Urban Improvement Trust, Bhiwadi, Distt. Alwar and Urban Improvement Trust, Ajmer and Urban Improvement Trust, Bhagat Singh Circle, Alwar V. Union Of India through Secretary, Ministry of Finance, Government of India, New Delhi and Commissioner of Income Tax, Aayakar Bhawan, Moti Doongari, Alwar and Assistant Commissioner of Income Tax, Circle-II, Alwar and Commissioner of Income Tax, Central Revenue Building, Opp. Bus Stand, Jaipur Road, Ajmer and Assistant Commissioner of Income Tax, Circle-I, Alwar

CW/13256/2008

AI Insights

The case involves multiple writ petitions filed by different Urban Improvement Trusts (UITs) challenging notices issued by the Income Tax authorities requiring them to file returns. The primary legal contention was whether the income of these trusts is exempt under the Income Tax Act, 1961. The court examined a related case, Commissioner of Income Tax-I, Jodhpur & Ors. vs. Jodhpur Development Authority & Ors., which had previously addressed the eligibility of UITs for tax exemption and registration under Section 12A of the Act. The court concluded that the activities of UITs, aimed at urban area improvement, qualify as public utility services, thus entitling them to the benefits under the Act.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 803045 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 17-01-2017
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax-I, Jodhpur & Ors. vs. Jodhpur Development Authority & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: PARINITOO JAIN; SAURABH JAIN
• Assessee Lawyers: R K MATHUR; SANJAY BHATI; AJAY RAJ TANTIA; ADITYA MATHUR
• Keywords: Income tax exemption; Registration under section 12A; Return of Income; Urban Improvement Trust
• Section: 12AA; 12A; 8; 2(15); 29; 62; 61

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B.Civil Writ Petition No. 13256 / 2008 Urban Improvement Trust, Bhiwadi, Distt. Alwar ----Petitioner Versus 1. Union Of India through Secretary, Ministry of Finance, Government of India, New Delhi 2. Commissioner of Income Tax, Aayakar Bhawan, Moti Doongari, Alwar 3. Assistant Commissioner of Income Tax, Circle-II, Alwar ----Respondents Connected With S.B.Civil Writ Petition No. 11388 / 2008 Urban Improvement Trust, Ajmer ----Petitioner Versus 1. Union of India through Secretary, Ministry of Finance, Government of India, New Delhi 2. Commissioner of Income Tax, Central Revenue Building, Opp. Bus Stand, Jaipur Road, Ajmer 3.Assistant Commissioner of Income Tax, Circle-II, Alwar --Respondents S.B.Civil Writ Petition No. 249 / 2009 Urban Improvement Trust, Bhagat Singh Circle, alwar, Through its Sr. Accounts Officer, Ms. Jyoti Bharadwaj ----Petitioner Versus 1. Union of India through Secretary, Ministry of Finance, Government of India, New Delhi 2. Commissioner of Income Tax, Central Revenue Building, 22, Moti Doongri, Alwar 3.Assistant Commissioner of Income Tax, Circle-I, Alwar, 22Moti Doongri, Alwar –- Respondents S.B.Civil Writ Petition No. 345/2012 Urban Improvement Trust, Ajmer ----Petitioner Versus 1. Union of India through Secretary, Ministry of Finance, Government of India, New Delhi 2. Commissioner of Income Tax, Central Revenue Building, Opp. Bus Stand, Jaipur Road, Ajmer 3.Assistant Commissioner of Income Tax, Circle-II, Alwar ---Respondents _____________________________________________________ For Petitioner(s) : Mr. R.K. Mathur, Sr.Counsel assisted by Mr. Sanjay Bhati, Mr. Ajay Raj Tantia & Mr. Aditya Mathur For Respondent(s) : Ms. Parinitoo Jain, Mr. Saurabh Jain on behalf of Mr.J.K. Singhi JUSTICE DINESH MEHTA Order 17/01/2017 The present writ petitions have been preferred by different Urban Improvement Trusts, inter allia challenging the proposed notices asking the petitioners trust to file return. The main grounds on which the petitioner Trusts have approached this Court was that according to them the income of trust is exempt under the provisions of Income Tax Act, 1961. Learned counsel for the parties submit that the Division Bench of this Court in Commissioner of Income Tax-I, Jodhpur & Ors. vs. Jodhpur Development Authority & Ors., D.B. Income Tax Appeal Nos.63/12, 92, 95, 96, 98/13 and 12/15 vide its judgment dt.5-7-2016 has decided the said controversy holding in paras 29 and 32 as under: “29. Coming to the question of entitlement of UIT, Sri Ganganagar, for registration under Section 12A of the Act of 1961, as noticed above, the UIT, Sri Ganganagar, a statutory body, has been constituted and established under Section 8 of UIT Act for the purpose of carrying out improvement of urban area of Sri Ganganagar. It is to be noticed that for achieving the object as mandated by Section 29 of the UIT Act, the UIT frames schemes for improvement of the specified urban area, which inter alia may provide for the acquisition of any land or other property necessary or effected by the execution of the scheme; the re-laying out of any land comprised in the scheme; the construction and re-construction of the buildings; the formation, construction and alteration of streets; the closure or demolition of dwellings or portion of the dwellings unfit for human habitation; the draining, water supply and lighting of the streets; the forming of open spaces for the benefits of the area comprised in the scheme or any adjoining area; all or any of the sanitary arrangements required for the area comprised in the scheme; the establishment and construction of the markets and other places of public requirement and convenience; the division of any land into plots for the erection of buildings for residential purposes; the provision of facilities for communication; the reclamation or reservation of the land for garden, afforestation and provision of fuel and grass supply and other needs of population; the planting and preservation of trees and plantation and any other matter for which in the opinion of the State Government it is expedient to make provisions with a view to improvement of the area comprised in scheme or the general efficiency thereof etc.. Undoubtedly, the aforesaid statutory functions which are being discharged by the UIT, are the activities undertaken for welfare of the public at large and certainly, fall within the expression of 'any other object of general public utility', as used in Section 2 (15) of the Act of 1961. It is true that while discharging aforesaid functions to achieve its predominant object of improvement of the urban area specified, the UIT, Sri Ganganagar is also engaged in sale, letting or exchange of any property or land comprised in the scheme and it is also empowered to levy betterment charges in terms of Section 62 of the UIT Act, but then, such activities undertaken by the UIT are apparently incidental and ancillary to its main object of improvement of specified urban area. It is pertinent to note that as per the mandate of Section 61 of the UIT Act, the UIT is under an obligation to constitute a fund to be called 'Improvement Fund' and as per the mandate of sub-section (2) (iii) and (v), all rents, profits and sale proceeds of lands, buildings and other property vested or vesting in or acquired by the trust under the said Act and all fees and charges payable to or received by the trust under the said Act are credited to the said Fund, which is utilised for the achievement of the predominant object of improvement of the urban area. Thus, for the parity of the reasons indicated above, while arriving at the conclusion regarding the entitlement of JDA, Jodhpur for registration under Section 12A read with Section 12 AA of the Act of 1961, the order passed by the ITAT, holding the UIT, Sri Ganganagar entitled for registration under Section 12A read with Section 12AA of the Act of 1961, also cannot be faulted with. 32. In the result, the Appeal No.63/12, questioning the legality of the order of the ITAT, Jodhpur dated 19.1.12 in ITA No.508/Jodh/2010 and the Appeal No.92/13, questioning the legality of order dated 18.1.13 passed by the ITAT, Jodhpur in ITA No.169/Jodh/2011, holding the JDA, Jodhpur and UIT, Sri Ganganagar entitled for registration under Section 12A of the Act of 1961, are dismissed. Consequently, the Appeal Nos.95/13, 96/13 and 98/13, directed against a common order of the ITAT dated 18.1.13 of the ITAT, Jodhpur and Appeal No.12/15, directed against order dated 23.7.14 of the ITAT, Jodhpur, are also dismissed. No order as to costs.” In view of the said judgment, these cases are also disposed off in terms of the law so laid down by judgment dt.5-7-2016 in aforesaid case. The petitioners herein are directed to file return of income and apply for registration, if not already done, within a period of 60 days from today, Commission Income Tax and the Assessing officer may pass appropriate order/assessment orders, thereafter. Copy of this order be placed in each file. (DINESH MEHTA)J. Anu/63-66 "