M/s Khanna Improvement Trust, Khanna V. CIT II, Ludhiana

ITA 406/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81022 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-11-2014
• Assessment Year: misc
• Appeal Filed On: 12-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Assessee Lawyers: LALIT TAKYAR
• Keywords: Charitable institution; Question of law
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 406/CHD/2013 ASSESSMENT YEARS : KHANNA IMPROVEMENT TRUST V CIT-II KHANNA LUDHIANA AAALI 0030 N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI LALIT TAKYAR RESPONDENT BY: SHRI AMARVEER SINGH DATE OF HEARING 20.11.2014 DATE OF PRONOUNCEMENT 26.11 .2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER OF LD CIT -II, LUDHIANA DATED 7.2.2013. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE IMPUGNED ORDER OF THE CIT-II IS PATENT LY AGAINST LAW, ERRONEOUS AND MERITS TO BE QUASHED. 2 THAT THE INVOKING OF THE PROVISIONS OF SECTION 1 2(A.A) OF THE IT ACT R.W.S. 2(15) AS AMENDED IS AGAINST LAW, INVA LID AND VOID AB INITIO. 3 THAT THE CIT HAS ALSO ERRED IS NOT APPRECIATING THE FACTS AND SUBMISSIONS MADE BY THE APPELLANT. 4 THAT THE ACTIVITIES OF THE TRUST ARE CHARITABLE A CTIVITIES WITHOUT ANY PROFIT MOTIVE AND THE EXEMPTION GRANTED SHOULD NOT HAVE BEEN REFUSED AND CANCELLED. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT IN TH IS CASE ORIGINALLY REGISTRATION WAS GRANTED TO THE ASSESSEE TRUST. HOWEVER, THERE WAS AN AMENDMENT IN SEC 2(15) W.E.F. 1.4.2009 AND THEREFORE NOTICE FOR CANCELLATION WAS ISSUED AN D AFTER DETAILED DISCUSSION IN PARA 2 OF THE IMPUGNED ORDER AND FOLLOWING THE DECISION OF AMRITSAR BENCH OF THE TRI BUNAL IN CASE 2 OF JAMMU DEVELOPMENT AUTHORITY IN ITA NO. 366/ASR/2 012 REGISTRATION WAS CANCELLED FOR ASSESSMENT YEAR 200 9-10. 4 BOTH THE PARTIES WERE HEARD IN DETAIL. 5 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT THAT THIS ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN CAS E OF IMPROVEMENT TRUST, MALERKOTLA V CIT, IN ITA NO. 380/CHDE/2013 WHEREIN IDENTICAL ISSUE WAS CONSIDERE D AND DECIDED AGAINST THE ASSESSEE. THE RELEVANT FINDING ARE CONTAINED PARA 8 TO 15 WHICH ARE AS UNDER: 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE TRUST HAD ORIGINALLY FILED AN APPLICAT ION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT ON 25.5. 2006 AND AS THE ASSESSEE WAS FOUND NOT TO HAVE FULFILLED THE CONDIT IONS UNDER SECTION 2(15) OF THE ACT, THE COMMISSIONER OF INCOM E TAX REJECTED THE GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT. THE APPEAL OF THE ASSESSEE BEFORE THE TRIBUNAL WAS ALSO DISMIS SED IN ITA NO. 640/CHD/2006 VIDE ORDER DATED 28.09.2007. THE HON' BLE PUNJAB & HARYANA HIGH COURT, IN VIEW OF THE ORDER PASSED IN THE CASE OF THE IMPROVEMENT TRUST, MOGA IN IT APPEAL NO. 620 OF 200 8 VIDE ORDER DATED 16.01.2009 GRANTED REGISTRATION TO THE ASSESS EE UNDER SECTION 12A OF THE ACT. PURSUANT TO THE DIRECTIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT, THE COMMISSIONER OF IN COME TAX ISSUED ORDER GRANTING REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT. THEREAFTER, NOTICE WAS ISSUED BY T HE COMMISSIONER OF INCOME TAX-II LUDHIANA DATED 08.09. 2011, COPY OF WHICH IS PLACED AT PAGES 11-12 OF THE PAPER BOOK AS TO WHY THE REGISTRATION GRANTED UNDER SECTION 12AA OF THE ACT SHOULD NOT BE WITHDRAWN IN VIEW OF THE AMENDED PROVISIONS OF SECT ION 2(15) OF THE ACT. THE ASSESSEE CLAIMS THAT IT WAS CONSTITUT ED UNDER THE PROVISIONS OF PUNJAB TOWN IMPROVEMENT TRUST ACT, 19 22 IN ORDER TO BRING ABOUT PLANNED DEVELOPMENTS IN THE TOWN OF MAL ERKOTLA BY WAY OF PROVIDING STREETS, HOUSING FACILITIES OR MAK ING PROVISIONS FOR OTHER PUBLIC UTILITY SERVICES. THE ACTIVITIES E NLISTED TO THE ASSESSEE WERE IN CONSONANCE WITH THE STATUTORY SCHE ME FORMULATED UNDER THE PUNJAB TOWN IMPROVEMENT TRUST ACT AND THE ASSESSEE CLAIMED THAT ITS OBJECTS WERE TO PROVIDE B ENEFITS TO THE PUBLIC WITHIN ITS LOCAL LIMITS RATHER THAN ANY BENE FITS TO THE TRUST ITSELF. THE ASSESSEE FURTHER CLAIMED THAT IT WAS N OT CARRYING ON ANY TRADE, COMMERCE OR BUSINESS AS IT WAS ACQUIRING THE LAND FROM TIME TO TIME UNDER THE ACQUISITION ACT AND THEREAFT ER THE LAND WAS UTILIZED FOR MAKING ROADS, PARKS, COMMUNITY HALLS E TC. AND OUT OF THE REMAINING AREA, PROVISIONS FOR SHOPS AND PLOTS WAS MADE. THE ASSESSEE ADMITS THAT IT WAS AUCTIONING ITS PLOTS OF LAND AND COMMERCIAL AREA AT RESERVE PRICE AND THE RECEIPTS C OMPRISED OF THE PROFITS BECAUSE OF INCREASE IN THE MARKET PRICE AND ALSO ON ACCOUNT OF OTHER CHARGES RECEIVED UNDER VARIOUS SCH EMES. 9. THE ASSESSEE WAS SHOW CAUSED BY THE COMMISSIONER OF INCOME TAX-II LUDHIANA TO EXPLAIN AS TO WHY THE REG ISTRATION GRANTED UNDER SECTION 12AA OF THE ACT SHOULD NOT BE WITHDRAWN IN VIEW OF THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT. THE FINANCE ACT, 2008 HAS INTRODUCED THE PROVISO TO SEC TION 2(15) OF THE ACT WHICH READS AS UNDER : 3 2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRONMENT (INCLU DING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTERE ST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT 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, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR 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 LAKH RUPEES] OR LESS IN THE PREVIOUS YEAR;] 10. THE ISSUE ARISING BEFORE US IS IN RELATION TO T HE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT UNDER WHICH THE PROVISO I & II ARE INTRODUCED W.E.F. 01.04.2009 AND IN CASE THE TRUST IS FOUND TO BE ENGAGED IN THE ADVANCEMENT OF ANY OTHER OBJEC T OF GENERAL PUBLIC UTILITY, THEN SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE FOR CHARITABLE PURPOSE WHEREIN IT INVOLVES THE CARRYING ON OF SUCH ACTIVITY IN THE NA TURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING A NY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION. THE SECOND PROVISO PROVID ES THAT THE FIRST PROVISO WOULD NOT APPLY IF AGGREGATE VALUE OF RECEIPTS IS RS. 25 LACS OR LESS. ADMITTEDLY IN THE CASE OF ASSESSE E, THE RECEIPTS WERE MORE THAN RS. 25 LACS. 11. WE FIND THAT SIMILAR ISSUE OF WITHDRAWAL OF REG ISTRATION UNDER SECTION 12AA(3) OF THE ACT IN THE CASE OF IMPROVEME NT TRUST, BATHINDA VS CIT, BATHINDA (SUPRA) AND THE TRIBUNAL VIDE ORDER DATED 18.12.2012 HELD THE SAID IMPROVEMENT TRUST, B ATHINDA TO BE NOT ENGAGED IN CHARITABLE ACTIVITIES IN VIEW OF THE AMENDED PROVISIONS OF SECTION 2(15) OF THE ACT AND THE REGI STRATION GRANTED UNDER SECTION 12AA OF THE ACT WAS WITHDRAWN BY ORDE R PASSED UNDER SECTION 12AA(3) OF THE ACT, WAS UPHELD BY THE TRIBUNAL. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER : 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE WITH US AS WELL AS DECISIONS CIT ED BY LD, COUNSEL FOR THE ASSESSEE ALONGWITH OTHER DOCUMENTAR Y EVIDENCES FILED BY HIM. AS PER IMPUGNED ORDER AND SUBMISSIONS OF THE ASSESSEE. THE MAIN ACTIVITIES OF THE ASSESSEE TRUST AT THAT TO PURCHASE LAND, TO ENHANCE AND DEVELOP THE LAND BY CUTTING IT INTO PLOTS ETC., TO ADVERTISE FOR SALE OF PLOTS IN THE DEVELOPED LAND AND TO SELL OFF THE LAND THROUGH AUCTION, MEANING THEREBY THAT THE ASSESSEE TRUST WAS BUYING UNDEVELOPED LAND AT A LOW PRICE AND DEVELOPE D IT AND PROVIDES THE SOME BASIC FACILITIES I.E. LEVELLING A ND CLEARING THE LAND, CUTTING IT INTO PLOTS, PROVIDING ACCESS R OADS, ELECTRICITY, PROVIDING WATER AND SEWERAGE FACILITIE S ETC. THE ASSESSEE-TRUST ENHANCED COST OF LAND FROM COST OF P URCHASE BY IT. THE ASSESSEE-TRUST IS ALSO CHARGING FEES AND FINES FROM SELLING OF FORMS, LAND ENHANCEMENT FEES, BUILDING P LAN FEES, ROAD CUTTING FEES, TRANSFER FEE3S. FINE AND PENALTI ES AND NON- CONSTRUCTION CHARGES AND THUS EARNING HUGE PROFITS WHICH IS CONTRARY TO THE PROVISIONS OF SECTION 2(15) OF THE ACT, AMENDED W.E.F. 01.04.2009. FOR THE SAKE OF CONVENIE NCE PROVISION OF SECTION 2(15) F THE ACT IS PRODUCED AS UNDER: 4 '2(15) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF A NY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED TH AT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHAR/TABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS, 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.' 7.1. KEEPING IN VIEW THE AFORESAID PROVISIONS, THE CHARITABLE PURPOSE INCLUDE RELIEF TO THE POOR, EDUCATION, MEDI CAL RELIEF AND ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBL IC UTILITY. IN THE PRESENT CASE, WE FOUND THAT THE ASSESSEE-TRU ST IS CARRYING ON VARIOUS ACTIVITIES IN THE NATURE OF TRA DE, COMMERCE OR BUSINESS AND RENDERING ITS SERVICES FOR THE PURPOSE OF TRADE, COMMERCE AND BUSINESS BECAUSE AS STATED ABOVE, THE ASSESSEE-TRUST IS CHARGING HUGE FEES ON ACCOUNT OF VARIOUS FACTS, AS MENTIONED ABOVE. NO DOUBT, THE ASSESSEE HAS GIVEN SOME EXPLANATION FOR CHARGING FEES FOR TH E AFORE- MENTIONED ACTIVITIES BY STATING THAT THE ASSESSEE-T RUST IS CHARGING FEES AS PER RULES FRAMED BY THE PUNJAB LOC AL BODIES GOVT. WHICH IS CLEARLY THE ADMISSION BY THE ASSESSE E-TRUST THAT THE ASSESSEE-TRUST IS DOING ACTIVITIES NOT FOR CHARITABLE PURPOSE BUT FOR BUSINESS PURPOSE ONLY. NO DOUBT, TH ESE PENALTIES CHARGED BY THE ASSESSEE-TRUST ARE IN THE NATURE OF COMPENSATORY BUT THAT IS NOT PERMISSIBLE FOR THE CH ARITABLE INSTITUTION. SOME OF THE ACTIVITIES UNDERTAKEN BY T HE ASSESSEE TRUST, THE ID. CIT(A) HAS REPRODUCED AT PA GES 7 TO 9 OF HIS ORDER, WHICH ARE REPRODUCED AS UNDER: (A) TO DEVELOP SEWERAGE IN THE CITY COSTING ABUT RS.5H .36 CRORES VIDE RESOLUTION NO.49 DATED 05.09.2008 (WITH OUT CHARGES OR RECOVERY). (B) THE TRUST HAS RESERVED 18.27 ACRES LAND FOR BUS ST AND FOR GENERAL PUBLIC VIDE RESOLUTION NO.18, DATED 03.10.2 007 FREE OF COST). (C) LAND MEASURING J .30 ACRES FOR CIA STAFF (POLICED DEPARTMENT) VIDE RESOLUTION NO.7L DATED 12.12.2008 (FREE OF COST). (D) COMMUNITY HALL, MEASURING 2000 SQ.YDS TO BE ERECTE D & BUILT IN RAJIV GANDHI NAGAR, GURUKUL ROAD . BATHINDA. VIDE RESOLUTION NO.75 DATED 30.09.2005 (FREE OF COST). (E) THE TRUST IS TO PROVIDE SERVICE LANE 16 WIDE WITH PARKING AND FOOTPATH. THE AMOUNT TO BE SPENT IS RS. ONE C RORE VIDE RESOLUTION NO.48 DATED 26.08.2008 (FREE OF COS T). (F) THE TRUST HAS GIVEN AS CHARITY OF TOWN CLEANING MA CHINE, (VACCUM MACHINE) TO THE MUNICIPAL CORPORATION, BATH INDA FOR RS,64.86 LAKHS VIDE RESOLUTION NO.56 (APP. RS.T EN LACS) VIDE LETTER NO. 1.1.46 DATED 24.09.2007 (FREE OF COST). 5 (G) TO PROVIDE LAND AS WELL AS CONSTRUCTION OF BUILDIN G FOR 14 PLOTS MEASURING 1512 S. YDS VALUING RS.45.2 LACS AN D CONSTRUCTION COST RS.64.86 LAKHS VIDE RESOLUTION NO .56 DATED 31.08.2006 AND WERE HANDED OVER TO THE POOR ( FREE OF COST). (H) TO CONSTRUCT 'ROAD DIVIDER' AND DEVELOPMENT & RENOVATION OF GONIANA BATHINDA- MANSA - G.T.ROAD, COSTING RS. 10.64 CRORE VIDE RESOLUTION NO.41 DATED 31.12.2007 (FREE OF COST). (I) DONATION OF RS. 5 LACS TO : DEAF & DUMB SCHOOL' FO R THE WELFARE OF SUCH HANDICAP STUDENTS, VIDE RESOLUTION NO.81 DATED 31.10.2005. (J) LAND FOR 'VRIDH ASHRAM (REST HOUSE FOR SENIOR CITIZENS) MEASURING 2038 SQ. YDS IN TRANSPORT NAGAR (FREE OF COST). (K) LAND MEASURING 2055 SQ.YDS LOR CHILDREN & LA DIES WELFARE ASSOCIATION IN TRANSPORT NAGAR VIDE RESOLUTION NO. 107 DATED 30.12.2005 (TREE OF COST). (L) LAND FOR 'PUBLIC HEALTH CARE CENTRE' MEASURIN G 1825 SQ. YDS IN KARNLA NEHRU VIDE RESOLUTION NO.23, DATED 03.06. 2009. (M) CONSTRUCTION OF RS.25 LAKH FOR CONSTRUCTION O F DIVIDER & ROAD FROM 'BRIDGE TO N.F.L. CHOWK.' PAYMENT WAS MADE IN 21.11.2001 BY CHEQUE TO PWD (B&R) FOR PUBLIC USE. (O) GRANT OF RS.1.25 LAKHS TO 'DEAF AND DUMB SCH OOL' BATHINDA VIDE RESOLUTION NO. 11 DATED 14.04.2007 FOR THE WEL FARE OF SUCH HANDICAP STUDENTS. (P) LAND RESERVED FOR 'YATRI NIWAS' IN BATHIND A NEAR TO NEW BUS STAND IN 49.5 ACRE (FREE OF COST). (Q) LAND PROVIDED FOR 'APPROACH ROAD' NEARLY 60 W IDE 382.4 SQ. MTR. CONSTRUCTION COST IS NEARLY RS.23.67 LACS APPR OVED VIDE RESOLUTION NO.2L DATED 11.10.2007 (FREE OF COST). AFTER PERUSING THE AFORESAID ACTIVITIES, WE ARE OF THE VIEW THAT-THE ID. APPELLATE AUTHORITY HAS RIGHTLY HELD THAT THE LAND OF THE ASSESSEE TRUST IS THE SAME CATEGORY OF OTHER REAL E STATE PRODUCTS AVAILABLE IN THE MARKET OFFERED BY THE PRIVATE COL ONIZERS AND REAL ESTATE AGENTS. BECAUSE THE ASSESSEE ADVERTISED THI S VALUE ADDED PRODUCT WIDELY IN PRINT AS WELL AS ELECTRONIC MEDIA SO AS TO ATTRACT A LARGE NUMBER OF CUSTOMERS/CLIENTS FROM ALL THE GE NERAL PUBLIC INCLUDING THE FINANCIALLY SOUND PERSONS FROM THE PU BLIC. 12. THE ASSESSEE TRUST BEFORE US IS THE IMPROVEMENT TRUST, MALERKOTLA AND THE FACTS OF THE PRESENT CASE ARE ID ENTICAL TO THE FACTS OF IMPROVEMENT TRUST, BATHINDA WHICH IS ALSO FORMULATED UNDER THE PUNJAB TOWN IMPROVEMENT TRUST ACT. IT WA S FAIRLY ADMITTED BY THE LD. AR FOR THE ASSESSEE DURING THE COURSE OF HEARING THAT THE APPEALS IN THE CASE OF VARIOUS IMP ROVEMENT TRUSTS UNDER THE AMENDED PROVISIONS OF SECTION 2(15) OF TH E ACT W.E.F. 01.04.2009 WERE PENDING BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT. AS THE FACTS OF THE PRESENT CASE ARE I DENTICAL TO THE FACTS BEFORE THE AMRITSAR BENCH OF THE TRIBUNAL IN IMPROVEMENT TRUST, BATHINDA VS CIT, BATHINDA (SUPRA) AND FOLLOW ING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF COMMISS IONER OF 6 INCOME TAX IN WITHDRAWING THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT. 13. THE LD. AR FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN BUREAU OF I NDIAN STANDARDS VS DIRECTOR GENERAL OF INCOME-TAX (EXEMPT IONS) (SUPRA). IN THE FACTS OF THE CASE BEFORE THE HON'B LE DELHI HIGH COURT, THE ASSESSEE WAS PERFORMING FUNCTIONS IN THE CAPACITY OF AN INSTRUMENTALITY OF THE STATE AND THE ISSUE WAS WHET HER IT WAS RENDERING SERVICES IN RELATION TO TRADE, COMMERCE O R BUSINESS BY GRANTING CERTIFICATION/QUALITY MARKS IN RETURN OF L ICENCING FEE. THE ASSESSEE THEREIN HAD CLAIMED EXEMPTION UNDER SECTIO N 10(23C)(4) OF THE INCOME TAX ACT AND IT WAS HELD THAT THE ASSE SSEE WAS STATUTORY BODY ESTABLISHED UNDER THE BIS ACT AND WA S BROUGHT INTO EXISTENCE FOR THE HARMONIOUS DEVELOPMENT OF THE ACT IVITIES OF STANDARDIZATION AND MARKETING AND QUALITY CERTIFICA TION OF GOODS. THE LICENCE FEE CHARGED BY THE ASSESSEE FOR SUCH AC TIVITIES WAS HELD NOT TO BE FOR THE PURPOSE OF PROFIT AND IT WAS HELD THAT IT WAS NOT INVOLVED IN CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. HOWEVER, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS PURCHASING LARGE CHUNK OF LAND AND AFTER DEVELOPING THE SAME, PART OF THE LAND WAS UTILIZED FOR SELLING AS PLOTS FOR RESIDENTIAL OR COMMERCIAL PURPOSES AND PR OFITS WERE GENERATED OUT OF SUCH ACTIVITIES AS PER THE MARKET TRENDS AND THE SAME WAS HELD TO BE IN THE NATURE OF TRADE, COMMERC E OR BUSINESS BY THE AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE O F ANOTHER IMPROVEMENT TRUST AT BATHINDA (SUPRA). AS THE FACTS OF THE ASSESSEE BEFORE US ARE IDENTICAL TO THE FACTS OF TH E CASE BEFORE THE AMRITSAR BENCH OF THE TRIBUNAL IN IMPROVEMENT T RUST, BATHINDA VS CIT, BATHINDA (SUPRA), THE SAME PARITY OF REASON ING IS SQUARELY APPLICABLE AND THE RELIANCE PLACED UPON BY THE ASSE SSEE ON THE RATIO LAID DOWN BY THE HON'BLE DELHI HIGH COURT IS MISPLACED. 14. WE FURTHER FIND THAT THE COMMISSIONER OF INCOME TAX, IN THE ORDER PASSED UNDER SECTION 12AA(3) OF THE ACT HAD R ELIED UPON THE RATIO LAID DOWN BY THE AMRITSAR BENCH OF TRIBUNAL I N THE CASE OF JAMMU DEVELOPMENT AUTHORITY (SUPRA), WHICH HAS BEEN CONFIRMED BY THE HON'BLE JAMMU & KASHMIR HIGH COURT (SUPRA) W HEREIN IT HAS BEEN HELD AS UNDER : 1. THE INSTANT APPEAL UNDER SECTION 260- A OF THE INCOME TAX ACT, 1961 (FOR BREVITY, THE ACT) I S DIRECTED AGAINST ORDER DATED 14.06.2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'AMRITSAR, UPHOLDING THE ORDER WITHDRAWING THE STATUS OF CHARITABLE INSTITUTION GI VEN TO THE APPELLANT-ASSESSEE UNDER SECTION 12AA(L)(B)(I) OF THE ACT, THE TRIBUNAL HAS REACHED A CATEGORICAL CONCLUS ION THAT THE ASSESSEE-JAMMU DEVELOPMENT AUTHORITY CANNO T BE REGARDED AS AN INSTITUTION OR TRUST WHICH MAY HA VE BEEN SET UP TO ACHIEVE THE OBJECTS ENUMERATED UNDER SECTION 2 OF THE ACT PARTICULARLY IN VIEW OF THE AD DITION OF FIRST AND SECOND PROVISO MADE BY THE FINANCE ACT, 2 008 W.E.F, 01.04.2009 TO SECTION 12 AA OF THE ACT. THER E ARE FINDINGS OF FACT THAT THE ASSESSEE-APPELLANT HAS RI OT BEEN ACTING TO ADVANCE ANY OF THE OBJECT CONCERNING GENE RA] PUBLIC UTILITY. EVEN OTHERWISE THE PROVISO WHICH HA S BEEN ADDED BY THE FINANCE ACT, 2008 W.E.F 01.04.2009 STIPULATES THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF THE GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, IF IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATU RE OF TRADE, COMMERCE OF BUSINESS OR ANY ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS OR A CESS OR FEE OR ANY OTHER CONSIDERATION. 2. WE FIND THAT NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW WOULD EMERGE FROM THE IMPUGNED ORDER OF THE INCOME TAX. APPELLATE TR IBUNAL 7 WARRANTING ADMISSION, OF THE APPEAL. THE APPEAL IS WHOLLY WITHOUT MERIT AND IS THUS LIABLE TO BE DISMISSED. 3. FOR THE REASONS AFOREMENTIONED, THIS APPEAL FAILS AND SAME IS DISMISSED ALONG WITH .CONNECTE D APPLICATION(S). 15. IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE J AMMU & KASHMIR HIGH COURT IN THE CASE OF JAMMU DEVELOPMENT AUTHORITY VS UNION OF INDIA & ANOTHER (SUPRA) AND AMRITSAR BE NCH OF TRIBUNAL IN IMPROVEMENT TRUST, BATHINDA VS CIT, BAT HINDA (SUPRA), WE ARE IN CONFORMITY WITH THE ORDER OF THE COMMISSI ONER OF INCOME TAX IN WITHDRAWING THE REGISTRATION GRANTED TO THE ASSESSEE UNDER SECTION 12AA OF THE ACT. THE GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE ARE THUS, DISMISSED. FOLLOWING THE ABOVE WE DECIDE THE ISSUE AGAINST THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.11.2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26.11.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR