEMPTIONS) LUCKNOW T AN /PAN : AAAAU5634K (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI SHUBHAM RASTOGI, FCA RESPONDENT BY: SHRI J.S. MINHAS, CIT (DR) DATE OF HEARING: 12 0 3 201 8 DATE OF PRONOUNCEMENT: 15 0 3 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEM P TIONS), LUCKNOW DATED 16/3/2016. 2 . THE GRIEVANCE OF THE ASSESSEE IS AGAINST RE JECTION OF APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT BY LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS). 3 . THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE HAD FILED AN APPLICATION UNDER SECTION 12A OF THE ACT ON 27/10/2015 WITH THE L D. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW. THE ASSESSEE IS A CIVIL AVIATION DEVELOPMENT AUTHORITY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT VIDE REGISTRATION NO. 108/2013 - 14 DATED 15.06.2013. ITA NO.383/LKW/2016 PAGE 2 OF 6 COPY OF REGISTRATION CERTIFICATE IS PLACED AT P AGE 33 OF THE PAPER BOOK. THE SAID SOCIETY HAS BEEN FORMED BY THE DIRECTORATE OF CIVIL AVIATION, GOVERNMENT OF UTTARAKHAND, VIDE G.O. DATED 30 TH MAY, 2013 AND IS GOVERNED BY THE RULES AND REGULATION FRAMED BY THE GOVERNMENT OF INDIA, MINISTRY OF CIVIL AVIA TION AND DIRECTOR GENERAL OF CIVIL AVIATION. COPY OF G.O. IS PLACED AT PAGES 11 TO 15 OF THE PAPER BOOK. THE PREDOMINANT OBJECTS OF THE SOCIETY AS LAID OUT IN THE MEMORANDUM OF ASSOCIATION ARE (1) PURCHASE OF LAND FOR RUN WAYS AND CONSTRUCTION OF RUN WAYS (2) PURCHASE OF LAND FOR HELIPAD AND CONSTRUCTION OF HELIPAD (3) PURCHASE OF AIRCRAFT AND HELICOPTER (4) ESTABLISHMENT OF AIR COMMUNICATION STATION/AIR TRAFFIC CONTROL (5) TO CONTROL THE AIRPORTS IN THE STATE AND PROVIDE VARIOUS SERVICES AT THE SAME (6) T O UNDERTAKE EXPANSION, PLANNING, DEVELOPMENT, CONSTRUCTION AND MAINTENANCE OF RUNWAYS, TERMINALS AND ANCILLARY BUILDINGS AT THE AIRPORTS AND (7) TO PROVIDE LANDING, TAKE OFF AND HALT FACILITY TO PRIVATE ENTITIES IN RESPECT OF ITS AIRCRAFT OR HELICOPTERS AG AINST DETERMINED CHARGES. ALL RULES AND REGULATIONS FRAMED BY THE GOVERNMENT OF INDIA, MINISTRY OF CIVIL AVIATION, DGCA AND OTHER CENTRAL STATUTES AND PROVISIONS SHALL BE TO THE EXTENT RELEVANT APPLICABLE ON THE SOCIETY. T HE PRIMARY PURPOSE AND PREDOMINA NT OBJECT OF THE ASSESSEE IS THE DEVELOPMENT OF TOURISM RELATED INFRASTRUCTURE FACILITIES, PROMOTION OF TOURISM AND CONSTRUCTION OF HELIPAD, RUNWAYS, TERMINALS AND ANCILLARY BUILDINGS AT THE AIRPORT. THE ASSESSEE SOCIETY HAS APPLIED FOR REGISTRATION UNDER SECTION 12AA PRIMARILY ON THE BASIS OF THE LAST LIMB OF SECTION 2(15) OF THE ACT WHICH SAYS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE ASSESSEE SOCIETY THEREFORE APPLIED BEFORE THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW ON THE BASIS OF SECTION 2(15) AS ADVANCEMENT OF GENERAL PUBLIC UTILITY BEING DEVELOPMENT AND PROMOTION OF TOURISM, CONSTRUCTION OF HELIPAD & AIRPORTS, CARRYING OUT SEARCH AND RESCUE OPERATIONS IN CASE OF EMERGENCIES, ETC. ARE THE WORK OF GENERAL ITA NO.383/LKW/2016 PAGE 3 OF 6 PUBLICITY UTILITY AND THUS APPLICATION WAS MADE. THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) ON DETAILED REASONS AS APPEARING IN HIS ORDER HAS REJECTED THE APPLICATION FOR REGISTRATION MADE BY THE ASSESSEE SOCIETY. THE REASONS ARE ALREADY THERE ON IN HIS ORDE R AND NEED NOT BE REPEATED HERE AGAIN. 4 . BEING AGGRIEVED, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE US. 5 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS AND CIRCUMSTANCES AND WE FIND THE PROVISION INVOLVED IN THIS ISSUE IS SECTION 2(15) WHERE THE LAST LIMB STATES THAT CHARITABLE PURPOSE INCLUDES ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THERE IS A PROVISO ADDED W.E.F. 1/4/2016 THAT ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF I T INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, ETC. WE HAVE TO DECIDE WHETHER THE OBJECTS OF THE ASSESSEE SOCIETY FULFILS TH E DEFINITION OF CHARITABLE PURPOSE AS ANY ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. SO FAR AS PROVISO IS CONCERNED, THERE IS AN INVOLVEMENT OF ANY BUSINESS ACTIVITY OR IN THAT CAN BE LOOKED INTO AT THE ASSESSMENT STAGE AND NOT AT THE STAG E OF GRANTING OF INITIAL REGISTRATION UNDER SECTION 12AA OF THE ACT. 6 . IN THIS REGARD, WE WOULD LIKE TO LOOK INTO THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT V. GUJARAT MARITIME BOARD , 295 ITR 561 (SC) WHEREIN IT HAS BEEN HELD THAT T HE EXPRES SION ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE INCOME - TAX ACT, 1961, IS OF THE WIDEST CONNOTATION. 7 . THAT EXPRESSION WOULD PRIMA FACIE INCLUDE ALL OBJECTS WHICH PROMOTE THE WELFARE OF THE GENERAL PUBLIC. IT CANNOT BE SAID THAT A ITA NO.383/LKW/2016 PAGE 4 OF 6 P URPOSE WOULD CEASE TO BE CHARITABLE EVEN IF PUBLIC WELFARE IS INTENDED TO BE SERVED. IF THE PRIMARY PURPOSE AND THE PREDOMINANT OBJECT ARE TO PROMOTE THE WELFARE OF THE GENERAL PUBLIC THE PURPOSE WOULD BE A CHARITABLE PURPOSE. THE WORD 'GENERAL' IN THE SA ID EXPRESSION MEANS PERTAINING TO A WHOLE CLASS. THEREFORE, ADVANCEMENT OF ANY OBJECT OF BENEFIT TO THE PUBLIC OR A SECTION OF THE PUBLIC AS DISTINGUISHED FROM BENEFIT TO AN INDIVIDUAL OR A GROUP OF INDIVIDUALS WOULD BE A CHARITABLE PURPOSE . THE SAID EXPR ESSION WOULD PRIMA FACIE INCLUDE ALL OBJECTS WHICH PROMOTE THE WELFARE OF THE GENERAL PUBLIC. IT CANNOT BE SAID THAT A PURPOSE WOULD CEASE TO BE CHARITABLE EVEN IF PUBLIC WELFARE IS INTENDED TO BE SERVED. IF THE PRIMARY PURPOSE AND THE PREDOMINANT OBJECT A RE TO PROMOTE THE WELFARE OF THE GENERAL PUBLIC THE PURPOSE WOULD BE CHARITABLE PURPOSE. IN THE PRESENT CASE, ASSESSEE SOCIETY HAS BEEN FORMED BY THE DIRECTORATE OF CIVIL AVIATION, GOVERNMENT OF UTTARAKHAND IN ORDER TO FACILITATE TOURISM AND PROMOTE AIRPOR T FACILITIES AND ALSO ADDRESSING TO VARIOUS EMERGENCIES AT UTTARAKHAND. IT IS ALSO REGISTERED WITH THE SOCIETIES REGISTRATION ACT . THE PREDOMINANT OBJECTS OF THE ASSESSEE SOCIETY IS FOR THE LARGER BENEFIT AND UTILITY OF PUBLIC WHICH MAKES IT A SOCIETY ES TABLISHED FOR CHARITABLE PURPOSES. THE MAIN OBJECTIVE IS PUBLIC UTILITY. WE FURTHER LOOK INTO THE DECISION OF CO - ORDINATE BENCH OF ITAT LUCKNOW BENCH IN THE CASE OF RAJ KARAN MATADAN CHARITABLE TRUST VS. CIT IN ITA NO.190/LKW/2016 WHEREIN THE CO - ORDINATE BENCH HAS OBSERVED THAT COMMISSIONER OF INCOME - TAX WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WILL ESSENTIALLY LOOK INTO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION AND MAKE ENQUIRIES IN THIS REG ARD AS NECESSARY, BUT AT THAT TIME THE SCOPE OF 12AA DOES NOT SEEK THAT THE LD. COMMISSIONER OF INCOME - TAX WILL ALSO SEE WHETHER THE INCOME DERIVED BY THE TRUST IS SPENT FOR CHARITABLE PURPOSES OR WHETHER THE TRUST IS EARNING PROFIT OR NOT. IN THIS CASE W E FIND THAT THOUGH THE LD. COMMISSIONER OF INCOME - ITA NO.383/LKW/2016 PAGE 5 OF 6 TAX (EXEMPTIONS) HAS STATED IN HIS ORDER THAT ASSESSEE SOCIETY HAS NOT PRODUCED ANY BOOKS AND VOUCHERS IN RESPECT OF EXPENSES FOR VERIFICATION OF THE OBJECTIONS AND ACTIVITIES. HOWEVER, WE FIND AS ON RECOR D A LETTER DATED 16/3/2016 GIVEN BY THE ASSESSEE WHEREIN THEY HAVE SUBMITTED DETAILS IN RESPECT OF ALL MAJOR GRANTS RECEIVED FROM THE STATE GOVERNMENT, COPY OF G.O NO.1161/12A - 149/2014 - 17 DATED 25/1/2016 REGARDING ALLOTMENT OF LAND FOR CONSTRUCTION OF HELI PAD, ALL RELEVANT PAPERS/DOCUMENTS/REGISTERS/BOOKS OF ACCOUNT/BILLS/VOUCHERS IN ORIGINAL ARE PRODUCED FOR VERIFICATION. THIS MAKES IT CLEARLY EVIDENT THAT ALL THE BILLS AND VOUCHERS AND NECESSARY DOCUMENTS HAVE BEEN PLACED BY THE ASSESSEE BEFORE THE DEPAR TMENT. WHETHER WHATEVER IT IS EARNING IS UTILIZING FOR CHARITABLE PURPOSE OR IT IS EARNING BUSINESS, THAT HAS TO BE LOOKED INTO AT THE ASSESSMENT STAGE. HERE IS A QUESTION OF GRANTING REGISTRATION FOR THE FIRST TIME UNDER SECTION 12AA AND WE HAVE ALREADY EXAMINED IN THE LIGHT OF SECTION 2 (15) PREDOMINANT OBJECTIVE OF THE ASSESSEE IS FOR SERVING PUBLIC UTILITY. WITH THESE OBSERVATIONS AND AS PER VARIOUS JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABOVE, WE DIRECT THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTION S) TO GRANT REGISTRATION UNDER SECTION 12A OF THE ACT TO THE ASSESSEE. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH MARCH , 201 8 JJ: 1203 ITA NO.383/LKW/2016 PAGE 6 OF 6 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR