The Dy. Commissioner of Income Tax (Exemptions), Circle-1, Ahmedabad V. Gujarat Industrial Development Corporation, Gandhinagar

MA 200/AHD/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4584 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 17-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Depreciation; Charitable institution; Set aside
• Section: 143(3); 12; 28; 11

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEMA AHMED, ACCOUNTANT MEMBER MISC. APPLICATION NO.200/AHD/2019 IN CROSS OBJECTION NO.55/AHD/2017 IN ITA NO.2700/AHD/2016 / ASSTT.YEAR : 2006-07 ASSTT.COMMISSIONER OF INCOME - TAX CIRCLE-1(EXEMPTIONS) AHMEDABAD. VS. GUJARAT INDUSTRIAL DEVELOPMENT CORPORATIONS UDYOG BHAVAN 2 ND FLOOR, BLOCK-4 AHMEDABAD. PAN : AABCG 8033 D ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI S.N.SOPARKAR, SR.ADV WITH SHRI PARIN SHAH, AR REVENUE BY : SHRI L.P. JAIN, SR.DR / DATE OF HEARING : 05/03/2021 !' / DATE OF PRONOUNCEMENT: 24/05/2021 #$/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: PRESENT MISC. APPLICATION IS DIRECTED AT THE INSTAN CE OF THE REVENUE POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL DATED 9.1.2019. THE APPLICATION FILED BY THE REVENUE POI NTS OUT APPARENT ERROR, WHICH READS AS UNDER: MA NO.200 /AHD/2019 2 2. IN THIS CASE DURING THE ASSESSMENT PROCEEDINGS ASSESSEE WAS NOT ALLOWED BENEFIT OF SECTION 11 AND 12 AND PROVISIONS OF SECTION 2(15) WAS MADE APPLICABLE. THE ASSESSEE FILED AN APPEAL BEFOR E THE CIT(A), GANDHINAGAR AGAINST THE ASSESSMENT ORDER PASSED U/S . 143(3) OF THE ACT ON 25-03-2015. THE THEN CIT(A), GANDHINAGAR VIDE HI S ORDER NO. CIT(A)/GNR/508/2015-16 DATED 31-08-2016 DECIDED THE APPEAL IN FAVOUR OF THE DEPARTMENT FOLLOWING HIS EARLIER DECISION IN ASSESSEE'S OWN CASE FOR A.Y. 2009-10, 2010-11 AND 2011-12 (ISSUE OF PRE MIUM RECEIVED ON LAND AND PLOT AND ISSUE OF DEPRECIATION WERE DECIDED IN FAVOUR OF THE ASSESSEE.) AGGRIEVED BY R-'TR A*'CRESAID ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE ITAT VIDE ITA NO.2700/AHD/2016. O N RECEIPT OF NOTICE, THE REVENUE FILED CROSS OBJECTION BEFORE TH E ITAT VIDE C.O. NO. 55/AHD/2017 ON 28-04-2017. THE FOLLOWING GROUND S OF APPEAL WERE TAKEN BY THE REVENUE IN THE SAID C.O.:- I) THE RESPONDENT ASSESSEE HAS VIOLATED THE PROVISI ONS OF SECTION 11(5) OF THE ACT AND THEREFORE PROVISIONS O F SECTION 13(1)(D) OF THE ACT WERE APPLICABLE. II) THE RESPONDENT ASSESSEE HAS FAILED TO INVEST IT S FUND AS PER THE MODES PRESCRIBED U/S. 11(5) OF THE ACT AND THER EFORE, THE PROVISIONS OF SECTION 11(1)(D) ARE ATTRACTED. (III) THE EXEMPTIONS CLAIMED BY THE ASSESSEE U/S. 1 1 OF THE ACT BE DISALLOWED IN VIEW OF SECTION 13(1)(D) OF THE AC T SINCE THE RESPONDENT ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 11 (5) OF THE ACT. 2.1 THE DEPARTMENT ALSO FILED APPEAL BEFORE THE ITA T VIDE ITA NO. 2738/AHD/2016 ON THE ISSUE OF PREMIUM RECEIVED ON L AND & PLOT AND ISSUE OF DEPRECIATION; THE ITAT DECIDED THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE IN ITA NO. 2738/AHD/2016 & 2700/ AHD/2016 ALONG WITH THEIR C.OS. FOR A.Y. 2012-13 VIDE ITS ORDER DA TED 10-11-2017. THE DECISION OF THE ITAT DATED 10-11-2017 IN ITA NO.S 2 738/AHD/2016 & 2700/AHD/2016 WAS NOT FOUND ACCEPTABLE BY THE DEPAR TMENT AND THEREFORE FURTHER APPEAL BEFORE HON'BLE GUJARAT HIG H COURT WERE FILED FOR A.Y. 2012-13. ON PERUSAL OF THE AFORESAID ORDER DATED 10-11-2017, IT HAS APPEARED THAT THE C.O. OF THE REVENUE REMAIN ED UN- ADJUDICATED. 2.2 THE HON'BLE ITAT VIDE ITS ORDER DATED 09-01-201 9 DISMISSED THE CROSS OBJECTION FILED BY THE DEPARTMENT. THE ITAT I N ITS ORDER C.O. NO. 55/AHD/2017 DATED 09-01-2019 FOR A.Y. 2012-13 H AS HELD THAT THE ISSUES AGITATED IN THE C.O. ARE NOT RELEVANT AND NO SPECIFIC FINDINGS REQUIRED TO BE RECORDED IN THE PRESENT PROCEEDINGS AS ALL THESE THINGS SHOULD BE TAKEN CARE OF BY THE A.O. WHILE PASSING F RESH ASSESSMENT ORDER IN PURSUANCE OF THE TRIBUNAL'S ORDER DATED 10 -11-2017. BUT, IT IS REVEALED FROM THE COMBINED ORDER DATED 10-11-2017 T HAT THE ITAT HAS NEITHER ADJUDICATED THE CROSS OBJECTION FILED BY TH E DEPARTMENT REGARDING MA NO.200 /AHD/2019 3 VIOLATION OF SECTION 11(5) R.W.S. 13(1)(D) OF THE A CT NOR ISSUED ANY DIRECTION FOR RE-EXAMINATION OF THIS ISSUE. SECONDL Y, THE FRESH ASSESSMENT IN PURSUANCE OF THE TRIBUNAL'S SET ASIDE ORDER WAS PASSED ON 28-12- 2018 WHEREAS THE ITAT HAS DECIDED THE APPEAL ON THE CROSS OBJECTION ON 09-01-2019. THEREFORE, THERE IS NO QUESTION OF T AKING CARE OF THIS ISSUE BY THE A.O. WHILE PASSING THE FRESH ASSESSMEN T ORDER. 3. THUS, THE AFORESAID ORDER OF THE ITAT DATED 10-1 1-2017 IS DEVOID OF MERITS AND FACTS. IT IS THEREFORE, REQUESTED THAT T HE ISSUE MAY KINDLY BE RE-ADJUDICATED. IN VIEW OF THE ABOVE, THE MISC. APP LICATION IS BEING FILED TO DRAW ATTENTION OF THE HON'BLE HIGH COURT IN THE ABOVE MATTER. 4. THE MISC. APPLICATION IS BEING FILED WITH THE PR IOR APPROVAL OF THE CIT(E), AHMEDABAD VIDE HIS LETTER NO. CIT(E)/AHD/GI DC/M.A./2019-20 DATED 10-06-2019. 2. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 26.9.201 2 DECLARING A LOSS OF RS.18,17,39,45,398/-. THE ASSESSMENT ORDER WAS PAS SED UNDER SECTION 143(3) ON 25.3.2015. THE LD.AO DID NOT GRANT BENEF IT OF SECTIONS 11 AND 12 OF THE INCOME TAX ACT, 1961, AND COMPUTED TH E INCOME AS PER NORMAL PROVISIONS OF THE INCOME TAX ACT. HE MADE V ARIOUS ADDITIONS, AND ULTIMATELY DETERMINED TAXABLE INCOME AT RS.16,7 6,42,10,676/-. THE DISPUTE TRAVELLED UPTO THE TRIBUNAL, AND THE TR IBUNAL DECIDED THE APPEALS FOR THE ASSTT.YEAR 2012-13 AND 2013-14 VIDE ORDER DATED 10.11.2017. SOMEHOW, THE TRIBUNAL FAILED TO DECIDE THE CROSS OBJECTION BEARING NO.55/AHD/2017 ALONG WITH THE APP EAL OF THE ASSESSEE. THE FACT REGARDING PENDENCY OF CO WAS N OT BROUGHT TO THE NOTICE OF THE BENCH, WHO HAS DECIDED THE APPEALS AN D CO FOR THE ASSTT.YEARS2012-13 AND 2013-14. WHEN THE FACT WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL, THEN IT HAS DECIDED CO ON 9 .1.2019. MA NO.200 /AHD/2019 4 3. THE REVENUE HAS FILED MA POINTING OUT APPARENT E RROR IN THE ORDER OF THE TRIBUNAL DATED 10.11.2017. IN THIS AP PLICATION EXTRACTED (SUPRA) IT HAS PLEADED THAT THE GROUNDS OF APPEAL ( GROUND NO.I, II AND III) TAKEN BY THE REVENUE IN ITS CO WERE NOT DECIDE D AS (EXTRACTED (SUPRA) ABOVE WHILE TAKING NOTE OF THE MA OF THE RE VENUE). IN THE PARAGRAPH 2, THE LD.ACIT(EXEMPTION), CIR.1, WHO HAS DRAFTED THIS MA HAS POINTED OUT THAT CO NO.55/AHD/2017 HAS BEEN DIS MISSED BY THE TRIBUNAL ON 9.1.2019 WITHOUT ADJUDICATING THE GROUN DS TAKEN IN THE CO. ON DUE CONSIDERATION OF THE ABOVE APPLICATIONS , WE FIND THAT THE LD.AO WHILE DRAFTING THIS APPLICATION FAILED TO ANA LYSIS THE FACTS IN AN ANALYTICAL MANNER. ON THE OTHER HAND, HE HAS POINT ED OUT APPARENT ERROR IN THE ORDER DATED 10.11.2017 WHEREAS IN THE BOTTOM OR IN THE PRIOR CLAUSES HE MADE REFERENCE TO ORDER OF THE TRI BUNAL DATED 9.1.2019 IN WHICH CO WAS DECIDED. AT THIS STAGE, L ET US TAKE NOTE OF THE FINDING RECORDED BY THE TRIBUNAL WHILE DISPOSIN G OF THE CO. IT READS CS UNDER: 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 26.9.201 2 DECLARING A LOSS AT RS.18,17,39,45,398/-. AN ASSESSMENT ORDER WAS P ASSED UNDER SECTION 143(3) ON 25.3.2015. THE LD.AO DID NOT GRA NT BENEFIT OF SECTIONS 11 AND 12 OF THE ACT AND COMPUTED INCOME A S PER NORMAL PROVISION OF THE INCOME TAX ACT. HE MADE VARIOUS A DDITIONS AND ULTIMATELY DETERMINED TAXABLE INCOME AT RS.16,76,42 ,10,676/-. ON APPEAL, THE LD.CIT(A) FURTHER UPHELD THAT INCOME OF THE ASSESSEE IS TO BE DETERMINED AS PER SECTION 28 TO 44 OF THE ACT. ACCORDING TO THE REVENUE, ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UN DER SECTIONS 11 AND 12 OF THE ACT. IN THIS BACKGROUND, REVENUE HAS RAISED GROUNDS EXTRACTED (SUPRA) IN THE CO. WE FIND THAT THE TRIB UNAL HAS ALLOWED APPEAL OF THE ASSESSEE AND HELD THAT IT IS TO BE TR EATED AS CHARITABLE INSTITUTION, WHICH IS ENTITLED FOR EXEMPTION UNDER SECTIONS 11 AND 12. ITS INCOME HAS TO BE DETERMINED ACCORDINGLY. FINDI NG RECORDED BY THE TRIBUNAL WHILE ADJUDICATING THE APPEAL OF BOTH THE PARTIES READ AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE C ORE ISSUE IN CONTROVERSY IS CORRECTNESS OF APPLICABILITY OF PROV ISO TO S.2(1T) MA NO.200 /AHD/2019 5 IN DUE FACTS OF THE CASE. WE FIND THAT THE IDENTICA L ISSUE AROSE IN ASSESSEE'S OWN ITA NOS.2700/AHD/16 & 427/AHD/17 (BY ASSESSEE) ITA NOS.2738/AHD/16 & 544/AHD/17 (BY REVE NUE) GIDC VS. DCIT/ACIT ASST.YEARS - 2012-13 & 2013-14 C ASE IN THE PRECEDING THREE ASSESSMENT YEARS. WE FIND THAT THE COORDINATE BENCH HAS DETERMINED THE ISSUE IN FAVOUR OF ASSESSEE AND HELD THAT PROVISO TO SECTION 2(15) DOE S NOT APPLY IN THE FACTS OF THE CASE. IT CONSEQUENTLY UPHELD TH E CLAIM OF THE ASSESSEE THAT OBJECT OF THE ASSESSEE ARE FOR CARRYI NG OUT THE ACTIVITY FOR CHARITABLE PURPOSE. THE REVENUE CARRIE D THE AFORESAID DECISION OF THE COORDINATE BENCH IN APPEA L BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WITHOUT ANY SUCCE SS. THE CATCH- NOTES OF THE JUDGEMENT OF THE HON'BLE GUJARA T HIGH COURT ARE EXTRACTED HEREUNDER:- SECTION 2(15), READ WITH SECTION 11, OF THE INCOME- TAX ACT, 1961 - CHARITABLE PURPOSE (OBJECTS OF GENERAL PUBLI C UTILITY) - ASSESSMENT YEAR 2009-10 - WHETHER WHERE ASSESSEE- CORPORATION WAS CONSTITUTED UNDER GUJARAT INDUSTRIA L DEVELOPMENT ACT, 1962, FOR PURPOSE OF SECURING AND ASSISTING RAPID AND ORDERLY ESTABLISHMENT AND ORGANIZATION OF INDUSTRIAL AREAS AND INDUSTRIAL ESTATES IN STATE OF GUJARAT, A ND FOR PURPOSE OF ESTABLISHING COMMERCIAL CENTERS IN CONNE CTION WITH ESTABLISHMENT AND ORGANIZATION OF SUCH INDUSTRIES I T COULD NOT BE SAID THAT ACTIVITIES CARRIED OUT BY ASSESSEE WER E EITHER IN NATURE OF TRADE, COMMERCE OR BUSINESS, FOR A CESS O R FEE OR ANY OTHER CONSIDERATION SO AS TO ATTRACT PROVISO TO SECTION 2(15) AND SAME COULD BE SAID TO BE FOR CHARITABLE P URPOSE AND, CONSEQUENTLY, ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 11 - HELD, YES [PARAS 15 AND 17] [IN FAVOUR OF ASSESSEE].' 8. THE HON'BLE JURISDICTIONAL HIGH COURT IN ESSENCE UPHELD THAT ASSESSEE WAS NOT INVOLVED IN THE ACTIVITIES IN THE SPIRIT OF COMMERCIAL ACCOMMODATION AND THEREFORE FALLS WITHIN THE AMBIT OF DEFINITION OF 'CHARITABLE PURPOSE' CONTEMP LATED UNDER S.2(15) OF THE ACT. IN VIEW OF ITA NOS.2700/AHD/16 & 427/AHD/17 (BY ASSESSEE) ITA NOS.2738/AHD/16 & 544/AHD/17 (BY REVENUE) GIDC VS. DCIT/ACIT ASST.YEA RS - 2012-13 & 2013-14 THE FOREGOING, WE FIND THAT THE R ELIEF SOUGHT BY THE ASSESSEE TO THE EXTENT THAT THE ACTIV ITIES CARRIED ON BY THE ASSESSEE SHOULD BE RECOGNIZED TO BE OF CH ARITABLE NATURE REQUIRES TO BE ENDORSED. HOWEVER, ALL OTHER ISSUES RAISED IN THE RESPECTIVE APPEALS OF THE ASSESSEE AN D REVENUE WOULD REQUIRE RE-EXAMINATION IN THE LIGHT OF CONCLU SION DRAWN IN FAVOUR OF ASSESSEE TOWARDS APPLICABILITY OF SECT ION 2(15) OF THE ACT AS NOTED ABOVE. THUS, ALL OTHER ISSUES ARE KEPT OPEN FOR RE-EXAMINATION AT THE END OF THE AO. 9. IN THE RESULT, CROSS-APPEALS OF THE ASSESSEE AS WELL AS REVENUE IN ITA NO.2738/AHD/2016 & 2700/AHD/2016 REL EVANT MA NO.200 /AHD/2019 6 TO AY 2012-13 ARE ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF DIRECTIONS NOTED HEREINABOVE. 4. SINCE VERY BASIC FOR DETERMINATION OF ASSESSEES TAXABLE INCOME HAS BEEN CHANGED, THEREFORE, ALL CONSEQUENTI AL ISSUES WERE TO BE EXAMINED BY THE AO WHILE GIVING EFFECT TO ORDER OF THE TRIBUNAL. THE ISSUES AGITATED IN THE CO ARE NO MORE RELEVANT AND NO SPECIFIC FINDING IS REQUIRED TO BE RECORDED IN THE PRESENT P ROCEEDINGS. ALL THESE THINGS SHOULD BE TAKEN CARE OF BY THE AO WHIL E PASSING FRESH ASSESSMENT ORDER IN PURSUANCE OF THE TRIBUNALS ORD ER IN THE APPEAL OF THE ASSESSEE. STATUS OF THE ASSESSEE HAS BEEN C HANGED. IT IS TO BE TREATED AS A CHARITABLE INSTITUTION AND ITS INCO ME IS ACCORDINGLY TO BE DETERMINED. THUS, NO FRESH DIRECTIONS ARE REQUI RED TO BE ISSUED TO THE AO, MORE SO, THE ISSUES AGITATED IN THE CO ARE BEING NOT ARISEN FROM THE ASSESSMENT ORDER. HENCE, THERE IS NO FORC E IN THE GROUNDS TAKEN IN THE CO. CROSS OBJECTION OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, CROSS OBJECTION OF THE REVENUE IS DISMISSED. 4. A PERUSAL OF THE ABOVE FINDING WOULD INDICATE TH AT THE TRIBUNAL HAS DULY TAKEN COGNIZANCE OF THE ISSUES ADJUDICATED IN THE CO, AND IN THE CONSCIOUS DECISION OF THE TRIBUNAL, THOSE ISSUE S BECAME REDUNDANT AND ACADEMIC ONE. THE TRIBUNAL WAS OF THE VIEW THA T SINCE CHARACTER OF THE ASSESSEE HAS BEEN CHANGED, IT HAS BEEN HELD THAT IT IS ENTITLED FOR THE BENEFIT OF SECTIONS 11 AND 12 OF THE ACT, AND C ONSIDERING ITS NATURE AS A CHARITABLE INSTITUTION, THE EXERCISE OF DETERM INING THE INCOME HAS TO BE CARRIED OUT AFRESH. IN SUCH CIRCUMSTANCES, Q UANTIFICATION AND IMPACT OF SECTION 11(5) AND 13(1)(D) HAS TO BE EXAM INED AFRESH. THE TRIBUNAL HAS OBSERVED THAT THIS ASPECT COULD BE LOO KED INTO WHILE DETERMINING THE TAXABLE INCOME OF THE ASSESSEE. IN THE FIRST ROUND, THE INCOME OF THE ASSESSEE WAS DETERMINED BY DENYING EX EMPTION UNDER SECTION 11 AND 12. THIS STAND OF THE AO WAS REVERS ED BY THE TRIBUNAL, AND THE MATTER WAS RELEGATED TO HIM TO EXAMINE AFRE SH. WE FAIL TO UNDERSTAND HOW IT CAN BE PLEADED THAT CO FILED BY T HE REVENUE HAS NOT BEEN CONSIDERED ON MERIT. THESE VERY ISSUES WE RE AVAILABLE IN APPEALS OF THE ASSESSEE AS WELL OF THE REVENUE. TH E ULTIMATE DISPUTE MA NO.200 /AHD/2019 7 WAS TRUE DETERMINATION OF THE INCOME OF THE ASSESSE E. IN THE FIRST ROUND, THE AO WAS OF THE VIEW THAT BENEFIT OF SECTI ONS 11 AND 12 CANNOT BE GRANTED. THIS STAND DID NOT MEET APPROVA L OF THE TRIBUNAL. ONCE IT IS TO BE HELD THAT THE ASSESSEE IS A CHARIT ABLE INSTITUTION AND IT IS ENTITLED FOR BENEFIT UNDER SECTION 11 AND 12, THEN ALL OTHER ASPECTS OF SECTION 11(5) AND 13(1)(D) ETC ARE TO BE CONSIDERED AFRESH. SOMEHOW, IT APPEARS THAT THE LD.AO FAILED TO COMPREHEND OR C ONCUR WITH THE HIGHER APPELLATE AUTHORITIES ABOUT THE STATUS OF TH E ASSESSEE BEING HELD AS CHARITABLE INSTITUTION, WHICH IS ENTITLED FOR TH E BENEFIT OF SECTION 11 AND 12. TO OUR MIND, ALL THESE ASPECTS HAVE DULY B EEN CONSIDERED AND ADJUDICATED BY THE TRIBUNAL IN ITS ORDER AND THERE IS NO APPARENT ERROR. MISC. APPLICATION THUS STANDS DISMISSED. 5. IN THE RESULT, THE MISC. APPLICATION OF THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 24 TH MAY, 2021 AT AHMEDABAD. SD/ - (WASEEM AHMED) ACCOUNTANT MEMBER SD/ - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 24/05/2021