Andhra Pradesh Urban Infrastructure Fund , Hyderabad V. DIT (E), Hyderabad

ITA 549/HYD/2013

• Counselvise Citation: 54922514 RSA 2013
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SIVA KUMAR; SUBRAHMANYAM
• Keywords: Charitable institution; Opportunity of being heard; Corroborative evidences
• Section: 43B; 133(6); 12A; 12AA; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE S/SHRI B. RAMAKOTAIAH, A.M. & SAKTIJIT DEY, J.M. ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRA- -V- DIRECTOR OF INCOME-TAX STRUCTURE FUND, HYDERABAD. (EXEMPT IONS), HYDERABAD PAN:AABTA9956A FOR ASSESSEE : S/SRI SUBRAHMANYAM & V. SIVAKUMAR FOR REVENUE : MR. SOLGY JOSE T KOTTARAM DATE OF HEARING : 12-03-2014 DATE OF PRONOUNCEMENT : 09.05.2014 ORDER PER SAKTIJIT DEY, J.M. THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28-2-2013 PASSED BY THE DIT (E), HYDERA BAD REJECTING THE ASSESSEES APPLICATION FOR GRANT OF R EGISTRATION U/S 12AA OF THE ACT. 2. BRIEFLY, THE FACTS ARE THE ASSESSEE A TRUST CREA TED BY THE GOVERNMENT OF ANDHRA PRADESH WAS FORMED VIDE TR UST DEED EXECUTED ON 23-2-2005, THE SETTLOR OF THE TRU ST IS GOVERNOR OF ANDHRA PRADESH AND MEMBERS OF TRUST BOA RD ARE AS UNDER:- A) CHIEF SECRETARY OF ANDHRA PRADESH CHAIRMAN B) PRINCIPAL SECRETARY TO GOVERNMENT, FINANCE DEPT T. TRUSTEE C) PRL. SECY./SECRETARY TO GOVT. MA&UD DEPTT. TRUSTEE D) PRL. SECY TO GOVT., PLANNING DEPTT. TRUSTEE E) PRL. SECRETARY TO GOVT. HOUSING DEPTT. TRUSTEE 2 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. F) COMMISSIONER AND DIRECTOR OF MUNICIPAL ADMINISTRATION TRUSTEE G) MANAGING DIRECTOR, APUFIDC S ECRETARY OF TRUST THE TRUST WAS CREATED WITH THE PRIMARY OBJECT OF FI NANCING INFRASTRUCTURE PROJECTS IN THE STATE OF ANDHRA PRA DESH UNDERTAKEN BY URBAN LOCAL BODIES, STATUTORY BODIES, PUBLIC SECTOR UNDERTAKINGS AND PRIVATE INVESTORS, AS THE S ETTLER HAS NOTED THE NEED FOR PROVIDING COST EFFECTIVE FINANC E FOR URBAN INFRASTRUCTURE THROUGH DIRECT LOANS, EPT AND ALSO PROVIDING FOR RAISING RESOURCES ON IT POOLED BASIS AND ALSO PROVIDE NEW CREDIT ENHANCEMENTS FOR ACHIEVING THE OBJECTIVE OF LOW COST FINANCE FOR THE URBAN SECTOR. THE ASSESSEE MADE A N APPLICATION IN THE PRESCRIBED MANNER ON 30-5-2007 B EFORE THE DIT (E) SEEKING REGISTRATION, U/S 12AA OF THE ACT. THE APPLICATION WAS INITIALLY REJECTED BY THE DIT (E) V IDE ORDER DATED 22-11-2007 FOR THE REASON THAT THE ASSESSEE F AILED TO FURNISH THE INFORMATION CALLED FOR AND DID NOT MAKE THE REQUIRED COMPLIANCE TO THE QUERIES MADE BY HIM. 3. THE ASSESSEE CHALLENGED THE ORDER PASSED BY THE DIT (E) REFUSING REGISTRATION BY FILING AN APPEAL BEFOR E THE ITAT. THE TRIBUNAL VIDE ORDER DATED 31-3-2008 IN ITA NO.128/HYD/2008 SET ASIDE THE ORDER ASSED BY THE DI T (E) AND REMITTED THE MATTER BACK TO HIM FOR CONSIDERING THE MATTER AFRESH AFTER PROVIDING A REASONABLE OPPORTUN ITY OF BEING HERD TO THE ASSESSEE. IN PURSUANCE TO THE OR DER PASSED BY THE ITAT, THE DIT (E) TOOK UP THE PROCEED INGS AGAIN BY ISSUING A NOTICE TO THE ASSESSEE ON 2-8-20 08. IN COURSE OF PROCEEDINGS, THE DIT (E) SOUGHT FOR CLARI FICATION FROM THE ASSESSEE ON DIFFERENT ISSUES. HE ALSO CAL LED UPON 3 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. THE ASSESSEE TO SUBMIT A NOTE DESCRIBING THE FACTUA L POSITION. THE DIT (E) AFTER EXAMINING THE BOOKS OF ACCOUNTS A LSO SOUGHT CLARIFICATION WITH REGARD TO CERTAIN EXPENDI TURE DEBITED IN THE ACCOUNT FOR DIFFERENT FINANCIAL YEAR S AND ALSO ASKED THE TRUST TO PRODUCE THE BANK STATEMENT FOR T HE PRECEDING THREE FINANCIAL YEARS I.E., 2004-05 TO 20 06-07. AFTER EXAMINING THE BOOKS OF ACCOUNTS AND VERIFYI NG OTHER INFORMATION FURNISHED BY THE ASSESSEE, THE DIT (E) NOTED THAT THE ASSESSEE TRUST WAS FORMED PURSUANT TO G.O. NO.72 OF MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT DEPARTMENT DATED 18-2-2005 OF GOVERNMENT OF ANDHRA PRADESH. ON GOING THROUGH THE OBJECT OF THE TRUST A S MENTIONED IN THE TRUST DEED, THE DIT (E) NOTED THA T THE TRUST WAS CREATED PRIMARILY FOR THE PURPOSE OF PR OVIDING FINANCE FOR INFRASTRUCTURE PROJECT IN THE STATE OF ANDHRA PRADESH. REFERRING TO PARAS 2 AND 3 AT PAGE-4 OF THE TRUST DEED, THE DIT (E) NOTED THAT THE PURPOSE FOR WHICH THE TRUST HAS BEEN CREATED I.E., FINANCE FOR INFRASTRUCTURE P ROJECTS IN THE STATE OF ANDHRA PRADESH UNDER TAKEN BY DIFFEREN T BODIES IS NOT CHARITABLE HAVING REGARD TO THE MEANING OF CHARITABLE PURPOSE AS CONTAINED IN THE PROVISIONS OF SECTION 2(15) OF THE ACT. HENCE THE REGISTRATION CANNOT BE GRANTED U/S 12A OF THE ACT TO THE ASSESSEE. FURTHER, REFERRING TO THE MAIN OBJECTS OF THE ASSESSEE AS CONTAINED IN SECTION 2.3 UNDER ARTICLE-II AT PAGE-9 OF THE SAID TRUST DEED, THE DI T (E) WAS OF THE VIEW THAT AS A WHOLE THE ASSESSEE TRUST IS MAIN LY PROVIDING FINANCIAL ASSISTANCE TO DIFFERENT BODIES FOR DEVELOPMENT OF INFRASTRUCTURE PROJECTS WHICH DOES N OT FIT IN TO THE TERM CHARITABLE PURPOSE AS DEFINED IN SECT ION 2(15) 4 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. OF THE ACT, AS THE OBJECTS OF THE TRUST CANNOT BE C ONSIDERED TO BE FOR GENERAL PUBLIC UTILITY. THE DIT (E) ON GO ING THROUGH SOME CLAUSES OF THE TRUST DEED WAS OF THE VIEW THAT NOT ONLY THE TRUST HAS BEEN FORMED BY THE GOVERNMENT OF AND HRA PRADESH BUT THE GOVT. OF A.P IS ALSO THE SOLE BE NEFICIARY OF THE TRUST. FURTHER REFERRING TO CLAUSE -5 OF THE TRUST DEED, IT IS NOTED THAT THE TRUST IS FULLY OWNED BY GOVERNME NT OF ANDHRA PRADESH. FROM THIS, THE DIT (E) CONCLUDED T HAT AS THE ENTIRE INCOME FROM THE TRUST IS MEANT FOR TH E GOVT. OF A.P AND AS THE TRUST IS WHOLLY OWNED BY GOVERNMENT OF ANDHRA PRADESH AND THE GOVERNMENT OF AP IS THE SOLE BENEFICIARY, IT CANNOT BE GRANTED REGISTRATION U/S 12AA OF THE ACT BY TREATING IT AS PUBLIC CHARITABLE INSTITUTION . WITH THE AFORESAID OBSERVATION, THE DIT (E) REJECTED THE ASS ESSEES APPLICATION FOR REGISTRATION. 4. THE LEARNED AR REFERRING TO THE PREAMBLE OF THE TRUST DEED AS WELL AS OTHER CLAUSES SUBMITTED THAT THE MI SSION STATEMENT DECLARES THAT TRUST WOULD FACILITATE THE SUSTAINED DEVELOPMENT OF URBAN INFRASTRUCTURE IN THE STATE BY ENABLING URBAN LOCAL BODIES AND OTHER LOCAL ENTITIES TO HAVE ACCESS TO LOW COST CAPITAL BY SUPPORTING URBAN SECTOR REFORMS TO MAKE THEM CREDITWORTHY AND EVENTUALLY ACCESS THE CAPITAL MARKET ON THEIR OWN AND BY FACILITATING PUBLIC PRIVATE COM MUNITY INITIATIVE FOR BUILDING URBAN INFRASTRUCTURE. THE LEARNED AR REFERRING TO THE OBJECT OF THE TRUST AS CONTAINED IN SECTION 2.3 OF ARTICLE II OF THE TRUST DEED SUBMITTED THAT THE TRUST RECEIVES MONIES FROM CENTRAL AND STATE GOVERNMENT U RBAN INFRASTRUCTURE ORIENTED SCHEMES. IN THE PRECEDING Y EARS, HE TRUST RECEIVED FUNDS GRANTS FROM CENTRAL GOVERNMEN T UNDER 5 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION (JN NURM), URBAN INFRASTRUCTURE DEVELOPMENT SCHEME FOR SMALL A ND MEDIUM TOWNS (UIDSSM) AND INTEGRATED HOUSING AND DEVELOPMENT PROGRAM AND, FROM STATE GOVT. UNDER AP MUNICIPAL DEVELOPMENT PROJECT. IT WAS SUBMITTE D THAT THESE FUNDS WERE UTILIZED BY THE TRUST TO SANCTION GRANTS AND LOANS WITH NOMINAL INTEREST, TO VARIOUS URBAN LOCAL BODIES (MUNICIPALITIES AND MUNICIPAL CORPORATIONS) BASED O N THE APPROVED URBAN INFRASTRUCTURE PLAN. IT IS SUBMIT TED THAT THE COMPONENTS TO WHICH THESE GRANTS CAN BE RELEASE D TO URBAN LOCAL BODIES IS SPECIFIED IN THE SCHEME FRAME D BY THE GOVERNMENT AND THE TRUST HAS TO ADHERE TO THE NORMS FIXED BY THE GOVERNMENT AND THE ELIGIBLE ITEMS UNDER THES E SCHEMES GENERALLY INCLUDE SEWERAGE, STORM WATER DRA INAGE, SOLID WASTE MANAGEMENT, IMPROVE INFRASTRUCTURE FACI LITIES IN TOWNS, CREATE DURABLE PUBLIC ASSETS, TO PROMOTE PLA NNED INTEGRATED DEVELOPMENT OF TOWNS AND CITIES. IT WAS SUBMITTED THAT PORTION OF THE AMOUNT TO BE RELEASED IS EARMARKED AS LOAN TO THE ULB WITH AN INTENTION TO C REATE A REVOLVING FUND, WHICH WILL RECEIVED THE LOAN REPAYM ENTS FROM THESE ULB AND UTILIZE THE SAME TO FUND URBAN INFRAS TRUCTURE PROJECTS IN FUTURE. 5. IT WAS SUBMITTED THAT THE DETAILED LIST OF ACTI VITIES AND NATURE OF THE ELEMENTS TO WHICH THESE WERE GRANTED WERE SUBMITTED TO THE DIT (E). IT WAS CONTENDED THAT TH E DIT (E) FAILED TO APPRECIATE THE FUNCTION OF THE TRUST ARIS ING FROM ITS OBJECTS AND WAS ABLE TO DECIPHER AN ACTIVITY CARRIE D OUT TO AID URBAN POOR NON CHARITABLE. CONTESTING FURTHER T HE REASONING OF THE DIT (E), THE LEARNED AR SUBMITTED THAT THE 6 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. DIT (E) IS NOT JUSTIFIED IN HOLDING THAT SINCE THE ASSESSEE TRUST IS WHOLLY OWNED BY THE GOVERNMENT OF ANDHRA P RADESH AND ALSO SINCE THE GOVERNMENT IS THE SOLE BENEFICIA RY, THE ASSESSEE TRUST CANNOT BE GRANTED REGISTRATION UNDER SEC. 12AA OF THE ACT. THE DIT (E) HAS IGNORED THE STATED OBJECTS WHICH CLEARLY SHOW THAT THE ASSESSEE TRUST, CREATED BY THE GOVERNMENT OF ANDHRA PRADESH, ACTING THROUGH THE GOVERNOR, HAS FOR ITS OBJECT THE IMPROVEMENT OF UR BAN INFRASTRUCTURE THROUGH MORE THAN ONE MEANS AND THES E ARE ENUMERATED IN THE OBJECTS WHICH CLEARLY SHOW THAT T HE OBJECTS HAVE A LARGER GOAL OF IMPROVING THE LIVING STANDARDS OF THE URBAN POPULATION AND ALSO ADDRESS PROBLEMS O F ENVIRONMENTAL CONSERVATION. IT WAS SUBMITTED THAT THE PREMISES ON WHICH THE DIT (E) REFUSED TO GRANT REGI STRATION IS TOTALLY UNFOUNDED. IN SUPPORT OF HIS CONTENTION THE LEARNED AR RELIED ON THE DECISIONS OF JURISDICTIONAL HIGH C OURT IN CASE OF CIT VS. AP STATE ROAD TRANSPORT CORPORATION (159 ITR 1 (SC) AND THE DECISION OF CIT VS. GUJARAT MARITIME B OARD (295 ITR 561 (SC). THE LEARNED AR FURTHER CONTENDED, T O ENCOURAGE SUCH KIND OF ACTIVITIES BEING TAKEN UP BY A TRUST CREATED BY THE CENTRAL OR A STATE GOVERNMENT, SEC. 10(46) HAS BEEN ENACTED BY FINANCE ACT, 2011 W.E.F. 1-6-2 011. THE LEARNED AR SUBMITTED THAT SINCE THE ASSESSEE-TRUST HAS BEEN CREATED ON 23-2-2005 WHEN THE PROVISION U/S 10(46) WAS NOT INCORPORATED IN THE STATUTE BOOK BUT NEVERTHELE SS THE STATUTORY PROVISION BROUGHT BY THE FINANCE ACT, 201 1 CLEARLY HIGHLIGHTS THE FACT THAT THE LEGISLATURE RECOGNIZIN G THE NEED FOR PROVIDING INCENTIVE TO TRUSTS CREATED BY CENTRA L OR STATE GOVT., WITH THE OBJECT OF REGULATING OR ADMINISTERI NG ANY 7 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. ACTIVITY FOR THE BENEFIT OF THE GENERAL PUBLIC HAS BROUGHT THE PROVISION INTO THE STATUTE. 6. THE LEARNED DR, ON THE OTHER HAND, WHILE JUSTIF YING THE ORDER OF THE DIT (E) CONTENDED THAT AS THE ACT IVITIES OF THE ASSESSEE TRUST, DOES NOT COME WITHIN THE MEANIN G OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT, IT IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA. THE LEARNED DR SUBMITTED THAT THE ASSESSEE TRUST DOES NOTHING MORE THAN PRO VIDING FINANCE TO LOCAL BODIES, STATUTORY BODIES, PUBLIC SECTOR UNDERTAKING AND PRIVATE INVESTORS. THEREFORE, IT I S PURELY A FINANCING AGENCY AND NOT CARRYING OUT ANY ACTIVITY OF GENERAL PUBLIC UTILITY. HENCE, REGISTRATION U/S 12AA CANNO T BE GRANTED. 7. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. WE HAVE ALSO CAREFULLY APPLIED OUR MIND TO THE DECISIONS PLACED BEFORE US. ON PERUSAL OF THE ORD ER PASSED BY THE DIT (E), IT IS APPARENT THAT HE HAS REFUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT PRIMARILY ON TWO R EASONS: ( I) THE OBJECT OF THE TRUST SHOWS THAT IT HAS BEEN SOLELY MADE FOR THE PURPOSE OF FINANCING INFRASTRUCTURE PROJECTS IN THE STATE OF ANDHRA PRAD ESH UNDER TAKEN BY DIFFERENT BODIES WHICH DOES NOT COME WITHIN THE MEANING OF CHARITABLE PURPOSE AS DEFINED U/S 2(15) OF THE ACT. II) THE TRUST HAS BEEN CREATED BY GOVERNMENT OF ANDHRA PRADESH AND GOVERNMENT BEING THE SOLE BENEFICIARY OF THE TRUST, IT CANNOT BE TREATED AS A PUBLIC CHARITABLE INSTITUTION. 8 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. 