TaxTMI 
TaxTMI 
2012 (8) TMI 305
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.... section 10 (20A) of the IT. Act till A.Y.2002-03. Section 10(20A) was removed from the statute w.e.f. AY.2003-04. Furthermore, section 10(20) which defined local authorities placed limitations under this section. Hence assessee no more enjoyed exemption U/S 10(20A) or section 10(20). Therefore, assessee applied for registration under sec.12A with the Director of Income-tax (Exemption), Mumbai, and was granted Registration u/s.12A vide order of DIT No. DIT(E)/McIl2A136714/2003 dtd. 22.07.2002. Subsequently, attempt was made to cancel the registration granted and the learned DIT(E), Mumbai, issued a show cause notice to assessee dtd. 08/02/2006 vide letter No. DIT(F)/MC/Show Cause /05-06/295, in response to which, assessee filed reply through letter dtd.24.02.2006 to the DIT(E) objecting to cancellation of registration. No action by the DIT(E) has been taken so far and as such the registration granted uJs.12A has not been withdrawn as yet. 4. The Assessing Officer examined the whole issue in the assessment order and held that despite the registration under section 12A having not been withdrawn by the DIT(E), the Assessing Officer is entitled to go beyond and verify whether ....
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....ction 13 cannot be made applicable to the case of public enterprises/public sector undertakings/public sector utility service provider. The basic incentive provided in the exemption section cannot be intended for utilization of public property and application of income of public property administered through Govt. reaching the people as a whole. (4) The absence of profit motive in the functioning of the MMRDA does not by itself create a situation of total exemption from the charge of income tax in respect of income which has earned or likely to earn from its activities comprising of providing various infrastructural facilities and also deriving income ancillary to its principal activities such as rental income from let out property/sale and leasing out of commercial plots to its customers, development charges, income from investments etc. In view of the nature and activities being carried out by the authority as well as the legal status discussed in the foregoing paragraphs, its claim for Exemption under section 11 of the I.T. Act cannot be entertained. 6. Before the CIT (A) assessee raised certain fundamental issues i.e. (a) Whether during the currency of r....
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.... held on the issue whether a local authority is entitled to exemption under section 11, 12 and 13. Following the decision of the ITAT Ahmedabad Bench in the case of Gujarat Maritime Board vs. CIT (2005) 147 Taxman 31 (Mag.) which in turn were upheld by the Hon'ble Gujarat High Court and further affirmed by the Supreme Court in the case of CIT vs. Gujarat Maritime Board 295 ITR 561 and further on the conclusions derived from the decision of the Hon'ble Supreme Court in the case of CIT vs. AP State Roadways Transport Corporation 159 ITR 1 and DIT vs. Bharat Diamond Bourse 259 ITR 280 it was held that for the purpose of falling under section 11 it is not necessary that the status of assessee should be that of a Trust and any institution or Trust is entitled to claim exemption, if it is satisfied the conditions mentioned in section 11 to 13. 10. The CIT (A) further considered in Ground No.3 the findings of AO that the activities of assessee are not genuine and they are not charitable in nature. On this issue also since the list of present activities undertaken by assessee are for the public at large which was accepted at the time of grant of registration under section 12A, A....
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....Maritime Boards (supra) are squarely applicable to the assessee's case. 5. It is necessary to reproduce sub-sec. (15) of Sec. 2 of the Act, which defines term 'charitable purpose which reads as under:- "Charitable purpose" includes relief of the poor, education, medical relief, preservation of environment including watersheds, forests and wildlife and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity." 6. In the case of Gujarat Maritime Boards (supra) while interpreting the expression "Charitable purpose" in section 2(15) of the I.T. Act, the Hon'ble Supreme Court has held as under:- "14. We have perused number of decisions o....
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.... Hon'ble Supreme Court of India in the case of Gujarat Maritime Boards (supra). 7. In our opinion, the activities of the SRA, present assessee are charitable in nature and hence, the assessee is entitled for exemption u/s.11 of the I.T. Act. Moreover, the assessee has been also granted the registration u/s.12AA that has not been cancelled. Therefore, in our opinion, in the light of our above discussion no interference is called in the order under challenged before us and we accordingly confirm the order of the Ld. CIT (A) and dismiss the ground taken by the revenue". Similar view was also expressed by the Coordinate Bench in the case of Maharashtra Housing & Area Development Authority in ITA No.5758/Mum/2010 where the Coordinate Bench held as under: "3. We have perused the records and considered the matter carefully. The dispute is regarding allowability of deduction under section 11 of the Income Tax Act in case of the assessee. There is no dispute that the assessee has been registered under section 12AA of the Income tax Act by the DIT(E) which means that charitable character of the assessee is not in dispute. Therefore, exemption under section 11 in case of the....