AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (12) TMI 354
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.... facts of the case, in brief, are that the assessee filed an application in Form No. 10A for registration under section 12A of the Act on August 31, 2006. The assessee enclosed a copy of Notification No. 7(10)/Udh/71 dated June 9, 1981 issued by the Government of Rajasthan by which various Urban Improvement Trusts (UITs) were reconstituted, including the assessee and copies of income and expenditure accounts and balance sheets for the period of three years, i.e., the year ending March 31, 2003 to March 31, 2005 with the abovesaid application. Copies of aims and objectives were also filed with the application. The aims and objectives filed with the application were stated as under : 1. To plan the different commercial or residential projects. 2. For implementation of the project to acquire the land, pass the award for compensation or settlement of awards. 3. To develop the basic and fundamental services in the different commercial or residential projects of the trust like : a. To construct the roads. &n....
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.... the facts involved in the case of CIT v. Gujarat Maritime Board [2007] 295 ITR 561 (SC) and again rejected the application of the assessee for granting the registration under section 12A of the Act. The reliance was placed on the decision of the Income-tax Appellate Tribunal, Amritsar Bench in the case of Jalandhar Development Authority v. CIT [2009] 124 TTJ (Amritsar) 598. Now the assessee is in appeal. 4. Learned counsel for the assessee submitted that objectives of the assessee are charitable in nature and this issue is squarely covered in favour of the assessee vide various judgments. The reliance was placed on the following case laws : (i) CIT v. Gujarat Maritime Board [2007] 295 ITR 561 (SC). (ii) Jodhpur Development Authority v. CIT [2012] 145 TTJ (Jd) 221. (iii) CIT v. Improvement Trust [2009] 308 ITR 361 (P&H). (iv) Improvement Trust v. CIT, Hissar [2007] 12 SOT 307 (Delhi). 5. In his rival submissions the learned Departmental representative strongly supported the impugned order passed by the learned Commissioner of Inco....
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....siness or any activity of rendering any service in relation to any trade, commerce, or business for payment to be non-charitable within the meaning of proviso must be carried on by the trust or institution, not to subserve its charitable purposes, but with the real object of carrying on such activity on commercial lines. If the predominant object of such activity is to carry out the charitable purposes of the trust or institution then such activity will not lose its character of a charitable purpose merely because some profit arises from the activity." 6.2.1. In the present case also the main objects of the assessee are to construct the roads, provide the water and electricity facility, to construct the drainage system, to improve the gardens and open space, to provide housing facility by allotting the residential plots, etc., which are in the nature of general public utility and even though the assessee might be carrying on with a profit motive but such activity was incidental to the objects of the assessee, therefore, it was entitled for registration under section 12A of the Act. 6.3. Similarly, the Income-tax Appellate Tribunal, Delhi "F" Bench in the case of Improvement Trust....
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....om the delay in filing the application, conditions of section 12A(a) were satisfied. The procedure for registration has been prescribed in section 12AA. On a careful study of this section, it is clear that the Commissioner has to examine the following two things before registering a trust or an institution : (a) objects of the trust or the institution, and (b) genuineness of its activities. On a combined perusal of the provisions of sections 23 to 44 of the 1982 Act, it would be clear that the basic intent and purpose of constituting the assessee was to develop the town of Hansi for securing better amenities and better living for the people of the town. All these activities constituted charitable purposes, as understood under section 2(15) under the residuary clause of 'object of general public utility'. Therefore, there was nothing in the objects of the assessee, which could come in the way of its registration. During the financial year 2002-03, the assessee had earned substantial income by the sale of land. Income had also been earned from banks by way of interest and charges recovered from var....
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..... The assessee, the Gujarat Maritime Board, which was constituted under the Gujarat Maritime Board Act, 1981, for the purpose of development and maintenance of minor ports in the State of Gujarat, applied for registration under section 12A of the Income-tax Act, 1961, as a charitable institution. The Commissioner rejected the assessee's application. On appeal, the Appellate Tribunal held that the object of the assessee was to develop and maintain minor ports in the State of Gujarat which was an object of general public utility and directed the Commissioner to register the assessee under section 12A ; and the High Court affirmed the decision of the Appellate Tribunal." 6.3.2. It has further been held as under : "Affirming the decision of the High Court, that the assessee was under a legal obligation to apply its income which was directly and substantially from the business held under trust for the development of minor ports in the State of Gujarat. The assessee was established for the predominant purpose of development of minor ports within the State of Gujarat, the management and control of the Board was essentially wi....
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....e filed the return of income declaring total income at nil. In the return gross loss was shown at Rs. 2,15,60,346, which was claimed to be carried forward to the next year. However, the assessment was completed at a loss of Rs.1,81,59,300 by disallowing the benefit of carry forward of loss. The Assessing Officer observed that the assessee had shown gross receipts of Rs. 1,42,02,845 and as per the provisions of section 44AB, the assessee was required to get its accounts audited and to submit the copy of audit report within prescribed time limit before the Assessing Officer but the assessee failed to comply with the provisions of section 44AB of the Act. Therefore, the penalty proceedings under section 271B of the Act were initiated by issuing notice on October 3, 2007. In compliance to the said notice, the assessee filed reply dated February 25, 2008 stating therein as under : "The assessee has claimed the status of charitable trust and also applied for the registration under section 12A. The request of registration was rejected by the worthy Commissioner of Income-tax, Bikaner. Against the order of rejection of registrat....
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.... 2. CST v. Sai Publication Fund [2002] 126 STC 288 (SC) 3. Sole Trustee, Lok Shikshana Trust v. CIT [1975] 101 ITR 234 (SC). 11.1. It was stated that the assessee had shown only loss, which was admitted by the Assessing Officer and even after scrutiny only loss was determined. It was further stated that the activities of the assessee-trust not being in the nature of the business, the provisions of section 44AB were not attracted and the consequent levy of penalty under section 271B was not justified. 11.2. The learned Commissioner of Income-tax (Appeals), after considering the submissions of the assessee, observed that the gross receipts of the assessee were Rs. 1,42,02,845, which exceeded the limit prescribed under section 44AB of the Act and the assessee was required under the law not only to get its accounts audited but also to file the audit report within the stipulated time but the assessee failed on both the counts, therefore, the penalty under section 271B of the Act was leviable. He further observed that the assessee was not a local authority or at par with municipalities and the activities of the assessee were comme....