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2013 (12) TMI 354
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....n under section 12A of the Income-tax Act, 1961 (hereinafter referred to as "the Act" in short). 3. The 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 ....
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.... Income-tax, on the direction of the Tribunal, adjudicated the case and observed that the facts of the assessee's case were different from 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). ....
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....lifies the 'object of general public utility' and not its 'advancement' or accomplishment or carrying out. 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 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 ....
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....bed form and in the prescribed manner. The assessee had made an application to the Commissioner in the prescribed form and in the prescribed manner. Therefore, apart from 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 fina....
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....c welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfare of the general public the purpose would be a charitable purpose. 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 G....
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....rned Commissioner of Income-tax (Appeals). 10. First we will deal with I. T. A. No. 59/Jodh/2011 relating to the assessment year 2003-04. The facts of the case, in brief, are that the assessee 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 tr....
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....reliance was placed on the following judgments of the honourable Supreme Court : 1. CIT v. Lahore Electric Supply Co. Ltd. [1966] 60 ITR 1 (SC). 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 co....
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....ntion of the assessee to cause loss to the Revenue, so as per section 271B of the Act, penalty should not be levied. Reliance was placed on the judgment of the honourable Uttarakhand High Court in the case of CIT v. Iqbalpur Co-operative Cane Development Union Ltd. [2009] 23 DTR 60 (Uttarakhand) ; [2009] 179 Taxman 27 (Uttarakhand). 13. In his rival submissions the learned Departmental representative strongly supported the orders of the authorities below. 14. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is noticed that the Assessing Officer while levying the penalty under section 271B of the Act, observed that the assessee-trust was not registered under section 12A of the Act, therefore, it was not entitled to deduction under section 11 of the Act and its income has rightly been assessed as business income vide assessment order dated October 3, 2007. Thus, the assessee was required to get his accounts audited and to submit copy of such audit report as per the provisions of section 44AB of the Act. From the above observations of the Assessing Officer, it is clear that the income of t....