8. BEFORE GOING INTO THE MERITS OF THE ISSUE IT IS NECESSARY TO LOOK INTO THE DEFINITION CHARITABLE PURPOSE U/S 2(15) OF THE ACT, WHICH READ AS UNDER:- CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, (PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES O R OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTI VITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS, OR AN Y ACTIVITY OF RENDERING ANY SERVICE IN RELATING TO AN Y TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR AN Y OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SU CH ACTIVITY: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT A PPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS TWENTY FIVE LAKH RUPEES] OR LESS IN THE PREVIOUS YEAR;] A READING OF THE AFORESAID PROVISION WOULD MAKE IT CLEAR THAT ANY OBJECT IN THE NATURE OF GENERAL PUBLIC UTILITY ALSO COMES WITHIN THE EXPRESSION OF CHARITABLE PURPOSE. THE REFORE, THE ISSUE BEFORE US IS WHETHER THE ACTIVITIES/OBJECTS OF THE TRUST 9 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. AS MENTIONED IN THE TRUST DEED ARE IN THE NATURE OF OBJECTS OF GENERAL PUBLIC UTILITY. 9. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSE E TRUST HAS BEEN CREATED BY THE GOVERNMENT OF ANDHRA PRADES H AND THE BOARD OF TRUSTEES AS MENTIONED HEREIN BEFORE AR E FUNCTIONARIES OF THE STATE GOVERNMENT OR ITS AGENCI ES. THE READING OF THE TRUST DEED AS A WHOLE CERTAINLY MAKE S IT CLEAR THAT THE TRUST HAS BEEN CREATED TO FINANCE DIFFERE NT SCHEMES/UTILIZING THE FUNDS PROVIDED BY THE CENTRAL OR STATE GOVERNMENT BY WAY OF GRANTING LOANS, GRANTS ETC., TO DIFFERENT MUNICIPAL BODIES OR MUNICIPAL CORPORATION FOR IMPLEMENTING SCHEMES OF CENTRAL OR STATE GOVERNMENT . THE INFRASTRUCTURE PROJECTS AS MENTIONED IN CLAUSE(J) O F SECTION 1.1 OF ARTICLE 1 OF THE TRUST DEED MAKES IT CLEAR THAT THEY INCLUDE PROVISION OF WATER SUPPLY, ROADS, DRAINAGE , SOLID WASTE MANAGEMENT, STREET LIGHTS, SEWERAGES, SEWERAG E DISPOSAL, HEALTH SERVICES ETC. THEREFORE, BY PROVI DING FUNDS FOR DEVELOPMENT OF SUCH INFRASTRUCTURAL PROJECTS TO BE IMPLEMENTED THROUGH MUNICIPAL BODIES OR CORPORATION , THE ASSESSEE, MAY BE INDIRECTLY, IS WORKING FOR ACHIEVE MENT OF ITS OBJECTS OF GENERAL PUBLIC UTILITY. 10. IT IS NOT DISPUTED BY THE DIT (E) THAT THE LOAN GRANT/ FUNDS PROVIDED BY THE ASSESSEE TRUST IS TOWARDS ACH IEVING THE OBJECT OF ESTABLISHING THE AFORESAID INFRASTRUC TURE PROJECTS. THEREFORE, CREATING OF INFRASTRUCTURE PR OJECTS AS MENTIONED IN CLAUSE (J) OF 1.1. OF ARTICLE-1 OF THE TRUST DEED IS CERTAINLY TOWARDS ACHIEVING THE OBJECTS OF GE NERAL PUBLIC UTILITY SINCE BY DEVELOPMENT OF SUCH INFRASTRUCTUR E PROJECTS, 10 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. THE PUBLIC AT LARGE WILL BE BENEFITTED. FURTHER, I T APPEARS FROM THE SUBMISSIONS OF THE LEARNED AR THAT THE TRU ST ACTS AS A NODAL AGENCY FOR IMPLEMENTING VARIOUS INFRASTRUCT URE ORIENTED SCHEMES OF THE CENTRAL GOVT. AND STATE GO VT. THE FUNDS RECEIVED BY THE TRUST UNDER THESE SCHEMES ARE GIVEN AS GRANTS/LOANS WITH NOMINAL INTEREST TO MUNICIPALI TIES AND MUNICIPAL CORPORATIONS FOR DEVELOPING INFRASTRUCTUR E FACILITIES UNDER THE SCHEMES. THEREFORE, THE ACTIVITY OF THE ASSESSEE CAN BE CONSIDERED TO BE ADVANCING THE OBJECTS OF GE NERAL PUBLIC UTILITY WITHOUT ANY PROFIT MOTIVE. THE TERM GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE ACT IS SUBJ ECT MATTER OF INTERPRETATION OF HONBLE SUPREME COURT IN NUMBER O F DECISIONS. THE HONBLE SUPREME COURT IN CASE OF C IT VS. GUJARAT MARITIME BOARD (SUPRA) WHILE INTERPRETING T HE EXPRESSION GENERAL PUBLIC UTILITY AS MENTIONED IN SECTION 2(15) OF THE ACT HELD AS UNDER : WE HAVE PERUSED A NUMBER OF DECISIONS OF THIS COUR T WHICH HAVE INTERPRETED THE WORDS, IN SECTION 2(15), NAMELY, 'ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY '. FROM THE SAID DECISIONS IT EMERGES THAT THE SAID EXPRESSION IS OF THE WIDEST CONNOTATION. THE WORD 'GENERAL' IN THE SAID EXPRESSION MEANS PERTAINING T O 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 GR OUP OF INDIVIDUALS WOULD BE A CHARITABLE PURPOSE (CIT V S. AHMEDABAD RANA CASTE ASSOCIATION [1983] 140 ITR 1 (SC)). THE SAID EXPRESSION WOULD PRIMA FACIE INCLUD E ALL OBJECTS WHICH PROMOTE THE WELFARE OF THE GENERA L PUBLIC. IT CANNOT BE SAID THAT A PURPOSE WOULD CEAS E 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 TH E GENERAL PUBLIC THE PURPOSE WOULD BE CHARITABLE PURPOSE. WHEN AN OBJECT IS TO PROMOTE OR PROTECT TH E INTEREST OF A PARTICULAR TRADE OR INDUSTRY THAT OBJ ECT BECOMES AN OBJECT OF PUBLIC UTILITY, BUT NOT SO, IF IT 11 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. SEEKS TO PROMOTE THE INTEREST OF THOSE WHO CONDUCT THE SAID TRADE OR INDUSTRY (CIT VS. ANDHRA CHAMBER OF COMMERCE [1965] 55 ITR 722 (SC)). IF THE PRIMARY OR PREDOMINANT OBJECT OF AN INSTITUTION IS CHARITABLE, ANY OTHER OBJECT WHICH MIGHT NOT BE CHARITABLE BUT WHIC H IS ANCILLARY OR INCIDENTAL TO THE DOMINANT PURPOSE, WOULD NOT PREVENT THE INSTITUTION FROM BEING A VALI D CHARITY (ADDL. CIT VS. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION [1980] 121 ITR 1 (SC)). THE PRESENT CASE IN OUR VIEW IS SQUARELY COVERED BY THE JUDGMENT OF THIS COURT IN THE CASE OF CIT VS. ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 (SC) IN WHICH IT HAS BEEN HELD THA T SINCE THE CORPORATION WAS ESTABLISHED FOR THE PURPO SE OF PROVIDING EFFICIENT TRANSPORT SYSTEM, HAVING NO PROFIT MOTIVE, THOUGH IT EARNS INCOME IN THE PROCES S, IT IS NOT LIABLE TO INCOME-TAX. APPLYING THE RATIO OF THE SAID JUDGMENT IN THE CASE OF ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 (SC), WE FIND THAT, IN THE PRESENT CASE, THE GUJARAT MARITIME BOARD IS ESTABLISHED FOR THE PREDOMINANT PURPOSE OF DEVELOPMENT OF MINOR PORTS WITHIN THE STATE OF GUJARAT, THE MANAGEMENT AND CONTROL OF THE BOARD IS ESSENTIALLY WITH THE ST ATE GOVERNMENT AND THERE IS NO PROFIT MOTIVE, AS INDICATED BY THE PROVISIONS OF SECTION 73, 74 AND 7 5 OF THE 1981 ACT. THE INCOME EARNED BY THE BOARD IS DEPLOYED FOR THE DEVELOPMENT OF MINOR PORTS IN THE STATE OF GUJARAT. IN THE CIRCUMSTANCES, IN OUR VIEW THE JUDGMENT OF THIS COURT IN ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 SQUARELY APPLIES TO THE FACTS OF THE PRESENT CASE. 11. THEREFORE, CONSIDERED IN THE LIGHT OF THE RATIO LAID DOWN IN THE AFORESAID DECISIONS BY THE HONBLE SUPREME C OURT, IT HAS TO BE HELD THAT THE OBJECTS OF THE ASSESSEE TRU ST AS MENTIONED IN THE TRUST DEED WOULD CERTAINLY MAKE IT CLEAR THAT THEY ARE IN THE NATURE OF GENERAL PUBLIC UTIL ITY SINCE THE FUNDING OF DIFFERENT PROJECTS ULTIMATELY ARE FOR TH E BENEFITS OF GENERAL PUBLIC. IN AFORESAID VIEW OF THE MATTER, T HE DIT (E) WAS NOT CORRECT IN REFUSING THE REGISTRATION ON THE AFORESAID 12 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. GROUNDS. SO FAR AS THE CONCLUSION OF THE DIT (E) T HAT THE TRUST HAS BEEN CREATED FOR THE BENEFIT OF GOVERNMEN T IS CONCERNED, WE ARE OF THE VIEW THAT THE CONCLUSION OF THE DIT (E) IS TOTALLY IRRELEVANT. THE GOVERNMENT CERTAINLY WORKS FOR THE BENEFIT OF THE CITIZENS, AND HENCE IT CANNOT BE SAID THAT INCOME ARISING FROM THE TRUST IS NOT FOR THE GENERA L PUBLIC UTILITY AND FOR THE BENEFIT OF PARTICULAR CLASS OF PEOPLE OR PARTICULAR SECTION OF SOCIETY. IN THIS VIEW OF THE MATTER, WE ARE OF THE OPINION THAT THE DIT (E) WAS NOT JUSTIFI ED IN NOT GRANTING REGISTRATION TO THE ASSESSEE U/S 12AA OF T HE ACT. ACCORDINGLY, WE DIRECT HIM TO GRANT REGISTRATION TO THE ASSESSEE TRUST U/S 12A OF THE ACT. 12. IN COURSE OF HEARING OF APPEAL BEFORE US, THE LEARNED AR HAS SUBMITTED THAT THE ASSESSEE SHOULD BE GRANTE D REGISTRATION FROM THE CREATION OF THE TRUST AND NOT FROM THE DATE OF APPLICATION MADE IN FORM NO.10A. HOWEVER, IT IS NOT DISPUTED THAT THE ASSESSEE TRUST THOUGH WAS CREATED W.E.F. 23-2-2005 BUT IT MADE APPLICATION FOR REGISTRATION BEFORE THE DIT (E) ON 30-5-2007. THEREFORE, IT IS APPAREN T AND OBVIOUS THAT HE ASSESSEE HAS NOT MADE THE APPLICATI ON WITHIN THE TIME PRESCRIBED U/S 12A (1)(A) OF THE ACT. HOW EVER, THE PROVISO TO THE AFORESAID SECTION PROVIDES AN EXCE PTION BY GIVING A DISCRETION TO THE REGISTERING AUTHORITY TO GRANT REGISTRATION FROM THE DATE OF CREATION OF THE TRUST SUBJECT TO THE CONDITION THAT THE ASSESSEE TRUST SATISFIES THE REGISTERING AUTHORITY THAT IT WAS PREVENTED BY SUFFICIENT CAUSE FOR MAKING AN APPLICATION BEFORE EXPIRY OF THE PERIOD AS MENTION IN CLAUSE (A) OF SECTION 12A(1). THEREFORE , IT IS THE DUTY OF THE ASSESSEE TRUST TO SATISFY THE REGISTERI NG AUTHORITY 13 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. THAT IT WAS PREVENTED BY SUFFICIENT CAUSE IN APPLYI NG FOR REGISTRATION WITHIN THE PRESCRIBED TIME. AT THIS S TAGE, WE CANNOT USURP THE POWER OF THE REGISTERING AUTHORITY BY CONDONING DELAY. WITH THE AFORESAID OBSERVATION, W E SET ASIDE THE ORDER OF THE DIT (E) AND DIRECT HIM TO GR ANT REGISTRATION TO THE ASSESSEE TRUST U/S 12A OF THE A CT. HOWEVER, THE DATE OF GRANT OF REGISTRATION IS LEFT OPEN AS THE ASSESSEE HAS TO SATISFY THE DIT (E) REGARDING THE C AUSE OF DELAY. THE DIT (E) SHALL AFFORD A REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE TO EXPLAIN THE DELAY AN D DECIDE THE ISSUE ACCORDINGLY. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 .05. 2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 9 TH MAY, 2014 JMR* 1.AP URBAN INFRASTRUCTURE FUND, 2 ND FLOOR, ENGINEER-N-CHIEF (PUBLIC HEALTH) COMPLEX, KASHANA BUILDINGS, AC GUAR DS, HYDERABAD. 2.DIRECTOR OF INCOME-TAX (EXEMPTIONS), 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3.DR, ITAT, HYDERABAD. 14 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. ITA NO.1690/HYD/13 1 ST PARA THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE BEFORE US READ AS UNDER:- // GROUNDS 2 AND 3 // 2. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.2,12,896/- ON ACCOUNT OF EXPENDITURE CLAIMED TOWARDS EMPLOYEES CONTRIBUTION TO THE PF. BRIEFLY THE FATS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN THE BUSIN ESS OF ADVERTISING AGENCY. FOR THE IMPUGNED ASSESSMENT YE AR 2010-11 ON 30-9-2010 THE ASSESSEE FILED ITS RETURN DECLARING TOTAL INCOME OF RS.65,32,166/-. DURING SCRUTINY AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID EMPLOYEES CONTRIBUTION TO PF AMOUNTING TO RS.2,12,896/- BEYOND DUE DATE AS PROVIDED U/S 2 (24 )(X) OF TH ACT. HE THEREFORE DISALLOWED THE SAME BY INVOKI NG THE PROVISIONS CONTAINED U/S 36(1)(VA) READ WITH SECTIO N 15 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. 2(24)(X) OF THE ACT. THE ASSESSEE CHALLENGED THE DISALLOWANCE MADE BEFORE TAME FIRST APPELLATE AUTHO RITY. DURING THE APPEAL PROCEEDINGS BEFORE THE CIT (A) IT WAS CONTENDED THAT SINCE THE ASSESSEE HAS PAID THE AMOU NT WITHIN THE GRACE PERIOD UNDER THE RELEVANT STATUTE, IT CANNOT BE DISALLOWED. IN THE ALTERNATIVE, IT WAS ALSO CON TENDED BY THE ASSESSEE THAT WHEN THE EMPLOYEES CONTRIBUTION T O THE PF IS PAID WITHIN THE DUE DATE OF FILING OF THE RET URN, THE SAME IS ALLOWABLE U/S 43B OF THE ACT. IN SUPPORT O F SUCH CONTENTION, THE ASSESSEE PLACED RELIANCE ON THE DEC ISION OF P & H HIGH COURT IN CASE OF CIT VS. LAKHANI INDIA LIM ITED (232 CTR 81) AND OF HONBLE DELHI HIGH COURT IN CAS E OF CIT VS. AIMIL LIMITED (321 ITR 508). THE CIT (A) AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DIRECTE D THE ASSESSING OFFICER TO ALLOW THE EXPENDITURE IF THE E MPLOYEES PF CONTRIBUTIONS ARE PAID DURING THE GRACE PERIOD. HOWEVER, HE DIRECTED THAT THE PAYMENTS WHICH ARE BEYOND THE GRACE PERIOD SHOULD NOT BE ALLOWED. 3. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. IT IS THE CONTENT ION OF THE LEARNED AR THAT THE AMOUNT OF RS.2,12,896/- TOWARDS EMPLOYEES CONTRIBUTION TO PF WAS PAID TO THE GOVERN MENT ACCOUNT WITHIN THE DUE DATE OF FILING THE RETURN OF THE IMPUGNED ASSESSMENT YEAR. HENCE, THE EXPENDITURE C LAIMED IS ALLOWABLE U/S 43B OF THE ACT IN VIEW OF RATIO LA ID DOWN BY THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS AIMI L LIMITED (SUPRA) AND THAT OF PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. LAKHANI INDIA LIMITED (SUPRA). 4. THE LEANED DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE CIT (A). IT IS EVIDENT FROM THE FACTS ON RE CORD THAT DUE DATE FOR FILING THE RETURN OF THE IMPUGNED ASSE SSMENT YEAR IS 30-9-2010. AS CAN BE SEEN FROM DETAILS OF PAYMENT MADE WHICH IS EXTRACTED IN PARA-5 OF THE CIT(A) ORD ER ALL THE PAYMENTS HAVE BEEN MADE PRIOR TO DUE DATE OF FILING OF RETURN OF INCOME. IN THESE CIRCUMSTANCES, THE EXPE NDITURE CLAIMED CANNOT BE DISALLOWED IN VIEW OF THE PROVISI ONS CONTAINED UNDER THE PROVISO TO SECTION 43B OF THE A CT. IN 16 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. THIS CONTEXT, WE RELY UPON DECISIONS OF HONBLE DEL HI HIGH COURT IN CASE OF CIT VS. AIMIL LIMITED (SUPRA) AND THAT OF PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. LAKH ANI INDIA LIMITED (SUPRA). WE THEREFORE DIRECT DELETION OF AMOUNT OF RS.2,12,896/- HENCE THIS GROUND OF THE ASSESSEE IS ALLOWED. 5. THE NEXT ISSUE AS RAISED IN GROUND NO.3 RELATES TO DISALLOWANCE OF AN AMOUNT OF RS.1,15,99,328 TOWARDS COMMISSION PAYMENT TO AGENTS. BRIEFLY THE FACTS AR E, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER N OTICED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF AN AMO UNT OF RS.1,15,99,328/- TOWARDS PAYMENT OF COMMISSION. ON EXAMINING THE DETAILS, THE ASSESSING OFFICER NOTED THAT THE MAJORITY OF THE ASSESSEES CLIENTS ARE STATE GOVERN MENT DEPARTMENTS OR STATE PUBLIC UNDERTAKINGS. THE ASSE SSING OFFICER THEREFORE ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF COMMISSION AGENTS WHO LIAISED WITH THE GOVERNMENT DEPARTMENT AND SUPPORTING EVIDENCE TOWARDS SERVICES RENDERED BY THE COMMISSION AGENTS IN RESPONSE TO TH E QUERY MADE BY THE ASSESSING OFFICER, AS NOTED BY TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER, THE ASSE SSEE SUBMITTED NAMES OF COMMISSION AGENTS IN RESPECT OF FEW GOVERNMENT CLIENTS ONLY. SO FAR AS THE SERVICES RE NDERED BY COMMISSION AGENTS, THE ASSESSEE SUBMITTED COPIES OF LETTERS WRITTEN TO STATE GOVERNMENT DEPARTMENTS/PUBLIC SECT OR UNDERTAKINGS AND THE ASSESSEE COULD NOT FURNISH ANY OTHER EVIDENCE WITH REGARD TO THE SERVICES RECEIVED FROM THE SAID AGENTS. 6. THE ASSESSING OFFICER NOTED THAT MERE WRITING OF THE LETTERS TO THE GOVERNMENT DEPARTMENTS WOULD NOT CON STITUTE A SERVICE SINCE THE SAME COULD BE UNDERTAKEN BY THE ASSESSEE ITSELF. THE ASSESSING OFFICER ALSO CALLED FOR THE INFORMATION FROM THE STATE GOVERNMENT DEPARTMENTS/P SUS , EXERCISE OF POWERS CONFERRED. HOWEVER, SINCE NO IN FORMATION RECEIVED FROM THE CONCERNED DEPARTMENT/PSUS THE ASS ESSING OFFICER PROCEEDED TO DISALLOW THE EXPENDITURE CLAIM ED OF RS.1,15,99,328/- AND ADDED THE SAME TO THE INCOME O F THE 17 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. THE ASS ESSEE CHALLENGED THE ADDITION MADE IN AN APPEAL BEFORE TH E CIT (A). 7. THE CIT (A) ALSO CONFIRMED THE DISALLOWANCE BY H OLDING AS UNDER:- // PARAS 6.2 TO 6.4 OF CIT (A).// 8. THE LEARNED AR MOSTLY REITERATING THE SUBMISSION S MADE BEFORE THE FIRST APPELLATE AUTHORITY CONTENDED THAT IT COLLECTS ORDERS FROM VARIOUS GOVERNMENTAL AUTHORITI ES AND FROM OUTSIDERS AND PLACE SUCH ORDERS WITH THE MEDIA . IN THE PROCESS, IT COLLECTS THE ADVERTISEMENT CHARGES AND MAKES PAYMENT TO THE PUBLISHERS AFTER RETAINING ITS DISCO UNT. IT WAS SUBMITTED THAT FOR THIS PURPOSE, THE ASSESSEE ENGAG ES THE SERVICES F THE AGENTS FOR CONTACTING THE VARIOUS DE PARTMENTS OF THE GOVERNMENT FOR BOOKING THE SPACE IN THE MEDI A THROUGH THE ASSESSEE AND TO OBTAIN THE DATA FOR PUB LICATION IN THE MEDIA, TO PROVIDE THE DATA SO OBTAINED JOT T HE MEDIA FOR PUBLICATION AND TO COLLECT THE BILLS RAISED AGA INST THE CONCERNED. IT WAS CONTENDED THAT THE ASSESSEE HAS NOT ONLY SHOWN THE PAYMENTS IN ITS BOOKS OF ACCOUNTS BUT HAD DEDUCTED TDS ON SUCH PAYMENTS. THE RECEIPTS ALSO S HOWN THE AMOUNT RECEIVED IN THE RESPECTIVE HANDS. ITY WAS THEREFORE CONTENDED THAT THE PAYMENT BEING GENUINE, IT CANNOT BE DISALLOWED. WITH REGARD TO THE OBSERVATI ON MADE BY THE ASSESSING OFFICER AND CIT (A) THAT THE ASSE SSEE HAS NOT FURNISHED NECESSARY DETAILS WITH REGARD TO THE SERVICES RENDERED BY THE SO CALLED AGENTS, THE LEARNED AR SU BMITTED THAT EVEN THOUGH THE ASSESSEE HAS SUBMITTED ALL N ECESSARY DETAILS, BUT NEITHER THE ASSESSING OFFICER NOR THE CIT (A) HAVE EXAMINED THE SAME. IN THIS CONTEXT, THE LEARN ED AR REFERRING TO THE DOCUMENTS SUBMITTED IN THE PAPER B OOK CONTENDED THAT THE MATTER CAN BE VERIFIED BY THE AS SESSING OFFICER. 9. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDERS OF THE CIT (A) SUBMITTED THAT AS THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE PAYMENT 18 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. BY FURNISHING NECESSARY DETAILS OF THE NATURE OF SE RVICES RENDERED BY THE AGENTS, THE DISALLOWANCE MADE IS JU STIFIED. 10. WE HAVE HEARD THE SUBMISSION OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. ON A PERUSAL OF T HE ASSESSMENT ORDER AS WELL AS THE ORDER PASSED BY THE CIT (A), IT BECOMES ABSOLUTELY CLEAR THAT THE EXPENDITURE CL AIMED HAS BEEN DISALLOWED ON THE REASON THAT THE ASSESSEE HAS NOT ADDUCED THE DETAILS ASKED FOR TO PROVE THE GENUINE NESS OF THE PAYMENT BY SUBSTANTIATING THE NATURE OF SERVICE S RENDERED BY THE SUB-AGENTS AND THEIR CONNECTION WIT H THE BUSINESS OF THE ASSESSEE. HOWEVER, IT IS THE CONTE NTION OF THE LEARNED AR THAT ALL INFORMATION HAVE BEEN FILE D BEFORE THE ASSESSING OFFICER. ON A PERUSAL OF THE ASSESSM ENT ORDER, IT IS VERY MUCH CLEAR THAT THE ASSESSING OFFICER IN FACT HAS CALLED FOR INFORMATION FROM THE GOVERNMENT DEPARTME NTS/ PSUS U/S 133(6) OF THE ACT. HOWEVER, THE ASSESSING OFFICER HAS MADE THE ADDITION BY OBSERVING THAT NO INFORMA TION HAS BEEN RECEIVED FROM THE CONCERNED DEPARTMENTS /PSUS U/S 133(6) OF THE ACT. IN JOUR VIEW, THE ASSESSEE CAN NOT BE HELD RESPONSIBLE IF THE GOVERNMENT DEPARTMENTS/PSUS FAILED TO PROVIDE ANY INFORMATION. SINCE THE ASSESSING OF FICER HAS TAKEN UP AN ENQUIRY WITH THE GOVERNMENT DEPARTMENTS /PSUS IT IS THE DUTY OF THE ASSESSING OFFICER TO OBTAIN N ECESSARY INFORMATION FROM THE CONCERNED DEPARTMENTS/PSUS BY MAKING NECESSARY ENQUIRY WITH THEM. IT IS ALSO INC UMBENT UPON THE ASSESSING OFFICER TO EXAMINE THE INFORMATI ON SUBMITTED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM. ON GOING THROUGH THE ASSESSMENT ORDER AS WELL AS THE ORDER O F THE CIT (A) AND THE DOCUMENTS SUBMITTED BEFORE US BY THE AS SESSEE, WE ARE OF THE VIEW THAT THE ENTIRE ISSUE RELATING T O PAYMENT OF COMMISSION REQUIRES EXAMINATION AT THE HANDS OF THE ASSESSING OFFICER. 11. THE ASSESSING OFFICER SHOULD CONDUCT NECESSARY ENQUIRY WITH THE CONCERNED DEPARTMENTS/PSUS TO FIND OUT THE GENUINENESS OF THE PAYMENT MADE TOWARDS COMMISSION. THE ASSESSEE ON ITS PART MUST PROVE THE NATURE OF SERV ICES RENDERED BY THE SUB-AGENTS AND ALSO THE FACT WHETHE R SUCH 19 ITA.NO.549/HYD/2013 ANDHRA PRADESH URBAN INFRASTRUCTURE FUND, HYDERABAD. SERVICES WERE REQUIRED FOR THE PURPOSE OF BUSINESS. THEREFORE, CONSIDER THE TOTALITY OF FACTS AND CIRCU MSTANCES, WE REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSI NG OFFICER WHO SHALL CONSIDER THE SAME AFRESH AFTER CONDUCTING NECESSARY ENQUIRY AND EXAMINE ALL FACTS AND MATERIA LS ON RECORD. THE ASSESSING OFFICER MUST ACCORD A REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE D ECIDING THIS ISSUE. 12. IN THE RESULT, THE APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES.