Greater Mohali Area Development Authority, Mohali v. CIT II, Chandigarh

ITA 349/CHANDI/2008 | misc
Pronouncement Date: 16-04-2014 | Result: Dismissed

Appeal Details

RSA Number 34921514 RSA 2008
Bench Chandigarh
Appeal Number ITA 349/CHANDI/2008
Duration Of Justice 1 year(s) 11 month(s) 22 day(s)
Appellant Greater Mohali Area Development Authority, Mohali
Respondent CIT II, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 16-04-2014
Date Of Final Hearing 26-03-2014
Next Hearing Date 26-03-2014
Assessment Year misc
Appeal Filed On 24-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R. SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 349/CHD/2008 ASSESSMENT YEARS : GREATER MOHALI AREA DEVELOPMENT VS. CIT-II CHANDI GARH AUTHORITY MOHALI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.K. TREHAN RESPONDENT BY: SHRI AMARVEER SINGH DATE OF HEARING 26.3.2014 DATE OF PRONOUNCEMENT 16.4.2014 O R D E R PER T.R. SOOD THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 5.3 .2008 OF THE LD CIT-II CHANDIGARH. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE GREATER MOHALI AREA DEVELOPMENT AUTHORITY (GMADA) IS ENGAGED IN COMMERCIAL ACTIVITY OF DEVELOPMENT AND S ALE OF PLOTS FOR RESIDENTIAL AND COMMERCIAL PURPOSES AND CONSTRUCTIO N OF FLATS HOUSES AND SALE THEREOF AND STATING THAT THE ASSESSES DOMI NANT ACTIVITY IS COMMERCIAL IN NATURE AND FOR THE MOTIVE OF EARNING OF PROFITS WITHOUT CONSIDERING THE FACT THAT GREATER MOHALI AREA DEVEL OPMENT AUTHORITY IS CONSTITUTED U/S 29(1) OF THE PUNJAB REGIONAL AND TO WN PLANNING AND DEVELOPMENT ACT 1995 AND THE OBJECT OF THE GMADA I S GIVEN IN THE SECTION 28 OF THE PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPMENT ACT 1995 WHICH ARE OBJECT OF GENERAL PUBLIC UTILI TY WHICH IS DEFINED IN SECTION 2(15) OF THE INCOME TAX ACT AND CHARITABLE IN NATURE. 2. THAT THE LEARNED CIT HAS STATED THAT ALTHOUGH TH E VARIOUS INFRASTRUCTURE FACILITIES PROVIDED IN THE AREA UNDE R THE JURISDICTION OF GMADA ARE CHARITABLE IN NATURE BUT REGISTRATION U/S 12 A WAS REJECTED BY COMPARING GMADA WITH BIG PRIVATE DEVELOPERS / BUILD ERS WHICH IS NOT CORRECT. 3. THAT THE LEARNED CIT HAS NOT CONSIDERED THE BIG INFRASTRUCTURE PROJECTS WHICH ARE UNDER IMPLEMENTATION BY THE GMAD A INVOLVING HUGE EXPENDITURE WITHOUT ANY COMMERCIAL RETURN ON SUCH E XPENDITURE AND THESE ACTIVITIES ARE OF GENERAL PUBLIC UTILITY A ND CHARITABLE IN NATURE. 4. THAT THE LEARNED CIT HAS NOT CONSIDERED THE FOLL OWING JUDICIAL PRONOUNCEMENTS RELEVANT FOR GRANTING REGISTRATION U /S 12 A OF INCOME TAX ACT. I) CIT V. ANDHRA PRADESH STATE ROAD TRANSPORT CORPO RATION (1986) 159 ITR 1 (SC) 2 II) GUJARAT MARITIME BOARD 2007-TIOL-237-SC-IT III) CIT V. AGRICULTURAL PRODUCE AND MARKET COMMITT EE (2007) 163 TAXMAN 359 (BOM.). 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE A SSESSEE HAD APPLIED FOR REGISTRATION U/S 12A(A) OF THE ACT. IT WAS MAINLY CONTENDED BEFORE THE LD. COMMISSIONER THAT T HE ASSESSEE-AUTHORITY WAS ENGAGED IN THE CHARITABLE AC TIVITIES BECAUSE IT WAS REQUIRED TO DO DEVELOPMENT ACTIVITIE S IN THE SPECIFIED AREA UNDER PUNJAB REGIONAL AND TOWN PLANN ING AND DEVELOPMENT ACT 1995. IT WAS MAINLY ENGAGED IN TH E CARRYING OUT OF FOLLOWING ACTIVITIES: (I) DEVELOPMENT OF REHRI MARKET; (II) WATER SUPPLY AND SEWERAGE; (III) DEVELOPMENT OF SPORTS COMPLEX; (IV) BRIDGES; (V) BUS QUEUE SHELTER; (VI) BUS STANDS; (VII) SWIMMING POOLS; (VIII) COMMUNITY CENTRES; (IX) TOILET BLOCKS; (X) DEVELOPMENT OF PARKS; (XI) CREMATION GROUNDS; (XII) CONSTRUCTION OF SCHOOL BUILDING; (XIII) SEWERAGE TREATMENT PLANT; (XIV) LAND IS GIVEN AT SUBSIDIZED RATES TO SCHOOL. AS PER TERMS OF ALLOTMENT LETTER TO SCHOOLS EDUCATION AT SUBSIDIZED RATES IS TO