Khurja Development Authority, Bulandshahr V. CIT, Meerut

ITA 905/DEL/2011

• Counselvise Citation: 90520114 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-02-2014
• Assessment Year: misc
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SULEKHA VERMA
• Keywords: Charitable institution; Cancellation of registration
• Section: 12A; 12AA; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A: NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUN TANT MEMBER ITA NO. 905/DEL/2011 ASSESSMENT YEAR KHURJA DEVELOPMENT AUTHORITY VS. CIT YAMUNAPURAM COMMERCIAL COMPLEX INCOM E TAX OFFICE, M.G. ROAD, BHOOR, BHAINSALI GROUND, BULANDSHAHR MEERUT PAN: AAALK0805D (APPELLANT) (RESPONDENT) ITA NO. 387 5/DEL/2009 ASSESSMENT YE AR BULANDSHAHR-KHURJA DEVELOPMENT AUTHORITY VS. CIT YAMUNAPURAM COMMERCIAL COMPLEX INCOME TAX OFFICE, M.G. ROAD, BHOOR, BHAINSALI GROUND, BULANDSHAHR MEERUT PAN: AAALK0805D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KAPIL GOEL, ADVOCATE ASSESSEE BY : MS. SULEKHA VERMA, (CIT) DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE APPELLANTS HAVE QUESTIONED ACTION OF T HE LD. CIT WHEREBY HE HAS REJECTED THE APPLICATION OF THE APPELLANT FOR SEEKI NG REGISTRATION U/S 12AA OF THE I.T. ACT, 1961 IN ITA NO. 905/D/2011 AND CANCELLED/ WITHDRAWN THE REGISTRATION ALREADY GRANTED IN ITA NO. 3875/D/2009. ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 2 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL A VAILABLE ON RECORD AND THE DECISIONS RELIED UPON. IN THE CASE OF KHURJA DEVELO PMENT AUTHORITY (ITA NO. 905/DEL/2011), IT IS THE SECOND ROUND OF THE APPEAL BEFORE THE TRIBUNAL. IN THE FIRST ROUND THE TRIBUNAL VIDE ITS ORDER DATED 14.7. 2009 IN ITA NO. 1851/DEL/2009 HAD SET ASIDE THE MATTER BACK TO THE FILE OF LD. CO MMISSIONER OF INCOME TAX TO DECIDE THE ELIGIBILITY OF THE APPELLANT FOR REGISTR ATION AFRESH IN VIEW OF THE CITED JUDICIAL PRECEDENCE. 3. WHILE SETTING ASIDE THE MATTER BACK TO THE FI LE OF THE LD. CIT, THE TRIBUNAL IN THE SAME SENTENCE IN PARA NO. 5 OF THE ORDER HAS ME NTIONED AS IN SIMILAR CASES OF LOCAL AREA DEVELOPMENT AUTHORITIES HAVE BEEN HEL D TO BE ELIGIBLE FOR REGISTRATION. IN THE BODY OF ORDER, THE TRIBUNAL HA S QUOTED RELEVANT PARAGRAPH OF THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL I N THE CASE OF U.P. AWAS EVAM VIKAS PARISHAD, IN ITA NO. 1690/LUCK/2003 FOR ASSES SMENT YEAR 2003-04 ORDER DATED 25.7.2005. THE MATTER HAS ACCORDINGLY BEEN DE CIDED BY THE LD. CIT AFRESH VIDE ITS ORDER DATED 28.12.2010 DECLINING THE REQUE STED REGISTRATION TO THE APPELLANT KHURJA DEVELOPMENT AUTHORITY. AGAINST THI S ORDER, THE APPELLANT HAS PREFERRED PRESENT APPEAL. ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 3 4. IN THE CASE OF THE APPELLANT BULANDSHAHAR-KHUR JA DEVELOPMENT AUTHORITY ITA NO. 3875/D/2009, THE ACTION OF THE LD. CIT IN CANCE LLING / WITHDRAWING THE REGISTRATION ALREADY GRANTED EARLIER, HAS BEEN QUES TIONED. 