2010 (2) TMI 1274 - AT - Income Tax

Tribunal directs fresh assessment on taxability of Doon Valley Authority's income

M/s Doon Valley Special Area Development Authority, Dehradun Versus ACIT, DCIT (OSD), Addl. CIT and Vice-Versa.

M/s Doon Valley Special Area Development Authority, Dehradun Versus ACIT, DCIT (OSD), Addl. CIT and Vice-Versa. - TMI Issues involved: Appeals and cross-objection filed by the assessee and Revenue against the order of CIT(A) for AY 2004-05, 2005-06 & 2006-07, in the matter of order passed u/s 143(3) of the IT Act.The judgment pertains to the appeals and cross-objection filed by the assessee and Revenue against the order of CIT(A) for AY 2004-05, 2005-06 & 2006-07, in the matter of order passed u/s 143(3) of the IT Act. The assessee, Doon Valley Special Area Development Authority, was established with the objective of planned development and ecological balance maintenance. The AO had taxed the income of the assessee, considering it non-charitable, as it was not registered u/s 12AA at the time. However, the assessee later obtained registration u/s 12AA. The Tribunal referred to a similar case and directed the matter to be reconsidered by the AO to determine the taxability of expenses incurred by the assessee for charitable purposes. The Tribunal ordered the restoration of all appeals to the AO for fresh assessment based on the directions given in the previous order. The AO was directed to decide the issue accordingly. The appeals and cross-objections were allowed for statistical purposes.In summary, the judgment addresses the issue of taxability of income of the Doon Valley Special Area Development Authority, emphasizing the importance of registration u/s 12AA for claiming charitable status. The Tribunal's decision to restore the appeals to the AO for fresh assessment reflects the need for a thorough examination of expenses incurred by the assessee for charitable purposes.