Income Tax Officer, Chandigarh v. The Nabha Improvement Trust,

ITA 201/CHANDI/2016 | 2012-2013
Pronouncement Date: 28-11-2017 | Result: Dismissed

Appeal Details

RSA Number 20121514 RSA 2016
Assessee PAN AAALI0017R
Bench Chandigarh
Appeal Number ITA 201/CHANDI/2016
Duration Of Justice 1 year(s) 8 month(s) 20 day(s)
Appellant Income Tax Officer, Chandigarh
Respondent The Nabha Improvement Trust,
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 28-11-2017
Date Of Final Hearing 28-02-2017
Next Hearing Date 28-02-2017
First Hearing Date 28-02-2017
Assessment Year 2012-2013
Appeal Filed On 09-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB CHANDIGARH BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI B.R.R. KUMAR ACCOUNTANT MEMBER ITA NO.201/CHD/2016 ASSESSMENT YEAR: 2012-13 THE ITO EXEMPTION VS. THE NABHA IMPROVEMENT TRUST WARD CHANDIGARH PATIALA GATE NABHA PUNJAB PAN NO. AAALI0017R (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. Y.K. SUD REVENUE BY : SH. MANJIT SINGH DATE OF HEARING : 05/10/2017 DATE OF PRONOUNCEMENT : 28/11/2017 ORDER PER B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A)- PATIALA DT. 18/12/2015. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF LD. CIT(A) IS PERVERSE BOTH IN LA W AND ON FACTS OF THE CASE. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING TH E APPEAL OF THE ASSESSEE BY HOLDING THAT IT IS CARRYING OUT CHARITABLE ACTIVITI ES WHEREAS IT WAS MAINLY ENGAGED IN DEVELOPING AND SELLING OF COMMERCIAL PROPERTIES DURING THE YEAR. 3. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AS THE A MENDMENT IN 2(15) IS EFFECTIVE W.E.F. 01.04.2009 AND THE ASSESSMENT IN T HE CASE HAS BEEN COMPLETED CONSIDERING THE ACTIVITIES OF ASSESSEE WHICH ARE NO T FOR 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' AS PER FIRS T PROVISO. 4. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AS THE R ATIO LAID DOWN IN THE CASES OF PUNJAB URBAN DEVELOPMENT AUTHORITY AND JAMMU DEV ELOPMENT AUTHORITY (TO THE EXTENT IMPROVEMENT TRUSTS CARRY OUT LAND DEVELO PMENT IN A SIMILAR MANNER AS DEVELOPMENT AUTHORITIES DO) HAS BEEN IGNORED. 3. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT I S AN ARTIFICIAL JURIDICAL PERSON HAVING INCOME FROM PLANNING & DEVELOPMENT OF CITIES AND THE SAME WAS SHOWN INCOME OF RS. 2 41 90 570/- AS EXEMPT. 2 4. DURING THE COURSE OF ASSESSMENT PROCEEDING ASSE SSING OFFICER OBSERVED THAT THE APPELLANT WAS CARRYING ON BUSINESS OF SALE & PURCHASE OF RESIDENTIAL HOUSES CONSTRUCTION OF MUTLI-STOREYED HOUSES SALE OF RESIDENTIAL PLOTS AND COMMERCIAL PLOTS BY AUCTION. IT EARNED NET PROFIT O F RS. 2 41 90 570/- DURING THE YEAR UNDER CONSIDERATION WHICH IS IN THE NATURE OF TRADE COMMERCE AND BUSINESS BUT IS NOT COVERED WITHIN THE MEANING OF THE EXPRESSION 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY' U/S 2(15) OF THE INCOME TAX ACT 1961. HOWEVER THE ASSESSEE TRUST H AS STATED DURING ASSESSMENT PROCEEDINGS THAT IT WAS NOT CARRYING ON ANY BUSINES S ACTIVITY BUT THE OBJECT OF TRUST WAS PLANNING DEVELOPMENT AND IMPROVEMENT OF CITY. 5. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE CONTENTION OF THE ASSESSEE WAS NOT CORRECT IN VIEW OF OMISSION OF SECTION 10(2 0A) OF THE INCOME TAX ACT BY THE FINANCE ACT 2002 W.E.F 01/04/2003 AND BY WAY OF AMENDMENT OF SEC. 2(15) OF THE INCOME TAX ACT 1961 BY THE FINANCE ACT 200 8 & 2010 W.E.F 01/04/2009 I.E A.Y. 2009-10. 6. THE LD. CIT(A) HAS DELETED THE ADDITION BASED ON THE JUDGMENT OF COORDINATE BENCH OF ITAT AMRITSAR IN CASE OF HOSHIA RPUR IMPROVEMENT TRUST IN ITA NO. 200/ ASR /2010 DT. 10/09/2015. 7. BEFORE US DURING THE HEARING THE LD. DR SUBMITTE D THAT THE ONLY ISSUE RAISED BY THE REVENUE THROUGH ITS VARIOUS GRO UNDS OF APPEAL LISTED AT SR.NOS. 1 TO 4 IS THAT THE LD CIT (A) HAS ERRED IN TREATING THE ASSESSEE AS COVERED BY SECTION 2(15) OF THE ACT AND THEREBY EXTENDING T HE BENEFITS OF SECTION 11 TO THE ASSESSEE. IT WAS SUBMITTED THAT THE LD CIT(A) H AS SIMPLY RELIED ON THE DECISION OF HON'BLE ITAT . THE LD CIT(A) HAS NOT DI SCUSSED AND/OR DISTINGUISHED CASE LAWS ON THE SAME OF FACTS AS THAT OF THE ASSES SEE RELIED BY THE LD AO WHILE HOLDING THAT THE ASSESSEE IS NOT COVERED U/S 2(15) AND HENCE ITS INCOME IS TAXABLE AND NOT EXEMPT U/S 11 OF THE ACT. 8. THE LD. DR ARGUED THAT THE LD.CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE RELYING ON THE ORDER OF HON'BLE ITAT A MRITSAR IN THE CASE OF HOSHAIRPUR IMPROVEMENT TRUST VS ITO (ITA NO.496/ASR /2013). HE FURTHER CONTENDED THAT WHILE RELYING ON THE DECISION OF HON 'BLE ITAT AMRITSAR IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST (SUPRA) THE LD.CIT( A)DID NOT FOLLOW THE DECISION IN THE CASES OF HOUSING BOARD HARYANA VS CIT (ITA N O 1200/CHD/2004) DATED 30.05.2014 AND KHANNA IMPROVEMENT TRUST VS CIT (ITA NO. 406/CHD/2013) DATED 3 26.11 2014 IN THESE CASES THE HON'BLE ITAT HAS DECI DED THE ISSUE IN FAVOUR OF THE REVENUE HOLDING THAT HOUSING BOARD HARYANA AND KHAN NA IMPROVEMENT TRUST ARE NOT COVERED BY THE DEFINITION OF CHARITABLE ORG ANIZATION AS PROVIDED U/S 2(15) W.E.F. 01 04.2009. WHILE DECIDING THE ISSUE I N FAVOUR OF THE REVENUE THE HON'BLE ITAT HAS RELIED ON THE DECISION OF HON'BLE ITAT AMRITSAR IN THE CASE OF JAMMU DEVELOPMENT AUTHORITY(JDA) WHICH HAS SUBSEQUE NTLY BEEN UPHELD BY HONBLE J&K HIGH COURT AND BY HONBLE SUPREME DECIS IONS AS DISCUSSED SUPRA THE HONBLE ITAT HAS RELIED ON THE DECISION OF J&K HIGH COURT IN THE CASE OF JDA WHICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE HONBL E SUPREME COURT. 9. LD. AR RELIED ON THE ORDER OF THE LD. CIT (A) IN THE COURSE OF HEARING THE LD AR ARGUED BASED ON THE DECISION OF HON'BLE PUNJAB A ND HARYANA HIGH COURT IN THE CASE OF TRIBUNE TRUST (2016) 76 TAXMANN.COM 363 (P&H). IN THIS CASE THE HON'BLE HIGH COURT HAS DECIDED THE ISSUE OF APPLICA BILITY OF SECTION 2(15) IN FAVOUR OF IMPROVEMENT TRUST MOGA THE HON'BLE HIGH COURT HAS ALSO CONSIDERED THE DECISION OF HON'BLE J&K HIGH COURT IN THE CASE JDA AND HAS TRIED TO DISTINGUISH IT BY HOLDING THAT: 'THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT FOR T HE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/APPEL LANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERAL PUBLIC UTI LITY. THE JUDGMENT WAS THEREFORE BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FO R THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUE STION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO UNDERSTAND HOW THI S ORDER CAN POSSIBLY BE RELIED UPON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED THEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPE CIAL LEAVE PETITION FILED AGAINST THAT ORDER IS THEREFORE OF NO ASSISTANCE TO THE REVENU E EITHER .' HON'BLE HIGH COURT OF PUNJAB & HARYANA HIGH COURT V IDE ORDER DT. 23/12/2016 IN CASE OF CIT(E) CHANDIGARH VS. M/S IMPROVEMENT TRUS T MOGA HELD AS UNDER: 73. THE TRIBUNAL ALSO RIGHTLY HELD THAT AN OBJECT O F GENERAL PUBLIC UTILITY DOES NOT NECESSARILY REQUIRE THE 66 OF 74 ITA-62-2015 AND IT A 147-2016 - 67 - ACTIVITIES TO BE FUNDED OR SUBSIDIZED BY THE STATE. SO LONG AS THE O BJECTS FALL WITHIN THE AMBIT OF THE WORDS 'OBJECT OF GENERAL PUBLIC UTILITY' IT IS SUFFICIENT. THE ACHIEVEMENTS OF THOSE OBJECTS DO NOT HAVE TO BE AS A RESULT OF STAT E FUNDING OR STATE SUBSIDY. THE TRIBUNAL ACCORDINGLY RIGHTLY HELD THAT THE AUTHORIT IES WERE NOT JUSTIFIED IN DENYING THE BENEFIT OF SECTION 11 AND HOLDING THAT THE ASSE SSEE WAS NOT COVERED BY THE WORDS 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL P UBLIC UTILITY' IN SECTION 2(15). THE TRIBUNAL THEREFORE RIGHTLY DIRECTED TH E ASSESSING OFFICER TO DELETE DISALLOWANCE OF EXEMPTION. 74. IT CANNOT POSSIBLY BE SUGGESTED THAT THE GOVERN MENT OF PUNJAB FORMED THE TRUSTS UNDER THE PUNJAB TOWN IMPROVEMENT ACT 1922 BECAUSE IT WANTED TO CARRY ON THE BUSINESS AS COLONIZERS OR DEVELOPERS UNDER T HE MASK OF THE CATEGORY 'OBJECTS OF GENERAL PUBLIC UTILITY'. 4 75. SECTION 28(2)(III) OF THE PUNJAB TOWN IMPROVEME NT ACT 1922 PERMITS A SCHEME UNDER THIS ACT TO PROVIDE INTER- ALIA FOR THE DISPO SAL OF THE LAND VESTED IN OR ACQUIRED BY THE TRUST INCLUDING BY LEASE SALE AND EXCHANGE THEREOF. THIS HOWEVER IS NOT THE PREDOMINANT ACTIVITY OR RESPONS IBILITY OF THE TRUST. NOR FOR THIS ASSESSEE IS MAKING PROFITS FROM THIS ACTIVITY ITS P REDOMINANT MOTIVE. 76. THE POWER OF THE ASSESSEE TO DISPOSE OF LAND CO NFERRED BY SECTION 28(2)(III) IS NOT AN ABSOLUTE OR INDEPENDENT POWER. IT IS CONFERR ED UPON THE ASSESSEE IN THE DISCHARGE OF ITS STATUTORY DUTIES IMPOSED ON IT BY THE PTI ACT OF FRAMING SCHEMES. SUB SECTION (1) OF SECTION 28 ENTITLES THE ASSESSEE TO COMBINE THE VARIOUS SCHEMES REFERRED TO IN CHAPTER-IV. SUB SECTION (2) STIPULATES THAT THE SCHEME 67 OF 74 ITA-62-2015 AND ITA 147-2016 - 68 - UNDER THE ACT MAY PROVIDE FOR A VARIETY OF THINGS INCLUDING THE DISPOSAL OF LAND BELONGING TO THE ASSESSEE. THIS POWER IS THEREFORE IN FURTHERANCE OF CONNECTED WITH AND IN RELATION TO A SCHEME IN CHAPTER-IV. IT IS NOT AN ABSOLUTE POWER INDEPENDENT OF AND UNCONNECTED WITH THE ASSESSEE'S STATUTORY FUNCTIONS UNDER THE PTI AC T. 77. THE PREDOMINANT ACTIVITY OF AND THE PURPOSE FOR THE ESTABLISHMENT OF THE ASSESSEE IS SUMMED UP IN TWO WORDS 'TOWN IMPROVEMEN T' IN THE TITLE 'PUNJAB TOWN IMPROVEMENT ACT 1922'. THE PREAMBLE IS TITLED 'AN ACT FOR THE IMPROVEMENT OF CERTAIN AREAS'. THE PREAMBLE STATES 'WHEREAS IT IS EXPEDIENT TO MAKE PROVISION FOR THE IMPROVEMENT AND EXPANSION OF TOWNS IN PUNJAB'. THE ACT IN GENERAL AND CHAPTER-IV THEREOF IN PARTICULAR INDICATES THE REAS ON FOR AND THE BASIS OF THE ESTABLISHMENT OF THE TRUST. ALMOST EVERY SECTION IN THE CHAPTER INDICATES CLEARLY THAT THE TRUST IS ESTABLISHED FOR THE PURPOSE OF 'A DVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY'. THIS IS THE PREDOMINANT PU RPOSE OF THE TRUST. 78. THE LANGUAGE OF THE PROVISIONS OF THE ACT ARE S ELF EXPLANATORY IN THIS REGARD. THE TRUST MUST DEAL WITH THE BUILDINGS UNFIT FOR HU MAN HABITATION THE DANGER CAUSED OR LIKELY TO BE CAUSED TO THE HEALTH OF THE INHABITANTS OF THE AREA ON ACCOUNT OF THE CONGESTED CONDITIONS OF STREETS OR B UILDINGS OR WANT OF LIGHT AIR VENTILATION OR PROPER CONVENIENCES IN AN AREA AND S ANITARY DEFECTS. THE TRUST IS REQUIRED TO FRAME THE STREET SCHEMES TO LAY OUT NEW STREETS THOROUGHFARES AND OPEN SPACES OR ALTER EXISTING STREETS WHENEVER IT A PPEARS TO THE TRUST THAT IT IS NECESSARY TO DO SO FOR THE PURPOSE OF PROVIDING BUI LDING SITES OR REMEDYING 68 OF 74 ITA-62-2015 AND ITA 147-2016 - 69 - DEFECTIVE VE NTILATION OR CREATING NEW OR IMPROVING EXISTING MEANS OF COMMUNICATION AND FACIL ITIES FOR TRAFFIC. 79. THE TRUST MUST ALSO PREPARE DEVELOPMENT SCHEMES . THIS DUTY CONTAINED IN SECTION 24 IS NOT AKIN TO THAT OF A PRIVATE DEVE LOPER OR A COLONIZER AS WRONGLY SUGGESTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE DEVELOPMENT SCHEME UNDER SECTION 24 IS PREPARED FOR THE PURPOSE OF DEVELOPMENT OF A LOCALITY. SUB SECTION (2) OF SECTI ON 24 PROVIDES THAT THE TRUST MAY IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AN D FOR THE PUBLIC ADVANTAGE TO PROMOTE AND CONTROL THE DEVELOPMENT OF AND TO PROVI DE FOR THE EXPANSION OF A MUNICIPALITY IN ANY LOCALITY ADJACENT THERETO WITHI N THE LOCAL AREA OF SUCH TRUST PREPARE 'AN EXPANSION SCHEME'. THE DEVELOPMENT SCHE ME THEREFORE IS FOR THE PUBLIC PURPOSE OF DEVELOPMENT OF ANY LOCALITY AND A N EXPANSION SCHEME IS ALSO PREPARED WHEN IT IS EXPEDIENT AND FOR THE PUBLIC AD VANTAGE AS OPPOSED TO A MERE PERSONAL ADVANTAGE AS IN THE CASE OF PRIVATE D EVELOPERS OR THE COLONIZERS. THE TWO CANNOT POSSIBLY BE COMPARED. THESE SCHEMES DO NOT CONTEMPLATE MERE DEVELOPMENT OF THE PLOTS AND THE CONSTRUCTION OF TH E PREMISES FOR SALE. THE TRUST MUST UNDER THE ACT ADOPT A HOLISTIC APPROACH FOR TH E BETTERMENT AND ADVANTAGE OF THE ENTIRE AREA WITHIN ITS JURISDICTION. 80. SECTION 25 WHICH PROVIDES FOR A HOUSING ACCOMMO DATION SCHEME TO BE FRAMED IS SIMILAR. THE TRUST IS REQUIRED TO FRAME S UCH A SCHEME IF IT IS OF THE OPINION THAT IT IS EXPEDIENT AND FOR THE PUBLIC ADVANTAGE T O PROVIDE HOUSING ACCOMMODATION FOR ANY CLASS OF INHABITANTS WITHIN I TS LOCAL AREA. THE TRUST IS THEREFORE TO BE MOTIVATED NOT BY PERSONAL BUT BY P UBLIC BENEFIT. SUCH ACTIVITIES CLEARLY FALL 69 OF 74 ITA-62-2015 AND ITA 147-2016 - 70 - WITHIN THE LAST CATEGORY OF CASES IN THE PROVISO TO SECTION 2(15) AS IT STOOD A T THE RELEVANT TIME NAMELY 'ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY '. 5 81. IT CAN HARDLY BE SUGGESTED THAT THE GOVERNMENT OF PUNJAB ESTABLISHED THE ASSESSEE'S TRUST AND CONFERRED UPON IT PUBLIC RESPO NSIBILITIES AND DUTIES OF THE NATURE SPECIFIED IN THE PTI ACT AS A CAMOUFLAGE FOR ITS COMMERCIAL TRADE AND BUSINESS VENTURES. THE CREATION AND INCORPORATION O F THE TRUST UNDER SECTION 3 IS FOR A PUBLIC PURPOSE. WE HAVE NO DOUBT WHATSOEVER THAT THE ACTIVITIES OF THE TRUST FALL WITHIN THE MEANING OF THE WORDS 'CHARITABLE PURPOSE ' IN SECTION 2(15). 82. WHETHER THE MANDATE OF THE ACT IS FOLLOWED BY S UCH A TRUST IS A DIFFERENT MATTER. THE FACTS IN THAT REGARD ARE RELEVANT IN EX AMINING WHETHER THE ACTIVITIES OF THE TRUST OF A GIVEN YEAR ENTITLED IT TO THE BENEFI T OF THE INCOME TAX ACT. MERE PROFIT MAKING ON ACCOUNT OF CERTAIN INCIDENTAL OR A NCILLARY ACTIVITIES OF THE TRUST DO NOT DISENTITLE IT TO THE EXEMPTIONS. THE TRUST CONS TITUTED UNDER THE PTI ACT IS LIKELY TO MAKE PROFIT ON ACCOUNT OF ITS COMMERCIAL OR BUSINES S ACTIVITIES SUCH AS WHEN IT ACTS PURSUANT TO THE POWER UNDER SECTION 28(2)(III) BY DISPOSING OFF ITS LANDS. THAT HOWEVER DOES NOT TAKE IT OUT OF THE DEFINITION OF 'CHARITABLE PURPOSE' IN SECTION 2(15). AS WE HELD EARLIER TRADE COMMERCE AND BUSI NESS IN SECTION 2(15) MUST BE SUCH AS TO INVOLVE AN ELEMENT OF PROFIT. PROFIT HO WEVER IS NOT THE PREDOMINANT MOTIVE OF SUCH TRUSTS. IN OUR VIEW CONSIDERING THE NATURE OF THE ACT SELLING OF PLOTS AND PREMISES BY THE TRUST IS ONLY INCIDENTAL AND AN CILLARY TO ITS MAIN PURPOSE WHICH AT THE COST OF REPETITION IS 'TOWN IMPROVEMENT' IN 70 OF 74 ITA-62-2015 AND ITA 147- 2016 - 71 -ALMOST EVERY RESPECT. EVEN WHERE THE PLO TS ARE DEVELOPED AND PREMISES ARE CONSTRUCTED AND SOLD AT THE MARKET PRI CE THE ACTIVITY IS NOT COMMERCIAL OR BUSINESS VENTURE PER SE BUT ONE NECES SITATED ON ACCOUNT OF THE IMPLEMENTATION OF THE PROVISIONS OF THE TRUST THROU GH STATUTORY SCHEMES. THE MAIN PURPOSE OF SUCH SCHEMES IS DRIVEN BY PUBLIC REQUIRE MENTS AND NOT AS A COMMERCIAL VENTURE PER SE. THEY ARE INCIDENTAL TO T HE MAIN OBJECT OF THE TRUST. 83. IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT INDICATED ANY FACTS WHICH INDICATE THAT THE ASSESSEE DEVIATED FROM THIS PRINC IPLE. HE HAS MERELY REFERRED THE EXTENT OF PROFIT MAKING ACTIVITIES WITHOUT CORRELAT ING THE SAME TO THE OTHER ACTIVITIES OF THE TRUST. IN OUR VIEW THEREFORE TH E ORDER OF THE TRIBUNAL MUST BE UPHELD. 84. MR. GOEL RELIED UPON THE JUDGMENT OF THE HIGH C OURT OF JAMMU & KASHMIR IN JAMMU DEVELOPMENT AUTHORITY V. UNION OF INDIA AND A NOTHER ITA NO. 164 OF 2012. THE DIVISION BENCH DISMISSED THE APPEAL WITH THE FO LLOWING ORDER:- '1. THE INSTANT APPEAL UNDER SECTION 260-A OF THE I NCOME TAX ACT 1961 (FOR BREVITY THE ACT) IS DIRECTED AGAINST ORDER DATED 1 4.06.2012 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR UPHOLDING THE ORD ER WITHDRAWING THE STATUS OF CHARITABLE INSTITUTION GIVEN TO THE APPELLANT- ASSE SSEE UNDER SECTION 12AA(1)(B)(I)OF THE ACT. THE TRIBUNAL HAS REACHED A CATEGORICAL CONCLUSION THAT THE ASSESSEE-JAMMU DEVELOPMENT AUTHORITY CANNOT BE REGARDED AS AN INSTITUTION OR TRUST WHICH MAY HAVE BEEN SET UP TO ACHIEVE THE OBJECTS ENUMERATED UNDER SECTION 2 OF THE ACT PARTICULARLY IN VIEW OF THE ADDITION OF FIRST AND SECOND PROVISO MADE BY THE FINANCE ACT 2008 W. E.F. 01.04.2009 TO SECTION 12AA OF THE ACT. THERE ARE FINDINGS OF FACT THAT TH E ASSESSEE-APPELLANT HAS NOT BEEN ACTING TO ADVANCE ANY OF THE OBJECT CONCERNING GENERAL PUBLIC UTILITY. EVEN OTHERWISE THE PROVISO WHICH HAS BEEN ADDED BY THE F INANCE ACT 2008 W.E.F. 01.04.2009 STIPULATES THAT THE ADVANCEMENT OF ANY O THER OBJECT OF THE GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE I F IT INVOLVES CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE COMMERCE OR BUSINE SS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR B USINESS OR A CESS OR FEE OF ANY OTHER CONSIDERATION. 2. WE FIND THAT NO QUESTION OF LAW MUCH LESS A SUBS TANTIAL QUESTION OF LAW WOULD EMERGE FROM THE IMPUGNED ORDER OF THE INCOME TAX AP PELLATE TRIBUNAL WARRANTING ADMISSION OF THE APPEAL. THE APPEAL IS W HOLLY WITHOUT MERIT AND IS THUS LIABLE TO BE DISMISSED. 3. FOR THE REASONS AFOREMENTIONED THIS APPEAL FAIL S AND SAME IS DISMISSED ALONGWITH CONNECTED APPLICATION(S).' 6 THE JUDGMENT IS OF NO ASSISTANCE TO THE APPELLANT F OR THE DIVISION BENCH OBSERVED THAT THERE WERE FINDINGS OF FACT THAT THE ASSESSEE/ APPELLANT HAD IN THAT CASE NOT BEEN ACTING TO ADVANCE ANY OBJECT CONCERNING GENERA L PUBLIC UTILITY. THE JUDGMENT WAS THEREFORE BASED ON THE FACTS OF THIS CASE. IT IS OBVIOUSLY FOR THIS REASON THAT THE DIVISION BENCH HELD THAT NO QUESTIO N OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE ORDER OF THE TRIBUNAL. IT IS DIFFICULT TO UNDERSTAND HOW THIS ORDER CAN POSSIBLY BE RELIED UP ON AS LAYING DOWN ANY LAW WHEN COURT ITSELF RECORDS THAT THE ORDER IMPUGNED T HEREIN IS BASED ON THE FACTS OF THAT CASE. THE DISMISSAL OF THE SPECIAL LEAVE PETIT ION FILED AGAINST THAT ORDER IS THEREFORE OF NO ASSISTANCE TO THE REVENUE EITHER. 86. THE ASSESSEE NAMELY MOGA IMPROVEMENT TRUST IS UNDOUBTEDLY AN AUTHORITY CONSTITUTED IN INDIA. IT IS ALSO CONSTITUTED BY OR UNDER A LAW NAMELY THE PUNJAB TOWN IMPROVEMENT ACT 1922. FURTHER IT IS ENGAGED FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODAT ION. IT IS ALSO CONSTITUTED FOR THE PURPOSE OF PLANNING DEVELOPMENT OF IMPROVEMENT OF CITIES TOWNS AND VILLAGES OR FOR BOTH AS IS EVIDENT FROM SECTIONS 22 TO 28 OF THE PTI ACT QUOTED ABOVE. THE APPELLANTS WOULD THEREFORE UNDOUBTEDL Y HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A) . THE ASSESSEE WOULD NOT HAVE BEEN ENTITLED TO THE BENEFIT OF SECTION 10(20A) UPON ITS OMISSION BY THE FINANCE ACT 2002 WITH EFFECT FROM 01.04.2003. SECTION 10(20A) OF THE ACT DID NOT CONTAIN ANY OTHER REQUIREMENT. IT WAS WIDER THAN SECTION 2(15) . HOWEVER SECTION 2(15) AND THE CORRESPONDING SECTIONS INCLUDING SECTIONS 11 12 12A AND 12AA ARE INDEPENDENT OF SECTION 10(20A) OF THE ACT. UPON THE OMISSION OF SECTION 10(20A) THE PROVISIONS OF THE OTHER SECTIONS WERE NOT AFFECTED. THEY REMAINED INTACT. AN ASSESSEE COULD H AVE BEEN ENTITLED TO THE PROVISIONS OF SECTION 10(20A) AND THE OTHER PROVISIONS SIMULTANEOUSLY. THE OMISS ION OF ONE HOWEVER DOES NOT AFFECT THE VALIDITY OR TH E EXISTENCE OF THE OTHERS. THE TWO PROVISIONS ARE DISTINCT AND INDEPENDENT OF EACH OTHER. THUS THE OMISSION OF SECTION 10(20A) DID NOT AFFECT THE RIGHTS OF THE PARTIES CLAIMING THE BENEFIT OF SECTIONS 2(15) 11 12 12A AND 12AA OF THE ACT. 10. SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINATE B ENCH OF ITAT CHANDIGARH IN THE CASE OF THE IMPROVEMENT TRUST SANGRUR VS. T HE ITO IN ITA NO. 987/CHD/2014 AND BY THE HON'BLE ITAT AMRITSAR BENCH AMRITSAR IN THE CASE OF HOSHIARPUR IMPROVEMENT TRUST VS. INCOME TAX OFFICER WARD 1 WHEREIN FULL RELIEF HAS BEEN ALLOWED TO THE APPELLANT. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE BY THE REVENUE. 11. FOLLOWING THE SAME WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION WHICH WAS BASED THE ON CORRECT INTERPRETATION OF SECTION 2(15) 12. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/11/2017 AG COPY TO: THE APPELLANT THE RESPONDENT THE CIT TH E CIT(A) THE DR