Visakhapatnam Kakinada Petroleum, Visakhapatnam V. THE CIT, Visakhapatnam

ITA 728/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2133 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2015
• Assessment Year: misc
• Appeal Filed On: 24-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH LUCAS PETER
• Assessee Lawyers: A V RAGHURAM
• Keywords: Search and seizure; Charitable institution
• Section: 12AA; 27

Judgement Text

ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO. 728/VIZAG/2013 ( / ASSESSMENT YEAR : NA) VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL & PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM VS. CIT - 1 VISAKHAPATNAM [P AN : AAALV0500E] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / ASSESSEE BY : SHRI A.V. RAGHURAM, AR . '(& ) / REVENUE BY : SHRI TH. LUCAS PETER, DR ) - / DATE OF HEARING : 16.11.2015 ) - / DATE OF PRONOUNCEMENT : 08.01.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT-1, VISAKHAPATNAM DATED 1.10.2013. ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE VISAKHAPAT NAM KAKINADA PETROLEUM, CHEMICAL AND PETRO CHEMICAL INVESTMENT R EGION, SPECIAL DEVELOPMENT AUTHORITY (VK PCPIR SDA) CREATED BY GOV ERNMENT OF ANDHRA PRADESH, UNDER SECTION 3 OF ANDHRA PRADESH U RBAN AREAS DEVELOPMENT ACT, 1975 THROUGH A GOMS NO.373 DATED 2 4.5.2008. THE ASSESSEE HAS FILED AN APPLICATION BEFORE THE COMMIS SIONER OF INCOME TAX FOR GRANT OF REGISTRATION U/S 12AA OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) ALONG WITH FORM N O.10A. 3. IN THE APPLICATION FILED BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX, IT WAS STATED THAT THE ORGANIZATION STARTED ITS OPERATION ACTIVELY FROM THE FINANCIAL YEAR 2008 -09 AND ONWARDS. NO INDIVIDUAL IS BENEFITTED BY THE OBJECTIVES AND ACTI VITIES OF THE ORGANIZATION AND IT IS NOT CARRYING OUT ANY COMMERC IAL ACTIVITY COVERED BY SECTION 2(15) OF THE ACT AND SUBMITTED THAT THE ASSESSEE COMES WITHIN THE AMBIT OF GENERAL PUBLIC UTILITY AND PRAY ED FOR REGISTRATION U/S 12AA OF THE ACT. WHEN THIS APPEAL WAS TAKEN UP FOR HEARING BY THE LD. COMMISSIONER, THE ASSESSEE HAS SUBMITTED THAT THE A SSESSEE IS NOT INVOLVED IN CARRYING OUT ANY ACTIVITY RELATING TO T RADE, COMMERCE OR BUSINESS. THEREFORE, THE PROVISO TO SECTION 2(15) OF THE ACT HAS NO APPLICATION AND SUBMITTED THAT IT WILL COME WITHIN THE AMBIT OF ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 3 ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AND HENCE ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. 3. THE LD. COMMISSIONER AFTER CONSIDERING THE EXPLA NATIONS OF THE ASSESSEE, HE HAS OBSERVED THAT APPLICANT INSTITUTION WOULD ACT AS THE FINAL AUTHORITY FOR TAKING DECISIONS FOR INDUSTRIAL DEVELOPMENT OF THE REGION ONLY WITH REFERENCE TO PETROLEUM, CHEMICAL A ND PETROCHEMICAL INDUSTRIES TOGETHER WITH DEVELOPMENT OF SURFACE COM MUNICATION INCLUDING CONSTRUCTION OF BRIDGES, WITHOUT, HOWEVER , LEAVING UNADDRESSED THE ENVIRONMENTAL CONCERNS OF THE ENTIR E REGION. TO THAT EFFECT, IT DRAWS MASTER PLANS, IDENTIFIES THE AREAS AND ZONES OF INDUSTRIAL, DEVELOPMENT, SCREENS, QUALIFIED AND ELIGIBLE ENTREP RENEURS AND PERMITS THEM TO SET UP INDUSTRIAL UNITS AND INDUSTRY RELATE D ACTIVITIES FOR WHICH IT RECEIVES FROM THEM DEVELOPMENT CHARGES ALONG WITH A LLIED RECEIPTS SUCH AS PROCESSING FEES, FEES FOR LAY OUT/BUILDING APPRO VAL, FINES AND FORFEITURE ETC. BY ITSELF, THE APPLICANT INSTITUT ION MAY NOT BE SAID TO BE DIRECTLY ENGAGED IN ANY TRADE, COMMERCE OR BUSINESS , BUT THEN IT CANNOT DENY OF HAVING RENDERED SERVICES IN CONNECTION WITH THE BUSINESS OR COMMERCE OR TRADE OF THE ENTITIES FROM WHOM IT COLL ECTS VARIOUS CHARGES AND FEES. WITH THESE OBSERVATION, THE LD. COMMISSIONER CAME TO A CONCLUSION THAT THE ASSESSEE IS NOT ELIGIBLE FOR RE GISTRATION U/S 12AA OF ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 4 THE ACT ON THE GROUND THAT THE ACTIVITY OF THE ASSE SSEE ATTRACTED BY THE PROVISO TO SECTION 2(15) OF THE ACT. 4. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS CREATED BY THE SOVEREIGN AUTHORITY I.E. STATE OF ANDHRA PRADESH BY ISSUING A GOMS NO.373 DATED 24.5.2008 AND THE ASSES SEE IS INSTRUMENTALITY/AGENCY OF THE GOVERNMENT TO DISCHAR GE THE SOVEREIGN FUNCTIONS ON BEHALF OF THE GOVERNMENT I.E. TO CONTR OL THE ACTIVITIES RELATING TO PETROLEUM, CHEMICAL AND PETROCHEMICAL P ROJECTS AND SUBMITTED THAT NO COMMERCIAL ACTIVITY IS INVOLVED. THEREFORE, THE ASSESSEE IS ENTITLED FOR REGISTRATION U/S 12AA OF T HE ACT. 6. HE ALSO SUBMITTED THAT THE PURPOSE FOR WHICH THE INSTITUTE IS CREATED BY THE STATE IS FOR PROTECTION AND CONSERVA TION OF ENVIRONMENT, AS PER ENVIRONMENTAL NORMS AND THEREFORE SUBMITTED THAT THE ASSESSEE IS NOT ENGAGED IN ANY COMMERCIAL ACTIVITY AND PROVI SO TO SECTION 2(15) OF THE ACT, HAS NO APPLICATION AND SUBMITTED THAT THE ASSESSEE IS ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT. 7. THE LD. COUNSEL FURTHER SUBMITTED THAT ONCE THE ASSESSEE IS DISCHARGING ITS DUTY ON BEHALF OF THE SOVEREIGN AUT HORITY AS AN INSTRUMENTALITY/AGENCY FOR PROTECTION OF ECOLOGY AN D ENVIRONMENT, IT FALLS ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 5 UNDER THE DEFINITION OF GENERAL PUBLIC UTILITY AND THEREFORE THE PROVISO TO SECTION 2(15) OF THE ACT HAS NO APPLICATION. TO SU PPORT HIS ARGUMENT, THE LD. COUNSEL RELIED ON THE DECISION OF THE HON'B LE DELHI HIGH COURT IN THE CASE OF BUREAU OF INDIAN STANDARDS (BIS) VS. DI RECTOR GENERAL OF INCOME TAX VIDE W.P. (C)NO.1755 OF 2012 DATED 27.9.2 012. 8. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE SOLE PURPOSE FOR WHICH THE ASSESSEE IS CREATED FOR THE D EVELOPMENT OF COASTAL CORRIDOR I.E. VISAKHAPATNAM KAKINADA PETROL EUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION SPECIAL DEVELOPMENT AUTHORITY (VK PCPIR SDA). THOUGH DIRECTLY NOT INVOLVED IN TRADE OR COMMERCE OR BUSINESS, IT IS RENDERING SERVICE IN RELATION TO TH E TRADE, COMMERCE OR BUSINESS, WOULD COME WITHIN THE PURVIEW OF PROVISO TO SECTION 2(15) OF THE ACT, AND THEREFORE NOT ELIGIBLE FOR REGISTRATIO N U/S 12AA OF THE ACT AND STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. COMMISSIONER. THE LD. D.R. ALSO RELIED ON THE DECISION OF CHANDIGARH BENCH IN THE CASE OF PUNJAB STATE SEED CERTIFICATION AUTHORITY VS. CIT-I CHANDIGARH 144 ITD 671. HE ALSO RELIED ON THE DECISION OF ANDHRA PRAD ESH STATE SEED CERTIFICATION AGENCY VS. CCIT & OTHERS 256 CTR 380. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PET ROCHEMICAL ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 6 INVESTMENT REGION SPECIAL DEVELOPMENT AUTHORITY (VK PCPIR SDA) CREATED U/S 3 OF THE ANDHRA PRADESH URBAN AREAS DEV ELOPMENT ACT, 1975 THROUGH GOMS NO.373 DATED 24.5.2008. THE GOVE RNMENT OF ANDHRA PRADESH, MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT DEPARTMENT ISSUED A GOMS NO.373 IN WHICH IT HAS EXP LAINED THE PURPOSE FOR WHICH THE ABOVE GO WAS ISSUED. THE REL EVANT PORTION OF THE GO IS EXTRACTED AS UND ER: GOVERNMENT HAVE CONSTITUTED SPECIAL URBAN DEVELOPME NT AUTHORITIES FOR CERTAIN PRIORITY AREAS UNDER THE AEGIS OF THE AP UR BAN AREAS (DEVELOPMENT) ACT, 1975 WHICH WILL HELP IN ACHIEVING SPECIAL OBJECTIVE S OF ORDERLY GROWTH AND ENVIRONMENTAL UPGRADATION IN SUCH AREAS. THESE ARE AS ARE EITHER SPECIAL INVESTMENT ZONES, SPECIAL TOURIST AREAS OR AN EXCLUSIVE ECOLOG ICAL AREA WITH EMPHASIS ON PROTECTION AND CONSERVATION AS PER ENVIRONMENTAL NO RMS. GOVERNMENT OF INDIA RECENTLY UNVEILED THE POLICY FOR PETROLEUM, CHEMICA L AND PETROCHEMICAL INVESTMENT REGION (PCPIR) AND IDENTIFIED CERTAIN AREAS AS PCPIR WHICH WOULD BE EXCLUSIVE HUBS FOR CHEMICAL AND PETROCHEMICAL ACTIVITIES, ATTRACTI NG LARGE SCALE FOREIGN INVESTMENTS. IN ANDHRA PRADESH, THE AREA BETWEEN VISAKHAPATNAM AN D KAKINADA IS ONE AMONG SUCH IDENTIFIED PCPIRS BY THE GOVERNMENT OF INDIA. GOVERNMENT HAVE APPOINTED THE ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED AS THE NODAL AGENCY FOR DEVELOPMENT OF PCPIR IN ANDHRA PRADESH. 2. IN THE REFERENCE 9TH READ ABOVE, THE PRINCIPAL SECRETARY AND CIP., INDUSTRIES AND COMMERCE DEPARTMENT HAS SENT PROPOSAL S TO THE GOVERNMENT FOR DECLARING THE VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION (PCPIR) CORRIDOR FOR A TOTAL AREA OF 603.58 SQ.KMS. COMPRISING 110 REVENUE VILLAGES IN 10 MANDALS OF V ISAKHAPATNAM AND EAST GODAVARI DISTRICTS (STRETCHING FROM VISAKH APATNAM TO KAKINADA) AS A SPECIAL DEVELOPMENT AUTHORITY TO ACHIEVE THE OBJECT IVES OF THE GOVERNMENT OF INDIA, VIZ., DEVELOPMENT ACTIVITIES RELATING TO PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION (PCPIR) AND ADDRESS THE CONCOMITANT ISSUES OF LAND USE CONTROL, PREPARATION OF MASTER PLAN, ENFORCEMENT AND REGULAT ORY FUNCTIONS BESIDES PROMOTING AND IMPROVING CIRCULATION NETWORK IN SURROUNDING AR EAS, AND VARIOUS OTHER ACTIVITIES LIKE DEVELOPING THE SOCIAL INFRASTRUCTURE, HOUSING, IMPACT ON THE LIVELIHOOD OF THE PEOPLE IN THE AREA AND QUALITY OF LIFE, ENVIRONMENT AL ISSUES ON ACCOUNT OF PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION (PCPIR ). 3. GOVERNMENT, AFTER CAREFUL EXAMINATION OF THE IS SUE, AND IN EXERCISE OF POWERS CONFERRED UNDER SECTION 3 OF THE ANDHRA PRAD ESH URBAN AREAS ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 7 (DEVELOPMENT) ACT, 1975, DECIDED TO NOTIFY THE AREA S FOR A TOTAL AREA OF 603.58 SQ.KMS. STRETCHING FROM VISAKHAPATNAM TO KAKINADA C ONSISTING 110 REVENUE VILLAGES IN 10 MANDALS OF VISAKHAPATNAM AND EAST GODAVARI DI STRICTS AS PROPOSED BY THE APIIC LIMITED AS GIVEN IN APPENDIX-I AND CONSTITUTE T HE VISAKHAPATNAM-KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT RE GION (PCPIR) SPECIAL DEVELOPMENT AUTHORITY AS GIVEN IN APPENDIX-II. 10. AFTER CAREFUL CONSIDERATION OF THE ABOVE GOM NO .373 ISSUED BY THE GOVERNMENT OF ANDHRA PRADESH, THE ASSESSEE IS CREAT ED BY THE STATE OF ANDHRA PRADESH AS A SPECIAL DEVELOPMENT AUTHORITY T O ACHIEVE THE OBJECTIVES ENTRUSTED BY THE GOVERNMENT OF INDIA REL ATING TO PETROLEUM, CHEMICAL AND PETROCHEMICAL INDUSTRY FOR THE PURPOSE OF ORDERLY GROWTH AND ENVIRONMENTAL UPGRADATION IN SUCH AREAS. IT IS THE DUTY OF THE ASSESSEE THAT TO CONTROL THE LAND USAGE, PREPARATI ON OF MASTER PLAN, ENFORCEMENT AND REGULATORY FUNCTIONS, BESIDES OTHER FUNCTIONS SUCH AS DEVELOPMENT OF SOCIAL INFRASTRUCTURE, HOUSING, IMPA CT ON THE LIVELIHOOD OF THE PEOPLE IN THAT AREA AND QUALITY OF LIFE, ENVIRO NMENTAL ISSUES ON ACCOUNT OF PETROLEUM, CHEMICAL AND PETROCHEMICAL IN VESTMENT REGION. FURTHER, IT IS THE DUTY OF THE ASSESSEE TO CONTROL AND MONITOR, WHOEVER I.E. INDUSTRIALIST/ENTREPRENEUR HAS INTENDED TO EST ABLISH THEIR INDUSTRY/ENTREPRENEURSHIP IN THE ASSESSEES CORRIDO R, THEY HAVE TO ESTABLISH THEIR INDUSTRY/ENTREPRENEURSHIP, AS PER T HE NORMS LAID DOWN BY THE ASSESSEE AUTHORITY. IT IS THE DUTY OF THE ASS ESSEE TO SUPERVISE WHETHER THE ENTREPRENEURS WHO ARE INTENDED TO ESTAB LISH/ESTABLISHED ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 8 THEIR INDUSTRIES AS PER THE NORMS LAID DOWN BY THE ASSESSEE OR NOT. THE ASSESSEE IS COLLECTING DEVELOPMENT CHARGE FROM THE INDUSTRIES/ENTREPRENEURS, WHO OPT FOR SETTING UP OF INDUSTRIES/ENTREPRENEURSHIP IN THE ASSESSEES CORRI DOR, FOR USE OF LAND/ASSETS ETC. 11. FURTHER THE COLLECTION OF THE DEVELOPMENT CHARG ES HAS BEEN STATUTORILY AUTHORIZED U/S 27 OF THE ANDHRA PRADESH URBAN DEVELOPMENT ACT, 1975 (APUDA) AND THE RATES OF DEVELOPMENT CHAR GES ARE GOVERNED BY RULE 15 OF THE APUDA. OUT OF FEE COLLECTED, THE ASSESSEE SHALL UTILIZE 85% OF ITS INCOME TO IMPLEMENT THE PROVISIONS OF MA STER PLAN I.E. TRAFFIC IMPROVEMENT, CONSTRUCTION OF BRIDGES, DEVELOPMENT O F GREEN BELTS AND PARKS ETC., REMAINING 15% CAN BE UTILIZED FOR ADMIN ISTRATION AND OTHER MAINTENANCE. FROM THE ABOVE, IT IS VERY CLEAR THAT WHATEVER THE FEE IS COLLECTED BY THE ASSESSEE SHALL BE UTILIZED FOR THE BENEFIT OF PUBLIC AT LARGE AND ONLY 15% SHALL BE UTILIZED FOR THE PURPOS E OF ADMINISTRATION. WE FIND THAT THE ASSESSEE NEITHER INVOLVED IN ANY TR ADE, COMMERCE OR BUSINESS NOR RENDERING ANY SERVICE RELATING TO TRAD E, COMMERCE OR BUSINESS. THEREFORE, THE PROVISO TO SECTION 2(15) OF THE ACT HAS NO APPLICATION. 12. SO FAR AS CASE LAW RELIED BY THE LD. COUNSEL FO R THE ASSESSEE IS CONCERNED, IN THE CASE OF BUREAU OF INDIAN STANDARD S VS. DGIT (SUPRA), ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 9 THE HONBLE DELHI HIGH COURT HAS OBSERVED THAT REN DERING ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS CANNOT, IN THE OPINION OF THE COURT, RECEIVE SUCH A WIDE CONSTRUCTION AS TO ENFOL D REGULATORY AND SOVEREIGN AUTHORITIES, SET UP UNDER STATUTORY ENACT MENTS, AND TASKED TO ACT AS AGENCIES OF THE STATE IN PUBLIC DUTIES WHICH CANNOT BE DISCHARGED BY PRIVATE BODIES. OFTEN, APART FROM THE CONTROLLIN G OR PARENT STATUTES, LIKE THE BIS ACT, THESE STATUTORY BODIES (INCLUDING BIS) ARE EMPOWERED TO FRAME RULES OR REGULATIONS, EXERCISE COERCIVE PO WERS, INCLUDING INSPECTION, RAIDS; THEY POSSESS SEARCH AND SEIZURE POWERS AND ARE INVARIABLY SUBJECTED TO PARLIAMENTARY OR LEGISLATIV E OVERSIGHT. THE PRIMARY OBJECT FOR SETTING UP SUCH REGULATORY BODIE S WOULD BE TO ENSURE GENERAL PUBLIC UTILITY. THE PRESCRIBING OF STANDAR DS, AND ENFORCING THOSE STANDARDS, THROUGH ACCREDITATION AND CONTINUING SUP ERVISION THROUGH INSPECTION ETC., CANNOT BE CONSIDERED AS TRADE, BUS INESS OR COMMERCIAL ACTIVITY, MERELY BECAUSE THE TESTING PROCEDURES, OR ACCREDITATION INVOLVES CHARGING OF SUCH FEES. IT CANNOT BE SAID THAT THE PUBLIC UTILITY ACTIVITY OF EVOLVING, PRESCRIBING AND ENFORCING STANDARDS, INV OLVES THE CARRYING ON OF TRADE OR COMMERCIAL ACTIVITY. 13. WITH THE ABOVE OBSERVATION, THE HON'BLE DELHI HIGH COURT HAS QUASHED THE ORDER PASSED BY THE DGIT AND PETITI ON FILED BY THE ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 10 ASSESSEE WAS ALLOWED. THE HONBLE DELHI HIGH COURT HAS HELD THAT WHEN THE PUBLIC AUTHORITY COLLECTING A FEE FOR ENFORCING THE STANDARDS, IT CANNOT BE SAID THAT IT IS CARRYING ON TRADE OR COMM ERCIAL ACTIVITY. IN THE PRESENT CASE, THE ASSESSEE HAS COLLECTED SOME FEE F OR THE PURPOSE OF CONTROLLING THE USE OF THE LAND AND ENFORCEMENT OF REGULATIONS. THEREFORE, IT CANNOT BE SAID THAT THE PROPOSED COLL ECTION OF FEE IS AMOUNTING TO NEITHER IN RELATION TO TRADE, COMMERCE AND BUSINESS NOR RENDERING ANY SERVICE RELATING TO TRADE, COMMERCE A ND BUSINESS. THE ABOVE DECISION OF THE HONBLE DELHI HIGH COURT, IN OUR OPINION SQUARELY APPLIES TO THE FACTS OF THE CASE IN HAND. 14. SO FAR AS CASE LAWS RELIED BY THE LD. D.R. IS C ONCERNED, IN THE CASE OF PUNJAB STATE SEED CERTIFICATION AUTHORITY VS. CI T-I CHANDIGARH (SUPRA) HAS HELD THAT ASSESSEE SOCIETY WAS CHARGIN G FEES FROM PERSONS TO WHOM SAID SERVICES WERE RENDERED, PROVISO TO SEC TION 2(15) WOULD COME INTO OPERATION AND, THUS, ACTIVITY OF ASSESSEE -SOCIETY COULD NOT BE HELD TO BE A CHARITABLE PURPOSE. IN THE PRESENT CASE, THE FEE COLLECTED BY THE ASSE SSEE FOR THE PURPOSE OF REGULATING THE UTILIZATION OF LAND AND W ATER AND TO SEE THAT ENVIRONMENT IS NOT AFFECTED. THESE FACTS ARE ENTIR ELY DIFFERENT FROM THE CASE RELIED BY THE LD. D.R. AND HAS NO APPLICATION TO THE FACTS OF THE CASE. ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 11 15. IN ANOTHER CASE LAW, LD. D.R. HAS RELIED IN THE CASE OF ANDHRA PRADESH STATE SEED CERTIFICATION AGENCY VS. CCIT & OTHERS (SUPRA). IN THIS CASE THE HON'BLE ANDHRA PRADESH HIGH COURT HAS HELD THAT SEED CERTIFICATION WORK OF A STATE AGENCY IS A BUSINESS ACTIVITY AND NOT ENTITLED TO EXEMPTION UNDER SECTION 10(23C). IN THE PRESENT CASE, THE ASSESSEE IS ENTRUSTED VARIOUS WORKS BY THE STATE OF ANDHRA PRADESH SUCH AS APPROVAL OF PLANS, CONTROLLING USAGE OF LAN D, WATER, MAINTENANCE OF BRIDGES, CREATION PARKS AND ENVIRONMENTAL CONCER NS. THEREFORE, THE ABOVE CASE LAW RELIED BY THE LD. DR HAS NO APPLICAT ION TO THAT OF THE FATS OF THE CASE IN HAND. 16. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GUJARAT MARITIME BOARD 295 ITR 56 1 HAS CONSIDERED THE EXPRESSION ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE INCOME-TAX ACT, 1961 AND OBSERVED THAT THE E XPRESSION IS OF THE WIDE CONNOTATION. THAT THE EXPRESSION WOULD PRIMA FACIE INCLUDE ALL OBJECTS WHICH PROMOTE THE WELFARE OF THE GENERAL PU BLIC. IT CANNOT BE SAID THAT A PURPOSE WOULD SEIZE TO BE CHARITABLE IF PUBLIC WELFARE IS INTENDED TO BE SERVED. IF THE PRIMA FACIE PURPOSE AND THE PREDOMINANT OBJECT ARE TO PROMOTE WELFARE OF THE GENERAL PUBLIC , THE PURPOSE WOULD BE A CHARITABLE PURPOSE. ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 12 17. IN VIEW OF THE ABOVE, WE FIND THAT THE ASSESSEE NEITHER OR NOR INVOLVED DIRECTLY RENDERING ANY SERVICE RELATING TO TRADE, COMMERCE OR BUSINESS. THE ACTIVITY UNDERTAKEN BY THE AUTHORITY COMES WITHIN THE OBJECT OF THE GENERAL PUBLIC UTILITY BUT, IT CANNOT BE CONCLUDED THAT IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS. UNLESS THE ACTIVITY UNDERTAKEN BY THE ASSESSEE COMES WITHIN THE AMBIT OF TRADE, COMMERCE OR BUSINESS, TH E PROVISO TO SECTION 2(15) OF THE ACT WOULD NOT GET ATTRACTED. THE ASSE SSEE IS CREATED BY THE SOVEREIGN AUTHORITY I.E. STATE OF ANDHRA PRADESH FO R THE PURPOSE OF DEVELOPMENT, ORDERLY GROWTH OF INDUSTRIES AND ENVIR ONMENTAL UPGRADATION BY CONTROLLING THROUGH THE ASSESSEE VAR IOUS ASPECTS SUCH AS UTILIZATION OF LAND, WATER AND POLLUTION RELATING T O PETROLEUM, CHEMICAL AND PETROCHEMICAL INDUSTRY. THEREFORE, IN OUR OPIN ION, THE ASSESSEE IS ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT. 18. THUS, THE ORDER PASSED BY THE COMMISSIONER OF I NCOME-TAX IS QUASHED AND REGISTRATION U/S 12AA OF THE ACT IS GRA NTED. ORDERED ACCORDINGLY. ITA NO. 728/VIZAG/2013 VISAKHAPATNAM KAKINADA PETROLEUM, CHEMICAL AND PETROCHEMICAL INVESTMENT REGION, VISAKHAPATNAM 13 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8 TH JAN16. SD/- SD/- ( . . . . ) ( . ) ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 3 / DATED : 08.01.2016 VG/SPS ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE ASSESSEE VISAKHAPATNAM KAKINADA PETROLEUM, C HEMICAL AND PETROCHEMICAL INVESTMENT REGION, 9 TH FLOOR, VUDA BUILDINGS, SIRIPURAM JN., VISAKHAPATNAM. 2. '(& / THE REVENUE CIT-1, VISAKHAPATNAM. 3. 5 () / THE CIT (A), VISAKHAPATNAM. 4. ' , , / // / DR, ITAT, VISAKHAPATNAM 5 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM