M/s. Gujarat Institute of Housing & Estate Developers, Ahmedabad V. Dy,Commissioner of Income Tax,(Exemption), Ahmedabad

MA 83/AHD/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4402 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Section: 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS, GIHED BHAVAN SITE OFFICE, GIHED LANE, NEAR MAPLE COUNTY, B/H ORNET PARK, PAKVAN SINDHU BHAVAN ROAD, SHILAJ, AH MEDABAD PAN: AAATT4761F (APPELLANT) VS THE DCIT (EXEMPTION), 2 ND FLOOR, NATURE VIEW BUILDING, OF ASHRAM ROAD, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI RAJDEEP SINGH , SR. D . R. ASSESSEE BY: S H RI S.N. SOPARKAR , A.R. DATE OF HEARING : 01 - 07 - 2 016 DATE OF PRONOUNCEMENT : 29 - 07 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE AS SESSEE S SIX MISCELLANEOUS APPLICATIONS FILED UNDER SECTION 254(2) OF THE INCOME TAX ACT (IN SHORT THE ACT) SEEK TO MA NO S . 82 TO 87 / A HD/20 15 (IN ITA NO. 1051 TO 1056/AHD/2015 ) ASSESSMENT YEAR 200 6 - 07 TO 2011 - 12 M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 2 RECTIFY /RECALL OUR COMMON ORDER DATED 29 - 09 - 2015 REJECTING ITS MUTUALITY PLEA THEREBY UPHOLDING CIT(A) S LOWER APPELLATE ORDER DATED 02 - 02 - 2015. 2. WE ADVERT TO THE RELEVANT FACTS FIRST. THIS AS SESSEE IS A SECTION 25 COMPANY REGISTERED SINCE 01 - 09 - 2007. IT DOES HAVE ITS OBJECT CLAUSES (A TO L) FORMING PART OF THE MAIN ORDER. TH E ASSESSEE ORGANIZED GALA DINNERS, PROPERTY SHOWS AND CRICKET TOURNAMENTS. ITS MEMBERS AS WELL AS NON MEMBERS/OUTSIDERS MADE THEIR RESPECTIVE CONTRIBUTIONS TO THE SAME. THESE FIGURE S READ RS. 37,08,050/ - AND RS. 16,27,100/ - IN ASSESSMENT YEAR 2006 - 07 FOR EXAMPLE. THERE IS NO DISPUTE THAT THE LATTER CONTRIBUTIONS ALREADY STAND ASSESSED. THE ISSUE HOWEVER REMAINS TO THE EXTENT OF FORMER HEAD ONLY. THE ASSESSEE CLAIMED THESE SUMS AS EXEMPT FROM BEING TAXED SINCE IT HAD RECEIVED THE RELEVANT CONTRIBUTIONS FROM MEMBERS FOR THEIR COLLECTIVE BENEFITS WITHOUT ANY INTENTION OF MAKING PROFITS. THE ASSESSING OFFICER TOOK NOTICE OF ITS SECTION 12A NON - REGISTRATION. HE OBSERVED THAT THE IMPUGNED MUTUALITY WAS ONLY AN AFTERTHOUGHT ONE ANTICIPATING REJECTION OF ITS CHARITABLE ORGANIZATION ASPECT. 3. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) REJECTED ASSES SEE S CONTENTIONS IN THE LOWER APPELLATE COMMON ORDER INTER ALIA BY HOLDING THAT IT HAD BEEN ADOPTING DIFFERENT STAND THROUGHOUT, IT DID NOT DISCLOSE TRUE AND CO RRECT FACTS TILL 2010 - 11 SCRUTINY, ASSESSEE WAS ACCUSED FOR HAVING RAISED CLAIM OF SECTION 11 EXEMPTION WITHOUT SECTION 12A REGISTRATION AFTER ITS CONVERSION TO A SECTION 25 M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 3 COMPANIES, I TS OBJECTS DID NOT PROVIDE FOR THE MUTUALITY PRINCIPLE APPLICATION, TH E ASSESSEE S INCOME HAD BEEN DERIVED FROM MAINLY CARRYING OUT PROPERTY SHOWS IN INDIA AND ABROAD IN THE NATURE OF TRADE ON COMMERCIAL LINES. THE CIT(A) S VIEWS IS THAT THIS MUTUALITY PRINCIPLE APPLIES TO NON - COMMERCIAL ACTIVITIES ONLY. HE FURTHER OPINES THAT A MUTUAL ORGANIZATION S ESSENTIAL ELEMENTS CONSTITUTE ASSOCIATIO N OF PEOPLE CALLED MEMBERS FORMULATING A COMMON CAUSE INVOLVING CONTRIBUTIONS WITHOUT ANY AIM TO EARN PROFITS AND GAINS. HE UPHELD ASSESSING OFFICER S ACTION ON THIS REASONING. 4. T HE ASSESSEE FILED SIX MAIN APPEAL HEREINABOVE IN AS MANY ASSESSMENT YEARS FROM 2006 - 07 TO 2011 - 12. WE DECLINED ALL THESE CASES BY A COMMON ORDER SUBJECT MATTER OF THE INSTANT MISCELLANEOUS APPLICATIONS AS FOLLOWS: - 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILES. THERE IS NO DISPUTE THAT THE ASSESSEE - COMPANY IS REGISTERED U/S. 25 OF THE INDIAN COMPANIES ACT, 1956. ITS MEMORANDUM OF OBJECTS ALREADY STANDS REPRODUCED. IT HAS CARRIED OUT SOME FIESTAS, PROPERT Y SHOWS AND CRICKET TOURNAMENTS RESULTING IN CONTRIBUTIONS IN QUESTION RECEIVED FROM MEMBERS AND NON MEMBERS. IT SEEKS TO APPLY MUTUALITY CONCEPT IN CASE OF MEMBERS CONTRIBUTIONS. HON'BLE APEX COURT IN CASE OF BANGALORE CLUB V/S. CIT (2013) 350 ITR 509 (SC) CONSIDERS ALL THE RELEVANT CASE LAW RIGHT FROM STYLES (SURVEYOR OF TAXES) V/S. NEW YORK LIFE INSURANCE CO.(1889)2 TC 460 (HL) TILL THE RELEVANT POINT OF TIME IN REITERATING THREE BASIC FEATURES FOR APPLICATION OF THIS MUTUALITY CONCEPT. THE F IRST ONE IS THAT THERE HAS TO BE A COMPLETE IDENTITY BETWEEN THE CLASS OF CONTRIBUTORS AND PARTICIPATORS AND THE PARTICULAR LABLE OR FORM BY WHICH A MUTUAL ASSOCIATION IS KNOWN IS OF NO CONSEQUENCE. SECOND FEATURE IS THAT ACTION OF THE PARTIC IPATORS AND CONTRIBUTORS MUST BE IN FURTHERANCE OF THE MANDATE OF THE MUTUAL ASSOCIATION. THIRD FEATURE IS THAT THERE SHOULD NOT BE ANY SCOPE OF PROFITEERING BY THE CONTRIBUTORS FROM A M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 4 FUND MADE BY THEM WHICH COULD ONLY BE EXPENDED OR RETURNED TO THEMSELVES. THEIR LORDSHIPS ARE OF THE VIEW THAT MUTUALITY CONCEPT IS IN FURTHERANCE TO THE NOTION THAT NEITHER ANY ONE CAN TRADE NOR CAN HE DERIVE PROFITS FROM ONESELF. WE PROCEED TO DEAL WITH FACTS OF THE CASE KEEPING IN MIND THE ABOVESTATED TH REE FEATURES. COMING TO THE FIRST ONE OF A COMPLETE IDENTITY OF CONTRIBUTORS AND PARTICIPATORS LEADING TO RAISING OF THE FUND IN QUESTION, THERE IS NO DISPUTE THAT ASSESSEE'S CONTRIBUTIONS COLLECTED COMPRISE OF FUNDS RAISED FROM MEMBERS AS WELL AS NON ME MBERS. IT SEEKS TO RAISE A DISTINCTION QUA THE ONE COLLECTED FROM MEMBERS TO THAT DERIVED FROM NON MEMBERS. WE DISAGREE WITH THIS ARGUMENT. THE FACT REMAINS THAT IT IS THE OVERALL NATURE OF THE CONTRIBUTION THAT MATTERS FOR APPLYING MUTUALITY CONCEPT WH ICH ACTS AS AN EXCEPTION TO THE GENERAL PRINCIPLES OF THE ASSESSEE'S INCOME. THEREFORE, WE OBSERVE THAT THE ASSESSEE'S CONTRIBUTION DO NOT SATISFY THE ABOVESTATED PREPOSITION OF COMPLETE IDENTITY BETWEEN CONTRIBUTORS AND PARTICIPATORS SINCE THE NON MEMBERS IDENTITY IS NOWHERE IN PICTURE AFTER THEY HAVE MADE THE IMPUGNED CONTRIBUTION. 10. WE COME TO THE SECOND FEATURE OF THE MUTUALITY CONCEPT AS TO WHETHER ACTION OF THE PARTICIPATORS AND CONTRIBUTORS IS IN FURTHERANCE TO MANDATE OF THE ASSOCIAT ION OR NOT. THEIR LORDSHIPS OBSERVE THAT THE SAME CAN BE DETERMINED FROM THE MEMORANDUM OF ARTICLES OF ASSOCIATIONS, RULES OF MEMBERSHIP AND RULES OF THE OR GANISATION ETC. THE ASSESSEE'S OBJECTS STAND REPRODUCED HEREINABOVE. CLAUSE J THEREOF ST I PUL ATE S THAT THE ASSESSEE MAY COLLECT AND ACCEPT CONTRIBUTIONS FROM MEMBERS AS AND WHEN REQUIRED AS DETERMINED BY THE ASSOCIATION AND TO MAKE AND CREATE THEREFROM A FUND FOR OFFICE MAINTENANCE, SALARY TO EMPLOYEES, PROVIDE ESSENTIAL SERVICES TO MEMBERS AND RAISE A SINKING FUND FOR EMERGENCY AND OR OTHER CONTINGENCIES. THERE IS NO MECHANISM PROVIDED IN THE ABOVESTATED OBJECTS FOR RAISING RECEIPTS FROM NON MEMBERS. AND ALSO IN CARRYING OUT ANY ACTIVITIES OF FIESTAS, PROPERTY SHOWS AND CRICKET TOURN AMENTS. THE ASSESSEE'S EXPLANATION DOES NOT PROVE ANY LIVE NEXUS BETWEEN OBJECTS AND IMPUGNED ACTIVITIES. THESE ACTIVITIES CARRIED OUT ARE MORE IN THE NATURE OF COMMERCIAL EXERCISES PERFORMED IN VIEW OF CONTRIBUTIONS RECEIVED FROM MEMBERS AND NON MEMBERS T HAN SERVICES BEING PERFORMED IN FURTHERANCE TO THE MANDATE OF THE ASSOCIATION. WE ACCORDINGLY HOLD THAT THE ASSESSEE'S ACTIVITIES INVOLVING ACTION OF THE PARTICIPATORS AND CONTRIBUTORS DO NOT SATISFY ITS OBJECTS/MANDATE OF THE ASSOCIATION. THUS, THE ASSESS FAILS QUA THIS SECOND FEATURE. WE QUOTE CASE LAW OF CIT V/S. ROY AL M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 5 WESTERN TURF LTD.,(1953) 24 / ITR 551 (SC) HOLDING MONEY REALISED FROM BOTH MEMBERS AND NON - MEMBERS IN LIEU OF THE VERY SERVICES RENDERED IN COURSE OF THE SAME BUSINESS THEREBY DENYING MUT UALITY EXEMPTION. THEIR LORDSHIPS QUOTE ABSENCE OF ANY MUTUAL DEALING BETWEEN THE MEMBERS INTERSE AND NO PUTTING UP OF A COMMON TREND FO R DISCHARGING COMMON OBLIGATIONS UNDERTAKEN BY THE CONTRIBUTORS FOR THEIR MUTUAL BENEFITS. THE SAID ASSE SSEE; AN INCORPO RATED COMPANY W AS AUTHORIZED TO CARRY ON AN ORDINARY BUSINESS OF A RACECOURSE COMPANY AND THAT OF VICTUALLERS AND REFRESHMENT PURVEYORS AND IN FACT CARRYING ON SUCH A BUSINESS. IT WAS HELD THAT THIS COMPANY'S DEALINGS WITH NON MEMBERS TOOK PLACE IN THE ORD INARY COURSE OF BUSINESS CARRIED ON WITH A VIEW TO EARNING PROFITS AS ANY OTHER COMMERCIAL CONCERN. THE MUTUALITY EXEMPTION WAS ACCORDINGLY DENIED TO THE SAID ASSESSEE. WE REITERATE THE FACTS OF THE INSTANT CASE WHEREIN THE ASSESSEE HAS DEALT WITH MEMBERS AND NON MEMBERS IN RAISING THE IMPUGNED CONTRIBUTIONS QUA ITS ACTIVITIES OF ORGANIZING FIESTAS, PROPERTY FAIR AND CRICKET TOURNAMENTS. 11. COMING TO THE THIRD FEATURE, WE NOTICE FROM THE ABOVESTATED CASE LAW THAT THEIR LORDSHIPS HOLD THAT THERE IS NO SCO PE OF PROFITEERING BY THE CONTRIBUTOR FROM A FUND MADE BY THEM WHICH COULD ONLY BE EXPENDED OR RETURNED TO THEMSELVES. WE DEEM IT APPROPRIATE TO OBSERVE THAT ONCE THE ASSESSEE DOES NOT FULFIL L THE ABOVE TWO FEATURES, THIS THIRD ONE STANDS RENDERED \ ACADEMI C. 12. NOW WE COME TO ASSESSEE'S CASE LAW. THE FIRST ONE IS THAT OF (1997) 226 ITR 97 (SC) CIT V/S. BANKIPUR CLUB. THIS CLUB RECEIVED AMOUNTS TOWARDS CHARGES FOR PRIVILEGES AND PROVIDED TO MEMBERS AS PER ITS RULES. THERE WAS NO ELEMENT COMMERCIAL EMBEDDE D THEREIN. THEIR LORDSHIPS HELD THAT SURPLUS RECEIVED ARISING FROM THE ABOVESAID FACILITIES WERE EXEMPT ON MUTUALITY CONCEPT. THE SAME HAS BEEN HELD AS NOT APPLICABLE IN THE FACTS OF THE INSTANT CASE AS INDICATED IN THE PRECEDING PARAGRAPHS. THE NE XT CASE LAW IS THAT OF CHELMSFORD CLUB V/S. CIT (2000) 243 ITR 89. THIS ASSESSEE - CLUB OWNED A CLUB HOUSE PROVIDING RECREATIONAL AND REFRESHMENT FACILITIES EXCLUSIVELY TO ITS MEMBERS ON NO PROFIT NO LOSS BASIS AS AGAINST FACTS OF THE INSTANT CASE. THE SAME IS ACCORDINGLY DISTINGUISHED. THE THIRD JUDGEMENT QUOTED BEFORE US IS THAT OF (2015) 59 TA XMANN.COM 104 (GUJ.) CIT VS. PRABHUKUNJ COOPERATIVE HOUSING SOCIETY LTD., THIS SOCIETY RECEIVED CONTRIBUTION FROM OUTGOING MEMBERS AS PREMIUM ON SALE OF PLOTS. THE HON'BLE JURISDICTIONAL HIGH COURT OBSERVED THAT SINCE THIS AMOUNT WAS TO BE UTILIZED FOR BENEFITS OF THE M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 6 MEMBERS OF THE SOCIETY AND NOT TAXABLE INCOME. WE ARE OF THE VIEW THAT THERE IS NO SIMILARITY OF FACTS OF ISSUE INVO LVED BETWEEN THIS CASE LAW AND THE ONE IN HAND. WE HOLD THE SAME AS NOT APPLICABLE IN PECULIAR FACTS IN INSTANT CAS E. WE PROCEED FURTHER AND FIND THAT NEXT JUDICIAL PRECEDENT QUOTED IS (2015) 56 TA XMANN.COM 281 (GUJ.) JUNAGADH GYMKHANA VS. ITO. THIS CLUB'S MEMBERS HAD PAID GUEST CHARGES AND UTILIZED IT FOR BENEFIT AND DEVELOPMENT OF THEMSELVES. THE HON'BLE JURISDICTIONAL HIGH COURT HELD THIS CASE TO BE COVERED BY MUTUALITY CONCEPT ON THE GROUND THAT THE SAME CREATED A N IDENTITY BETWEEN THE PARTICIPANTS AND CONTRIBUTORS. JUST BECAUSE SOME TRANSACTIONS ARE NO N MUTUAL WOULD NOT DESTROY MUTUA LITY FACTOR. WE FIND THAT THE NON MEMBERS THEREIN WERE ONLY BROUGHT TO THE CLUB AND THEY HAD NOT PAID ANY AMOUNT AS AGAIN ST FACTS OF THE INSTANT CASE. WE DISTINGUISH THIS CASE LAW ACCORDINGLY. THE ASSESSEE QUOTES NEXT JUDGMENT OF ITAT KOLKATA BENCH (2012) 139 ITD 675 (KOL) BELVEDERE ESTATES TENANTS ASSOCIATION V/S. ITO WHEREIN THE ASSESSEE WAS FORMED BY TENANTS OF A BUILDING . IT WAS WORKING FOR COMMON INTEREST OF THE MEMBERS AND RENDERED SERVICES AS AGAINST THE ASSESSEE BEFORE US WHOSE ACTIVITIES IN QUESTION ARE NOT AS PER ITS OBJECTS BEING COMMERCIAL IN NATURE. THIS CASE LAW ALSO DOES NOT RESCUE THE ASSESSEE'S CASE. 13. TH E ASSESSEE HAS FILED BEFORE US ANOTHER COMPILATION OF JUDGMENTS, I.E. (1987) 168 240 (KER) COCHIN OIL MERCHANTS ASSOCIATION, (1984) 150 ITR 394 (AP) CIT V/S. WEST GODAVARI DISTRICT RICE MILL ASSOCIATION, (1994) 209 ITR 28 (KOL) CIT V/S. INDIAN PAPER MILLS ASSOCIATION. ALL THESE JUDICIAL PRECEDENTS DEAL WITH ISSUE OF SURPLUS ARISING FROM RECEIPTS FROM MEMBERS BY WAY OF SUBSCRIPTION OR OTHERWISE WHICH HAS BEEN HELD TO BE, COVERED BY MUTUALITY CONCEPT. WE REPEAT THAT THE ASSESSEE BEFORE US HAS ALREADY HELD AS NOT SATISFYING THAT ABOVESTATED THREE FEATURES AS REITERATED IN BANGLORE CLUB CASE (SUPRA). THE SAME ARE HELD AS NOT APPLICABLE IN FACTS OF PRESENT CASE. THE ASSESSEE HAS DRAWN OUR ATTENTION TO TWO MORE JUDGMENTS I.E. (1994) 209 ITR 294 (BOM) CIT V/S. ASPE E DISTRIBUTORS ASSOCIATION AND (1968 ) 69 ITR 878 (KOL.) AUTOMOBILE ASSOCI ATION OF BENGAL V/S. CIT WHEREIN T HE CONCERNED ASSESSEE HAD CHARGED MEMBERSHIP AND A MONTHLY MAGAZINE RESULTING IN MEMBERS' CONTRIBUTIONS. THE SAME HAVE BEEN HELD TO BE COVERED BY MUT UALITY CONCEPT. WE AGAIN REVERT BACK TO THE FACTS OF THE PRESENT CASE WHEREIN THE ASSESSEE HAS CARRIED OUT PROPERTY FAIRS, FIEASTAS AND CRICKET TOURNAMENTS WITHOUT PROVING NEXUS THEREOF WITH THE ABOVE EXTRACTS OBJECTS AND ALSO RECEIVED CONTRIBUTIONS FROM MEMBERS AND M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 7 NON MEMBERS. WE ACCORDINGLY CONCLUDE THAT THE ASSESSEE'S ARGUMENTS CLAIMING ITS V RECEIPTS FROM MEMBERS AS COVERED BY MUTUALITY CONCEPT HAVE TO BE REJECTED. WE ORDER ACCORDINGLY. THE ASSESSEE'S CORRESPONDING GROUNDS RAISED IN ALL SI X APPEALS AR E DECLINED. THE CIT (A)'S ORDERS UNDER CHALLENGE ARE CONFIRMED. 5. WE HAVE HEARD BOTH THE PARTIES. CASE FILES PERUSED. LEARNED REPRESENTATIVES APPEARING AT BOTH PAR TIES BEHEST STRONGLY REITERATE THEIR RESPECTIVE CASES FOR AND AGAINST THE MAINTAINABILITY OF THE INSTANT APPLICATIONS. SHRI SOPARKAR VEHEMENTLY ARGU ES THAT THESE MISCELLANEOUS APPLICATIONS ARE VERY MUCH MAINTA INA BLE SINCE OUR ORDER SUFFERS FROM MISTAKE APPARENT ON THE FACE OF RECORD AS PER CASE LAW OF (2008) 305 ITR 227 (SC) CIT VS. SAURASHT RA KUTCH STOCK EXCHANGE HOLDING THEREIN THAT RECTIFICATION OF AN ORDER FLOWS FROM THE FUNDAMENTAL PRINCIPLE PUTTING JUSTICE ABOVE ALL TECHNICALITIES. SHRI RAJDEEP SINGH IS LEARNED DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVENUE. HE INVITES OUR ATTE NTION TO THE ORDER SOUGHT TO BE RECTIFIED AND CONTENDS THAT THE SAME HAS TAKEN INTO ACCOUNT ALL THE MATERIAL FACTS AS WELL AS CASE LAWS WHILST REJECTING ASSSESSEE S MUTUALITY PLEA IN QUESTION. HE ACCORDINGLY SUBMITS THAT ANY MODIFICATION THEREIN WOULD AMO UNT TO REVIEW OF OUR EARLIER ORDER AS HELD BY A CO - ORDINATE BENCH IN (2009) 32 SOT 356 (MUM) ADARSHVEER P. JAIN VS. ACIT. WE PUT A SPECIFIC QUERY AS TO WHETHER HE DISPUTES THE LEGAL PROPOSITION SETTLED BY HON BLE APEX COURT HEREINABOVE. SHRI SINGH S CASE IS THAT THE SAME APPLIES ONLY IF ANY APPARENT ERROR ON THE FACE OF RECORD IS MADE OUT IN THE ORDER UNDER CHALLENGE. M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 8 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. HON BLE APEX COURT HAS VERY MUCH SETTLED THE LAW (SUPRA) THAT SUCH A RECTIFICATION U/S. 254(2) OF THE ACT IS MAINTAINABLE BY TREATING JUSTICE ABOVE ALL TECHNICALITIES. THEIR LORDSHIPS ELABORATELY DISCUSS SCOPE AND AMBIT OF SECTION 254(2) OF THE ACT TO HOLD FIRST OF ALL THAT A PATENT, MANIFEST AND SELF EVIDENT ERROR NOT REQUIRING ANY DISCUSSION OF EVIDENCE OR ARGUMENT CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF RECORD. HON BLE COURT IS OF THE VIEW THAT SUCH A RECTIFICATION DOES NOT REQUIRE ANY LONG DRAWN PROCESS OF TRAVELLING BEYOND THE RECORDS. WE KEEP IN THIS F INE DISTINCTION AND PROCEED TO EXAMINE OUR ORDER AS TO W HETHER THE SAME SUFFERS FROM ANY APPARENT OR NOT. 7. WE REVERT BACK TO FACTS OF THE INSTANT CASE. THERE IS NO QUARREL BETWEEN THAT THE ASSESSEE HAS RAISED ITS MUTUALITY PLEA QUA MEMBERS CONTRIBUT IONS ONLY AS COLLECTED BY ORGANIZING GALA DINNERS, PROPERTY SHOWS AND CRICKET TOURNAMENTS. SHRI RAJDEEP SINGH FAILS TO REBUT THE FACTUAL POSITION THAT ALL THESE EVENTS ARE IN THE NATURE OF ANNUAL GET TOGETHER BEING ORGANIZED FOR T HE PURPOSE OF PROMOTING B ROTHER HOOD. NOR IS IT HIS CASE THAT THE RELEVANT FIGURES IN THIS RECORDS POINT OUT LOSSES REALLY FROM THESE ACTIVITIES AS EVIDENT IN ASSESSMENT YEAR 2006 - 07. WE NOTICE FROM OUR ORDER THAT WE HAD CONSIDERED CASE LAW OF BANG A LORE CLUB VS. CIT 350 ITR 509 ( SC) PROPOUNDING THREE ESSENTIAL CONDITIONS THAT THERE HAS TO BE A COMPLETE IDENTITY BETWEEN THE CLASS OF CONTRIBUTORS AND PARTICIPA TO RS LEAVING THE PARTICULAR LEVEL OR FORM BY WHICH A MUTUAL ASSOCIATION IS KNOWN TO BE INSIGNIFICANT, M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 9 THE ACTIVITIES CONCER NED SHOULD BE IN FURTHERANCE TO MANDATE OF THE ASSOCIATION AND THERE SHOULD NOT BE ANY SCOPE OF PROFITEERING BY THE CONTRIBUTORS FROM A FUND MADE BY THEM WHICH COULD ONLY BE EXPANDED OR RETUNED TO THEMSELVES. WE DEEM IT APPROPRIATE TO OBSERVE THAT OUR ORD ER UNDER CHALLENGE DOES NOT DEAL WITH THE ABOVE STATED THIRD ASPECT OF MUTUALITY. 8. WE STAY BACK ON THE RELEVANT PORTION OF OUR ORDER REPRODUCED HEREINABOVE. OUR VIEW THEREIN IS THAT THE MOMENT ASSESSEE S MEMBERS CONTRIBUTIONS COMBINES WITH THE NON - MEM BERS CONTRIBUTIONS, PROPOSITION OF COMPLETE IDENTITY BETWEEN CONTRIBUTORS AND PARTICIPATORS IS LOST . WE NOTICE THAT OUR FINDING GOES CONTRARY TO HON BLE JURISDICTIONAL HIGH COURT S DECISION IN CASE OF JUNAGARH GYMKHANA (2015) 56 TAXMANN.COM 281 (GUJ) HOLD ING THEREIN THAT NON - MUTUAL TRANSACTION S IN DISPUTE INVOLVING NON - MEMBERS DO NOT DESTROY THE PRINCIPLE OF MUTUALITY. A LEARNED CO - ORDINATE BENCH IN THE SAID CASE HAD NOT DISPUTED APPLICATION OF MUTUALITY QU A VARIOUS SUMS RECEIVED FROM THE S E CLUB MEMBERS. OUR ORDER IN PARA 12 DID NOT NOTICE THIS FINE DISTINCTION WHILST DEALING WITH ASSESSEE S MEMBERS CONTRIBUTIONS ONLY. WE CONCLUDE QUA THE FORMER ASPECT THAT NOT ONLY AN ORDER N OT CONSIDER ING AN HON BLE JURISDICTIONAL HIGH COURT SUFFERS FROM AN ERROR APP ARENT ON THE FACE OF RECORD, BUT ALSO AN ORDER IN NOT APPLYING THE CORRECT RATIO STANDS ON THE SAME FOOTING. WE ACCEPT ASSESSEE S ARGUMENT QUA OUR FINDINGS ON THE FIRST ESSENTIAL ASPECT OF MUTUALITY. M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 10 9. WE NOW PROCEED TO EXAMINE CORRECTNESS OF OUR LATTER FINDING HOLDING THAT THE AS SESSEEE S ACTIVITIES ARE NOT AS PER MANDATE OF THE ASSOCIATION. WE HEAVILY RELIED ON CLAUSE J OF ITS OBJECTS TO CONCLUDE THAT THE MEMBERS CONTRIBUTIONS IN QUESTION ARISE IN CASE OF AS AND WHEN BASIS REQUIRED FOR THE PURPOS E OF MEETING OFFICE MAINTENANCE , EMPLOYEES SALARY, ESSENTIAL SERVICES AND FOR CREATION OF A SINKING FU ND. THIS CLAUSE READS AS UNDER - (J) TO COLLECT AND ACCEPT CONTRIBUTIONS FROM MEMBERS AS AND WHEN REQUIRED AND DETERMINED BY THE ASSOCIATION AND TO MAKE AND CREATE THERE FROM A FUND FOR OFFICE MAINTENANCE, SALARY TO EMPLOYEES, PROVIDE ESSENTIAL SERVICE TO THE MEMBERS, AND RAISE A SINKING FUND FOR EMERGENCY AND/OR CONTINGENCY EXPENSE. 10 . A BARE PERUSAL OF THE ABOVE EXTRACTED CLAUSE REVEALS THAT ASSESSE E HAS TO MAKE AND CREATE FROM ITS MEMBERS CONTRIBUTIONS A FUND FOR ABOVE PURPOSES. IT IS NOWHERE STIPULATED THEREIN THAT THESE PURP OSES WOULD FORM THE SOLE OBJECT FOR COLLECTION OF FUNDS FROM MEMBERS WHEREAS WE INTERPRETED THE SAME ON THESE LINES ONLY. WE REITERATE THAT THE ASSESSEE HAS RATHER SUFFERED LOSSES IN ORGANIZING THE IMPUGNED FIES TAS NEGATING POSSIBILITY OF HAVING ORGANIZED THE SAME ON COMMERCIAL LINES. ITS PURPOSE FOR HAVING ORGANIZED THE ACTIVITIES AS STATED IN THE CASE RECORDS ARE ANNUAL GE T TOGETHER S FOR PROMOTING BROTHERHOOD BETWEEN MEMBERS ONLY. WE OBSERVE IN THESE PECULIAR FACTS THAT OUR APPRECIATION OF THIS CLAUSE IS NOT AS PER THE LANGUAGE INCORPORATED IN THE RELEVANT OBJECT CLAUSE . WE ADMIT OUR TWO FINDINGS HEREINABOVE TO BE SUFFERING FROM MISTAKES APPARENT ON THE FACE OF RECORD IN VIEW OF ALL THIS DETAILED DISCUSSION. THERE IS M. A NO S . 82 TO 87 /AHD/20 15 (IN ITA NOS. 1051 TO 1056/AHD/2015. PAGE NO M/S. THE GUJARAT INSTITUTE OF HOUSING & ESTATE DEVELOPERS VS. DCIT 11 FURTHER NO DENIAL OF THE FACT THAT OUR ORDER DOES NOT DEAL WITH THIRD ASPECT OF MUTUALITY PRINCIPLE. WE FOLLOW HON BLE APEX COURT DECISION IN SAURASHTRA KUTCH STOCK EXCHANGE (SUPRA) TO RECALL OUR ORDER DATED 29 - 09 - 2015 TO THE EXTENT DISCUSSED ABOVE . ALL THESE APPEALS ARE RESTORED TO THEIR ORIGINAL NUMBERS . THE REGISTRY IS DIRECTED TO FIX THE SAME FOR FURTHER HEARING IN THE LIGHT OF ABOVE OBSERVATIONS IN DUE CO URSE. 11 . THE ASSESSEE SUCCEEDS IN ITS INSTANT MISCELLANEOUS APPLICATION S AS INDICATED HEREINABOVE. ORDER PR ONOUNCED IN THE OPEN C OURT ON 29 - 07 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 29 /07 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,