2017 (1) TMI 936

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....)(c) attracted as assessee was not granted exemption u/s 11. 2. Briefly the facts of the case are that the assessment was originally completed u/s 143(3) of the Act whereby the AO assessed income of the assessee as per normal provisions of the Act denying the exemption claimed by the assessee u/s 11, 12 &13 f the Income tax Act. The reason given by the AO was that in assessment year 2009-10, the definition of charitable purposes u/s 2(15) has been changed and CIT, Jaipur vide its order dated 29.12.2011 has withdrawn the registration u/s 12AA of the Act. Hence the assessee was held not entitled to exemption u/s 11, 12 & 13 of the Act. Subsequent to the passing of the assessment order u/s 143(3) of the Act, on further verification of record, it was found that in the balance sheet, the assessee has shown set apart/ accumulated balance u/s 11(2) which was not utilised for the purpose of the objects of the trust upto the end of assessment year. As the assessee was not eligible for claiming exemption u/s 11 and accordingly the closing balance set apart was to be brought to tax u/s 11(3)(c) of the Act. Accordingly the assessment proceedings were reopened u/s 147 of the Act and notice u/....

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....ored and held that the benefit u/s 11 & 12 has to be given to the assessee even though the departmental appeal is pending before High Court. Against the said decision of the Ld. CIT(A) the revenue is in appeal before us. 3. The ld. AR submitted that the matter is clearly covered by the decision of Hon'ble ITAT in ITA No. 380, 381 & 382/JP/2016 dated 22.11.2016 wherein the registration u/s 12AA was restored from A.Y. 2009-10. It was further submitted that the Hon'ble ITAT in the context of original proceedings u/s 143(3) of the Act for the impugned assessment year i.e 2009-10 has allowed the assessee the benefit of exemption u/s 11 & 12 of the Act and the ld AR took us through the relevant findings of the Coordinate Bench in ITA No. 427/JP/13 and ITA No. 447/JP/2013 for A.Y. 2009-10 dated 04.01.2016 which was pronounced subsequent to restoration of registration under section 12AA wherein the relevant findings are contained at para 6 of its order which are reproduced as under: "6. The assessee has been granted registration by the order of the Coordinate Bench in ITA No. 927/JP/2007 order dated 30/05/2008 w.e.f. 14/3/2007 wherein the Coordinate Bench has held that the assessee's ac....

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....onounced by the Coordinate Bench on 04.01.2016 and the AO was therefore not having the benefit of considering the decision of the Coordinate Bench where the assessee was held eligible for exemption under section 11 and 12 of the Act. Further, in the context of subsequent assessment years, this Bench has recently examined this subject matter in terms of eligibility of the subject assessee in terms of claiming exemption u/s 11 & 12 of the Act and the matter has again been decided in favour of the asesssee. The relevant findings are contained at para 14 & 15 of order dated 22.11.2016 which are reproduced as under: "(14). Further, the ld AR has drawn our reference to recent jurisdictional High Court decision in case of Jodhpur Development Authority (supra) and submitted that the ratio of the said decision squarely applies in the instant case. In order to determine whether the facts of the instant case are pari-materia with the facts brought up before the Hon'ble High Court, we have gone through the Jaipur Development Authority Act, 1982. Section 16 of the JDA Act provides that the main objects of the Authority shall be to secure integrated development of the Jaipur Region and for tha....

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....e of vacant land, income from levy on vacant land, all fees, costs and charges received by the Authority under this Act or any other law for time being in force, all money received by Authority from the disposal of land buildings and other property movable and immovable and other transactions including lease money, urban assessment, development charges and other similar charges and all money received by way of rents and profits or in any other manner or from any other source or from donations. Further, section 58 of the JDA Act provides that all property, funds and other assets vesting in the Authority shall be held and applied by it for the purposes and subject to the provisions of the Act. (14.1) It is thus noted that the main objects of the Jaipur Development Authority and the functions/activities to achieve such objectives are pari-materia with that of the Jodhpur development Authority. Further, the entire funds of the Jaipur Development Authority is mandatorily required to be utilized for discharging the functions to achieve the object of integrated development of Jaipur Region. In light of above, the decision of Hon'ble Rajasthan High Court in case of Jodhpur development a....