BE PROVIDED TO CHILDREN BELONGING TO POOR FAMILIES; (XV) LAND IS ALSO GIVEN TO HOSPITALS AT SUBSIDIZED RATES AND AS PER TERMS OF ALLOTMENT LETTER HOSPITALS TO PROVIDE TREATMENT TO POOR PARTIES AT SUBSIDIZED RATES; (XVI) ALLOTMENT OF BOOTHS TO REHRI MARKET OWNERS AT HIGHLY SUBSIDIZED RATES WHOSE SHOPS WERE DESTROYED IN FIRE ; (XVII) RESETTLEMENT OF SLUM DWELLERS OF GURUNANAK C OLONY IN SECTOR 49 MOHALI. SITES WERE ALLOTTED TO THESE SL UM DWELLERS FREE OF COST; (XVIII) GMADA IS PLANNING TO BRING WATER FOR THE RE SIDENTS OF MOHALI FROM KAJAOULI WATER WORKS COVERING THE DISTANCE OF 25 KMS THROUGH PIPELINES AT AN ESTIMATED COST OF RS. 100 C RORES; (XIX) LAND IS TO BE ACQUIRED FOR THE CONSTRUCTION O F APPROACH ROADS AND EXPRESS HIGHWAYS FOR UPCOMING AIR PORT AT MOHALI AT ESTIMATED COST OF RS. 800 CRORES; (XX) CONSTRUCTION OF HOUSES FOR ECONOMICAL WEAKER S ECTIONS OF SOCIETY AT COST OR AT SUBSIDIZED RATES; AND (XXI) LAND ALLOTTED TO RELIGIOUS BODIES AT VERY SUB SIDIZED FOR CONSTRUCTION OF TEMPLES GURUDWARAS DHARAMSHALAS E TC. THE LD. COMMISSIONER DID NOT FIND MUCH FORCE IN THE SUBMISSIONS AND FOLLOWING THE DECISION OF CHANDIGAR H BENCH IN 3 CASE OF PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHO RITY ITA NO. 764/CHD/2003 DECIDED THE ISSUE AGAINST THE ASSE SSEE. 4 AT THE OUTSET LD. D.R. FOR THE REVENUE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY T HE DECISION OF THIS BENCH IN PUNJAB URBAN PLANNING AND DEVELOPM ENT AUTHORITY (IN SHORT PUDA) 103 TTJ 988. 5 ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ASSESSEE NO DOUBT WAS CARVED OUT OF PUDA ONLY UNDER THE SAME ACT I.E. PUNJAB REGIONAL AND TO WN PLANNING AND DEVELOPMENT ACT 1995 TO CARRY OUT DEV ELOPMENT ACTIVITIES IN THE SPECIFIED AREA. HOWEVER HE TRIE D TO EMPHASIZE THAT HOW THE ASSESSEE WAS ENGAGED IN VARI OUS ACTIVITIES WHICH ARE IN THE NATURE OF CHARITABLE AC TIVITIES. HOWEVER HE COULD NOT POINT OUT ANY CONTRARY DECIS ION. 6 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE TRIBUN AL IN CASE OF PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHORITY VS. CIT (SUPRA). HEAD NOTE OF THE DECISION READS AS UNDER: CHARITABLE TRUST REGISTRATION U/S 12A LOCAL AU THORITY CONSTITUTED FOR PLANNED DEVELOPMENT OF STATE FOR CARRYING OUT ITS OBJECTS ASSESSEE IS ACQUIRING LANDS AT NOMINAL RAT ES AND SELLING THE SAME AFTER DEVELOPING IT TO GENERAL PUBLIC AT H IGHER RATES ASSESSEE IS NOT ALLOTTING HOUSES TO POOR MASSES FRE E OF COST FACILITIES LIKE PARKS SCHOOLS COMMUNITY CENTRES E TC. PROVIDED TO PLOT HOLDERS ARE A TOOL TO ATTRACT INVESTORS AND HI DDEN COST OF THESE FACILITIES ARE ALREADY INCLUDED IN COST CHARGED FRO M PUBLIC OBJECTS OF ASSESSEE ARE THEREFORE NOT OF CHARITABL E NATURE BUT MORE OF COMMERCIALIZED NATURE INVOLVING PROFIT MOTI VE RES JUDICATA IS NOT APPLICABLE TO INCOME-TAX PROCEEDING S FURTHERMORE ORDER PASSED BY LOWER AUTHORITY IS NOT BINDING ON THE TRIBUNAL ASSESSEES ACTIVITIES NOT BEING OF CHARI TABLE NATURE APPLICATION U/S 12A WAS RIGHTLY REJECTED BY CIT. SINCE THE FACTS AND THE CONTENTIONS ARE IDENTICAL T O THE FACTS AND CONTENTIONS IN THE CASE OF PUDA AND THEREFORE T HIS DECISION IS SQUARELY APPLIED TO THE PRESENT CASE. FURTHER THE ASSESSEE-AUTHORITY HAS BEEN CONSTITUTED UNDER SAME PROVISION 4 OF SAME ACT I.E. PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPMENT ACT 1995. THEREFORE IN OUR OPINION T HE ISSUE RAISED BY THE ASSESSEE STANDS COVERED BY THE EARLIE R DECISION OF THE TRIBUNAL IN CASE OF PUDA. FOLLOWING THE SAM E WE DECIDE THIS ISSUE AGAINST THE ASSESSEE. 7 IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16.4.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :16.4.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR