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

ITA 955/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4905 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 15-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: PRATEEK TOSNIWAL
• Keywords: Charitable institution; Set aside
• Section: 143(3); 12A; 13; 22; 12; 28; 11; 139

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 955/AHD/2016 ( ASSESSMENT YEAR : 2012-13) SURAT URBAN DEVELOPMENT AUTHORITY (SUDA) SUDA BHAVAN, NR. COLLECTOR OFFICE, NANPURA, SURAT - 395001 / VS. DY.CIT (EXEMPTIONS) CIRCLE-2, AHMEDABAD ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NOS. 2432 & 2433/AHD/2017 ( ASSESSMENT YEARS : 2013-14 & 2014-15) DY.CIT (EXEMPTIONS) CIRCLE-2, AHMEDABAD / VS. SURAT URBAN DEVELOPMENT AUTHORITY (SUDA) SUDA BHAVAN, NR. COLLECTOR OFFICE, NANPURA, SURAT - 395001 ./ ./ PAN/GIR NO. : AAALS0197G ( APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI PRATEEK TOSNIWAL, A.R. / REVENUE BY : SHRI SURENDRA KUMAR, CIT. D.R. DATE OF HEARING 18/02/2020 !'# / DATE OF PRONOUNCEMENT 20/02/2020 ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 2 - / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS BY THE ASSESSEE AND REVENUE A RE DIRECTED AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD. THE RELEVANT DETAILS ARE TABULATED AS UNDER: ITA NOS. NAME OF ASSESSEE AY CIT/ CIT(A)S ORDER DATED AOS PENALTY ORDER DATED AOS ORDER UNDER SECTION 955/AHD/16 SURAT URBAN DEVELOPMENT AUTHORITY (SUDA) 2012- 13 10.02.2016 24.03.2015 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) 2432/AHD/17 -DO- 2013- 14 28.08.2017 28.03.2016 -DO- 2433/AHD/17 -DO- 2014- 15 -DO- 21.12.2016 -DO- 2. THE GRIEVANCES RAISED BEING COMMON IN ALL THREE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY WAY OF THE COMMON ORDER. 3. WE SHALL TAKE UP APPEAL ASSESSEES APPEAL IN ITA NO.955/AHD/2016 CONCERNING AY 2012-13 AS A LEAD CAS E FOR ADJUDICATION. ITA NO. 955/AHD/2016 - AY- 2012-13 (ASSESSEES APPE AL) 4. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER AS WELL AS L D. COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD H AVE ERRED IN HOLDING THAT ASSESSEE IS NOT ENTITLED TO THE BEN EFIT OF SECTION 11 & 12 OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER AS WELL AS L D. COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD H AVE ERRED IN HOLDING THAT FIRST & SECOND PROVISO TO SECTION 2 (15) OF THE ACT, 1961 IS APPLICABLE IN THE ASSESSEE'S CASE. ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 3 - 3. ON THE TACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER AS WELL AS L D. COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD H AVE ERRED IN DISALLOWING EXEMPTION OF INR 37,50,00,000/- CLAI MED U/S 11(2) OF THE ACT. 1961 & DEDUCTION OF INR 9,10,65,1 53/- CLAIMED ON ACCOUNT OF INCOME U/S 11(1)(A) OF THE ACT 1961. 5. WHEN THE MATTER WAS CALLED FOR HEARING, THE LE ARNED AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A REGULATOR Y BODY CREATED BY STATE GOVERNMENT U/S 22 OF GUJARAT TOWN PLANNING AND URBA N DEVELOPMENT ACT (GTPUDA), 1976 FOR PROPER DEVELOPMENT OF SPECIF IED AREA IN THE STATE WHICH IS SUPPOSED TO BE ENSURED BY THE STATE GOVERNMENT. IT WAS SUBMITTED THAT THE ASSESSEE IS JUST LIKE A GOVERNME NT BODY FUNCTIONING FOR AND ON BEHALF OF STATE GOVERNMENT. AS FURTHER STATED, THE VERY PURPOSE OF THE ABOVE ACT IS TO ENSURE THE DEVELOPME NT OF VARIOUS AREAS OF THE STATE IN A PHASED AND PLANNED MANNER. THE GO VERNMENT OF GUJARAT AS PER THE PROVISIONS OF GTPUDA, 1976 HAD CONSTITUT ED SUDA AS AN URBAN DEVELOPMENT AUTHORITY BY ITS NOTIFICATION NO. GHB/23 UDA/1177/646(5) QZ, DATED 13.U1.1978. THE REASON FO R ENACTMENT OF GTPUDA, 1976 IS THE DEVELOPMENT OF AREAS FOR PUBLIC PURPOSE AND TO CREATE BETTER ENVIRONMENTAL CONDITION. FOLLOWING AR E THE MAIN TASKS OF THE SUDA: WORKING FOR THE PREPARATION AND IMPLEMENTATION OF DEVELOPMENT MEASURES. SURVEYING FOR THE DEVELOPMENT OF AREAS AND LAND A CQUISITION. MANAGING URBAN DEVELOPMENT SCHEMES. WORKING FOR WATER SYSTEMS, SEWAGE AND OTHER FACIL ITIES AND SERVICES. IN VIEW OF THE VARIOUS PROVISIONS OF GUJARAT TOWN P LANNING AND URBAN DEVELOPMENT ACT, 1976 IT IS CLAIMED THAT ASSESSEE C ANNOT PURCHASE ANY LAND & IN FACT ASSESSEE HAS NOT PURCHASED ANY LAND. AS PER PROVISIONS OF THE ABOVE ACT IT IS VERY MUCH CLEAR THAT ASSESSEE C AN ACQUIRE THE LAND EITHER BY AGREEMENT OR UNDER THE PROVISIONS OF LAND ACQUISITION ACT ONLY IN THE CASES ENVISAGED CLAUSES (B), (D), (K) & (N) OF SUB-SECTION (2) TO SECTION 12 OF SAID ACT. IT WAS SUBMITTED THAT A PERUSAL OF SAID CLAUSES ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 4 - WOULD REVEAL THAT LAND CAN BE RESERVED FOR PUBLIC P URPOSES SUCH AS SCHOOLS, COLLEGES & OTHER EDUCATIONAL INSTITUTIONS, TRANSPORT & COMMUNICATIONS. PREVENTION OR REMOVING POLLUTION OF WATER OR AIR CAUSED BY DISCHARGE OF WASTE ETC. FURTHER, SAID ACQUISITIO N CAN BE MADE ONLY BY WAY OF RESERVATION U/S 40(3)(J) AND (JJA) OF THE AC T AND SAID RESERVATION IS LIMITED TO THE SPECIFIED PERCENTAGE OF TOTAL LAN D ACQUIRED UNDER THE TOWN PLANNING SCHEME. THIS RESERVATION CAN BE MADE FOR THE PURPOSE OF PROVIDING HOUSING ACCOMMODATION TO THE MEMBERS OF S OCIALLY & ECONOMICALLY BACKWARD CLASSES OF THE PEOPLE. FURTHE R, LAND TO THE EXTENT OF 15% CAN BE ALLOTTED FOR SALE FOR RESIDENTIAL, CO MMERCIAL OR INDUSTRIAL USE SUBJECT TO THE FACT THAT PROCEEDS SHALL BE USED FOR THE PURPOSE OF PROVIDING INFRASTRUCTURAL FACILITIES. 5.1 IT WAS FURTHER SUBMITTED THAT AS PER SECTION 2( 15) OF THE ACT. 1961, AN ASSESSEE IS CONSIDERED AS A CHARITABLE INSTITUTI ON IF IT IS INVOLVED IN ANY OF THE FOLLOWING PURPOSES, NAMELY: > RELIEF OF THE POOR. > EDUCATION. > MEDICAL RELIEF. > PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS , FORESTS AND WILDLIFE). > PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST. > ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLI C UTILITY. 5.2 FURTHER, IT WAS CONTENDED THAT THE FIRST PROVIS O TO SECTION 2(15) OF THE ACT STATES THAT ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INV OLVES CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS; OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATI ON TO TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATI ON, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY. IT WAS THUS CONTENDED THAT THE FIRST PRO VISO TO SECTION 2(15) SHALL APPLY IN RESPECT OF ONLY LAST LIMB OF SECTION 2(15). THUS, IF AN ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 5 - INSTITUTION IS INVOLVED IN PROVIDING RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT OR MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST, THEN IT SHALL CONTIN UE TO CONSTITUTE 'CHARITABLE PURPOSE' EVEN IF IT INCIDENTALLY INVOLV ES THE CARRYING ON OF COMMERCIAL ACTIVITIES. 5.3 THE LEARNED AR SUBMITTED THAT THE SURAT URBAN D EVELOPMENT AUTHORITY (SUDA) IS THE UMBRELLA ORGANIZATION OF GU JARAT GOVERNMENT. THE AUTHORITY TAKES OVER THE NEW INFRASTRUCTURE DEV ELOPMENTS, RESIDENTIAL PROJECTS FOR PEOPLE FALLING IN LOW AND MIDDLE INCOME GROUP. SINCE THE ASSESSEE TRUST IS ENGAGED IN PROVIDING EA SILY AFFORDABLE RESIDENCE TO LOW AND MIDDLE INCOME GROUP, HENCE THE ASSESSEE COMES UNDER THE PURVIEW OF 'RELIEF TO POOR' WITHIN THE DE FINITION OF CHARITABLE PURPOSE. 5.4 IT WAS NEXT SUBMITTED THAT SINCE SURAT IS A CIT Y OF INDUSTRIES AND ENTERPRISES, AUTHORITY IS ALSO WITH SEVERAL OTHER G OVERNMENTAL AND PRIVATE AGENCIES CONCERNED TO ENSURE PLANNED DEVELOPMENT OF TRADE AND INDUSTRY TAKING CONSIDERATION THE ENVIRONMENTAL ASPECTS. IT WAS THUS SUBMITTED THAT THE DEVELOPMENT OF DISTRICT OF SURAT BY PROVID ING HOUSE, ROADS, DEVELOPMENT AND MAINTENANCE OF PARKS (BOOST TO ENVI RONMENT), PLANTATION OF TREES (AGAIN PERTAINING TO ENVIRONMEN T), PROVIDING SEWERAGE SYSTEMS (CLEAN AND HEALTHY ENVIRONMENT) ARE ALL OBJ ECTS OF WELFARE OF THE PEOPLE OF THE DISTRICT. FURTHER, TOGETHER WITH THE NEW DEVELOPMENTS, THE AUTHORITY ALSO HAS TO KEEP FRESH AND RENOVATE THE H ISTORIC SITES AND NATURAL ATTRACTIONS OF THE ASSIGNED TO SUDA. 5.5 IT WAS ALSO SUBMITTED THAT IRRESPECTIVE OF THE FACT THE ASSESSEE TRUST IS ENGAGED IN DEVELOPMENT OF VARIOUS AREAS AS PER T HE PROVISIONS OF THE ABOVE ACT WHICH IS FOR THE PUBLIC AT LARGE, THE ASS ESSEE TRUST DOES NOT FALL UNDER THE LAST LIMB OF THE DEFINITION OF CHARITABLE PURPOSE. SINCE THE ASSESSEE IS ENGAGED IN ABOVE MENTIONED CHARITABLE P URPOSE, HENCE IT IS NOT RIGHT TO APPLY FIRST PROVISO TO SECTION 2(15) O F THE ACT. ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 6 - 5.6 RELIANCE WAS PLACED ON THE RECENT DECISION OF T HE HONBLE GUJARAT HIGH COURT IN THE SIMILAR CASE OF AHMEDABAD URBAN D EVELOPMENT AUTHORITY (AUDA) VS ASSISTANT COMMISSIONER OF INCOM E TAX (EXEMPTIONS) |83 TAXMANN.COM 78| (GUJARAT) (2017). WHERE THE COURT WAS CALLED UPON TO DECIDE AS TO WHETHER AUDA CONSTITUTE D UNDER GUJARAT TOWN PLANNING AND URBAN DEVELOPMENT ACT, 1976, TO U NDERTAKE PREPARATION AND EXECUTION OF TOWN PLANNING SCHEMES AND TO EXECUTE WORKS IN CONNECTION WITH SUPPLY OF WATER, DISPOSAL OF SEWERAGE AND PROVISION OF OTHER SERVICES AND AMENITIES, COULD BE SAID TO BE PROVIDING GENERAL PUBLIC UTILITY SERVICES WITHIN MEANING OF S ECTION 2(15) AND, THUS, CAN CLAIM FOR EXEMPTION OF INCOME UNDER SECTION LL OF THE ACT. 5.7 THE HON'BLE GUJARAT HIGH COURT HELD THAT: 'FROM THE VARIOUS PROVISIONS OF THE TOWN PLANNING A CT. IT CAN BE GATHERED THAT ASSESSEE HAS BEEN CONSTITUTED AS URBA N DEVELOPMENT AUTHORITY UNDER THE PROVISIONS OF SECTION 22 OF THE TOWN PLANNING ACT. THE PURPOSE AND OBJECT OF CONSTITUTION OF THE URBAN DEVELOPMENT AUTHORITY IS PROPER DEVELOPMENT OR RE-DEVELOPMENT O F URBAN AREA. EVEN URBAN DEVELOPMENT AUTHORITY CONSISTS OF (I) A CHAIR MAN TO BE APPOINTED BY THE STATE GOVERNMENT; (II) SUCH PERSON S, NOT EXCEEDING [FOUR IN NUMBER] WHO ARE MEMBERS OF THE LOCAL AUTHO RITY OR AUTHORITIES FUNCTIONING IN THE URBAN DEVELOPMENT AREA, AS MAY B E NOMINATED BY THE STATE GOVERNMENT; (HI) THREE OFFICIALS OF THE STATE GOVERNMENT, TO HE NOMINATED BY THAT GOVERNMENT, EX-OFFICIO; (IV) THE PRESIDENTS OF THE DISTRICT PANCHAYATS FUNCTIONING IN THE URBAN DEVELO PMENT AREA, OR, AS THE CASE MAY BE, PART THEREOF, EX-OFFICIO; (V) THE CHIEF TOWN PLANNER OR HIS REPRESENTATIVE, EX-OFFICIO; (VI) THE CHIEF ENGI NEER OR ENGINEERS (PUBLIC HEALTH) OF THE LOCAL AUTHORITY OR AUTHORITI ES FUNCTIONING IN THE URBAN DEVELOPMENT AREA OR HIS OR THEIR NOMINEE OR N OMINEES, EX- OFFICIO: 5[(VI-A) THE MUNICIPAL COMMISSIONER OF THE MUNICIPAL CORPORATION, IF ANY, FUNCTIONING IN THE URBAN DEVEL OPMENT AREA, EX- OFFICIO;] (VII) A MEMBER SECRETARY TO BE APPOINTED BY THE STATE GOVERNMENT WHO SHALL ALSO BE DESIGNATED AS THE CHIE F EXECUTIVE AUTHORITY OF THE URBAN DEVELOPMENT AUTHORITY. THUS, THE CONSTITUTION OF THE URBAN DEVELOPMENT AUT HORITY IS SUBJECT TO THE CONTROL OF THE STATE GOVERNMENT. THE POWERS AND FUNCTIONS OF THE URBAN DEVELOPMENT AUTHORITY ARE CONTAINED IN SECTIO N 23. CONSIDERING SECTION 40 OF THE TOWN PLANNING ACT, THE TOWN PLANN ING SCHEME PREPARED BY THE URBAN DEVELOPMENT AUTHORITY WHICH H AS BEEN PREPARED SUBJECT TO SANCTION BY THE STATE GOVERNMENT FOR DEV ELOPMENT OF THE URBAN DEVELOPMENT AREA, ALSO PROVIDE FOR ROADS, OPE N SPACES, GARDENS, RECREATION GROUNDS, SCHOOLS, MARKETS, GREEN-BELTS, DAIRIES, TRANSPORT FACILITIES, PUBLIC PURPOSES OF ALL KINDS: DRAINAGE, INCLUSIVE OF SEWERAGE, SURFACE OR SUB-SOIL DRAINAGE AND SEWAGE DISPOSAL; L IGHTING; WATER SUPPLY ETC. ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 7 - THE TOWN PLANNING SCHEME ALSO PROVIDES FOR HISTORIC AL OR NATIONAL INTEREST OR NATURAL BEAUTY, AND OF BUILDINGS ACTUAL LY USED FOR RELIGIOUS PURPOSES. THE SCHEME ALSO PROVIDES FOR RESERVATION OF LAND TO THE EXTENT OFTEN PERCENT, OR SUCH PERCENTAGE AS NEAR TH ERETO AS POSSIBLE OF THE TOTAL AREA COVERED UNDER THE SCHEME, FOR THE PU RPOSE OF PROVIDING HOUSING ACCOMMODATION TO THE MEMBERS OF SOCIALLY AN D ECONOMICALLY BACKWARD CLASSES OF PEOPLE. AS PER SECTION 40(I)(JJ )FOR THE AFORESAID PURPOSES CERTAIN PERCENTAGE OF TOTAL AREA COVERED U NDER THE SCHEME ARE ALLOTTED EARMARKED. FIFTEEN PERCENT OF TOTAL AREA I S ALLOTTED FOR THE PURPOSE OF ROADS, FIVE PERCENT FOR PARKS, PLAY GROU NDS, GARDENS AND OPEN SPACE, FIVE PERCENT FOR SOCIAL INFRASTRUCTURE SUCH AS SCHOOL, DISPENSARY, FIRE BRIGADE, PUBLIC UTILITY PLACE AS E ARMARKED IN THE DRAFT TOWN PLANNING SCHEME AND FIFTEEN PERCENT FOR SALE B Y APPROPRIATE AUTHORITY FOR RESIDENTIAL, COMMERCIAL OR INDUSTRIAL USE DEPENDING UPON THE NATURE OF DEVELOPMENT. LAST FIFTEEN PERCENT IS EARMARKED UNDER THE TOWN PLANNING SCHEME FOR SALE, BY APPROPRIATE AUTHO RITY FOR RESIDENTIAL, COMMERCIAL OR INDUSTRIAL USE. THE APPROPRIATE AUTHORITY/URBAN DEVELOPMENT AUTHORI TY IS PERMITTED TO SALE THE SAID PLOTS/LANDS TO THE EXTENT OF 15 PER C ENT OF THE TOTAL AREA TO MEET WITH THE EXPENDITURE TOWARDS DRAINAGE, ROADS, GARDENS, SCHOOLS, MARKETS, WATER SUPPLY ETC. SO THAT MAXIMUM PRICE CA N BE FETCHED AND THE SAME CAN BE UTILIZED FOR {HE DEVELOPMENT OF THE URBAN DEVELOPMENT AREA AND SO AS TO AVOID ANY ALLEGATION OF FAVOURITI SM AND NEPOTISM, THE PLOTS ARE SOLD BY PUBLIC AUCTION. IT IS REQUIRED TO BE NOTED THE ENTIRE AMOUNT REALIZED BY THE ASSESSEE BEING URBAN DEVELOP MENT AUTHORITY EITHER BY SELLING PLOTS OR BY RECOVERY OF SOME FEES /CHARGES, URBAN AUTHORITY IS REQUIRED TO USE ONLY FOR THE PURPOSE O F DEVELOPMENT IN THE URBAN DEVELOPMENT AREA AND NOT FOR ANY OTHER PURPOS E. THE TRIBUNAL HAS OBSERVED AND HELD THAT AS THE ASSE SSEE IS SELLING THE PLOTS, TO THE EXTENT OF 15 PER CENT OF TOTAL AREA, BY PUBLIC AUCTION AND GETS MAXIMUM AMOUNT, IT AMOUNTS TO PROF HER ING AND THEREFORE, THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE IN THE NATURE OF BUSINESS. HOWEVER, WHILE HOLDING SO. TRIBUNAL HAS NOT PROPERL Y APPRECIATED THE OBJECT AND PURPOSE OF PERMITTING THE URBAN DEVELOPM ENT AUTHORITY TO SELL THE PLOTS, MAXIMUM TO THE EXTENT OF 15 PER CEN T OF THE TOTAL AREA I. E. TO MEET WITH THE EXPENDITURE FOR PROVIDING THEM INFRASTRUCTURAL FACILITIES LIKE GARDENS, ROADS, LIGHTING, WATER SUP PLY, DRAINAGE SYSTEM ETC. THE TRIBUNAL HAS ALSO NOT PROPERLY APPRECIATED THE REASONS FOR SELLING THE PLOT BY HOLDING PUBLIC AUCTION I. E.: ( I) TO AVOID ANY FURTHER ALLEGATION OF FAVOURITISM AND NEPOTISM AND (2) SO T HAT MAXIMUM MARKET PRICE CAN BE FETCHED, WHICH CAN BE USED FOR THE DEV ELOPMENT OF THE URBAN DEVELOPMENT AREA. [PARA 12] APPLYING THE RATIO OF VARIOUS EARLIER DECISIONS ON SIMILAR ISSUES TO THE FACTS OF THE CASE ON HAND AND WITH RESPECT TO THE A CTIVITIES OF THE AUDA-AHMEDABAD URBAN DEVELOPMENT AUTHORITY UNDER TH E PROVISIONS OF THE GUJARAT TOWN PLANNING ACT BY NO STRETCH OF I MAGINATION, IT CAN BE SAID THAT THE ACTIVITIES OF THE ASSESSEE (A UDA) CAN BE SAID TO BE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND/OR IT S OBJECT AND PURPOSE IS PROFITEERING. MERELY BECAUSE UNDER THE STATUTORY PROVISIONS AND TO MEET WITH THE EXPENDITURE OF TOWN PLANNING SCHEME A ND/OR PROVIDING VARIOUS SERVICES UNDER THE TOWN PLANNING SCHEME, SU CH AS ROAD, DRAINAGE, ELECTRICITY, WATER SUPPLY ETC. IF THE ASS ESSEE IS PERMITTED TO SALE THE PLOTS (LAND) TO THE EXTENT OF 15 PER CENT OF THE TOTAL AREA UNDER ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 8 - THE TOWN PLANNING SCHEME AND WHILE SELLING THE SAID PLOTS THEY ARE SOLD BY HOLDING THE PUBLIC AUCTION, IT CANNOT BE SA ID THAT ACTIVITIES OF THE ASSESSEE IS PROFITEERING, TO BE IN THE NATURE O F TRADE, COMMERCE AND BUSINESS. [PARA 13] CONSIDERING THE AFORESAID FACTS AND CIRCUMSTANCES A ND MORE PARTICULARLY, CONSIDERING THE FACT THAT THE ASSESSE E IS A STATUTORY BODY - URBAN DEVELOPMENT AUTHORITY CONSTITUTED UNDER THE P ROVISIONS OF THE ACT, CONSTITUTED TO CARRY OUT THE OBJECT AND PURPOS E OF TOWN PLANNING ACT AND COLLECTS REGULATORY FEES FOR THE OBJECT OF THE ACTS; NO SERVICES ARE RENDERED TO ANY PARTICULAR TRADE, COMMERCE OR B USINESS; WHATEVER THE INCOME IS EARNED/RECEIVED BY THE ASSESSEE EVEN WHILE SELLING THE PLOTS (TO THE EXTENT OF 15 PER CENT OF THE TOTAL AR EA COVERED UNDER THE TOWN PLANNING SCHEME) IS REQUIRED TO BE USED ONLY F OR THE PURPOSE TO CARRY OUT THE OBJECT AND PURPOSE OF TOWN PLANNING A CT AND TO MEET WITH EXPENDITURE WHILE PROVIDING GENERAL UTILITY SERVICE TO THE PUBLIC SUCH AS ELECTRICITY, ROAD, DRAINAGE, WATER ETC. AND EVEN TH E ENTIRE CONTROL IS WITH STATE GOVERNMENT AND EVEN ACCOUNTS ARE ALSO SU BJECTED TO AUDIT AND THERE IS NO ELEMENT OF PROFITEERING AT ALL, THE ACTIVITIES OF THE ASSESSEE CANNOT BE SAID TO BE IN THE NATURE OF TRAD E, COMMERCE AND BUSINESS AND, THEREFORE, PROVISO TO SECTION 2(L5)OF THE ACT SHALL NOT BE APPLICABLE SO FAR AS ASSESSEE IS CONCERNED AND, THE REFORE, THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION II OF THE AC T. [PARA 14] NOW, SO FAR AS ANOTHER QUESTION WHICH IS POSED FOR THE CONSIDERATION OF THIS COURT I.E. WHETHER WHILE COLLECTING THE CESS O R FEES, ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE RENDERING ANY SERVIC ES IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS IS CONCERNED, FOR THE R EASONS STATED ABOVE, MERELY BECAUSE THE ASSESSEE IS COLLECTING CESS OR F EES WHICH IS REGULATORY IN NATURE, THE PROVISO TO SECTION 2(L5)O FTHE ACT SHALL NOT BE APPLICABLE. AS OBSERVED HEREINABOVE NEITHER THERE I S ELEMENT OF PROFITEERING NOR THE SAME CAN BE SAID TO BE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. [PARA 15] HAVING REGARD TO THE FACTS OF THE CASE AND PURPOSE FOR WHICH THE ASSESSEE IS ESTABLISHED/CONSTITUTED UNDER THE PROVI SIONS OF THE GUJARAT TOWN PLANNING ACT, COLLECTION OF FEES AND CESS IS I NCIDENTAL TO THE OBJECT AND PURPOSE OF THE ACT. AND, THUS, THE CASE WOULD NOT FALL UNDER SECOND PART OF PROVISO TO SECTION 2(15). [PARA 15.1 ] THUS, THE TRIBUNAL HAS COMMITTED A GRAVE ERROR IN H OLDING THE ACTIVITIES OF THE ASSESSEE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AND, CONSEQUENTLY, HOLDING THAT THE PROVISO TO SECTION 2 (15) WOULD BE APPLICABLE AND, THEREFORE, THE ASSESSEE IS NOT ENTI TLED TO EXEMPTION UNDER SECTION 11. FOR THE REASONS STATED ABOVE, IT IS HELD THAT THE P ROVISO TO SECTION 2(15) WOULD NOT BE APPLICABLE SO FAR AS ASSESSEE- A UDA I S CONCERNED AND AS THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE PR OVIDING GENERAL PUBLIC UTILITY SERVICES, THE ASSESSEE IS ENTITLED TO EXEMP TION UNDER SECTION II. [PARA 15.2] IN VIEW OF THE ABOVE, THE IMPUGNED ORDER PASSED BY THE TRIBUNAL IS SET ASIDE. ACCORDINGLY, THE ASSESSEE'S APPEAL IS ALLOWE D. [PARA 16] ' ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 9 - 5.8 ON THE SIMILAR FOOTING, IT WAS CONTENDED THAT S UDA IS AN AUTONOMOUS BODY WHICH WAS ESTABLISHED UNDER SECTION 22 OF THE GUJARAT TOWN PLANNING AND URBAN DEVELOPMENT ACT, 1976 (XXVI I OF 1976) AND RULES MADE UNDER CARRYING PLANNED DEVELOPMENT OF AR EAS AS DEFINED AND DESIGNED BY THE GOVERNMENT OF GUJARAT AND ALSO INFR ASTRUCTURAL ACTIVITIES RELATING THERETO SUCH AS TO UNDERTAKE THE PREPARATI ONS OF DEVELOPMENT PLANS, MONITORING AND CONTROL OF DEVELOPMENT OF TOW N PLANNING AS CONSTRUCTION OF ROADS, BRIDGES AND CARRY OUT WORK I N CONNECTION WITH SUPPLY OF WATER AND DISPOSAL OF SEWERAGE AND PROVIS IONS FOR OTHER SERVICES AND ACTIVITIES SUCH AS DRAINAGE SYSTEM, WA TER CONNECTION, ETC. FOR THE BENEFIT OF PUBLIC AT LARGE. SUDA IS CONSTIT UTED TO CARRY OUT THE OBJECT AND PURPOSE OF TOWN PLANNING ACT AND COLLECT S REGULATORY FEES FOR THE OBJECT OF THE ACTS; NO SERVICES ARE RENDERED TO ANY PARTICULAR TRADE, COMMERCE OR BUSINESS. WHATEVER THE INCOME IS EARNED /RECEIVED BY THE ASSESSEE IS REQUIRED TO BE USED ONLY FOR THE PURPOS E TO CARRY OUT THE OBJECT OF TOWN PLANNING ACT AND TO MEET THE EXPENDI TURE WHILE PROVIDING GENERAL UTILITY SERVICE TO THE PUBLIC SUC H AS ELECTRICITY, ROAD, DRAINAGE, WATER ETC. ALSO, THE ENTIRE CONTROL IS WI TH STATE GOVERNMENT AND EVEN ACCOUNTS ARE ALSO SUBJECTED TO AUDIT. AS T HERE IS NO ELEMENT OF PROFITEERING AT ALL, THE ACTIVITIES OF THE ASSESSEE CANNOT BE SAID TO BE IN THE NATURE OF TRADE, COMMERCE AND BUSINESS HAVING R EGARD TO THE FACTS OF THE CASE AND PURPOSE FOR WHICH THE ASSESSEE IS ESTA BLISHED/CONSTITUTED UNDER THE PROVISIONS OF THE GUJARAT TOWN PLANNING A CT, COLLECTION OF FEES AND CESS ARE REGULATORY FEES AND ARE INCIDENTA L TO THE OBJECT AND PURPOSE OF THE ACT. IT WAS THUS CONTENDED THAT THE CASE WOULD NOT FALL UNDER SECOND PART OF PROVISO TO SECTION 2(15) OF TH E ACT. THEREFORE, PROVISO TO SECTION 2(15) OF THE ACT SHALL NOT BE AP PLICABLE SO FAR AS ASSESSEE IS CONCERNED AND, THEREFORE, THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. 5.9 COMING TO THE SPECIFICS, IT WAS CONTENDED THAT AS P ER SECTION 11(2), WHERE EIGHTY-FIVE PER CENT OF THE INCOME REF ERRED TO IN CLAUSE (A) OR CLAUSE (B) OF SUB-SECTION (1) READ WITH THE EXPL ANATION TO THAT SUB- SECTION IS NOT APPLIED, OR IS NOT DEEMED TO HAVE BE EN APPLIED, TO ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 10 - CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING TH E PREVIOUS YEAR BUT IS ACCUMULATED OR SET APART, CITHER IN WHOLE OR IN PAR T, FOR APPLICATION TO SUCH PURPOSES IN INDIA, SUCH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEA R OF THE PERSON IN RECEIPT OF THE INCOME, PROVIDED THE FOLLOWING CONDI TIONS ARE COMPLIED WITH, NAMELY: (A) SUCH PERSON FURNISHES A STATEMENT IN THE PRESCR IBED FORM AND IN THE PRESCRIBED MANNER TO THE ASSESSING OFFICER, STATING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN NO CASE EXCEED FIVE YEARS; (B) THE MONEY SO ACCUMULATED OR SET APART IS INVEST ED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5); (C) THE STATEMENT REFERRED TO IN CLAUSE (A) IS FURN ISHED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 FOR FURNISHING THE RETURN OF INCOME FOR THE PREVIOUS YEAR: PROVIDED THAT IN COMPUTING THE PERIOD OF FIVE YEARS REFERRED TO IN CLAUSE (A), THE PERIOD DURING WHICH THE INCOME COULD NOT B E APPLIED FOR THE PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART , DUE TO AN ORDER OR INJUNCTION OF ANY COURT, SHALL BE EXCLUDED. EXPLANATION.ANY AMOUNT CREDITED OR PAID, OUT OF IN COME REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OF SUB-SECTION (1), READ W ITH THE EXPLANATION TO THAT SUB-SECTION, WHICH IS NOT APPLIED, BUT IS ACCU MULATED OR SET APART, TO ANY TRUST OR INSTITUTION REGISTERED UNDER SECTION 1 2AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIVERSITY OR OTHER EDU CATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFERRED TO IN SUB-CLAUSE (IV) OR SUB-CLAUSE (V) OR SUB-CLAUSE (VI) OR SUB-CLAUSE (VI A) OF CLAUSE (23C) OF SECTION 10, SHALL NOT BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE OR RELIGIOUS PURPOSES, EITHER DURING THE PERIOD OF ACC UMULATION OR THEREAFTER. IN THIS BACKDROP, IT WAS CONTENDED THAT THE AMOUNT ACCUMULATED OR SET ASIDE BY SUDA OF RS.37,50,00,000 /- IS AS PER SECTION 11(2) WHICH CAN BE CLAIMED AS DEDUCTION AND HENCE, NO ADDITION CAN BE MADE ON THE ACCOUNT OF SAME. ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 11 - 5.10 AS REGARDS ADDITION OF RS.9,10,65,153/-, IT WA S SUBMITTED THAT AS PER SECTION 11(1) OF THE ACT, SUBJECT TO THE PROVIS IONS OF SECTIONS 60 TO 63, THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN T HE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOM E (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA: AND, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA , TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EX CESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY; IN THIS BACKGROUND, IT WAS SUBMITTED THAT THE ACCUM ULATION U/S LL(L)(A) OF THE ACT IS ELIGIBLE FOR 15% DEDUCTION UNDER THE ACT IF THE TRUST FAILS TO APPLY THE ENTIRE INCOME OF THE YEAR. THEREFORE, THE ADDITION IS NOT JUSTIFIED AS SUDA IS ELIGIBLE TO CLAIM INR 9,10,65, 153/- AS 15% DEDUCTION U/S LL(L)(A) OF THE ACT AS THE APPLICATIO N OF FUNDS NEED NOT BE MORE THAN 85%. 5.11 IT WAS NEXT CONTENDED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - 9. AHMEDABAD HAS PASSED AN ORDER FOR A. Y. 2009-10, A.Y. 2010-11, A.Y. 2011-12. A.Y. 2013-14 AND A.Y. 2015-1 6 GRANTING THE ASSESSEE THE BENEFIT OF DEDUCTION UNDER SECTION 11 R.W.S. 2(15). THE COMMISSIONER OF INCOME TAX (APPEALS) - 9, AHMEDABAD IN THE ORDER HAS STATED THAT 'THE MAIN ISSUE RAISED BY THE APPELLANT [SUDA] IS COVERED BY THE LATEST JUDGEMENT OF HON 'BLE GUJARAT HIGH COURT IN THE CASE OF AUDA VS ACIT IN ITA NO. 423, 424, 425 OF 2016 DATED 02.0 5.2017. ...... BOTH, I.E. THE APPELLANT AND AUDA ARE CONSTITUTED AS AUTH ORITIES UNDER THE GUJARAT TOWN PLANNING AND URBAN DEVELOPMENT ACT, 19 76. THE POWERS AND FUNCTIONS OF BOTH THE AUTHORITIES HAVE BEEN LAI D DOWN UNDER THE SAID ACT AND ARE IDENTICAL IN NATURE. NOWHERE IN THE ORD ER OF ASSESSMENT THE AO POINTED OUT THAT THE APPELLANT [SUDA] HAS UNDERT AKEN FUNCTIONS BEYOND THE MANDATE OF GUJARAT TOWN PLANNING AND URB AN DEVELOPMENT ACT. THE APPELLANT [SUDA] IS REGISTERED U/S 12A OF THE ACT. IT WAS THUS CONTENDED THAT, AS HELD BY HON'BLE GUJARAT HIGH COU RT IN DECISION QUOTED ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 12 - ABOVE, THE ASSESSEE CANNOT BE CONSIDERED TO BE COVE RED BY THE PROVISO TO SECTION 2(15) OF THE ACT AND HENCE AO CANNOT WITHDR AW THE CLAIM OF EXEMPTION BY INVOKING PROVISO TO SECTION 2(15) R.W. S. 13(8) OF THE ACT. AS A COROLLARY, THE ASSESSEE CANNOT BE ASSESSED U/S 28 TO 44 OF THE ACT. ' 6. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE LOWER AUTHORITIES BUT COULD NOT BRING ANY DISTINCTI ON QUA THE DECISION TAKEN IN THE CASE OF AHMEDABAD URBAN DEVELOPMENT AU THORITY (SUPRA). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE INSTANT CASE, TRIBUNAL HAS BEEN CALLED UPON TO ADJUDICATE W HETHER ASSESSEE IS ENTITLED TO BENEFIT OF SECTION 11 AND SECTION 12 OF THE ACT IN THE CIRCUMSTANCES OF THE CASE OR NOT. AS A NECESSARY CO NCOMITANT THERETO, AN INCIDENTAL QUESTION ARISES AS TO WHETHER THE FIRST AND SECOND PROVISO TO SECTION 2(15) OF THE ACT IS APPLICABLE IN THE FACTS OF THE CASE OR NOT AND CONSEQUENTLY, THE ACTIVITY OF THE ASSESSEE CAN BE R EGARDED AS CHARITABLE ACTIVITIES WITHIN THE MEANING OF SECTION 2(15) OF T HE ACT OR NOT. THE AO, IN THE INSTANCE CASE, HAS DISALLOWED EXEMPTION OF RS.37,50,00,000/- CLAIMED UNDER S.11(2) OF THE ACT AND FURTHER DENIED THE DEDUCTION OF RS.9,10,65,153/- CLAIMED ON ACCOUNT OF ACCUMULATION OF INCOME UNDER S.11(1)(A) OF THE ACT HOLDING THE ACTIVITY OF THE A SSESSEE AUTHORITY TO BE NON-CHARITABLE IN NATURE. WE FIND THAT IN THE SIMI LAR FACTS, THE CO- ORDINATE BENCH IN VADODARA URBAN DEVELOPMENT AUTHORITY VS. ITO IN ITA NO. 2751/AHD/2014 ORDER DATED 28.01.2019 HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF AHMEDABAD URBAN DEVELOPMENT AUTHORITY (SUPRA) AND CIT VS. GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (2017) 89 TAXMANN.COM 366 ( GUJ) AND ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE. T HE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CO-ORDINATE BENCH OF TRIBU NAL IN VADODARA URBAN DEVELOPMENT AUTHORITY (SUPRA) IS REPRODUCED HEREUNDER FOR EASE OF REFERENCE: 4. WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED T HE RELEVANT MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN SIMI LAR SET OF FACTS THE JURISDICTIONAL HIGH COURT PASSED THE ORDERS IN THE CASE OF URBAN DEVELOPMENT AUTHORITY-VS-ACIT, WHERE IT WAS HELD AS FOLLOWS: ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 13 - 'HELD, THAT THE OBJECT AND PURPOSE OF PERMITTING TH E AUTHORITY TO SELL THE PLOTS TO A MAXIMUM EXTENT OF 15% OF THE TO TAL AREA, WAS TO MEET THE EXPENDITURE FOR PROVIDING INFRASTRUCTUR AL FACILITIES LIKE GARDENS, ROADS, LIGHTING, WATER SUPPLY, DRAINA GE SYSTEM, ETC. THE REASONS FOR SELLING THE PLOTS BY HOLDING PUBLIC AUCTION WERE; (A) TO AVOID ANY FURTHER ALLEGATION OF FAVORITISM A ND NEPOTISM AND (B) SO THAT THE MAXIMUM MARKET PRICE COULD BE F ETCHED, WHICH COULD BE USED FOR THE DEVELOPMENT OF THE URBA N DEVELOPMENT AREA. CONSIDERING THE FACT THAT THE ASS ESSEE WAS A STATUTORY BODY, AN AUTHORITY CONSTITUTED UNDER THE PROVISIONS OF THE ACT, TO CARRY OUT THE OBJECT AND PURPOSE OF TOW N PLANNING ACT AND COLLECTED REGULATORY FEES FOR THE OBJECT OF THE ACTS, NO SERVICES WERE RENDERED TO ANY PARTICULAR TRADE, COM MERCE OR BUSINESS; AND WHATEVER INCOME WAS EARNED BY THE ASS ESSEE EVEN WHILE SELLING THE PLOTS (TO THE EXTENT OF 15% OF TH E TOTAL AREA COVERED UNDER THE TOWN PLANNING SCHEME) WAS REQUIRE D TO BE USED ONLY FOR THE PURPOSE TO CARRY OUT THE OBJECT A ND PURPOSE OF THE TOWN PLANNING ACT AND TO MEET THE EXPENDITURE O F PROVIDING GENERAL UTILITY SERVICE TO THE PUBLIC SUCH AS ELECT RICITY, ROAD, DRAINAGE, WATER ETC. AND THE ENTIRE CONTROL WAS WIT H THE STATE GOVERNMENT AND ACCOUNTS WERE ALSO SUBJECTED TO AUDI T AND THERE WAS NO ELEMENT OF PROFITEERING AT ALL. THE ACTIVITI ES OF THE ASSESSEE COULD NOT BE SAID TO BE IN THE NATURE OF T RADE, COMMERCE AND BUSINESS AND THEREFORE, THE PROVISO TO SECTION 2(15) OF THE ACT WAS NOT APPLICABLE SO FAR AS THE ASSESSEE WAS C ONCERNED. THEREFORE, THE ASSESSEE WAS ENTITLED TO EXEMPTION U NDER SECTION 11.' APART FROM THAT CIT-VS.-GUJARAT INDUSTRIAL DEVELOPM ENT CORPORATION, WHEREIN IT WAS HELD AS FOLLOWS: 'SECTION 2(15), READ WITH SECTION 11, OF THE INCOME -TAX ACT, 1961 - CHARITABLE PURPOSE (OBJECTS OF GENERAL PUBLIC UTI LITY) - ASSESSMENT YEAR 2009-10 - WHETHER WHERE ASSESSEE - CORPORATION WAS CONSTITUTED UNDER GUJARAT INDUSTRIAL DEVELOPMEN T ACT, 1962, FOR PURPOSE OF SECURING AND ASSISTING RAPID AND ORD ERLY ESTABLISHMENT AND ORGANIZATION OF INDUSTRIAL AREAS AND INDUSTRIAL ESTATES IN STATE OF GUJARAT, AND FOR PURPOSE OF EST ABLISHING COMMERCIAL CENTERS IN CONNECTION WITH ESTABLISHMENT AND ORGANIZATION OF SUCH INDUSTRIES IT COULD NOT BE SAI D THAT ACTIVITIES CARRIED OUT BY ASSESSEE WERE EITHER IN N ATURE OF TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHE R CONSIDERATION SO AS TO ATTRACT PROVISO TO SECTION 2 (15) AND SAME COULD BE SAID TO BE FOR CHARITABLE PURPOSE AND, CON SEQUENTLY,. ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 - HELD, YES (PARAS 15 AND 17)[IN FAVOUR OF ASSESSEE]' 5. WE FIND THAT THE OBJECT OF THE ASSESSEE IS SIMIL AR TO THAT OF THE CORPORATION BEFORE THE JURISDICTIONAL HIGH COURT AN D ON THE SIMILAR SET OF FACTS THE APPEAL WAS ALLOWED IN FAVOUR OF THE AS SESSEE HENCE RELYING UPON THE SAME WE ALLOW THE CLAIM OF THE ASSESSEE AN D THE DISALLOWANCE OF EXEMPTION AS CLAIMED BY THE ASSESSEE U/S 11 OF T HE ACT TO THE TUNE OF RS.70,73,005/- IS HEREBY QUASHED AND ADDITION MADE THEREON IS THUS DELETED. ITA NOS.955/AHD/16, 2432 & 2433/A/17 [SURAT URBAN DEVELOPMENT AUTHORITY] A.Y. 2012-13, 2013-14 & 2014 -15 - 14 - 6. IN THE RESULT, ASSESSEE'S APPEAL IS THUS ALLOWED . 8. IN THE LIGHT OF THE DECISION RENDERED BY THE HON BLE GUJARAT HIGH COURT AND APPLIED BY THE CO-ORDINATE BENCH IN VADODARA URBAN DEVELOPMENT AUTHORITY (SUPRA) AND GANDHINAGAR URBAN DEVELOPMENT AUTHORITY VS. DCIT ITA NO. 3621/AHD/2015 ORDER DATE D 23.07.2019, WE FIND MERIT IN THE PLEA RAISED ON BEHALF OF THE ASSE SSEE FOR HOLDING THE ACTIVITIES OF ASSESSEE TO BE FOR CHARITABLE PURPOSE S UNDER S.2(15) OF THE ACT AND CONSEQUENCE ELIGIBILITY OF BENEFITS UNDER S .11 & SECTION 12 OF THE ACT. THE ORDER OF THE CIT(A) IS THUS SET ASIDE AND THE AO IS DIRECTED TO GRANT RELIEF CLAIMED UNDER S.11(2) AND 11(1)(A) OF THE ACT TO THE ASSESSEE IN ACCORDANCE WITH LAW. 9. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.955/A HD/2016 IS ALLOWED WHEREAS REVENUES APPEALS IN ITA NOS. 2432 & 2433/AHD/17 ARE DISMISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 20/02/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 20/02/202 0