The Dy.Commissioner of Income Tax,(Exemptions)Circle-2, Ahmedabad V. Surat Urban Development Authority(SUDA), Surat

ITA 5/AHD/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7040 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 31-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 63; 12; 28; 11; 143(3); 260A; 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& Ms. MADHUMITA ROY, JUDICIAL MEMBER I .T .A . N o . 0 5 /A hd / 2 0 20 ( A s s e s s me nt Y ea r : 20 1 5- 16 ) A C I T (E x e m pt io n s ) C ir cl e - 2, A h m e d a ba d V s . Su r at U r b a n D ev elo p me nt Au th or i t y( S U D A ) , Su d a B ha v a n , N r . C o ll ec to r Of f ic e , N an pur a , S ur a t, G u j ar a t [ P A N N o . A A A LS 0 1 9 7G ] (Appellant) .. (Respondent) Revenue by : Shri Mohd. Usman, CIT DR Assessee by : Shri Prateek Toshniwal, Advocate D a t e of H ea r i ng 02.12.2021 D a t e of P r o no u n ce me nt 06.12.2021 O R D E R PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the Revenue is directed against the order dated 10.10.2019 passed by the Commissioner of Income Tax (Appeals)-9, Ahmedabad arising out of the order dated 26.12.2017 passed by the DCIT(Exemptions), Circle–2, Ahmedabad under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) for A.Y. 2015- 16. 2. The issue relating to the entitlement of exemption under Section 11 & 12 of the Act is before us. ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 2 - 3. The assessee, is an autonomous body established under Section 22 of the Gujarat Town Planning and Urban Development Act, 1976 (XXVII of 1976) and Rules made therein carrying Planned Development of areas as defined and designed by the Government of Gujarat and also infrastructural activities relating thereto to undertake the preparation of development plans, monitoring and control of development of town planning as construction of Roads, bridges and carried out work in connection with supply for water and disposal of sewerage etc. 4. The assessee has filed its return of income on 29.10.2015 declaring at total income at NIL upon claiming exemption under Section 11 of the Act which was finalized under Section 143(3) of the Act on 26.12.2017 by the Ld. AO determining the total income at Rs. 85,96,19,188/- as against the total income of Rs. NIL. While disallowing the exemption claimed under Section 11 & 12 of the Act by the assessee the Ld. AO observed that the case of the assessee falls under the ambit of the proviso 1 & 2 to the Section 2(15) of the Act and disallowed as follows: 1. Claim of exemptions u/s. 11(2) of Rs. 12,60,81,401/- 2. Claim of exemptions u/s. 11(a)(a) of Rs. 13,68,09,114/- 3. Claim of exemptions for additions to fixed assets Rs. 1,07,76,025/- 4. Claim of exemptions for expdt on Gen Dev Rs. 58,59,82,648/- The above were, in turn, deleted by the Ld. CIT(A) in appeal preferred by the assessee. Hence, the instant appeal before us by Revenue. ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 3 - 5. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the identical issue is covered by the order passed by the Coordinate Bench in the appeal preferred by the assessee in ITA No. 955/Ahd/2016 for A.Y. 2012-13 and in the appeals preferred by the Revenue in ITA Nos. 2432&2433/Ahd/2017 for A.Y. 2013-14 & 2014-15. It was further submitted by the Ld. AR that the order passed by the Ld. ITAT in allowing the claim of the assessee under Section 11 & 12 of the Act has been upheld by the Jurisdictional High Court in the appeal preferred by the Revenue in Tax Appeal Nos. 341 of 2020 & 342 of 2020, a copy of each of the orders passed by the Coordinate Bench and the Hon’ble Jurisdictional High Court have been submitted before us by the Ld. AR. 6. The Ld. DR, however, failed to controvert the contention of the assessee in allowing the claim of the assessee by the Coordinate Bench confirmed by the Jurisdictional High Court. 7. We have heard the respective parties, we have also perused the relevant materials available on record. 8. We have carefully considered the order passed by the Coordinate Bench in ITA No. 955/Ahd/2016 for A.Y. 2012-13 and ITA Nos. 2432&2433/Ahd/2017 for A.Y. 2013-14 & 2014-15 while dealing with the issue the Hon’ble Bench has been pleased to observe as follows: “5 . Wh e n t h e m a t t er w a s c a l l ed f o r h ea ri n g , t h e lea r n e d A R f o r t h e a ss e s s e e s u b m i t t e d t h a t t h e a ss e s s e e i s a re g u l a t o ry b o d y c r e a t e d b y S t a t e G o v e rn m e n t u / s 2 2 o f G u j a r a t To w n P l a n n i n g a n d U r b a n D e ve l o p m en t A ct ( G T P U D A ) , 1 9 7 6 f o r p r o p e r ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 4 - d e v el o p m e n t o f s p e c i f i ed a r ea i n t h e s t a t e w h i c h i s s u p p o s ed t o b e e n s u r e d b y t h e S t a t e G o v er n m e n t . I t w a s su b m i t te d t h a t t h e a s s es s e e i s j u s t l i k e a g o v e rn m e n t b o d y f u n c t i o n i n g f o r a n d o n b e h a l f o f S t a t e G o v e r n m e n t . A s f u r t h e r s t a t e d , t h e v e r y p u r p o se o f t h e a b o v e A c t i s t o en s u r e t h e d e v e l o p m e n t o f v ar i o u s a r ea s o f t h e st a t e i n a p h a s e d a n d p l a n n e d m a n n e r. T h e G o v e rn m en t o f G u j a ra t a s p e r t h e p r o v i s i o n s o f G T P U D A , 1 9 7 6 h a d co n st i t u t e d S U D A a s a n U r b a n De v el o p m e n t A u t h o ri t y b y i t s n o t i fi c a t i o n N o . G H B / 2 3 U DA / 1 1 7 7 / 6 4 6 ( 5 ) Q Z , d a t e d 1 3 . U 1 . 1 9 7 8 . T h e r ea s o n f o r e n a c t m en t o f G T P U D A , 1 9 7 6 i s t h e d e v e l o p m e n t o f a r ea s f o r p u b l i c p u r p o s e a n d t o cr e a t e b e t t e r e n v i r o n m e n t a l co n d i t i o n . F o l l o w i n g a r e t h e m a i n t a s k s o f t h e S U D A : • Wo r ki n g f o r t h e p r e p a r a t i o n a n d i m p l e m e n t a t i o n o f d e v el o p m e n t m e a s u r e s. • S u r ve yi n g f o r t h e d e v e l o p m e n t o f a r ea s a n d l a n d a c q u i s i t i o n . • Ma n a g i n g u rb a n d e v el o p m e n t s ch em e s . • Wo r ki n g f o r w a t e r sy s t em s , s e w a g e a n d o t h e r f a c i l i t i e s a n d s e r v i c e s . I n v i ew o f t h e v a r i o u s p ro vi s i o n s o f G u j a r a t To w n Pl a n n i n g a n d U r b a n D e v el o p m e n t A c t , 1 9 7 6 i t i s cl a i m ed t h a t a s s es s e e ca n n o t p u r ch a s e a n y l a n d & i n f a c t a ss e s s e e h a s n o t p u r c h as e d a n y l a n d . A s p e r p r o vi s i o n s o f t h e a b o v e A c t i t i s v e ry mu ch cl e a r t h a t a s s e s s ee c a n a c q u i r e t h e l a n d e i t h e r b y a g r e e me n t o r u n d er t h e p r o v i s i o n s o f L a n d A c q u i si t i o n A c t o n l y i n t h e c a s es e n v i sa g e d c l a u s e s ( b ) , ( d ) , ( k ) & ( n ) o f s u b - s e ct i on ( 2 ) t o s e c t i o n 1 2 o f s a i d A c t . I t w a s s u b m i t t e d t h a t a p e r u s a l o f s a i d c l a u s es w o u l d r e v e a l t h a t l a n d ca n b e r es e r v e d f o r p u b l i c pu r p o s e s s u c h a s s c h o o l s, c o l l e g e s & o t h er ed u c a t i o n a l i n s t i t u t i on s , t r a n sp o r t & c o m m u n i c a t i o n s . p re v e n t i o n o r r e m o v i n g p o l l u t i o n o f w a t e r o r a i r c a u s e d b y d i s c h a r g e o f w a st e et c . F u r t h er , s a i d a cq u i s i t i o n c a n b e m a d e o n l y b y w a y o f r e s er v a t i o n u / s 4 0 ( 3 ) ( j ) a n d ( j j a ) o f t h e A ct a n d s a i d r es e r v a t i o n i s l i m i t e d t o t h e s p eci f i e d p e r c e n t a g e o f t o t a l l a n d a c q u i re d u n d er t h e t o w n p la n n i n g s ch e m e . Th i s r es e r v a t i o n c a n b e ma d e f o r t h e p u rp o se o f p r o vi d i n g h o u si n g a cc o m m o d a t i o n t o t h e m e m b e r s o f so ci a l l y & e c o n o m i c a l l y b a c k w a r d c l a s s es o f t h e p eo p l e . F u r t h er , l a n d t o t h e e xt e n t o f 1 5 % c a n b e a l l o t t e d f o r s a l e f o r r e s id e n t i a l , c o m m er c i a l o r i n d u s t ri a l u s e s u b j e c t t o t h e f a ct t ha t p r o c e e d s s h a l l b e u s ed f o r t h e p u r p o s e o f p r o v i d i n g i n f r a s t ru ct u r a l f a c i l i t i e s . ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 5 - 5 . 1 I t w a s f u r t h e r s u b m i t t ed t h a t a s p er S e c t i o n 2 (1 5 ) o f t h e A c t . 1 9 6 1 , a n a s s e ss e e i s co n s i d e r ed a s a ch a r i t a b le i n s t i t u t i o n i f i t i s i n vo l v e d i n a n y o f t h e f o l l o w i n g p u r p o s es , n a m e l y: > R e l i ef o f t h e p o o r. > E d u c a t i o n . > Me d i ca l re l i e f . > P r e s e rv a t i o n o f e n vi r o n m e n t (i n c l u d i n g w a t er s h e d s, f o r e st s a n d w i l d l i f e ) . > P r e s e rv a t i o n o f m o n u m e n t s o r p l a c e s o r o b j e ct s o f a r t i st i c o r h i st o r i c i n t e r e s t . > A d v a n c em e n t o f a n y o t h e r o b j ec t o f g e n e r a l p u b l ic u t i l i t y. 5 . 2 F u rt h er , i t w a s c o n t en d e d t h a t t h e f i r s t p r o v i so t o s e c t i o n 2 ( 1 5 ) o f t h e A c t st a t es t h a t a d va n c em e n t o f a n y o t he r o b j e c t o f g e n e r a l p u b l i c u t i l i t y s h a l l n o t b e a c h a ri t a b l e p ur p o s e i f i t i n v o l v e s c a rr y i n g o n • a n y a c t i v i t y i n t h e n a t u r e o f t ra d e , c o m m er c e o r b u si n es s ; o r • a n y a c t i vi t y o f re n d e r i n g a n y se r vi c e i n r e l a t io n t o t r a d e , c o m m er c e o r b u s i n e s s f o r a c es s o r f ee o r a n y o t h er c o n s i d er a t i o n , i r r es p e c t i ve o f t h e n a t u r e o f u se o r a p p l i c a t i o n , o r r e t en t i o n , o f t h e i n co m e f r o m s u c h a c t i vi t y . I t w a s t h u s c o n t e n d e d t h a t t h e f i r s t p r o v i s o t o s e c t i o n 2 ( 1 5 ) sh a l l a p p l y i n r es p e c t o f o n l y l a s t l i m b o f s e ct i o n 2 ( 1 5 ). T h u s , if a n i n s t i t u t i o n i s i n vo l v e d i n p r o vi d i n g r e l i e f o f t h e p o o r , e d u c a ti o n , m e d i c a l r el i e f , p r es e r va t i o n o f e n v i r o n m e n t o r m o n u m e n t s o r p l a c e s o r o b j ec t s o f a r t i s t i c o r h i st o r i c i n t e r e s t , t h en i t sh a l l c o n t i n u e t o c o n s t i t u t e ' C h a r i t a b l e p u r p o s e ' e v en i f i t i n ci d e n ta l l y i n v o l v es t h e c a r r yi n g o n o f c o m m er c i a l a ct i v i t i e s. 5 . 3 Th e l e a r n e d A R su b m i t t e d t h a t t h e S u r a t U r b a n D e v e l o p m e n t A u t h o r i t y ( S U D A ) i s t h e u m b r e l l a o r g a n iza t i o n o f G u j a ra t G o v e rn m en t . T h e A u t h o r i t y t a k es o v e r t h e n ew i n f r a s t r u ct u re d e v e l o p m en t s , r e si d e n t i a l p ro j e c t s fo r p e o p l e f a l l i n g i n l o w a n d m i d d l e i n co m e g r o u p . S i n ce t h e as s e s s ee t r u s t i s e n g a g ed i n p r o v i d i n g e a s i l y a f f o r d a b l e re s i d e n c e t o l o w a n d m i d d l e i n co m e g ro u p , h e n c e t h e a ss e ss e e c o m e s u n d er t h e p u r vi e w o f " R e l i e f t o P o o r" w i t h i n t h e d ef i n i t i o n of C h a ri t a b l e P u rp o s e. 5 . 4 I t w a s n e xt s u b m i t t ed t h a t s i n ce S u r a t i s a c i ty o f i n d u s t r i es a n d en t e r p ri s e s , a u t h o r i t y i s a l s o w i t h s e ve r a l o t h er g o v e r n m e n t a l a n d p r i v a t e a g e n c i e s c o n c e r n e d t o en sur e p l a n n e d d e v el o p m e n t o f t r a d e a n d i n d u s t r y t a k i n g c o n s i d e r a ti o n t h e ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 6 - e n v i ro n m e n t a l a s p e ct s . I t w a s t h u s su b m i t t e d t h a t th e d e v el o p m e n t o f d i s t r i ct o f S u r a t b y p r o v i d i n g h o u se, r o a d s , d e v el o p m e n t a n d m a i n t e n a n c e o f p a r k s ( b o o s t t o e n vir o n m e n t ) , p l a n t a t i o n o f t r ee s ( a g a i n p e r t a i n i n g t o e n v i r o n m e nt ) , p r o v i d i n g s ew e r a g e s y s t e ms ( cl e a n a n d h e a l t h y e n v i r o n m e n t ) a re a l l o b j ec t s o f w e l f a r e o f t h e p e o p l e o f t h e d i s t r i c t . Fu r t h e r , t o g e t h er w i t h t h e n ew d e v e l o p m e n t s , t h e A u t h o ri t y a l s o h a s to k e ep f r e s h a n d r e n o v a t e t h e h i s t o r i c s i t e s a n d n a t u r a l a t t r a c ti o n s o f t h e a s s i g n e d t o S U D A . 5 . 5 I t w a s a l s o s u b m i t t e d t h a t i rr e sp e c t i v e o f t h e f a c t t h e a s s es s e e t r u s t i s e n g a g e d i n d e v el o p m e n t o f va r i o u s a r e a s a s p er t h e p r o vi s i o n s o f t h e a b o v e A c t w h i c h i s f o r t h e p ub l i c a t l a r g e , t h e a ss e ss e e t r u s t d o e s n o t f a l l u n d e r t h e l a s t l i mb o f t h e d e f i n i t i o n o f C h a r i t a b l e p u r p o s e . S i n c e t h e a ss e s s ee i s en g a g e d i n a b o v e m e n t i o n e d c h a ri t a b l e p u rp o s e , h e n c e i t i s n o t r i g h t t o a p p l y f i r s t p r o v i s o t o S e ct i o n 2 ( 1 5 ) o f t h e A ct . 5 . 6 R e l i a n c e w a s p l a ce d o n t h e r e c e n t d ec i s i o n o f th e H o n ’ b l e G u j a ra t H i g h C o u rt i n t h e s i m i l a r ca s e o f A h m e d a b a d U r b a n D e v e l o p m e n t A u t h o r i t y ( A U D A ) v s A s s i s t a n t C o m m i s s i on er o f I n c o m e T a x ( E x e m p t i o n s ) | 8 3 t a xm a n n . co m 7 8 | ( G u j a r at ) ( 2 0 1 7 ) . w h e r e t h e c o u rt w a s c a l l e d u p o n t o d ec i d e a s t o w h et h er A U D A c o n s t i t u t e d u n d e r G u j a r a t T o w n P l a n n i n g a n d U r b a n D e v e l o p m e n t A c t , 1 9 7 6 , t o u n d e r t a k e p r e p a r a t i o n a n d e x e c u t i o n o f t o w n p l a n n i n g sc h e m e s a n d t o ex e cu t e w o r k s i n c on n e c t i o n w i t h s u p p l y o f w a t e r, d i s p o s a l o f s e w er a g e a n d p r o vi si o n o f o t h er s e r v i c e s a n d a m e n i t i e s , c o u l d b e s a i d t o b e pr o v i d i n g g e n e r a l p u b l i c u t i l i t y s e rv i c es w i t h i n m e a n i n g o f se ct i o n 2 ( 1 5 ) a n d , t h u s , c a n c l a i m f o r e x em p t i o n o f i n co me u n d e r s e c t i o n l l o f t h e A c t . 5 . 7 Th e H o n ' b l e G u j a r a t Hi g h C o u r t h el d t h a t : " F ro m t h e v a r i o u s p ro v i si o n s o f t h e T o w n P l a n n i n g Ac t . i t c a n b e g a t h e r ed t h a t a ss e ss e e h a s b e e n co n s t i t u t ed a s U r b a n D e v el o p m e n t A u t h o r i t y u n d er t h e p r o vi s i o n s o f s e c t i o n 2 2 o f t h e T o w n P l a n n i n g A ct . Th e p u r p o s e a nd o b j ec t o f c o n s t i t u t i o n o f t h e U rb a n D e v e l o p m e n t A u th o ri t y i s p ro p e r d ev el o p m e n t o r re - d e v el o p m e n t o f u r b a n a rea . E v en U r b a n D e ve l o p m en t A u t h o r i t y c o n si s t s o f ( i ) a C h a i r ma n t o b e a p p o i n t e d b y t h e S t a t e G o v e rn m e n t ; (i i ) s u c h p e rs o n s , n o t e xc e ed i n g [ f o u r i n n u m b er] w h o a re m e m b er s o f t h e l o c a l a u t h o ri t y o r a u t h o ri t i e s f u n c ti o n i n g ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 7 - i n t h e u r b a n d e v el o p m en t a r ea , a s m a y b e n o m i n a t e d b y t h e S t a t e G o v e rn m e n t ; ( H i ) t h r e e o f f i c i a l s o f t h e St a t e G o v e r n m e n t , t o h e n o mi n a t e d b y t h a t G o v e rn m e n t , e x - o f f i c i o ; ( i v ) t h e P r es i d en t s o f t h e d i s t r i ct p a n ch ay a t s f u n ct i o n i n g i n t h e u r b a n d e v e l o p m en t a r e a , o r , a s th e ca s e m a y b e , p a rt t h er e o f , e x- o f f i ci o ; ( v ) t h e C h i e f T o wn p l a n n er o r h i s r e p r e s e n t a t i v e , e x - o f f i c i o ; ( v i ) t h e C h i e f E n g i n e e r o r E n g i n e e r s ( P u b l i c H ea l t h ) o f t h e l o c a l a u t h o ri t y o r a u t h o r i t i es f u n ct i o n i n g i n t h e u r b a n d e v el o p m e n t a r e a o r h i s o r t h ei r n o m i n e e o r n o mi n ees , e x - o f f i c i o : 5 [ ( v i - a ) t h e M u n i c i p a l C o m m i ss i o n e r o f t h e Mu n i c i p a l C o r p o r a t i o n , i f a n y , f u n c t i o n i n g i n t h e ur b a n d e v el o p m e n t a r e a , e x- o f f i c i o ;] (v i i ) a m e m b e r se cr et a r y t o b e a p p o i n t e d b y t h e S t a t e G o v e r n m e n t w h o s h a l l a l s o b e d e s i g n a t e d a s t h e C h i e f E x e c u t i v e A u t h o ri t y o f t h e U r b a n D e v e l o p m e n t A u t h o r i t y. Th u s , t h e c o n st i t u t i o n o f t h e U r b a n D e v el o p m e n t A u th o ri t y i s s u b j ec t t o t h e c o n t r o l o f t h e S t a t e Go v er n m e n t . Th e p o w e r s a n d f u n c t i o n s o f t h e U r b a n D e v el o p m e n t A u t h or i t y a r e co n t a i n e d i n s e c t i o n 2 3 . C o n s i d er i n g se c t i o n 4 0 o f t h e To w n P l a n n i n g A c t , t h e T o w n P l a n n i n g S ch em e p r ep a r ed b y t h e U r b a n D ev el o p m e n t A u t h o ri t y w h i c h h a s b e e n p r e p a r e d s u b j e c t t o s a n ct i o n b y t h e S t a t e G o v e r n m e nt f o r d e v el o p m e n t o f t h e Ur b a n De v el o p m e n t A r e a , a l so p r ov i d e f o r r o a d s , o p en s p a c es , g a r d e n s , r e c r e a t i o n g r o u n d s, s ch o o l s , m a rk e t s , g r ee n - b e l t s , d a i r i es , t r a n s p o rt fa ci l i t i es , p u b l i c p u r p o s es o f a l l k i n d s: d r a i n a g e , i n cl u s i ve of s ew e r a g e , su r f a c e o r s u b - s o i l d r a i n a g e a n d s e w a g e d i s p o s a l ; L i g h t i n g ; W a t e r s u p p l y et c . Th e T o w n P l a n n i n g S c h e m e a l s o p r o vi d e s f o r h i s t o r i ca l o r n a t i o n a l i n t er e st o r n a t u ra l b e a u t y, a n d o f b u i l d i ng s a c t u a l l y u s e d f o r r e l i g i o u s p u r p o s e s . Th e S c h e m e a ls o p r o vi d es f o r r e s er v a t i o n o f l a n d t o t h e e x t en t o f t en p e r c e n t , o r su c h p e r ce n t a g e a s n e a r t h e r et o a s p o s si b l e o f t h e t o t a l a r e a c o v e r ed u n d er t h e s c h e m e , f o r t h e p ur p o s e o f p r o v i d i n g h o u s i n g a c c o m m o d a t i o n t o t h e m e m b e rs of s o c i a l l y a n d e co n o m i c a l l y b a c k w a r d c l a s s e s o f p e o p le. A s p e r se c t i o n 4 0 (i ) ( j j ) f o r t h e a f o r e s a i d p u r p o s es c ert a i n p e r c e n t a g e o f t o t a l a r ea c o v er e d u n d e r t h e s c h e m e ar e a l l o t t e d ea r m a r k e d . F i f t e en p er c en t o f t o t a l a r ea is a l l o t t e d f o r t h e p u r p o s e o f r o a d s , f i v e p e r c e n t f o r p a r ks , p l a y g r o u n d s , g a r d e n s a n d o p e n s p a c e , f i v e p e r c e n t f o r ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 8 - s o c i a l i n f r a st r u c t u r e s u c h a s s ch o o l , d i s p e n s a r y , fi r e b r i g a d e , p u b l i c u t i l i t y p l a c e a s ea r m a r ke d i n t h e Dr a f t To w n P l a n n i n g S ch em e a n d F i f t e e n p e r c en t f o r s a l e by a p p r o p r i a t e a u t h o r i t y f o r re s i d e n t i a l , c o m m e r c i a l or i n d u s t r i a l u s e d e p e n d i n g u p o n t h e n a t u r e o f d e v e l o pm en t . La st F i f t e en p er c e n t i s e a r m a r k ed u n d er t h e To w n P l a n n i n g S c h e m e f o r s a l e , b y a p p r o p r i a t e a u t h o r i t y f o r r es i d e n t i a l , c o m m e r c i a l o r i n d u s t r i a l u s e. Th e a p p r o p ri a t e a u t h o ri t y / U r b a n D e v e l o p m en t A u t h o rit y i s p e r mi t t e d t o s a l e t h e s a i d p l o t s/ l a n d s t o t h e e xt e n t o f 1 5 p e r c en t o f t h e t o t a l a r e a t o m e e t w i t h t h e e xp en d it u re t o w a r d s d r a i n a g e, ro a d s, g a r d en s , s c h o o l s , m a r k et s , w a t er s u p p l y et c . S o t h a t m a xi m u m p r i ce c a n b e f e t ch ed a nd t h e s a m e c a n b e u t i l i z e d f o r t h e d e v el o p m e n t o f t h e U r ba n D e v e l o p m e n t A r e a a n d s o a s t o a v o i d a n y a l l e g a t i o n o f f a v o u r i t i sm a n d n ep o t i s m , t h e p l o t s a r e so l d b y p u bl i c a u c t i o n . It i s r e q u i r ed t o b e n o t e d t h e en t i r e a m o un t r ea l i z e d b y t h e a s se s s e e b e i n g U r b a n De v el o p m e n t A u t h o r i t y e i t h er b y s e l l i n g p l o t s o r b y r e c o v e r y o f s o m e f e es / c h a r g es , U r b a n A u t h o r i t y i s r e q u i r ed t o u s e o nl y f o r t h e p u r p o s e o f d e v el o p m e n t i n t h e U r b a n D e v el o p m e n t A r e a a n d n o t f o r a n y o t h e r p u r p o s e . Th e T r i b u n a l h a s o b s er v e d a n d h e l d t h a t a s t h e a s s ess e e i s s el l i n g t h e p l o t s , t o t h e e x t e n t o f 1 5 p e r c e n t o f t o t a l a r ea , b y p u b l i c a u c t i o n a n d g e t s m a x i m u m a m o u n t , i t a m o u nt s t o p r o f h er i n g a n d t h er e f o r e , t h e a ct i v i t i e s o f t h e as s es s e e c a n b e s a i d t o b e i n t h e n a t u r e o f b u s i n e s s . H o w e v er , w h i l e h o l d i n g s o . T ri b u n a l h a s n o t p r o p er l y a p p r e cia t e d t h e o b j ec t a n d p u r p o s e o f p e r m i t t i n g t h e U r b a n D e v e l o p m e n t A u t h o r i t y t o s el l t h e p l o t s, m a x i m u m t o t h e e x t e n t o f 1 5 p e r c e n t o f t h e t o t a l a r e a i . e . t o m ee t w i t h t h e e x p en d i t u r e f o r p r o v i d i n g t h e m i n f ra s t r u ct u r a l f a c il i t i e s l i k e g a r d e n s , r o a d s , l i g h t i n g , w a t e r s u p p l y , d r a i n ag e s ys t e m e t c . T h e T r i b u n a l h a s a l s o n o t p r o p e r l y a p p r e ci a t ed t h e r e a s o n s f o r s e l l i n g t h e p l o t b y h o ld i n g p u b l i c a u ct i o n i . e . : ( I ) t o a v o i d a n y f u r t h e r a l l eg a t i o n o f f a v o u r i t i sm a n d n e p o t i sm a n d ( 2 ) so t h a t m a x i m u m m ar ke t p r i c e ca n b e f e t c h ed , w h i ch c a n b e u s ed f o r t h e d e v el o p m e n t o f t h e U rb a n D e v e l o p m e n t A re a . [ P a r a 1 2] A p p l y i n g t h e r a t i o o f v a r i o u s e a r l i e r d e c i s i o n s o n s i m i l a r i s su es t o t h e f a c t s o f t h e c a s e o n h a n d a n d w i t h r es p e c t t o ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 9 - t h e a c t i v i t i e s o f t h e A U D A - A h m e d a b a d U r b a n D e v e l o p m e n t A u t h o r i t y u n d er t h e p r o v i si o n s o f t h e Gu j a r a t To w n P l a n n i n g A ct b y n o s t r et c h o f i m a g i n a t i o n , i t ca n b e s a i d t h a t t h e a ct i v i t i e s o f t h e a s s e s s e e ( A U DA ) c an b e s a i d t o b e i n t h e n a t u r e o f t r a d e , c o m m er c e o r b u sin e ss a n d / o r i t s o b j e ct a n d p u rp o s e i s p r o f i t e er i n g . M e r el y b e c a u s e u n d er t h e s t a t u t o ry p r o v i s i o n s a n d t o m ee t w i t h t h e e xp en d i t u re o f T o w n P l a n n i n g S c h e m e a n d / o r p r o vi d i n g v a r i o u s s e r v i c es u n d e r t h e T o w n P l a n n i n g S c h e m e , s u ch a s r o a d , d r a i n a g e , el e c t ri c i t y , w a t e r s u p p l y e t c. i f t h e a ss e ss e e i s p e r m i t t ed t o s a l e t h e p l o t s ( l a n d ) t o t h e e xt e n t o f 1 5 p er c e n t o f t h e t o t a l a r e a u n d er th e T o w n P l a n n i n g S c h e m e a n d w h i l e s el l i n g t h e s a i d p l o t s t he y a re s o l d b y h o l d i n g t h e p u b l i c a u c t i o n , i t c a n n o t b e sai d t h a t a c t i v i t i es o f t h e a s s e ss e e i s p r o f i t e e r i n g , t o b e in t h e n a t u r e o f t r a d e , c o m m e r c e a n d b u si n es s . [ P a r a 1 3 ] C o n s i d e r i n g t h e a f o re s a i d f a c t s a n d ci r c u m s t a n ce s an d m o r e p a r t i c u l a r l y , c o n s i d e ri n g t h e f a c t t h a t t h e a ss es s e e i s a s t a t u t o r y b o d y - U r b a n D e v el o p m e n t A u t h o ri t y c o n s t i t u t e d u n d e r t h e p r o vi s i o n s o f t h e A c t , c o n s t it u t ed t o c a r ry o u t t h e o b j e c t a n d p u r p o s e o f To w n P l a n n i n g Ac t a n d c o l l e c t s r e g u l a t o r y f e e s f o r t h e o b j e c t o f t h e A c t s ; n o s er v i c e s a r e r e n d er e d t o a n y p a r t i c u l a r t r a d e , co m me r ce o r b u s i n e s s ; w h a t e v e r t h e i n c o m e i s e a r n e d / r e c e i v ed b y t h e a s s es s e e e v e n w h i l e s el l i n g t h e p l o t s ( t o t h e ex t en t o f 1 5 p e r c en t o f t h e t o t a l a r e a c o v er e d u n d e r t h e To wn P l a n n i n g S c h e m e ) i s r e q u i r e d t o b e u s ed o n l y f o r t he p u r p o s e t o ca rr y o u t t h e o b j e ct a n d p u r p o s e o f T o w n P l a n n i n g A c t a n d t o m e et w i t h e xp en d i t u r e w h i l e p r ov i d i n g g e n e r a l u t i l i t y s e r v i c e t o t h e p u b l i c su ch a s e l e c tr i ci t y , r o a d , d r a i n a g e , w a t er et c . a n d e v e n t h e en t i re c o n tr o l i s w i t h S t a t e G o v e r n m e n t a n d e ve n a c co u n t s a r e a l s o s u b j ec t e d t o a u d i t a n d t h e r e i s n o e l e m e n t o f p r o f it e er i n g a t a l l , t h e a ct i v i t i e s o f t h e a ss e s s e e ca n n o t b e s ai d t o b e i n t h e n a t u r e o f t ra d e , c o m m e r c e a n d b u s i n e s s a n d , t h e r ef o r e, p r o vi s o t o s e ct i o n 2 ( l 5 ) o f t h e A ct s h a l l n o t b e a p p l i c a b l e s o f a r a s a s s es s e e i s c o n c er n e d a n d , t h er e f o re , t h e a s s es s e e i s en t i t l e d t o ex e m p t i o n u n d er se c t i o n I I o f t h e A c t . [ P a r a 1 4 ] N o w , s o f a r a s a n o t h e r q u es t i o n w h i c h i s p o s ed f o r t h e c o n s i d er a t i o n o f t h i s C o u r t i . e . w h e t h e r w h i l e c o l lec t i n g t h e c e s s o r f e es , a c t i v i t i es o f t h e a ss e s s e e c a n b e s a i d t o ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 10 - b e r e n d e r i n g a n y s er v i c e s i n r e l a t i o n t o a n y t ra d e , c o m m er c e o r b u s i n e s s i s c o n c e r n e d , f o r t h e r e a s o n s st a t e d a b o v e , m e re l y b ec a u se t h e a s se s s e e i s c o l l e c t i n g c ess o r f e es w h i c h i s r e g u l a t o ry i n n a t u r e , t h e p r o v i s o t o s e c t i o n 2 ( l 5 ) o f t h e A c t s h a l l n o t b e a p p l i c a b l e. A s o b s e r v e d h e r ei n a b o v e n e i t h e r t h er e i s el e m e n t o f p ro f i t e e r i ng n o r t h e s a m e ca n b e s a i d t o b e i n t h e n a t u r e o f t ra d e , c o m m er c e o r b u s i n es s . [ P a r a 1 5 ] H a v i n g r e g a r d t o t h e f a c t s o f t h e ca s e a n d p u r p o s e f o r w h i c h t h e a s s e s s e e i s e s t a b l i sh e d / c o n s t i t u t ed u n d e r t h e p r o vi s i o n s o f t h e G u j a r a t T o w n P l a n n i n g A c t , c o l l e ct i o n o f f e es a n d c e ss i s i n c i d e n t a l t o t h e o b j ec t a n d p u r p os e o f t h e A c t . a n d , t h u s , t h e c a s e w o u l d n o t f a l l u n d e r s e co nd p a r t o f p r o v i s o t o se c t i o n 2 ( 1 5 ) . [ P a r a 1 5 . 1] Th u s , t h e Tr i b u n a l h a s co m mi t t ed a g ra v e e rr o r i n ho l d i n g t h e a c t i v i t i es o f t h e a s s es s e e i n t h e n a t u r e o f t rad e , c o m m er c e o r b u s i n e s s a n d , co n s e q u e n t l y , h o l d i n g t h at t h e p r o vi s o t o s e c t i o n 2 ( 1 5 ) w o u l d b e a p p l i c a b l e a n d , t h e r ef o r e, t h e a s s es s e e i s n o t e n t i t l e d t o e x e m p t i on u n d er s e c t i o n 1 1 . F o r t h e r e a s o n s st a t ed a b o v e, i t i s h el d t h a t t h e pro vi s o t o s e c t i o n 2 ( 1 5 ) w o u l d n o t b e a p p l i ca b l e s o f a r a s a s ses s e e - A U D A i s c o n c e r n e d a n d a s t h e a c t i vi t i e s o f t h e a s ses s e e c a n b e sa i d t o b e p r o vi d i n g g e n e ra l p u b l i c u t i l i t y s e rv i c es , t h e a ss e s s e e i s en t i t l ed t o e x e mp t i o n u n d e r s e c t i o n I I . [ P a r a 1 5 . 2] I n vi e w o f t h e a b o v e , t h e i m p u g n e d o r d e r p a s s ed b y t h e Tr i b u n a l i s s e t a si d e . A c c o r d i n g l y, t h e a s se s s e e ' s a p p e a l i s a l l o w ed . [ P a r a 1 6 ] " 5 . 8 O n t h e s i m i l a r f o o t i n g , i t w a s co n t e n d ed t h a t SU DA i s a n a u t o n o m o u s b o d y w h i ch w a s e st a b l i s h e d u n d er s e c t i o n 2 2 o f t h e G u j a ra t To w n P l a n n i n g a n d U r b a n D e v e l o p m e n t A ct , 1 97 6 ( X X V I I o f 1 9 7 6 ) a n d R u l e s m a d e u n d er ca r r y i n g P l a n ne d D e v e l o p m e n t o f a re a s a s d e f i n e d a n d d e s i g n ed b y t h e G o v e r n m e n t o f G u j a ra t a n d a l so i n f r a s t r u c t u r a l a c t iv i t i es r el a t i n g t h e re t o s u c h a s t o u n d er t a k e t h e p r e p a r a t io n s o f d e v el o p m e n t p l a n s , m o n i t o r i n g a n d c o n t ro l o f d e v el op m e n t o f t o w n p l a n n i n g a s co n s t r u c t i o n o f r o a d s, b ri d g e s a n d c a r r y o u t w o r k i n c o n n e c t i o n w i t h s u p p l y o f w a t e r a n d d i s p o sal o f ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 11 - s ew e r a g e a n d p r o v i s i o n s f o r o t h e r s er v i c e s a n d a c t iv i t i e s s u ch a s d r a i n a g e s y s t e m , w a t er c o n n e c t i o n , e t c. f o r t h e b ene f i t o f p u b l i c a t l a r g e . S U D A i s c o n s t i t u t e d t o c a r r y o u t t h e o b j ec t a n d p u r p o s e o f To w n P l a n n i n g A ct a n d c o l l e c t s r eg u l a t o ry f e es f o r t h e o b j e ct o f t h e A c t s ; n o s e r vi c es a r e r e n d e r e d t o a n y p a r t i c u l a r t r a d e, c o m m e r c e o r b u s i n e s s . Wh a t e v e r t h e i n co m e i s e a r n e d / r e ce i v e d b y t h e a s s es s e e i s r e q u i re d t o b e us ed o n l y f o r t h e p u r p o s e t o c a r r y o u t t h e o b j e ct o f To w n P l a n n i ng A ct a n d t o m e e t t h e e x p e n d i t u r e w h i l e p r o v i d i n g g en er a l u t i l i ty s er v i c e t o t h e p u b l i c s u ch a s e l e c t r i ci t y , r o a d , d r a i n a g e, w a te r e t c . A l so , t h e en t i r e c o n t r o l i s w i t h S t a t e G o v e rn m e n t a n d e v en a c c o u n t s a r e a l s o s u b j e c t e d t o a u d i t . A s t h e r e i s n o el e m e n t o f p r o f i t e e r i n g a t a l l , t h e a c t i v i t i es o f t h e a ss e ss e e c a n n o t b e s a i d t o b e i n t h e n a t u r e o f t r a d e, c o m m er c e a n d b u s i n e s s h a v i n g r eg a r d t o t h e f a ct s o f t h e c a s e a n d p u r p o s e f o r w h ic h t h e a s s es s e e i s e st a b l i s h e d / c o n s t i t u t e d u n d e r t h e p r o v is i o n s o f t h e G u j a ra t T o w n P l a n n i n g A c t , c o l l e c t i o n o f f e e s a n d ce ss a re r eg u l a t o r y f e es a n d a re i n c i d e n t a l t o t h e o b j e c t a nd p u r p o s e o f t h e A c t . I t w a s t h u s c o n t e n d e d t h a t t h e c a se w o u l d n o t f a l l u n d er s e c o n d p a rt o f p r o v i s o t o s e c t i o n 2 ( 1 5 ) o f t h e A c t . T h e re f o re , p r o vi s o t o s e c t i o n 2 ( 1 5 ) o f t h e A ct s h a l l n o t b e a pp l i c a b l e so f a r a s a s s e ss e e i s co n c e r n e d a n d , t h e r e f o r e , t h e a ss e sse e i s e n t i t l e d t o e x e m p t i o n u n d e r s e c t i o n 1 1 o f t h e A c t . 5 . 9 C o m i n g t o t h e s p ec i f i c s , i t w a s c o n t en d e d t h a t a s per s e c t i o n 1 1 ( 2 ) , w h e r e e i g h t y- f i v e p e r ce n t o f t h e i nc o m e r e f e r r e d t o i n c l a u se ( a ) o r c l a u s e ( b ) o f s u b - s e ct i o n ( 1 ) rea d w i t h t h e E x p l a n a t i o n t o t h a t su b - s ec t i o n i s n o t a p p l i e d , o r i s n o t d e e m e d t o h a v e b e e n a p p l i ed , t o c h a ri t a b l e o r r e l i g i o u s p ur p o s e s i n I n d i a d u r i n g t h e p r e v i o u s y ea r b u t i s a c cu m u l a t e d or se t a p a r t , c i t h e r i n w h o l e o r i n p a r t , f o r a p p l i c a t i o n t o s u c h p u r p o s e s i n I n d i a , su ch i n c o m e so a c c u m u l a t e d o r s e t a p a r t sh a ll n o t b e i n c l u d e d i n t h e t o t a l i n c o m e o f t h e p r ev i o u s y e a r of t h e p e r s o n i n r e c e i p t o f t h e i n c o m e , p r o v i d e d t h e f o l l o w i n g c o n d it i o n s a re c o m p l i e d w i t h , n a m e l y: — ( a ) s u c h p e rs o n f u r n i sh e s a st a t e me n t i n t h e p re s cri b e d f o r m a n d i n t h e p r es c ri b e d m a n n er t o t h e A s s e ss i n g Of f i ce r, s t a t i n g t h e p u r p o s e f o r w h i c h t h e i n co m e i s b e i n g a c cu m u l a t e d or s e t a p a r t a n d t h e p er i o d f o r w h i c h t h e i n c o m e i s t o b e a c cu m ul a t e d o r se t a p a r t , w h i c h s h a l l i n n o c a s e e x c ee d f i v e ye a r s ; ( b ) t h e m o n e y s o a c c u m u l a t e d o r s e t a p a r t i s i n v e s ted o r d e p o s i t ed i n t h e f o r m s o r m o d e s s p e ci f i e d i n s u b - sec t i o n ( 5 ) ; ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 12 - ( c ) t h e s t a t em e n t re f e rr e d t o i n cl a u s e ( a ) i s f u r ni s h e d o n o r b e f o r e t h e d u e d a t e s p e ci f i e d u n d e r s u b - s e c t i o n ( 1 ) o f s e c t i o n 1 3 9 f o r f u r n i s h i n g t h e r et u rn o f i n c o m e f o r t h e p revi o u s y ea r : P r o v i d e d t h a t i n c o m p u t i n g t h e p e ri o d o f f i v e y e a r s r e f er r e d t o i n c l a u s e ( a ) , t h e p e r i o d d u r i n g w h i c h t h e i n c o m e co u l d n o t b e a p p l i e d f o r t h e p u r p o s e f o r w h i c h i t i s so a c c u m u l at e d o r se t a p a r t , d u e t o a n o r d e r o r i n j u n c t i o n o f a n y c o u r t , s h a l l b e e x c l u d ed . E x p l a n a t i o n . — A n y a m o u n t c r ed i t e d o r p a i d , o u t o f i nc o m e r ef e r r e d t o i n c l a u s e ( a ) o r c l a u s e ( b ) o f su b - s e c ti o n ( 1 ) , r ea d w i t h t h e E x p l a n a t i o n t o t h a t s u b - s e ct i o n , w h i ch i s n o t a p p l i ed , b u t i s a c c u m u l a t ed o r s e t a p a r t , t o a n y t r u s t o r i ns t i t u t i o n r eg i st e r ed u n d e r s e c t i o n 1 2 A A o r t o a n y f u n d o r i n st i t u t i o n o r t r u s t o r a n y u n i v e r s i t y o r o t h e r ed u c a t i o n a l i n s t i tu t i o n o r a n y h o s p i t a l o r o t h er m ed i ca l i n st i t u t i o n r e f er r e d t o in su b - c l a u se ( i v ) o r s u b -c l a u s e ( v) o r s u b - c l a u s e ( vi ) o r s u b - c la u s e ( vi a ) o f c l a u s e ( 2 3 C ) o f s ec t i o n 1 0 , s h a l l n o t b e t r ea t ed a s a p p l i c a t i o n o f i n c o m e f o r c h a ri t a b l e o r r e l i g i o u s p u r p o s e s , ei t h e r d u ri n g t h e p e r i o d o f a c c u m u l a t i o n o r t h e re a f t e r . I n t h i s b a c kdr o p , i t w a s c o n t e n d e d t h a t t h e a m o u n t a c cu m u l a t e d o r s e t a s i d e b y S U D A o f R s . 3 7 , 5 0 , 0 0 , 0 0 0 / - i s a s p e r s ec t i o n 1 1 ( 2 ) w h i c h c a n b e c l a i m e d a s d e d u c t i o n a n d h e n c e , n o a d d i t i o n c a n b e ma d e o n t h e a c c o u n t o f sa m e. 5 . 1 0 A s r e g a r d s a d d i t i o n o f R s . 9 , 1 0 , 6 5 , 1 5 3 / - , i t w as s u b m i t t e d t h a t a s p e r S e ct i o n 1 1 ( 1 ) o f t h e A c t , su b j e c t t o t he p r o vi s i o n s o f s e c t i o n s 6 0 t o 6 3 , t h e f o l l o w i n g i n co m e s h a l l n o t be i n c l u d ed i n t h e t o t a l i n c o m e o f t h e p r e v i o u s y ea r o f t h e p e r so n i n r e c e i p t o f t h e i n co me — ( a ) i n c o m e d er i v e d f r o m p ro p e r t y h e l d u n d e r t ru s t w h o l l y f o r c h a r i t a b l e o r r el i g i o u s p u rp o s e s, t o t h e e xt e n t t o w h i c h s u c h i n c o m e i s a p p l i e d t o s u ch p u r p o se s i n I n d i a : a n d , wh e r e a n y s u c h i n c o m e i s a c cu m u l a t e d o r s e t a p a r t f o r a p p l i cat i o n t o s u c h p u r p o s e s i n In d i a , t o t h e ex t e n t t o w h i c h t h e i n c o me s o a c c u m u l a t e d o r se t a p a r t i s n o t i n e xc e s s o f f i f t e en p e r c en t o f t h e i n co me f r o m s u c h p r o p er t y ; I n t h i s b a c k g r o u n d , i t w a s s u b m i t t e d t h a t t h e a c c u mu l a t i o n u / s 1 1 ( 1 ) ( a ) o f t h e A c t i s el i g i b l e f o r 1 5 % d e d u c t i o n un d e r t h e A c t i f t h e t r u s t f a i l s t o a p p l y t h e e n t i r e i n c o m e o f t h e yea r . T h e r e f o re , t h e a d d i t i o n i s n o t j u s t i f i ed a s S U D A i s e l i g i b l e to c l a i m I N R ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 13 - 9 , 1 0 , 6 5 , 1 5 3 / - a s 1 5 % d e d u ct i o n u / s l l ( l ) ( a ) o f t h e A c t a s t h e a p p l i c a t i o n o f f u n d s n e e d n o t b e mo r e t h a n 8 5 %. 5 . 1 1 I t w a s n e x t c o n t en d e d t h a t t h e C o m m i s si o n e r o f I n c o m e Ta x ( A p p ea l s ) - 9 . A h m e d a b a d h a s p a s s ed a n o r d e r f or A . Y . 2 0 0 9 - 1 0 , A . Y . 2 0 1 0 - 1 1 , A . Y . 2 0 1 1 - 1 2 . A . Y . 2 0 1 3 -1 4 an d A . Y . 2 0 1 5 - 1 6 g r a n t i n g t h e a s s es s e e t h e b e n e f i t o f d e d u c ti o n u n d er s e c t i o n 1 1 r . w . s . 2 ( 1 5 ) . Th e C o mm i s s i o n er o f I n c o m e Ta x ( A p p e a l s ) - 9 , A h m ed a b a d i n t h e o rd er h a s s t a t e d t ha t " Th e m a i n i s su e r a i s e d b y t h e a p p e l l a n t [ S U D A ] is c o v e r e d b y t h e l a t es t j u d g e m en t o f H o n ' b l e G u j a ra t H i g h C o u r t i n t h e c a se o f A U D A v s A C I T i n I T A N o . 4 2 3 , 4 2 4 , 4 2 5 o f 2 0 1 6 d a t e d 0 2 . 05 . 2 0 1 7 . . . . . . . B o t h , i . e . t h e a p p e l l a n t a n d A U D A a r e c o n st i t u t e d as A u t h o r i t i es u n d e r t h e G u j a r a t T o w n P l a n n i n g a n d U r b a n D e v e l o p m en t A c t , 1 9 7 6 . Th e p o w er s a n d f u n ct i o n s o f b o t h t h e a u t h o r i ti e s h a v e b e e n l a i d d o w n u n d e r t h e s a i d A c t a n d a r e i d e n t i c a l i n n a t u re . N o w h e r e i n t h e o r d e r o f a ss e ss m e n t t h e A O p o i n t e d ou t t h a t t h e a p p e l l a n t [ S U D A] h a s u n d e r t a k en f u n ct i o n s b e y o n d t he m a n d a t e o f G u j a r a t To w n P l a n n i n g a n d Ur b a n D e v el o p m e n t A c t . Th e a p p e l l a n t [ S U D A] i s r e g i st e r ed u / s 1 2 A o f t h e A c t . I t w a s t h u s c o n t e n d e d t h a t , a s h el d b y H o n ' b l e G u j a r a t H i g h C o ur t i n d e c i si o n q u o t e d a b o ve , t h e a s s es s e e ca n n o t b e co n s id e r ed t o b e c o v er e d b y t h e p r o vi s o t o s e c t i o n 2 ( 1 5 ) o f t h e A c t a n d h e n c e A O c a n n o t w i t h d r a w t h e cl a i m o f e x e m p t i o n b y i n v o k i n g p r o v i so t o s e c t i o n 2 ( 1 5 ) r . w . s . 1 3 ( 8 ) o f t h e A c t . A s a c o r o l l ar y, t h e a s s e s s e e c a n n o t b e a s s e s s ed u / s 2 8 t o 4 4 o f t h e A ct . " 6 . Th e l e a r n ed DR , o n t h e o t h er h a n d , r el i e d u p o n th e o r d e rs o f t h e l o w er a u t h o ri t i es b u t co u l d n o t b r i n g a n y d is t i n c t i o n q u a t h e d e c i si o n t a k en i n t h e c a s e o f A h m ed a b a d Ur b a n De v e l o p m e n t A u t h o r i t y ( s u p r a ) . 7 . We h a v e c a r e f u l l y c o n si d e r e d t h e r i v a l s u b m i s s i on s . I n t h e i n s t a n t c a s e , T r i b u n a l h a s b e e n c a l l ed u p o n t o a d j u d i c a t e w h e t h e r a s s e s s ee i s en t i t l e d t o b en ef i t o f S e ct i o n 1 1 a n d S e c t i o n 1 2 o f t h e A c t i n t h e c i r c u m s t a n c e s o f t h e ca s e o r no t . A s a n e c es s a r y c o n co m i t a n t t h er e t o , a n i n c i d e n t a l q u e s t io n a r i s e s a s t o w h et h e r t h e f i rs t a n d s ec o n d p r o vi s o t o S e ct i o n 2 ( 1 5 ) o f t h e A c t i s a p p l i ca b l e i n t h e f a c t s o f t h e c a s e o r n o t an d c o n s e q u en t l y, t h e a ct i vi t y o f t h e a s s es s ee c a n b e reg a r d e d a s c h a r i t a b l e a c t i vi t i e s w i t h i n t h e m e a n i n g o f S ec t i o n 2 ( 1 5 ) o f t h e A c t o r n o t . T h e A O , i n t h e i n s t a n c e c a s e , h a s d i s al l o w e d e x e m p t i o n o f R s . 3 7 , 5 0 , 0 0 , 0 0 0 / - c l a i m e d u n d e r s . 1 1 ( 2) o f t h e A c t a n d f u rt h er d en i ed t h e d e d u ct i o n o f R s . 9 , 1 0 , 6 5 , 1 5 3 /- c l a i m e d o n ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 14 - a c c o u n t o f a c cu m u l a t i o n o f i n c o m e u n d e r s . 1 1 ( 1 ) ( a ) o f t h e A c t h o l d i n g t h e a c t i vi t y o f t h e a s s e s s e e a u t h o ri t y t o be n o n - c h a r i t a b l e i n n a t u r e . W e f i n d t h a t i n t h e s i mi l a r f a c t s, t h e c o - o r d i n a t e b e n c h i n V a d o d a r a U rb a n D e v e l o p m en t A u t h o ri t y vs . I TO i n I T A N o . 2 7 5 1 / A h d / 2 0 1 4 o r d e r d a t e d 2 8 . 0 1 . 2 0 1 9 h a s p l a ce d r e l i a n ce u p o n t h e d e c i si o n o f t h e H o n ’ b l e G uj a r a t H i g h C o u r t i n t h e c a s e o f A h m ed a b a d U r b a n D e v e l o p m e n t A ut h o r i t y ( s u p r a ) a n d C I T v s . G u j a ra t I n d u s t r i a l D e v e l o p m e n t C o r p o r a t i o n ( 2 0 1 7 ) 8 9 t a x m a n n . c o m 3 6 6 ( G u j ) a n d a d j u d i ca t ed t h e i s s u e i n f a v o u r o f t h e a ss e s s e e. Th e r el e va n t o p e r a t i v e p a ra o f t h e o rd er o f t h e co - o r d i n a t e b e n c h o f Tr i b u n a l i n V a d o d a r a U rb a n D e v e l o p m e n t A u t h o r i t y ( s u p r a ) i s r e p ro d u ce d h e r e u n de r f o r ea se o f r e f er e n c e : “4 . W e h a v e h e a r d t h e r es p e c t i ve p a r t i e s , p e ru s e d th e r el e va n t m a t e r i a l s a va i l a b l e o n r ec o r d . W e f i n d t h at i n s i m i l a r s e t o f f a c t s t h e J u r i s d i c t i o n a l H i g h C o u r t p a ss e d t h e o rd er s i n t h e c a s e o f U r b a n D e v e l o p m e n t A u t h o r it y - vs - A C I T, w h e r e i t w a s h el d a s f o l l o w s : " He l d , t h a t t h e o b j e c t a n d p u r p o s e o f p er m i t t i n g t he A u t h o r i t y t o s e l l t h e p l o t s t o a m a x i m u m e x t en t o f 1 5 % o f t h e t o t a l a r e a , w a s t o m e et t h e e xp en d i t u r e f o r p r o vi d i n g i n f r a s t r u c t u r a l f a c i l i t i e s l i k e g a r d en s , r o a d s , l i g h t i n g , w a t e r s u p p l y , d r a i n a g e s y st e m , et c. Th e r ea s o n s f o r s el l i n g t h e p l o t s b y h o l d i n g p u b l i c a u c t i o n w e r e ; ( a ) t o a v o i d a n y f u r t h e r a l l e g a t i o n of f a v o r i t i s m a n d n e p o t i s m a n d ( b ) s o t h a t t h e m a x i m u m m a r k e t p r i c e c o u l d b e f et c h ed , w h i c h c o u l d b e u s e d f o r t h e d ev e l o p m e n t o f t h e u r b a n d e v el o p m e n t a r e a . C o n s i d e r i n g t h e f a c t t h a t t h e a s s es s e e w a s a s t a t u t o r y b o d y , a n A u t h o ri t y c o n s t i t u t e d u n d e r t h e p r o v i si o n s o f t h e A ct , t o c a rr y o u t t h e o b j e c t a n d p u r p o s e o f To w n P l a n n i n g A c t a n d co l l e ct e d r eg u l a t o r y f e e s f o r t h e o b j e ct o f t h e A c t s, n o s e r vi c es w er e r en d e r e d t o a n y p a r t i c u l a r t r a d e, c o m m er c e o r b u s i n e s s ; a n d w h a t e v e r i n co m e w a s ea r n e d b y t h e a s s es s e e ev en w h i l e s e l l i n g t h e p l o t s ( t o t h e e xt e n t o f 1 5 % o f t h e t o t a l a r e a c o v e re d u n d e r t h e To w n P l a n n i n g S c h e m e ) w a s r eq u i r ed t o b e u s e d o n l y f o r t h e p u rp o s e t o c a r r y o u t t h e o b j e ct a n d p u r p o s e o f t h e To w n P l a n n i n g A c t a n d t o m e e t t h e ex p e n d i t u r e o f p r o v i d i n g g e n e r a l u t i l i t y s er v i ce t o t h e p u b l i c s u ch a s e l e ct r i c i t y, r o a d , d r a i n a g e , ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 15 - w a t e r et c . a n d t h e e n t i r e c o n t r o l w a s w i t h t h e S t a te g o v e r n m e n t a n d a c co u n t s w er e a l s o s u b j e ct e d t o a u d i t a n d t h e r e w a s n o el e m e n t o f p r o f i t e er i n g a t a l l . T h e a c t i vi t i e s o f t h e a s s es s e e co u l d n o t b e s ai d t o b e i n t h e n a t u r e o f t r a d e, c o m m e r c e a n d b u s i n e ss a n d t h e r ef o r e , t h e p ro vi s o t o S ec t i o n 2 ( 1 5 ) o f t h e A c t w a s n o t a p p l i c a b l e s o f a r a s t h e a s s e ss e e w a s c o n c e rn ed . T h e r ef o r e , t h e a ss e s s e e w a s en t i t l e d t o e x e m p t i o n u n d e r s ec t i o n 1 1 . " A p a r t f r o m t h a t C I T - v s. -G u j a r a t I n d u s t r i a l De v el o p me n t C o r p o r a t i o n , w h er e i n i t w a s h e l d a s f o l l o w s: " S e ct i o n 2 (1 5 ) , r e a d w i t h s e c t i o n 1 1 , o f t h e I n co m e- t a x A c t , 1 9 6 1 - C h a r i t a b l e p u r p o s e ( O b j ec t s o f g e n e r a l p u b l i c u t i l i t y ) - A s s e s s m en t ye a r 2 0 0 9 -1 0 - Wh e t h e r w h e r e a s s es s e e - co rp o r a t i o n w a s c o n s t i t u t e d u n d e r G u j a ra t I n d u s t r i a l D e v el o p m e n t A c t , 1 9 6 2 , f o r p u rp o s e o f s e cu r i n g a n d a s si s t i n g r a p i d a n d o r d e rl y e s t a b l i s h m e n t a n d o r g a n i z a t i o n o f i n d u s t r i a l a r e a s a n d I n d u s t r i a l es t a t es i n S t a t e o f G u j a ra t , a n d f o r p u r p o s e o f e s t a b l i sh i n g co m m er c i a l c e n t er s i n c o n n e c t i o n w i t h e st a b l i s h m en t a n d o r g a n i z a t i o n o f s u c h i n d u s t r i es i t co u l d n o t b e s a id t h a t a c t i v i t i es c a r r i e d o u t b y a s s es s e e w e re e i t h e r i n n a t u r e o f t r a d e , co m m e r c e o r b u s i n e s s , f o r a C e s s or F e e o r a n y o t h e r co n s i d e r a t i o n s o a s t o a t t r a c t p r o vi s o t o s e ct i o n 2 (1 5 ) a n d s a m e c o u l d b e s a i d t o b e f o r ch a r i t a b l e p u r p o s e a n d , c o n s e q u e n t l y , . A s s es s e e w a s e n t i t l ed t o ex e mp t i o n u n d er s ec t i o n 1 1 - H e l d , y e s ( P a ra s 1 5 a n d 1 7 ) [ I n f a v o u r o f a s s es s e e] " 5 . W e f i n d t h a t t h e o b j e c t o f t h e a s s es s e e i s si m i la r t o t h a t o f t h e c o r p o r a t i o n b e f o r e t h e J u ri s d i c t i o n a l H i g h Co u r t a n d o n t h e s i m i l a r s e t o f f a c t s t h e a p p e a l w a s a l l ow ed i n f a v o u r o f t h e a s s e s s e e h en c e r e l yi n g u p o n t h e s a m e w e a l l o w t h e c l a i m o f t h e a s s e s s e e a n d t h e d i s a l l o w a n ce o f e x e m p t i o n a s cl a i m e d b y t h e a s s es s e e u / s 1 1 o f t h e A c t t o t h e t u n e o f R s . 7 0 , 7 3 , 0 0 5 / - i s h e re b y q u a s h e d a n d a dd i t i o n m a d e t h e r e o n i s t h u s d e l et e d . 6 . In t h e r e su l t , a s s e ss e e' s a p p ea l i s t h u s a l l o w e d. ” ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 16 - 8 . I n t h e l i g h t o f t h e d e c i s i o n r e n d er e d b y t h e H o n’ b l e G u j a ra t H i g h C o u r t a n d a p p l i ed b y t h e c o - o r d i n a t e be n c h i n V a d o d a r a U r b a n D e v e l o p m e n t A u t h o r i t y ( s u p ra ) a n d G a n d h i n a g a r Ur b a n D e v e l o p m e n t A u t h o r i t y v s . D C I T I TA N o . 3 6 2 1 / A h d / 2 0 1 5 o r d e r d a t ed 2 3 . 0 7 . 2 0 1 9 , w e f i n d m e r i t i n t h e p l e a r a i s ed o n b e h a l f o f t h e a s s e s s e e f o r h o l d i n g t h e a ct i v i t i es o f a s s es s e e t o b e f o r c h a r i t a b l e p u r p o s es u n d e r s . 2 ( 1 5) o f t h e A c t a n d c o n s e q u en ce el i g i b i l i t y o f b en ef i t s u n d e r s. 1 1 & S e ct i o n 1 2 o f t h e A ct . T h e o r d e r o f t h e C I T ( A ) i s t h u s s et a si d e a n d t h e A O i s d i r e c t e d t o g r a n t re l i e f c l a i me d u n d er s . 1 1 ( 2 ) an d 1 1 ( 1 ) ( a ) o f t h e A c t t o t h e a s s es s ee i n a c c o r d a n ce w i t h l a w . 9 . I n t h e r e s u l t , a ss e ss e e’ s a p p e a l i n I TA N o . 9 5 5 / Ah d / 2 0 1 6 i s a l l o w ed w h e re a s R ev e n u e ’ s a p p e a l s i n I T A N o s . 2 4 3 2 & 2 4 3 3 / A h d / 1 7 a r e d i s m i s s e d . ” 9. We have further carefully considered the order passed by the Hon’ble High Court in dismissing the appeal preferred by the Revenue challenging the same issue in Tax Appeal Nos. 341 of 2020 and 342 of 2020 the relevant extract whereof is reproduced hereinbelow: “342 of 2020: 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for Short, ‘the Act, 1961’) is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal ‘D’ Bench, Ahmedabad dated 20.02.2012 in the ITA No. 2433/Ahd/2017 for the A.Y. 2014-15. 3. We have heard Ms. Mauna Bhatt, the learned Senior Standing Counsel appearing for the Revenue. 4. All the questions of law referred to above and proposed by the Revenue stand squarely covered by the decision of this Court in the case of Ahmedabad Urban Development Authority vs. ACIT reported in 396 ITR 323 (Guj).” 10. Thus, from the above we find that the assessee’s case is squarely covered by the order passed by the Coordinate Bench in holding the activities of the assessee for charitable purposes under Section 2(15) of the ITA No.05/Ahd/2020 ACIT vs. Surat Urban Development Authority Asst.Year –2015-16 - 17 - Act and the consequential benefits under Section 11 & 12 of the Act. We find no reason to deviate from the stand taken by the Co-ordinate Bench on this aspect. Further that the decision of the Coordinate Bench has further been confirmed by the Hon’ble Jurisdictional High Court. Hence, respectfully relying upon the same we hold, that the assessee is entitled to the benefit of the claim under Section 11 & 12 of the Act for the year under consideration and hence the order passed by the Ld. CIT(A) in favour of the assessee as impugned before us is according to us just and proper so as to warrant interference and the same is, thus, hereby confirmed. The appeal preferred by the Revenue is found to be devoid of any merit and, therefore, dismissed. 11. In the result, the appeal preferred by the Revenue is dismissed. This Order pronounced in Open Court on 06/12/2021 Sd/- Sd/- (WASEEM AHMED) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 06/12/2021 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad