TaxTMI 
TaxTMI 
2014 (4) TMI 102
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....ads as under: 'Definitions. 2. In this Act, unless the context otherwise requires,- (1) ............... (2) ................ (15) "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: Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lakh rupees or less in the previous year;'  ....
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....e tax payer. The legislative intent is, thus, clearly in favour of the impact of the provisos to section 2(15) being allowed or being given effect to in determination of the total income for a particular year, being a variable phenomenon (refer para 8 in Maharashtra Housing & Area Development Authority vs. Addl. DIT(E) [2013] 58 SOT 196 (Mum.)). Reliance was placed on the following decisions: i. CIT vs. Sarvodaya Ilakkiya Pannai [2012] 343 ITR 300 (Mad.) ii. Maharashtra Housing & Area Development Authority vs. ADIT(E) (supra); iii. Khar Gymkhana vs. DIT(E) (in ITA No.373/Mum/2012 dated 10.07.2013); iv. Mahatma Gandhi Charitable Society vs. CIT [2013] 142 ITD 565 (Cochin- Trib.); v. Rajasthan Housing Board vs. CIT [2012] 19 ITR (Trib) 524 (Jp.); vi. Asst. CIT vs. Aurangabad Holiday Resorts (P.) Ltd. [2009] 118 ITD 01 (Pune) and vii. Gujarat Cricket Association vs. DIT (E) [2012] 19 ITR (Trib) 520 (Ahbd). 3.2 On facts, the assessee is an Authority established under an Act passed by the State Legislature, namely, the Mumbai Me....
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....essment proceedings is to verify the application of income of a charitable institution for charitable purposes and the satisfaction of other conditions, as spelled out in sections 11 to 13 of the Act, subject to which the exemption to the said income as not forming part of the total income is granted. It is to be noted that per the amended law, applicable w.e.f. 01.04.2009 (i.e., A.Y. 2009-10 onwards), the law links the manner in which the object, per se charitable, is achieved or accomplished, with it being so or regarded as so under the Act, in-so-far as it is toward the advancement of an object of general public utility (Maharashtra Housing & Area Development Authority (supra) - para 8). In other words, the only course available in law is for the cancellation of the said registration where the first proviso to section 2(15) is attracted. As regards the application of the second proviso to section 2(15), which limits the operation of the first proviso to an extant threshold limit qua the receipts of the institution from its activities (presently at Rs.25 lacs), the same, where so, could be reviewed inasmuch as the withdrawal of registration in the first instance had been occasion....
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....; ii. Mumbai Metropolitan Region Development Authority (in ITA Nos.5584 & 5062/Mum/2009 dated 29.06.2012); iii. Jalandhar Development Authority vs. CIT [2009] 124 TTJ (Asr) 598; iv. Tamil Nadu Cricket Association vs. Director of Income-tax (Exemptions) [2013] 57 SOT 439 (Chennai); v. Punjab Urban Planning & Development Authority vs. CIT [2006] 103 TTJ (Chd.) 988; vi. Jammu Development Authority vs. CIT [2012] 52 SOT 153 (Asr.)(URO); vii. Improvement Trust vs. CIT [2013] 30 taxmann.com 58 (Asr.); Findings 4. Having heard both the parties at length, and given our careful consideration to the matter, we proceed with our analysis/decision. 4.1 At the outset, however, it would be relevant to clarify an aspect of the matter having a direct bearing on its adjudication. There is no scope to say of the Revenue's action as being in excess of the jurisdiction of the competent authority on account of the registration withdrawn having been granted u/s.12A of the Act on 22.07.2002 (PB pg.39); the registrations under which provision stood included for withdrawal u/s.12AA(3) only by F....
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....development of the Bombay Metropolitan Region according to the Regional Plan, and for that purpose the functions of the Authority shall be- a) review any physical, financial and economical plan; b) review any project or scheme for development which may be proposed or may be in the course of execution or may be completed in the Metropolitan Region; c) formulate and sanction for the development of the Metropolitan Region or any part thereof; d) execute projects and schemes; e) recommend to the State Government any matter or proposal requiring action by the State Government or any other authority for the overall development of the Metropolitan Region; f) participate with any other authority for inter-regional development; g) finance any project or scheme for the development of the Metropolitan Region; h) co-ordinate execution of the project or schemes for the development of the Metropolitan Region; i) supervise or otherwise ensure adequate supervision over the planning and execution of any project or scheme,....
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....ctioning of the authority, and for which it has the requisite mandate under its charter, referring to sections 12(1)(g) and 21A of the MMRD Act for the purpose, as we observe was also done before the ld. DIT(E). Section 12(1) stands reproduced above. Section 18 (1)(j) is relevant in this regard. The same, as also s. 21A, read as under: "CHAPTER V FINANCE, BUDGET AND ACCOUNTS '18. (1) There shall be a fund for the Metropolitan Authority to be called Mumbai Metropolitan Region Development Fund to which shall be credited all moneys received by the Authority, including- Funds of the Metropolitan Authority. (j) all moneys borrowed by the Authority.' Power to Metropolitan Authority to finance projects and schemes and impose conditions therefor. '21A. The Metropolitan Authority shall be Competent to give grants, advances or loans to, or to share expenses with, any local authority or other authority in the Metropolitan Region, for any of the purposes of time being in force, but subject to the restrictions (if any) contained in the Mumbai Municipal Corporation Act, it shall be lawful for such other authority to accept such grants....
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....k to emphasize that in order to be considered as a part of the assessee's regular business or functional activity, it has to be firstly in compliance of the objective of s. 12 of its governing act, qua projects that fall within its purview as a part of the regional plan, being reviewed and supervised by it. Secondly, that the assessee cannot be only or even predominantly a financing organization, and as such earning its revenue primarily or predominantly by way of interest, as financing itself could not be considered as an advancing an object of general public utility. True, financing is a vital input for execution of projects, but then so are other goods and services that go into undertaking the same. Their supply, as also that of funds, as by banks and financial institutions engaged in providing long term finance to public or infrastructure projects, cannot be considered as per se charitable. Again, the terms of lending (e.g. whether as soft loans over long gestation period, or at regular, prevailing rates of interest, etc.) have not been specified, and which would also be relevant. What is a ratio of the interest revenue from that of the assessee's other, principal activity/s ha....