5. IN SUPPORT OF THE GROUNDS RAISED IN ITA NO. 90 5/D/2011, THE LD. AR SUBMITTED T HAT THE LD. CIT WHILE REJECTING THE APP LICATION FOR REGISTRATION HAS NOT APPRECIATED THE ORDER OF THE TRIBUNAL, LUCKNOW BENC H GRANTING REGISTRATION TO U.P. AVAS ARAM VIKAS PARISHAD AND FOUR DEVELOPMENT AUTHORITIES OF UTTAR PRADESH. IN SUPPORT OF THE GROUNDS RAISED IN ITA NO . 3875/D/09, THE LD. AR SUBMITTED THAT THE LD. CIT HAS ERRED IN CANCELLING/ WITHDRAWING THE REGISTRATION WHICH WAS GRANTED TO THE APPELLANT IN COMPLIANCE OF THE DIRECTION OF THE TRIBUNAL. 6. WE FIND THAT IN BOTH THE APPEALS A COMMON ISSU E IS INVOLVED. THE SAID COMMON ISSUE IS AS TO WHETHER THE APPELLANTS ARE EL IGIBLE FOR REGISTRATION U/S 12A OF THE I.T. ACT IN VIEW OF INSERTION OF PROVISO TO SECTION 2 (15) W.E.F. 1.4.2009 WITH THIS FACTUAL DIFFERENCE THAT IN THE CASE OF TH E APPELLANT KHURJA DEVELOPMENT AUTHORITY THE APPLICATION FOR REGISTRATION WAS REJE CTED AND IN CASE OF THE APPELLANT BULANDSHAHAR-KHURJA DEVELOPMENT AUTHORITY THE REGISTRATION GRANTED EARLIER WAS CANCELLED/WITHDRAWN INVOKING PROVISIONS U/S 12AAOF THE ACT, HOWEVER ON THE COMMON BASIS IN CASE OF BOTH THE APPELLANTS THAT THEIR ACTIVITIES ARE NOT ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 4 CHARITABLE IN NATURE BUT IN THE RETURN OF THE TRADE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. WE HAVE THUS HEARD BOTH THE APPEALS TOGETH ER AND THESE ARE BEING DISPOSED OFF VIDE A CONSOLIDATED ORDER. 7. ON THE ISSUE INVOLVED, THE LD. AR SUBMITTED T HAT THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MEERUT DEVELOPMENT AUTHORIT Y IN ITA NO. 2037/DEL/2013, VIDE ORDER DATED 27.8.2013 HAS HELD THE APPELLANT A S ELIGIBLE FOR REGISTRATION. IN THIS REGARD THE TRIBUNAL HAS FOLLOWED SEVERAL DECIS IONS ON THE BASIS OF WHICH IN THE FIRST ROUND OF THE APPEAL, THE TRIBUNAL VIDE IT S ORDER DATED 14.7.2009 HAD SET ASIDE THE MATTER FOR FRESH CONSIDERATION OF THE LD. CIT. 8. THE LD. AR SUBMITTED THAT THE LD. CIT WHILE ADJUDICATING UPON THE ISSUE AFRESH, IN COMPLIANCE OF THE ORDER DATED 14.7.2009 IN ITA NO. 1851/D/09 OF THE TRIBUNAL, HAS HOWEVER HELD THAT THE APPELLANT IS NO T ELIGIBLE FOR REGISTRATION. HE SUBMITTED THAT THE PROVISO TO SECTION 2 (15) OF THE ACT ARE NOT APPLICABLE IN THE PRESENT CASE AS THE APPELLANT WAS CREATED BY AN ACT OF THE GOVERNMENT AND IS THUS A PUBLIC INSTITUTION. ITS ACTIVITIES ARE FOR A DVANCEMENT OF GENERAL PUBLIC UTILITIES. ITS MANAGEMENT IS GOVERNED BY A BOARD CO MPRISING OF EX-OFFICIO GOVERNMENT OFFICIALS AND MEMBERS OF PUBLIC I.E. CHA IRMAN/PRESIDENT OF NAGAR PALIKA/MUNICIPAL BOARD IN THE JURISDICTIONAL AREA O F THE AUTHORITY, WHO ARE DIRECTLY ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 5 ELECTED BY THE INHABITANTS OF THE AREA. THE APPELLA NT AUTHORITY IS NOT BEIGN RUN ON PROFIT MOTIVE. IT IS ALSO RUNNING SCHEMES FOR TH E WEAKER SECTIONS OF TH E SOCIETY, IN PURSUANCE OF THE CONSTITUTION OF INDIA UNDER WHICH, EVERY STATE IS RESPONSIBLE FOR TOWN PLANNING FOR THE WELFARE OF TH E PUBLIC. SIMILAR ARE THE OBJECTS AND ACTIVITIES IN THE CASE OF THE APPELLANT BULANDSHAHAR KHURJA DEVELOPMENT AUTHORITY IN ITA NO. 3875/DEL/2009. HE ALSO CITED THE FOLLOWING DECISIONS :- I) U.P. AWAS EVAM VIKASH PARISHAD VS. I TO AND ORS. IN ITA NO. 690/LUE/2003 ORDER DATED 25 TH JULY, 2005. II) JODHPUR DEVELOPMENT AUTHORITY VS. CI T (2012) 68 DTR (JD) (TRIB) 84 III) JHANSI DEVELOPMENT AUTHORITY VS. CIT , ITA NO. 459/AGRA/2007, ORDER DATED 5/12/2008 IV) MEERUT DEVELOPMENT AUTHORITY VS. CIT , ITA NO. 2783/DEL/2009, ORDER DATED 11.2.2011. V) CIT VS. KRISHI UTPADAN MANDI SAMITI (2011) 331 ITR 154 (ALL) VI) U.P. FOREST CORPN. VS. DCIT (2003)1 27 TAXMAN 527 (ALL) VII) AGRA DEVELOPMENT AUTHORITY VS. CIT ITA NO. 66/AGRA./2012 9. THE LD. AR POINTED OUT FURTHER THAT THE CBDT V IDE CLAUSES 5,6,7 AND 8 OF THE MEMORANDUM EXPLAINING PROVISIONS IN FINANCE BILL 20 12 REPORTED IN 342 IR 286 (STATUTE) HAS MADE THE POSITION CLEAR REGARDING APP LICABILITY OF SECOND PROVISO TO SECTION 2 (15) OF THE ACT, WHERE THE ACTIVITY OF AN Y TRUST OR INSTITUTION IS OF THE NATURE OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERA L PUBLIC UTILITY AND IT INVOLVES CARRYING ONE OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. IT HAS BEEN MADE CLEAR THAT THERE IS NEED TO PROVIDE IN LAW THAT NO EXEMPTION WOULD BE AVAILABLE FOR A PREVIOUS YEAR TO A TRUST OR INSTITUTION TO ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 6 WHICH FIRST PROVISO OF SUB-SECTION 2 (!5) BECOME AP PLICABLE FOR THAT PARTICULAR PREVIOUS YEAR, HOWEVER THIS TEMPORARY PHASE IN ONE YEAR MAY NOT BE TREATED AS ALTERING THE VERY NATURE OF THE TRUST OR INSTITUTIO N SO AS TO LEAD TO CANCELLATION OF REGISTRATION OR WITHDRAWAL OF APPROVAL OR RESCINDIN G OF NOTIFICATION ISSUED IN RESPECT OF TRUST OR INSTITUTION. HE POINTED OUT THA T IN THE CASE OF THE APPELLANT BULLANDSHAHAR KHURJA DEVELOPMENT AUTHORITY, THE T RIBUNAL IN THE FIRST ROUND VIDE ORDER DATED 15.2.2007 IN ITA NO. 4429/D/2009 H AD SET ASIDE THE REJECTION OF APPLICATION FOR REGISTRATION BY THE LD. CIT AND HAD DIRECTED THE LD. CITN TO GRANT THE REGISTRATION. IN COMPLIANCE THE LD. CIT H AD GRANTED REGISTRATION WHICH HAS BEEN NOW CANCELED IN VIEW OF THE PROVISO TO SEC TION 2(!5) OF THE ACT INSERTED W.E.F. 1.4.2009. HE HAS WITHDRAWN THE REGISTRATION W.E.F. 1.4.2008. HE SUBMITTED THAT IT IS NOT MENTIONED IN THE PROVISIONS OF SECTI ON 12AA(3) THAT THE REGISTRATION CAN BE WITHDRAWN PRIOR TO THE DATE WHEN FIRST NOTIC E WAS ISSUED BY THE COMMISSIONER. THE LD. AR POINTED OUT THAT IN THE PR ESENT CASE FIRST NOTICE WAS ISSUED BY THE COMMISSIONER ON 24.12.2008 WHEREAS RE GISTRATION HAS BEEN WITHDRAWN BY HIM W.E.F. 1.4.2008. HE SUBMITTED THAT IN HIS ORDER THE LD. COMMISSIONER HAS NOT MENTIONED ANYWHERE WHETHER THE APPELLANT HAS VIOLATED ANY OF THE TWO CONDITIONS MENTIONED U/S 12AA(3) UND ER WHICH THE REGISTRATION CAN BE CANCELLED. HE HAS SIMPLY WITHDRAWN THE REGIST RATION ON THE BASIS OF AMENDMENT IN THE DEFINITION OF CHARITABLE ACTIVITIE S U/S 2 (15) OF THE ACT BY FINANCE ACT 2008 W.E.F. 1.4.2009. HE SUBMITTED THAT DELHI BENCH OF THE TRIBUNAL ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 7 IN THE CASE OF MEERUT DEVELOPMENT AUTHORITY (SUPRA) VIDE ORDER DATED 11.2.2011 HAS CANCELLED THE ORDER OF THE WITHDRAWAL OF REGIST RATION W.E.F. 1.4.2008 BY LD. COMMISSIONER OF INCOME TAX, MEERUT ON THE BASIS THA T REGISTRATION WAS CANCELLED BY THE LD. COMMISSIONER W.E.F. 1.4.2008 WHEREAS THE AMENDMENT WAS APPLICABLE W.E.F. 1.4.2009. 10. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND TRIED TO JUSTIFY THE ORDER IMPUGNED. HE SUBMITTED THAT THE DECISIONS INC LUDING THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS . UP HOUSING & DEVELOPMENT BOARD & ORS. (SUPRA) RELIED UPON BY THE LD. AR HAVI NG DISTINGUISHABLE FACTS HENCE NOT HELPFUL TO THE APPELLANT. THE PRESENT APP EALS INVOLVE AN ISSUE OF WITHDRAWAL OF REGISTRATION, WHICH WAS EARLIER GRATN ED U/S 12AA OF THE ACT. IN THE CITED CASES HOWEVER, REGISTRATION WAS NOT WITHDRAWN AND THERE AN ISSUE INVOLVE WAS ELIGIBILITY OF THE APPLICANT FOR THE REGISTRAT ION SOUGHT FOR. 11. SHE SUBMITTED THAT THE DECISIONS OF THE TRIBU NAL RELIED UPON BY THE LD. AR ARE RELATING TO THE PERIOD WHEN PROVISO TO SECTION 2 (15) OF THE I.T. ACT WAS NOT IN OPERATION. SHE ALSO REFERRED CBDT CIRCULAR NO. 1 1 DATED 19.12.2008 REFERRED BY THE LD. CIT AT PAGE NO. 18 OF ITS ORDER. SHE SUB MITTED THAT THE LD. CIT HAD WITHDRAWN THE REGISTRATION IN VIEW OF THE PROVISO T O SECTION 2(15) OF THE ACT FOLLOWING THE PROCEDURE FOR WITHDRAWAL LAID DOWN U/ S 12AA (3) OF THE ACT. ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 8 12. THE LD. CIT, DEPARTMENTAL REPRESENTATIVE ALSO REFERRED EXPLANATORY NOTES BY FINANCE ACT 2008 ON SECTION 2 (!5) AND THE DISSO LUTION CLAUSE OF THE UP URBAN PLANNING AND DEVELOPMENT ACT, 1973, WHEREIN IT HAS BEEN MADE CLEAR THAT THE GOVT. MAY BY NOTIFICATION IN THE GAZETTE DECLARE TH AT THE AUTHORITY SHALL BE DISSOLVED WITH EFFECT FROM SUCH DATE AS MAY BE SPEC IFIED IN THE NOTIFICATION AND THE AUTHORITY SHALL BE DEEMED TO BE DISSOLVED ACCOR DINGLY FROM THE SAID DATE AND ALL PROPERTIES, FUNDS AND DUES WHICH ARE VESTED IN, OR REALIZED BY THE AUTHORITY SHALL VEST IN OR BE REALIZED BY THE STATE GOVERNMEN T. IN SUPPORT SHE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- I) JAMMU DEVELOPMENT AUTHORITY VS. UNION OF IND IA, ITA NO. 164/JK/2012, HONBLE HIGH COURT OF JAMMU AND KASHMIR II) JAMMU DEVELOPMENT AUTHORITY VS. CIT, ITA NO . 30/ASR/2011, ITAT AMRITSAR BENCH, AMRITSAR III) NOIDA VS. C.CIT, 2011-TIOL-187-HC-ALL-IT IV) JALANDHAR DEVELOPMENT AUTHORITY VS. CIT (20 10) 35 SOT 15 (AMRITSAR) V) IMPROVEMENT TRUST VS. CIT (2013) 30 TAXMAN .COM 58 (ASR.) VI) PUNJAB URBAN PLANNING & DEVELOPMENT AUTHOR ITY VS. CIT, 103 TTJ 998 (CHAND.) SHE ALSO REFERRED :- I) CBDT CIRCULAR NO. 11/2008, DATED 19.12.20 08 II) EXPLANATORY NOTES OF FINANCE ACT, 2008 ON SECTION 2 (!5) III) OBJECT OF THE AUTHORITY IV) DISSOLUTION CLAUSE OF THE AUTHORITY 13. HAVING GONE THROUGH THE DECISIONS RELIED UPO N, WE FIND THAT THE APPELLANT AS PER SITUS OF THE ASSESSING OFFICER IS SITUATED W ITHIN THE TERRITORIAL JURISDICTION OF HONBLE ALLAHABAD HIGH COURT, HENCE DECISION OF THE JURISDICTIONAL HIGH COURT IS ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 9 BINDING UPON IT. THE HONBLE ALLAHABAD HIGH COURT I N THE CASE OF CIT VS. UP HOUSING AND DEVELOPMENT AND ORS. (SUPRA) HAS BEEN P LEASED TO HOLD THE ACTIVITIES OF THE ASSESSEE AS CHARITABLE IN NATURE. 14. THE HONBLE ALLAHABAD HIGH COURT AFTER DISCUS SING PROVISIONS LAID DOWN UNDER SECTION 12A, 12AA AND PROVISO TO SECTION 2(15 ) OF THE I.T. ACT THE CITED DECISIONS BEFORE IT AS WELL AS CBDT CIRCULAR DATED 19.12.2008 HAS BEEN PLEASED TO UPHOLD THE ORDERS OF THE TRIBUNAL, HOLDING THE A SSESSEE ELIGIBLE FOR EXEMPTION. THE RELEVANT EXTRACT OF THE SAID JUDGMENT DATED 16. 9.2013 IS BEING REPRODUCED HERE UNDER :- CIT VS. KRISHI UPAJ MANDI SAMITI (2008) 218 CTR (MP) 512 (SIC) CIT VS. K.U.M.S. (2008) 216 CTR (RAJ) 277 CIT VS. MARKET COMMITTEE (2007) 294 ITR 563 (PU NJ & HAR.) CIT VS. AGRICULTURAL PRODUCTS & MARKET COMMITTE E (2007) 291 ITR 419 (BOM) CIT VS. RED ROSE SCHOOL (2007) 163 TAXMAN 19 (A LL.) FOR THE APPLICABILITY OF PROVISO TO SECTION 2 (1 5) THE ACTIVITIES OF THE TRUST SHOULD BE CARRIED OUT ON COMMERCIAL LINES WITH INTE NTION TO MAKE PROFIT. WHERE THE TRUST IS CARRYING OUT ITS ACTIVITIES ON NON-COM MERCIAL LINES WITH NO MOTIVE TO EARN PROFITS, FOR FULFILLMENT OF ITS AIMS AND OBJEC TIVES, WHICH ARE CHARITABLE IN NATURE AND IN THE PROCESS EARN SOME PROFITS, THE SA ME WOULD NOT BE HIT BY PROVISO TO SECTION 2 (!5). THE AIMS AND OBJECTS OF THE ASSESSEE-TRUST ARE ADMITTEDLY CHARITABLE IN NATURE. MERE SELLING SOME PRODUCT AT A PROFIT WILL NOT IPSO FACTO HIT ASSESSEE BY APPLYING PROVISO TO SECTION 2 (!5) AND DENY EXEMPTION AVAILABLE U/S 11. THE INTENTION OF THE TRUSTEES AND THE MANNER IN WHICH THE ACTIVITIES OF THE CHARITABLE TRUST INSTITUTION ARE UNDERTAKEN ARE HIGHLY RELEVANT TO DECIDE THE ISSUE OF APPLICABILITY OF PROVISO TO SEC TION 2 (!5). THERE IS NO MATERIAL/EVIDENCE BROUGHT ON RECORD BY THE REVENUE WHICH MAY SUGGEST THAT THE ASSESSEE WAS CONDUCTING ITS AFFAIR S ON COMMERCIAL LINES WITH MTIVE TO EARN PROFIT OR HAS DEVIATED FROM ITS OBJEC TS AS DETAILED IN THE TRUST DEED OF THE ASSESEE. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISO TO ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 10 SECTION 2(!5) IS NOT APPLICABLE TO THE FACTS AND CI RCUMSTANCES OF THE CASE, AND THE ASSESEE WAS ENTITLED TO EXEMPTION PROVIDED U/S 11 F OR THE RELEVANT ASSESSMENT YEAR. FROM THE RECORD, IT ALSO APPEARS THAT THE AUTHORIT Y HAD BEEN MAINTAINING INFRASTRUCTURE, DEVELOPMENT AND RESERVE FUND IDRF A S PER THE NOTIFICATION DATED 15.1.1998 THE MONEY TRANSFERRED TO THIS FUNDS IS TO BE UTILIZED FOR THE PURPOSE OF PROJECT AS SPECIFIED BY THE COMMITTED HAVING CONSTI TUTED BY THE STATE GOVT. UNDER THE SAID NOTIFICATION AND THE SAME COULD NOT BE TREATED TO BE BELONGING TO THE AUTHORITY OR THE RECEIPT IS TAXABLE NATURE IN ITS HANDS. FOR THIS REASON ALSO, IT APPEARS THAT THE FUNDS ARE UTILIZED FOR GENERAL UTILITY. MOREOVER, IN THE INSTANT CASE, THE ASSESSING OFFICE R HAS NOT GIVEN ANY DEFECTIVE IN COMPUTATION OF INCOME AS PER SECTION 11 AS SUBMI TTED IN FORM-XB, BUT OBSERVED THAT THE ACTIVITIES OF THE ASSESEE ARE NOT CHARITABLE. THE ACTIVITIES OF THE ASSESEES ARE GENUINE. SO, THEN WE FIND NO REASON TO INTERFERE WITH IMPUGNED ORDERS PASSED BY THE TRIBUNAL. THE SAME ARE HEREBY SUSTAINED ALONG WITH REASONS MENTIONED THEREIN. THE ANSWER TO THE SUBSTANTIAL QUESTIONS OF LAW ARE IN FAVOUR OF THE ASSESEE AND AGAINST THE DEPARTMENT. IN VIEW OF THE ABOVE OF ABO VE, ALL THE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED, AS STATED ABOVE. 15. THE HONBLE SUPREME COURT IN THE CASE OF SUR AT ART SILK CLOTH MANUFACTURES ASSOCIATION 121 ITR (SC) HAS BEEN PLEA SED TO HOLD AS UNDER :- 'THE TEST WHICH HAS, NOW TO BE APPLIED IS WHETHER T HE PREDOMINANT OBJECT OF THE ACTIVITY INVOLVED IN CARRYING OUT THE OBJECT OF GEN ERAL PUBLIC UTILITY IS TO SUB SERVE THE CHARITABLE PURPOSE OR TO EARN PROFIT. WHERE PRO FIT MAKING IS THE PREDOMINANT OBJECT OF THE ACTIVITY, THE PURPOSE, THOUGH AN OBJE CT OF GENERAL PUBLIC UTILITY, WOULD CEASE TO BE A CHARITABLE PURPOSE. BUT WHERE T HE PREDOMINANT OBJECT OF THE ACTIVITY IS TO CARRY OUT THE' CHARITABLE PURPOSE AN D NOT TO EARN PROFIT, IT WOULD NOT LOSE ITS CHARACTER OF A CHARITABLE PURPOSE UNDER TH E TERMS OF THE TRUST, THE MERE FACT THAT THE' ACTIVITIES OF THE TRUST YIELD PROFIT WILL NOT ALTER THE CHARITABLE CHARACTER OF THE TRUST. THE TEST NOW IS, MERE CLEAR LY THAN IN THE PAST, THE GENUINENESS OF THE PURPOSE TESTED BY THE OBLIGATION CREATED TO SPEND THE MONEY EXCLUSIVELY OR ESSENTIALLY ON CHARITY. THE RESTRICT IVE CONDITION THAT THE PURPOSE SHOULD NOT INVOLVE THE I CARRYING ON OF ANY ACTIVIT Y FOR PROFIT WOULD BE SATISFIED IF PROFIT MAKING IS NOT THE REAL OBJECT.' ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 11 THE AUTHORITY BELOW HAS NOT EXAMINED THE PRESENT CA SES IN VIEW OF THE ABOVE DECISIONS AND OTHERS WHILE COMING TO THE CONCLUSION THAT THE APPELLANTS ACTIVITIES ARE TRADE IN NATURE WITHIN THE MEANING OF THE PROVI SION TO SECTION 2 (!5) OF THE ACT. 16. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MEERUT DEVELOPMENT AUTHORITY VS. CIT (SUPRA) HAS ALSO DECIDED AN IDENT ICAL ISSUE IN ALMOST SIMILAR FACTS IN FAVOUR OF THE ASSESSEE, WITH THIS FINDING THAT THE LD. CIT WAS NOT JUSTIFIED IN THE WITHDRAWING THE REGISTRATION GRANTED TO THE ASSESSEE, BESIDES OTHER ALSO ON THE BASIS THAT THE COMMISSIONER WAS NOT JUSTIFIE D IN CANCELLING THE REGISTRATION W.E.F. 1.4.2008, WHEREAS THE AMENDMENT WAS APPLICAB LE FROM 1.4.2009. SIMILAR ARE THE DATES IN THE PRESENT CASE OF BULANDSHAHR KH URJA DEVELOPMENT AUTHORITY. THE JAIPUR BENCH OF THE TRIBUNAL IN THE CAE OF RAJA STHAN HOUSING BOARDS. CIT (SUPRA) HAS HELD AS UNDER :- IN VIEW OF THE AMENDED PROVISIONS OF SECTION 2(15) , IF IN ANY YEARS, GROSS RECEIPTS OF A CHARITABLE INSTITUTION EXCEED PRESCRI BED LIMIT THEN IN THAT YEAR, ASSESSING OFFICER IS EMPOWERED TO EXAMINE ALL OWABILITY OF EXEMPTION U/S 11 BUT SAME HAS NO EFFECT ON REGISTRATION GRANT ED TO SAID INSTITUTION U/S 12AA. 17. WE THUS RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF CAIT VS. UP HOU SING AND DEVELOPMENT BOARD AND ORS. (SUPRA) AND COORDINATE BENCH OF THE TRIBUN AL IN THE ABOVE CASE HOLD THAT THE LD. CIT WAS NOT JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSESEE FOR ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 12 REGISTRATION U/S 12AA OF THE ACT IN THE CASE OF KHU RJA DEVELOPMENT AUTHORITY EVEN AFTER THE MATTER WAS SET ASIDE BY THE TRIBUNAL WITH ITS FINDING IN FAVOUR OF THE ASSESSEE IN ITA NO. 1851/DEL/2009 DATED 14.7.20 07. WE THUS WHILE SETTING ASIDE ORDER IMPUGNED DIRECT THE LD. CIT TO GRANT TH E REGISTRATION W.E.F. THE REQUESTED DATE AS PER THE PROVISIONS OF THE LAW IN THE CASE OF KHURJA DEVELOPMENT AUTHORITY. SO FAR AS THE APPELLANT BULA NDSHAHR KHURJA DEVELOPMENT AUTHORITY IS CONCERNED, WE WHILE SETTIN G ASIDE THE ORDER IMPUGNED DIRECT THE LD. CIT TO RESTORE THE REGISTRATION W.E. F. 1.4.2008. 18. BEFORE PARTING WITH THE ORDER, WE MAKE IT CLEA R OVER HERE THAT AT THE TIME OF EXAMINING THE ASSESSEE FOR GRANT OF EXEMPTION U/S 1 1 AND OTHER RELEVANT PROVISIONS OF THE ACT, THE ASSESSING OFFICER WILL B E AT LIBERTY TO EXAMINE THE SAME AS PER SECTION 13 AND OTHER RELATED PROVISIONS OF T HE I.T. ACT 1961. IN THE RESULT APPEALS ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2014. SD/- SD/- (T.S. KAPOOR) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 29 TH APRIL, 2014 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT ITA NO. 905/DEL/11 & ITA NO. 3875/DEL/09 13 5. DR BY ORDER ASSTT. REGISTRAR, ITAT