DCIT, C-1 (E), Chandigarh V. M/s Improvement Trust, Patiala

ITA 847/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5319 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 29-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR G S PHANI KISHORE
• Assessee Lawyers: ASHOK GOEL
• Keywords: Charitable institution; Question of law; Set aside
• Section: 143(3); 12A; 12AA; 22; 28; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH BEFORE: SHRI. N.K.SAINI, VP & SHRI. R.L. NEGI, JM ITA NO.468/CHD/2018 ASSESSMENT YEAR : 2013-14 THE JCIT(OSD), (EXEMPTIONS) CIRCLE-1, CHANDIGARH M/S PATIALA IMPROVEMENT TRUST CHOTTI BARADARI, PATIALA-PUNJAB PAN NO: AAAJI0034L APPELLANT RESPONDENT ITA NO.847/CHD/2019 ASSESSMENT YEAR : 2014-15 THE DCIT C-1(E), SECTOR-17, CHANDIGARH M/S PATIALA IMPROVEMENT TRUST CHOTTI BARADARI, PATIALA-PUNJAB PAN NO: AAAJI0034L APPELLANT RESPONDENT ITA NO.164/CHD/2019 ASSESSMENT YEAR : 2015-16 THE DCIT (E) C-1, SECTOR-17, CHANDIGARH M/S PATIALA IMPROVEMENT TRUST CHOTTI BARADARI, PATIALA-PUNJAB PAN NO: AAAJI0034L APPELLANT RESPONDENT ASSESSEE BY : SHRI ASHOK GOEL, CA REVENUE BY : DR. G.S. PHANI KISHORE, CIT DATE OF HEARING : 07/10/2020 DATE OF PRONOUNCEMENT : 07/10/2020 ORDER PER RAM LAL NEGI; JM THE REVENUE HAS FILED THE CAPTIONED APPEALS AGAINST THE ORDERS DT. 02/01/2018, 22/03/2019 AND 28/11/2018 PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS) (FOR SHORT THE CIT(A)), PATIA LA PERTAINING TO THE A.Y. 2013- 14, 2014-15 AND 2015-16 RESPECTIVELY, WHEREBY THE L D. CIT(A) HAS ALLOWED THE APPEALS FILED BY THE ASSESSEE AGAINST THE ASSESSMEN T ORDERS PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHO RT THE ACT). 2 2. SINCE THESE APPEALS PERTAIN TO THE SAME ASSESSEE AND THE REVENUE HAS RAISED THE COMMON ISSUE IN ALL THE THREE APPEAL S, EXCEPT IN APPEAL PERTAINING TO THE ASSESSMENT YEAR 2014-15, WHEREIN THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) INTER ALIA ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN ALLOWING THE GROUND OF APPEAL WITH RESPECT TO DI SALLOWANCE OF DONATION EXPENDITURE OF RS. 4 CRORE, THESE APPEALS WERE CLUB BED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 468/CHD/2018 AY 2013-14 3. BRIEF FACTS OF THE LEAD CASE PERTAINING TO THE A SSESSMENT YEAR 2013-14 ARE THAT THE ASSESSEE SOCIETY REGISTERED UNDER SECTION 12A OF THE ACT, 1961 WITH THE LD. CIT-1, AMRITSAR VIDE NO. CIT-I/ASR/2006-07/213 DATED 24/04/2006 & VIDE ORDER NO. CIT-I/ASR/ITI(TECH)/07-08/PS-81, DT. 26/10/2007 , SUBSEQUENTLY WITHDRAWN VIDE ORDER F.NO. CIT/PTA/TECH/12AA, DT. 13/10/2014, FILE D ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING NIL I NCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. THE AO NOTICED THAT DU RING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE CA RRIED ON THE BUSINESS OF SALE AND PURCHASE OF RESIDENTIAL PLOTS AND COMMERCI AL PROPERTIES AND EARNED HUGE NET PROFIT OF RS. 9,95,74,223/-, WHICH DOES NO T FALL WITHIN THE AMBIT OF THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY UNDER SECTION 2(15) OF THE ACT. ACCORDINGLY, THE AO ASKED THE ASSESSEE TO JUSTIFY ITS CLAIM AND AFTER HEARING THE ASSESSEE REJECTED THE CLAIM OF THE ASSE SSEE. THE AO REJECTED THE CLAIM OF THE OF THE ASSESSEE AND AFTER MAKING ADDIT ION ON ACCOUNT OF DISALLOWANCE OF DONATION AMOUNTING AND DISALLOWAN CE OF SERVICE TAX PAID, PASSED ASSESSMENT ORDER U/S 143(3) OF THE ACT, DETE RMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 11,00,93,437/- 4. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEF ORE THE LD. CIT(A). THE LD. CIT(A) RELYING ON THE DECISION OF THE ITAT AMR ITSAR BENCH IN THE CASE OF 3 HOSHIARPUR IMPROVEMENT TRUST VS. ITO, WARD-1 HOSHIA RPUR , ITA NO. 200/ASR/2010 & 336/ASR/2014 FOR THE A.YS 2005-06 & 2009-10 AND THE DECISION OF THE ITAT CHANDIGARH BENCH IN ASSESSEES OWN CASE ITA NO. 177/CHD/2016 , ALLOWED THE APPEAL OF THE ASSESSEE. FEELING AGGRIEVED BY THE SA ID FINDINGS OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER BY RAISING THE FOLLOWING EFFECTIVE GROUNDS: I. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE ASSESSEE IS ELIGIB LE FOR EXEMPTION U/S 11 WHEREAS THE ASSESSEE WAS NOT ACTUAL CARRYING ON ACTIVITIES FOR THE ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UT ILITY. II. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN IGNORING THE TRUE INTENT AND PURPOS E BEHIND THE AMENDMENT IN SECTION 2(15) BROUGHT IN W.E.F. 01.04. 2009 AND WHICH WAS ALSO CLEARLY EXPLAINED IN CBDT CIRCULAR N O. 11 DATED 19.12.2008 BY PROVIDING THAT 'AN ASSESSEE WHO CLAIM S THAT THEIR OBJECT IS 'CHARITABLE PURPOSE' WITHIN THE MEANING O F S. 2(15) WOULD BE WELL ADVISED TO ESCHEW ANY ACTIVITY WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS.' III. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN IGNORING THE INTENT OF AMENDMENT IN 2(15) BY RELYING ON THE OBJECTS OF THE ASSESSEE EVEN WHEN TH E SAID AMENDMENT HAD REFOCUSED THE SECTION'S APPLICABILITY BASED ON THE ACTIVITIES OF ENTITIES. IV. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN IGNORING THE STRINGENT IMPORT OF TH E PROVISO WHEREIN EVEN ACTIVITIES IN THE NATURE OF TRADE, COM MERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS HAVE BEEN SPECIFICALLY PRECLUDED FROM THE AMBIT OF EXEMPTION CLAUSES. V. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THE ASSESSEE ELIGIBLE FOR E XEMPTION U/S 11 BY HOLDING THAT BUSINESS ACTIVITIES BEING CARRIED O N BY THE ASSESSEE WERE INCIDENTAL TO THE ATTAINMENT OF OBJEC TS WHICH PREDOMINANTLY WERE FOR TOWN IMPROVEMENT WHEREAS THE ASSESSEE HAD NOT BEEN ABLE TO DEMONSTRATE DURING THE COURSE OF PROCEEDINGS THAT ANY SUCH ACTIVITY WAS CARRIED ON. 4 VI. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THE BUSINESS ACTIVITIES AS INCIDENTAL EVEN AS THE ACCOUNTS OF THE ENTITY REVEAL THAT THIS (SALE/P URCHASE OF PROPERTIES ON COMMERCIAL LINES) HAS BECOME THE PRED OMINANT ACTIVITY TO THE DETRIMENT OF THE MAIN MANDATE OF TH E IMPROVEMENT TRUSTS NAMELY TOWN IMPROVEMENT. VII. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN NOT TAKING INTO ACCOUNT THE AMENDME NT BROUGHT IN SECTION 2(15) W.E.F. 01.04.2016 WHICH EXPRESSLY BAR S EXEMPTIONS TO ENTITY CARRYING ON BUSINESS ACTIVITIES IN THE CO URSE OF ACTUAL CARRYING OF SUCH ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY. VIII. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN IGNORING THE INTENTION AND PURPOSE BEHIND THE OMISSION OF SECTION 10(20A) W.E.F. 04.04.2003 WHICH EARLIER HAS EXPRESSLY PROVIDED EXEMPTION TO STATUARY AUTHORITIE S CONSTITUTED FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNIN G, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWN AND VILL AGES, OR BOTH. IX. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN FAILING TO CONSIDER THE JUDGEMENTS IN PUDA VS. CIT AND JALANDHAR DEVELOPMENT AUTHORITY VS. CIT WHICH H AVE BEEN FOLLOWED BY THE TRIBUNAL AMRITSAR BENCH IN JAMMU DE VELOPMENT AUTHORITY VS. CIT REPORTED AS (2012) 52 SOT ASR WHIC H WERE UPHELD BY HON'BLE J&K HIGH COURT (2102) 52 SOT ASR 1 53 WHICH WAS FURTHER UPHELD BY HON'BLE SUPREME COURT OF INDI A IN SPECIAL LEAVE TO APPEAL (C) NO. 4990 OF 2014 VIDE ITS ORDER DATED 21.07.201 4. 6. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT (A) HAS WRONGLY HELD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE I NVOLVED IN THE PRESENT APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER O F THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 120/CHD/2017 FOR THE A.Y. 2012-13. THE LD. COUNSEL FURTHER POINTED OUT THAT THE TRIBUNAL HAS D ECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF TRIBUNE TRUST (2016) 76 TAXMANN.COM 363 (P&H) IN WHICH THE HON'BLE HIGH COURT HAS DECIDED THE ISSUE OF APPLICA BILITY OF SECTION 2(15) OF THE ACT IN FAVOUR OF THE IMPROVEMENT TRUST, MOGA. 5 7. LD. COUNSEL FURTHER POINTED OUT THAT THE HON'BLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE DECISION OF THE TRIBUNAL AND DISM ISSED THE REVENUES APPEAL ITA NO. 74/2018 IN ASSESSEES OWN CASE, BY FOLLOWING ITS EARLIER JU DGMENT RENDERED IN THE CASE OF TRIBUNE TRUST VS. CIT AND ANOTHERS. 8. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) FAIRLY ADMITTED THAT THE ISSUE INVOLVED IN THE PRESENT CAS E IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HON'BLE JURISDICTIO NAL HIGH COURT, HOWEVER, SUPPORTED THE ORDER PASSED BY THE A.O. ON THE GROUN D THAT THE DEPARTMENT HAS FILED SLP AGAINST THE ORDER OF THE HON'BLE HIGH COU RT IN THE HON'BLE SUPREME COURT. THE LD. DR FURTHER ADMITTED THAT THE HONBLE SUPREME COURT HAS NOT STAYED THE OPERATION OF THE IMPUGNED ORDER. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD INCLUDING THE ORDE R OF THE COORDINATE BENCH RENDERED IN ASSESSEES OWN CASE PERTAINING TO THE A SSESSMENT YEAR 2012-13 AS WELL AS THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT DELIVERED IN ASSESSEES OWN CASE. AS POINTED OUT BY THE LD. COUN SEL FOR THE ASSESSEE, THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR THE A.Y. 2012-13. THE FINDI NGS OF THE COORDINATE BENCH READ AS UNDER: 9. LD. AR RELIED ON THE ORDER OF THE LD. CIT (A) A ND THE ORDER IN HIS OWN CASE. IN THE COURSE OF HEARING ON 07.06 2017, THE LD AR SUBM ITTED THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF TRIBUN E TRUST (2016) 76 TAXMANN.COM 363 (P&H). IN THIS CASE THE HON'BLE HIG H COURT HAS DECIDED THE ISSUE OF APPLICABILITY OF SECTION 2(15) IN FAVOUR O F IMPROVEMENT TRUST , MOGA THE HON'BLE HIGH COURT HAS ALSO CONSIDERED THE DECISION OF HON'BLE J&K HIGH COURT IN THE CASE JDA AND HAS TRIED TO DISTINGUISH IT BY HOL DING THAT: 'THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT FOR THE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/ APPELLANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERA L PUBLIC UTILITY. THE JUDGMENT WAS, THEREFORE, BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FOR THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTIO N OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO 6 UNDERSTAND HOW THIS ORDER CAN POSSIBLY BE RELIED UP ON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED T HEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPECIAL LEAVE PETIT ION FILED AGAINST THAT ORDER IS, THEREFORE, OF NO ASSISTANCE TO THE REVENUE EITHER.' HON'BLE HIGH COURT OF PUNJAB & HARYANA HIGH COURT V IDE ORDER DT. 23/12/2016 IN CASE OF CIT(E), CHANDIGARH VS. M/S IMPROVEMENT TRUS T, MOGA HELD AS UNDER: 73. THE TRIBUNAL ALSO RIGHTLY HELD THAT AN OBJECT O F GENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THE 66 OF 74 ITA-62-2015 AND IT A 147-2016 - 67 - ACTIVITIES TO BE FUNDED OR SUBSIDIZED BY THE STATE. SO LONG AS THE O BJECTS FALL WITHIN THE AMBIT OF THE WORDS 'OBJECT OF GENERAL PUBLIC UTILITY', IT IS SUFFICIENT. THE ACHIEVEMENTS OF THOSE OBJECTS DO NOT HAVE TO BE AS A RESULT OF STAT E FUNDING OR STATE SUBSIDY. THE TRIBUNAL ACCORDINGLY RIGHTLY HELD THAT THE AUTHORIT IES WERE NOT JUSTIFIED IN DENYING THE BENEFIT OF SECTION 11 AND HOLDING THAT THE ASSE SSEE WAS NOT COVERED BY THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL P UBLIC UTILITY' IN SECTION 2(15). THE TRIBUNAL, THEREFORE, RIGHTLY DIRECTED TH E ASSESSING OFFICER TO DELETE DISALLOWANCE OF EXEMPTION. 74. IT CANNOT POSSIBLY BE SUGGESTED THAT THE GOVERN MENT OF PUNJAB FORMED THE TRUSTS UNDER THE PUNJAB TOWN IMPROVEMENT ACT, 1922 BECAUSE IT WANTED TO CARRY ON THE BUSINESS AS COLONIZERS OR DEVELOPERS UNDER T HE MASK OF THE CATEGORY 'OBJECTS OF GENERAL PUBLIC UTILITY'. 75. SECTION 28(2)(III) OF THE PUNJAB TOWN IMPROVEME NT ACT, 1922 PERMITS A SCHEME UNDER THIS ACT TO PROVIDE INTER- ALIA FOR THE DISPO SAL OF THE LAND VESTED IN OR ACQUIRED BY THE TRUST INCLUDING BY LEASE, SALE AND EXCHANGE THEREOF. THIS, HOWEVER, IS NOT THE PREDOMINANT ACTIVITY OR RESPONS IBILITY OF THE TRUST. NOR FOR THIS ASSESSEE IS MAKING PROFITS FROM THIS ACTIVITY ITS P REDOMINANT MOTIVE. 76. THE POWER OF THE ASSESSEE TO DISPOSE OF LAND CO NFERRED BY SECTION 28(2)(III) IS NOT AN ABSOLUTE OR INDEPENDENT POWER. IT IS CONFERR ED UPON THE ASSESSEE IN THE DISCHARGE OF ITS STATUTORY DUTIES IMPOSED ON IT BY THE PTI ACT OF FRAMING SCHEMES. SUB SECTION (1) OF SECTION 28 ENTITLES THE ASSESSEE TO COMBINE THE VARIOUS SCHEMES REFERRED TO IN CHAPTER-IV. SUB SECTION (2) STIPULATES THAT THE SCHEME 67 OF 74 ITA-62-2015 AND ITA 147-2016 - 68 - UNDER THE ACT MAY PROVIDE FOR A VARIETY OF THINGS INCLUDING THE DISPOSAL OF LAND BELONGING TO THE ASSESSEE. THIS POWER IS, THEREFORE, IN FURTHERANCE OF, CONNECTED WITH AND IN RELATION TO A SCHEME IN CHAPTER-IV. IT IS NOT AN ABSOLUTE POWER INDEPENDENT OF AND UNCONNECTED WITH THE ASSESSEE'S STATUTORY FUNCTIONS UNDER THE PTI AC T. 77. THE PREDOMINANT ACTIVITY OF AND THE PURPOSE FOR THE ESTABLISHMENT OF THE ASSESSEE IS SUMMED UP IN TWO WORDS 'TOWN IMPROVEMEN T' IN THE TITLE 'PUNJAB TOWN IMPROVEMENT ACT, 1922'. THE PREAMBLE IS TITLED 'AN ACT FOR THE IMPROVEMENT OF CERTAIN AREAS'. THE PREAMBLE STATES 'WHEREAS IT IS EXPEDIENT TO MAKE PROVISION FOR THE IMPROVEMENT AND EXPANSION OF TOWNS IN PUNJAB'. THE ACT IN GENERAL AND CHAPTER-IV THEREOF IN PARTICULAR INDICATES THE REAS ON FOR AND THE BASIS OF THE ESTABLISHMENT OF THE TRUST. ALMOST EVERY SECTION IN THE CHAPTER INDICATES CLEARLY THAT THE TRUST IS ESTABLISHED FOR THE PURPOSE OF 'A DVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY'. THIS IS THE PREDOMINANT PU RPOSE OF THE TRUST. 7 78. THE LANGUAGE OF THE PROVISIONS OF THE ACT ARE S ELF EXPLANATORY IN THIS REGARD. THE TRUST MUST DEAL WITH THE BUILDINGS UNFIT FOR HU MAN HABITATION, THE DANGER CAUSED OR LIKELY TO BE CAUSED TO THE HEALTH OF THE INHABITANTS OF THE AREA ON ACCOUNT OF THE CONGESTED CONDITIONS OF STREETS OR B UILDINGS OR WANT OF LIGHT, AIR, VENTILATION OR PROPER CONVENIENCES IN AN AREA AND S ANITARY DEFECTS. THE TRUST IS REQUIRED TO FRAME THE STREET SCHEMES TO LAY OUT NEW STREETS, THOROUGHFARES AND OPEN SPACES OR ALTER EXISTING STREETS WHENEVER IT A PPEARS TO THE TRUST THAT IT IS NECESSARY TO DO SO FOR THE PURPOSE OF PROVIDING BUI LDING SITES OR REMEDYING 68 OF 74 ITA-62-2015 AND ITA 147-2016 - 69 - DEFECTIVE VE NTILATION OR CREATING NEW OR IMPROVING EXISTING MEANS OF COMMUNICATION AND FACIL ITIES FOR TRAFFIC. 79. THE TRUST MUST ALSO PREPARE DEVELOPMENT SCHEMES . THIS DUTY CONTAINED IN SECTION 24 IS NOT AKIN TO THAT OF A PRIVATE DEVELOP ER OR A COLONIZER AS WRONGLY SUGGESTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE DEVELOPMENT SCHEME UNDER SECTION 24 IS PREPARED FOR THE PURPOSE OF DEVELOPMENT OF A LOCALITY. SUB SECTION (2) OF SECTI ON 24 PROVIDES THAT THE TRUST MAY IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AN D FOR THE PUBLIC ADVANTAGE TO PROMOTE AND CONTROL THE DEVELOPMENT OF AND TO PROVI DE FOR THE EXPANSION OF A MUNICIPALITY IN ANY LOCALITY ADJACENT THERETO WITHI N THE LOCAL AREA OF SUCH TRUST PREPARE 'AN EXPANSION SCHEME'. THE DEVELOPMENT SCHE ME, THEREFORE, IS FOR THE PUBLIC PURPOSE OF DEVELOPMENT OF ANY LOCALITY AND A N EXPANSION SCHEME IS ALSO PREPARED WHEN IT IS EXPEDIENT AND FOR THE PUBLIC AD VANTAGE AS OPPOSED TO A MERE PERSONAL ADVANTAGE AS IN THE CASE OF PRIVATE D EVELOPERS OR THE COLONIZERS. THE TWO CANNOT POSSIBLY BE COMPARED. THESE SCHEMES DO NOT CONTEMPLATE MERE DEVELOPMENT OF THE PLOTS AND THE CONSTRUCTION OF TH E PREMISES FOR SALE. THE TRUST MUST UNDER THE ACT ADOPT A HOLISTIC APPROACH FOR TH E BETTERMENT AND ADVANTAGE OF THE ENTIRE AREA WITHIN ITS JURISDICTION. 80. SECTION 25 WHICH PROVIDES FOR A HOUSING ACCOMMO DATION SCHEME TO BE FRAMED IS SIMILAR. THE TRUST IS REQUIRED TO FRAME S UCH A SCHEME IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AND FOR THE PUBLIC ADVANTAGE T O PROVIDE HOUSING ACCOMMODATION FOR ANY CLASS OF INHABITANTS WITHIN I TS LOCAL AREA. THE TRUST IS, THEREFORE, TO BE MOTIVATED NOT BY PERSONAL BUT BY P UBLIC BENEFIT. SUCH ACTIVITIES CLEARLY FALL 69 OF 74 ITA-62-2015 AND ITA 147-2016 - 70 - WITHIN THE LAST CATEGORY OF CASES IN THE PROVISO TO SECTION 2(15) AS IT STOOD A T THE RELEVANT TIME, NAMELY, 'ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY '. 81. IT CAN HARDLY BE SUGGESTED THAT THE GOVERNMENT OF PUNJAB ESTABLISHED THE ASSESSEE'S TRUST AND CONFERRED UPON IT PUBLIC RESPO NSIBILITIES AND DUTIES OF THE NATURE SPECIFIED IN THE PTI ACT AS A CAMOUFLAGE FOR ITS COMMERCIAL, TRADE AND BUSINESS VENTURES. THE CREATION AND INCORPORATION O F THE TRUST UNDER SECTION 3 IS FOR A PUBLIC PURPOSE. WE HAVE NO DOUBT WHATSOEVER THAT THE ACTIVITIES OF THE TRUST FALL WITHIN THE MEANING OF THE WORDS 'CHARITABLE PURPOSE ' IN SECTION 2(15). 82. WHETHER THE MANDATE OF THE ACT IS FOLLOWED BY S UCH A TRUST IS A DIFFERENT MATTER. THE FACTS IN THAT REGARD ARE RELEVANT IN EX AMINING WHETHER THE ACTIVITIES OF THE TRUST OF A GIVEN YEAR ENTITLED IT TO THE BENEFI T OF THE INCOME TAX ACT. MERE PROFIT MAKING ON ACCOUNT OF CERTAIN INCIDENTAL OR A NCILLARY ACTIVITIES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONS TITUTED UNDER THE PTI ACT IS LIKELY TO MAKE PROFIT ON ACCOUNT OF ITS COMMERCIAL OR BUSINES S ACTIVITIES SUCH AS WHEN IT ACTS PURSUANT TO THE POWER UNDER SECTION 28(2)(III) BY DISPOSING OFF ITS LANDS. THAT, 8 HOWEVER, DOES NOT TAKE IT OUT OF THE DEFINITION OF 'CHARITABLE PURPOSE' IN SECTION 2(15). AS WE HELD EARLIER, TRADE, COMMERCE AND BUSI NESS IN SECTION 2(15) MUST BE SUCH AS TO INVOLVE AN ELEMENT OF PROFIT. PROFIT, HO WEVER, IS NOT THE PREDOMINANT MOTIVE OF SUCH TRUSTS. IN OUR VIEW CONSIDERING THE NATURE OF THE ACT, SELLING OF PLOTS AND PREMISES BY THE TRUST IS ONLY INCIDENTAL AND AN CILLARY TO ITS MAIN PURPOSE WHICH AT THE COST OF REPETITION IS 'TOWN IMPROVEMENT' IN 70 OF 74 ITA-62-2015 AND ITA 147- 2016 - 71 -ALMOST EVERY RESPECT. EVEN WHERE THE PLO TS ARE DEVELOPED AND PREMISES ARE CONSTRUCTED AND SOLD AT THE MARKET PRI CE, THE ACTIVITY IS NOT COMMERCIAL OR BUSINESS VENTURE PER SE BUT ONE NECES SITATED ON ACCOUNT OF THE IMPLEMENTATION OF THE PROVISIONS OF THE TRUST THROU GH STATUTORY SCHEMES. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIRE MENTS AND NOT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO T HE MAIN OBJECT OF THE TRUST. 83. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT INDICATED ANY FACTS WHICH INDICATE THAT THE ASSESSEE DEVIATED FROM THIS PRINC IPLE. HE HAS MERELY REFERRED THE EXTENT OF PROFIT MAKING ACTIVITIES WITHOUT CORRELAT ING THE SAME TO THE OTHER ACTIVITIES OF THE TRUST. IN OUR VIEW, THEREFORE, TH E ORDER OF THE TRIBUNAL MUST BE UPHELD. 84. MR. GOEL RELIED UPON THE JUDGMENT OF THE HIGH C OURT OF JAMMU & KASHMIR IN JAMMU DEVELOPMENT AUTHORITY V. UNION OF INDIA AND A NOTHER ITA NO. 164 OF 2012. THE DIVISION BENCH DISMISSED THE APPEAL WITH THE FO LLOWING ORDER:- '1. THE INSTANT APPEAL UNDER SECTION 260-A OF THE I NCOME TAX ACT, 1961 (FOR BREVITY, THE ACT) IS DIRECTED AGAINST ORDER DATED 1 4.06.2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR, UPHOLDING THE ORD ER WITHDRAWING THE STATUS OF CHARITABLE INSTITUTION GIVEN TO THE APPELLANT- ASSE SSEE UNDER SECTION 12AA(1)(B)(I)OF THE ACT. THE TRIBUNAL HAS REACHED A CATEGORICAL CONCLUSION THAT THE ASSESSEE-JAMMU DEVELOPMENT AUTHORITY CANNOT BE REGARDED AS AN INSTITUTION OR TRUST WHICH MAY HAVE BEEN SET UP TO ACHIEVE THE OBJECTS ENUMERATED UNDER SECTION 2 OF THE ACT PARTICULARLY IN VIEW OF THE ADDITION OF FIRST AND SECOND PROVISO MADE BY THE FINANCE ACT, 2008 W. E.F. 01.04.2009 TO SECTION 12AA OF THE ACT. THERE ARE FINDINGS OF FACT THAT TH E ASSESSEE-APPELLANT HAS NOT BEEN ACTING TO ADVANCE ANY OF THE OBJECT CONCERNING GENERAL PUBLIC UTILITY. EVEN OTHERWISE THE PROVISO WHICH HAS BEEN ADDED BY THE F INANCE ACT, 2008 W.E.F. 01.04.2009 STIPULATES THAT THE ADVANCEMENT OF ANY O THER OBJECT OF THE GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS OR A CESS OR FEE OF ANY OTHER CONSIDERATION. 2. WE FIND THAT NO QUESTION OF LAW MUCH LESS A SUBS TANTIAL QUESTION OF LAW WOULD EMERGE FROM THE IMPUGNED ORDER OF THE INCOME TAX AP PELLATE TRIBUNAL WARRANTING ADMISSION OF THE APPEAL. THE APPEAL IS W HOLLY WITHOUT MERIT AND IS THUS LIABLE TO BE DISMISSED. 3. FOR THE REASONS AFOREMENTIONED, THIS APPEAL FAIL S AND SAME IS DISMISSED ALONGWITH CONNECTED APPLICATION(S).' THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT F OR THE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/ APPELLANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERA L PUBLIC UTILITY. THE 9 JUDGMENT WAS, THEREFORE, BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FOR THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTIO N OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO UNDERSTAND HOW THIS ORDER CAN POSSIBLY BE RELIED UP ON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED T HEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPECIAL LEAVE PETIT ION FILED AGAINST THAT ORDER IS, THEREFORE, OF NO ASSISTANCE TO THE REVENUE EITHER. 86. THE ASSESSEE, NAMELY, MOGA IMPROVEMENT TRUST IS UNDOUBTEDLY AN AUTHORITY CONSTITUTED IN INDIA. IT IS ALSO CONSTITUTED BY OR UNDER A LAW, NAMELY, THE PUNJAB TOWN IMPROVEMENT ACT, 1922. FURTHER, IT IS ENGAGED FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODAT ION. IT IS ALSO CONSTITUTED FOR THE PURPOSE OF PLANNING, DEVELOPMENT OF IMPROVEMENT OF CITIES, TOWNS AND VILLAGES OR FOR BOTH AS IS EVIDENT FROM SECTIONS 22 TO 28 OF THE PTI ACT QUOTED ABOVE. THE APPELLANTS, WOULD, THEREFORE, UNDOUBTEDL Y HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A). THE ASSESSEE WOULD NOT HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A) UPON ITS OMISSION BY THE FINANCE ACT, 2002 WITH EFFECT FROM 01.04.2003. SECTION 10(20A) OF THE ACT DID NOT CONTAIN ANY OTHER REQUIREMENT. IT WAS WIDER THAN SECTION 2(15). HOWEVER, SECTION 2(15) AND THE CORRESPONDING SECTIO NS INCLUDING SECTIONS 11, 12, 12A AND 12AA ARE INDEPENDENT OF SECTION 10(20A) OF THE ACT. UPON THE OMISSION OF SECTION 10(20A), THE PROVISIONS OF THE OTHER SEC TIONS WERE NOT AFFECTED. THEY REMAINED INTACT. AN ASSESSEE COULD HAVE BEEN ENTITL ED TO THE PROVISIONS OF SECTION 10(20A) AND THE OTHER PROVISIONS SIMULTANEO USLY. THE OMISSION OF ONE, HOWEVER, DOES NOT AFFECT THE VALIDITY OR THE EXISTE NCE OF THE OTHERS. THE TWO PROVISIONS ARE DISTINCT AND INDEPENDENT OF EACH OTH ER. THUS THE OMISSION OF SECTION 10(20A) DID NOT AFFECT THE RIGHTS OF THE PA RTIES CLAIMING THE BENEFIT OF SECTIONS 2(15), 11, 12, 12A AND 12AA OF THE ACT. 12. FOLLOWING THE SAME WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND DECIDING THE IDENTICAL ISSUE IN FAVOUR OF THE A SSESSEE THE DEPARTMENTAL APPEAL STANDS DISMISSED. 10. FURTHER, AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE HONBLE JURISDICTIONAL HIGH COURT HAS DISMISSED THE REVENUE S APPEAL ITA NO. 74 OF 2018 FILED AGAINST ORDER DATED 13.07 2017 RENDERED BY THE TRIB UNAL IN ASSESSEES APPEAL PERTAINING G TO THE ASSESSMENT YEAR 2013-14 AND CO NFIRMED THE SAME. ADMITTEDLY, THE HONBLE SUPREME COURT HAS NOT STAYED THE OPERATION OF THE IMPUGNED ORDER DATED 11. 07. 2018 PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT. UNDER THESE CIRCUMSTANCES WE DEEM IT APPROPRIATE TO DISPOSE OF THIS APPEAL BY FO LLOWING THE DECISION OF THE HONBLE HIGH COURT RENDERED IN ASSESSEES CASE. 11. IN OUR CONSIDERED VIEW, SINCE THE ORDER PASSED BY OF THE LD. CIT(A) IS IN ACCORDANCE WITH THE JUDGMENT OF THE HONBLE JURISD ICTIONAL HIGH COURT, WE DO NOT FIND 10 ANY REASON TO INTERFERE WITH THE SAME. HENCE, RESPE CTFULLY FOLLOWING JUDGMENT OF THE HONBLE HIGH COURT IN ASSESSEES CASE DISCUSSED ABO VE, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE REVENUES APPEAL. ITA NO. 847/CHD/2019 AY 2014-15 THE FACT OF THE CASE AND THE ISSUE INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE AND THE ISSUE INVOLVED IN ASS ESSEES APPEAL FOR THE ASSESSMENT YEAR 2013-14 EXCEPT THE AMOUNT OF TOTAL INCOME OF T HE ASSESSEE DETERMINED BY THE AO AND GROUND NO (VII)OF THE APPEAL, VIDE WHICH THE RE VENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN ALLOWING THE DONATION AMOUNTIN G TO RS. 4 CRORE TOWARDS PUNJAB STATE CANCER AND DRUG ADDICTION TREATMENT INFRASTRUCTURE FUND ON THE GROUND THAT THE LD. CIT(A) HAS ALLOWED THE SAME WITHOUT DISCUSSING THE SAME IN ITS ORDER. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. VIDE GROUND NO. I TO VI, THE REVENUE HAS CHALLENGE THE ACTION OF THE LD. CIT (A) IN HOLDING THE ASSESSEE ELIGIBLE FOR CLAIMING EXEMPTION U/S 11 OF THE ACT. SINCE WE HAVE DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN RE VENUES APPEAL ITA NO. 468/CHD/2018, PERTAINING TO THE ASSESSMENT YEAR 2013-14 BY FOLLOW ING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT DISCUSSED ABOVE, CONSISTE NT WITH OUR FINDINGS IN THE SAID CASE WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMI SS GROUND NO 1 TO VI OF THE REVENUES APPEAL. 3. SO FOR AS THE ISSUE RAISED BY THE REVENUE VIDE G ROUND NO (VII) IS CONCERNED, AS POINTED OUT BY THE LD. DR, THE LD. CIT(A) HAS NOT D ISCUSSED THIS ISSUE SEPARATELY IN ITS ORDER AS TO WHETHER THE DONATION IN QUESTION IS REL ATED TO THE OBJECTS OF THE ASSESSEE SOCIETY SO AS TO ALLOW THE SAME. IN OUR CONSIDERED OPINION, THERE IS MERIT IN THE CONTENTION OF THE LD. DR THAT THE LD. CIT(A) OUGHT TO HAVE DISCUSSED AND DECIDED THE ISSUE BEFORE ALLOWING THE CLAIM OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE ALSO ADMITTED THAT THE LD. CIT (A) HAS NOT DEALT WITH TH IS ISSUE SEPARATELY. THEREFORE, IN OUR CONSIDERED VIEW, THIS ISSUE REQUIRES ADJUDICATION B Y THE FIRST APPELLATE AUTHORITY. HENCE, IN ALL FAIRNESS, WE SET ASIDE THIS ISSUE TO THE FIL E OF THE LD. CIT (A) FOR DECIDING THE SAME AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 11 ITA NO. 164/CHD/2019 AY 2015-16 THE FACT OF THE CASE AND THE ISSUE INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE AND THE ISSUE INVOLVED IN ASS ESSEES APPEAL FOR THE ASSESSMENT YEAR 2013-14 EXCEPT THE AMOUNT OF TOTAL INCOME OF T HE ASSESSEE DETERMINED BY THE AO. SINCE, WE HAVE UPHELD THE ORDER OF THE LD. CIT( A) AND DISMISSED THE REVENUES APPEAL ITA NO. 468/CHD/2018 PERTAINING TO ASSESSMEN T YEAR 2013-14, CONSISTENT WITH OUR FINDING IN THE SAID APPEAL, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE PRESENT APPEAL FILED BY THE REVENUE. IN THE RESULT, APPEALS FILED BY THE REVENUE FOR TH E ASSESSMENT YEARS 2013-14 AND 2015-16 ARE DISMISSED AND APPEAL PERTAINING TO THE ASSESSMENT YEAR 2014-15 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED ON 07/10/2020 UNDER RUL E 34(4) OF THE INCOME TAX RULES) SD/- SD/- ( N.K. SAINI) (R.L. NEGI ) VICE PRESIDENT JUDICIAL MEMBER AG DATE: 07/10/2020 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. THE CIT(A) 5. DR, ITAT, CHANDIGARH 6. GUARD FILE BY ORDER, ASSISTANT REGISTRAR