M/s Doon Valley Special Area Development Authority, Dehradun V. ACIT, Dehradun

ITA 3855/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58940 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SAXENA
• Assessee Lawyers: MAHESH CHHILLER
• Keywords: Condonation of delay
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3855/DEL./2011 (ASSESSMENT YEAR : 2007-08) M/S. DOON VALLEY SPECIAL AREA DEVELOPMENT AUTHORITY , VS. ACIT, CIRCLE 1, 30 / 2, MOHINI ROAD, DEHRADUN. DEHRADUN - (PAN : AAALD1025F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHESH CHHILLER, ADVOCATE REVENUE BY : SHRI V.K. SAXENA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE CIT (APPEALS)-I, DEHRADUN DATED 27.04.2011 FOR THE ASSE SSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS UNDER :- GROUND NO.1 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT (A) HAS GROSSLY ERRED IN NOT APPRECIATI NG THE FACT THAT THE APPELLANT AUTHORITY HAS BEEN CREATED WITH THE O BJECT OF GENERAL PUBLIC UTILITY WHICH IS A CHARITABLE OBJECT WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME TAX ACT, 196 1. GROUND NO.2: ITA NO.3855/DEL./2011 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT (A) HAS GROSSLY ERRED IN HOLDING THAT T HE APPELLANT AUTHORITY IS A BUSINESS ENTITY EARNING PROFITS AND GAINS. GROUND NO.3: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT (A) HAS GROSSLY ERRED IN UPHOLDING THE COMPUTATION OF INCOME AT RS.4,94,67,240/- BY THE A.O, BY REJECT ING THE PRINCIPLE OF DIVERSION OF FUNDS TO THE INFRASTRUCTU RE DEVELOPMENT FUND BY AN OVER-RIDING TITLE AS PER THE EXPRESS ORD ER OF THE STATE GOVERNMENT. 2. THE ASSESSEE DOON VALLEY SPECIAL AREA DEVELOPM ENT AUTHORITY WAS SET UP AS PER U.P GOVT. G.O DATED 11.03.1987 WITH A N OBJECTIVE OF PLANNED DEVELOPMENT OF SPECIAL AREA AND MAINTAINING ECOLOGI CAL BALANCE OF THE AREA. IT IS AN ORGANIZATION WITH AN OBJECTIVE OF DOING WO RK WHICH WAS ORIGINALLY DONE BY THE MUNICIPAL AUTHORITIES I.E. OF SANCTIONI NG OF MAPS AND COLLECTION OF DEVELOPMENT CHARGES ETC. AND HAS SAME POWERS WHI CH A NAGAR MAHAPALIKA HAS UNDER THE UTTAR PRADESH NAGAR MAHAPALIKA ADHINI YAM, 1959 FOR THE PURPOSE OF MUNICIPAL ADMINISTRATION AND FOR THE PUR POSE OF TAXATION. IN ADDITION TO ABOVE OBJECTS, ITS OBJECT IS ALSO PROVI DING BASIC AMENITIES TO THE PEOPLE OF SPECIAL AREA WHICH INCLUDE ROADS & STREET S, WATER & ELECTRIC SUPPLY, PARKS, PLAYGROUNDS, DRAINAGE & SEWERAGE, PUBLIC WOR KS & OTHER UTILITIES AND OF NOT EARNING PROFIT. IF ANY SURPLUS ARISES, IT IS ALSO USED FOR THE PURPOSE OF DEVELOPMENT AND NO PART OF IT IS DISTRIBUTED TO MEM BERS OR EMPLOYEES. ITA NO.3855/DEL./2011 3 2.1 AS PER G.O NO. 152/9-A-1-1998 DATED 15.01.1998 OF STATE GOVERNMENT FOR THE DEVELOPMENT OF INFRASTRUCTURE OF THE AREA UNDER THE PURVIEW OF AUTHORITY, SOME SPECIFIC PART OF ITS INC OME HAS TO BE TRANSFERRED TO INFRASTRUCTURE FUND ACCOUNT SO THAT IT CAN BE USED FOR THE DEVELOPMENT OF THE AREA AS AND WHEN REQUIRED AS THE DEVELOPMENT IS A C ONTINUOUS PROCESS AND NOT LIMITED TO ANY SPECIFIC YEAR. 2.2 IN THE CASE OF DOON VALLEY SPECIAL AREA DEVELOP MENT AUTHORITY, IT IS BOUND AS PER DIRECTIVES OF STATE GOVT. G.O TO TRANS FER SPECIFIC PERCENTAGE OF ITS INCOME TO THE INFRASTRUCTURE DEVELOPMENT FUND. THEREFORE AT THE TIME OF RECEIPT OF INCOME, THERE IS STATUTORY OBLIGATION AT TACHED TO IT TO TRANSFER SPECIFIC PERCENTAGE OF THAT INCOME TO THE RESERVE A ND ONLY THE BALANCE AMOUNT IS INCOME IN THE HANDS OF AUTHORITY. THOUGH THE FUN DS CONTINUE TO REMAIN WITH THE APPELLANT, THE SAME ARE ADMINISTERED STRIC TLY BY FOLLOWING THE INSTRUCTIONS OF STATE GOVERNMENT. 2.3 THE RECEIPTS OF THE APPELLANT AUTHORITY ARE BY WAY OF MAP FEES, SUPERVISION CHARGES, STACKING FEES, LAND CONVERSION CHARGES, COMPOUNDING ETC. FOR WHICH THE STATE GOVT. HAS AUTHORIZED IT BY SPECIAL ACT AND THE EXPENDITURE HAS TO BE DONE ON THE DEVELOPMENT OF TH E AREA, PROVIDE BASIC FACILITIES AS WATER, STREET LIGHT, DRAINAGE & SEWER AGE SYSTEM, PLANTATION & DEVELOPMENT OF PARKS ETC. I.E. FOR THE OBJECTIVE FO R WHICH THE AUTHORITY WAS SET-UP, SO IT CANNOT BE LINKED TO ANY USUAL BUSINES S ACTIVITY. ITA NO.3855/DEL./2011 4 2.4 SINCE THE APPELLANT AUTHORITY WAS CREATED WITH THE OBJECT OF GENERAL PUBLIC UTILITY WHICH IS A CHARITABLE OBJECT WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME TAX ACT, 1961, THE APPELLANT APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT VIDE APPLICATION DATED 23.07.2009. THE LD. CIT, DEHRADUN GRANTED REGISTRATION TO THE APPEL LANT W.E.F. 23.07.2009 VIDE CERTIFICATE DATED 29.01.2010. THE APPELLANT AUTHORI TY AGAIN APPLIED FOR REGISTRATION VIDE APPLICATION DATED 15.03.2010 SEEK ING REGISTRATION FROM BACK DATE I.E. 01.04.2003. IT WAS REJECTED BY THE CIT VI DE ORDER DATED 20.09.2010 BECAUSE AFTER 01.06.2007, THE LD. CIT IS NOT EMPOWE RED TO CONDONE THE DELAY. APPLICATION BY THE APPELLANT AUTHORITY FOR CONDONAT ION OF DELAY TO THE CBDT UNDER SECTION 119(2) OF THE INCOME TAX ACT WAS FILE D ON 04.03.2011. THE SAID APPLICATION FOR CONDONATION OF DELAY IS PENDIN G ADJUDICATION BEFORE THE CBDT. 3. AT THE TIME OF THE HEARING, THE LEARNED AR SUBMI TTED THAT THE ISSUES ARE COVERED BY THE DECISION OF ITAT, BENCH B, NEW DEL HI IN ITA NO.2130/DEL/2009 FOR THE ASSESSMENT YEAR 2004-05, I TA NO.2131/DEL/2009 FOR THE ASSESSMENT YEAR 2005-06 AND ITA NO.2132/DEL /2009 FOR THE ASSESSMENT YEAR 2006-07 WHERE THE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE ONLY CHANGE IN THE FACTS AND CIR CUMSTANCES ARE REGARDING THE FILING OF THE APPLICATION FOR CONDONATION OF TH E DELAY TO THE CBDT UNDER SECTION 119 (2) OF INCOME-TAX ACT WHICH HAS BEEN FI LED ON 04.03.2011. THE ITA NO.3855/DEL./2011 5 ITAT IN ASSESSEES OWN CASE IN ITA NOS.2130/DEL/200 9 AND 2131/DEL/2009 HAS OBSERVED THAT THE ASSESSEE IS IN PROCESS TO TAK E SUITABLE STEPS IN THE MATTER WITH THE CBDT FOR CONDONATION OF THE DELAY AND MATT ER WAS RESTORED TO ASSESSING OFFICER TO RE-EXAMINE AND DECIDE AFRESH. NOW, THE ASSESSEE HAS ALREADY FILED THE APPLICATION FOR CONDONATION OF DE LAY U/S 119 (2) OF THE INCOME-TAX ACT ON 04.03.2011. IN THE INTEREST OF J USTICE AND EQUITY, WE ARE INCLINED TO AGREE WITH THE PRAYER OF THE LEARNED AR TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF MARCH, 2012. SD/- SD/- (I.P. BANSAL) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD DAY OF MARCH, 2012/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-I, DEHRADUN. 5.CIT(ITAT), NEW DELHI AR, ITAT NEW DELHI.