AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 857
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....ue Appeal filed against order of CIT(Appeals) order dt13-03-2015. Since the issues are common in all these appeals, they are clubbed and heard together and consolidated order is passed. For the sake of convenience, we shall take up the assessee's appeal in ITA 606/Bang/2014 Asst Year 2009-2010 and Facts narrated therein. The assessee has raised the following grounds of appeal : 1. The order of the learned Commissioner of Income-tax (Appeals) in so far as it is against the appellant is opposed to law, facts, equity and circumstances of the case. 2. The appellant denies itself liable to be assessed to tax on any amount over and above the declared income of Rs. NIL by it in the return of income on the facts and circumstances of the case and consequently the appellant denies itself liable to be assessed to tax on an amount of Rs. 132,59,11,000/- being the excess of income over expenditure as part of taxable income on the facts and circumstances of the case. 3. The learned Commissioner of Income-Tax (Appeals) is not justified in law in concluding the appellate proceedings inspite of specific request by the Appellant to keep the appellate proceedings in abeyance till disposal o....
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....1,000/- treated as taxable income by the learned Assessing Officer by invoking the proviso to section 2(15) of the Act on the facts and circumstances of the case. (d) The learned Commissioner of Income Tax (Appeals) is not justified in law in denying the exemption as a charitable institution for the reason that appellant is carrying on business. The inference drawn for holding that the appellants are doing business are purely arbitrary and purely on suspicion and surmise devoid of factual foundation. (e) The learned Commissioner of Income Tax (Appeals) ought not to have denied exemptions for charitable purpose as the Appellant do not fall under second proviso to section 2(15) of the Act. (f) The learned Commissioner of Income Tax (Appeals) ought to have taken into account the speech of the Finance Minister which indicate the object and drift of the amendment in as much as that genuine Charitable Trusts are not hit by the proviso to section 2(15) of the Act. (g) Without prejudice the authorities below ought to have granted exemption in respect of the other limbs of charity by applying the principles of apportionment and ought to have granted proportionate relief in respect o....
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....e question of taxing a State does not arise in law on the facts and circumstances of the case b) Without prejudice the learned Commissioner of Income-tax (Appeals) is not justified in law in holding a sum of Rs. 4439.63 lakhs being income from property taxes, building licence fee, betterment charges, development charges, supervision charges and road cutting charges as business income and covered by the proviso to section 2(15) of the Act on the facts and circumstances of the case. c) The learned authorities below ought to have held that the amount of Rs. 4439.63 lakhs is not even income under the scheme of the Income tax Act and thus ought not to have assessed the same on the facts and circumstances of the case. 9. Other Grounds : a) The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the claim of the Appellant on the ground that the Appellant is a service provider of public transport is totally contrary to the facts of the case and indicates non- application of mind on the facts and circumstances of the case and consequently passed a perverse order. b) The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that as per ....
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....of Rs. 135.54 Crores after set off of the prior period expenses of Rs. 2.75 Crores and the net surplus being Rs. 132.59 Crores. The Return of Income was processed under Section 143(1) of the Act on 29.09.2010. Subsequently, the case was selected for scrutiny and Notice under Section 143(2) and 142(1) of the Act along with questionnaire were issued. In compliance, the learned Authorised Representative of the assessee appeared along with the Chief Accounts Officer from time to time and furnished the details. Whereas the Assessing Officer on considering the financial results found that surplus is Rs. 135.54 Crores after claiming Expenses, out of the total Receipts of Rs. 376.46 Crores , the net profit percentage works out to 35.95% and the AO also referred to the earlier years profit, and the assessee has made net profit is more than builder engaged in similar kind of business and systematic profit earned with a range from 20 to 30%. The Assessing Officer considering the profits earned in the systematic commercial activity being Sale of sites, Apartments and Auctions, relied on the decision of Hon'ble Jharkhand High Court in the case of CIT Vs. Queen's Educational Society 177 taxm....
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....the assessee has filed an appeal with the CIT (Appeals). In the appellate proceedings, the CIT (Appeals) considered the grounds of appeal, submissions and further the learned Authorized Representative of the assessee made a request to keep the appeal in abeyance till 31.12.2013 and in view of cancellation of Registration under Section 12AA by DIT (Exemptions) due to the amend mend to Section 2(15) of the Act. Further letter was filed on 1.11.2014 mentioned that the appeal order of cancellation under Section 12AA(3) is challenged before the Hon'ble Tribunal in ITA No.12/Bang/2012 and was posted for hearing on 31.12.2011 and Hence Requested to keep the appeal in abeyance till the disposal of appeal by the Tribunal. For the Asst. Year 2009-10, the CIT (Appeals) found that Assessee relied on the decision of Karnataka Housing Board in ITA No.1095/Bang/2011 dt.31.01.2013 holding that the Registration already granted under Section 12AA cannot be revoked. But the Revenue has filed an appeal before the Hon'ble High Court against the order of the Tribunal in the case of Karnataka Housing Board (supra) which was admitted and granted stay on.14.8.2013. Hence the CIT (Appeals) is of the opi....
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....dency of appeal before the Tribunal against the cancellation order of 12AA of the Act. We found that the assessee has made a request before the appellate authority on the issue that the appeal was filed against the cancellation order under Section 12AA(3) of the Act by the DIT (Exemptions) Dt.8.11.2011 at page 2 paras 2 & 2.2 of order of CIT(Appeals). Whereas the CIT (Appeals) has proceeded on the grounds of appeal irrespective of Registration or cancellation under Section 12AA(3) of the Act. We also found that the assessee has made a request for keeping the appeal in abeyance till the order of the Tribunal pronounced. But for various reasons and limitations and as per Department guidelines, the CIT(Appeals) has passed the order on 18.02.2014. we found that the co-ordinate Bench of the Tribunal set-aside order of cancellation of Registration under Section 12AA of the Act. we consider it proper to refer to the findings and observations in assessee case in ITA No.12/Bang/2012 dt.10.04.2015 at pages 3 to 9 paras 4 & 5 which is read as under : "4. We have perused the order of the ld.DIT(E). It is not disputed that the assessee has substantial other receipts about Rs. 25,563/- lakhs a....
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....tion 63,04,074 Rent received 1,92,90,492 Forfeiture of deposits 1,12,40,038 Water supply Charges 17,42,26,156 To Excess of income over expenditure 1,55,76,64,004 by gain on disposal of land 18,69,72,000 3. From the aforesaid figures, it is evident that the KIADB charges for every services it renders. Therefore, the authority was of the view, there is no element of charity or providing any services or industrial sites free of cost. After meeting all the expenses, KIADB has earned a net profit of Rs. 155,76,64,004/-. Under various heads, KIADB has earned huge profit. Thereafter, taking note of the change in the definition of Section 2(15) of the Act, which came into effect from 1.4.2009, it was held that the activity carried on by the assessee is in the nature of trade, commerce or business or any activity of rendering any services in relation to trade, commerce or business and therefore, the consideration received irrespective of the nature of the use or application, or retention, of the income, from such activity would take the case out of Section 2(15) of the Act and therefore after referring to the various judgments relied on i....
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....e registration under Section 12A of the Act was cancelled which has been erroneously interfered with by the Tribunal. 6. Per contra, learned counsel appearing for the assessee contended, once a person is granted registration under Section 12A of the Act, the said benefit could be denied only if the case falls under Section 12AA(3) of the Act. Admittedly, the assessee's case do not fall under that provision. Even if the activity carried on by the assessee ceases to be a charitable purpose in view of the amendment brought about to the definition of charitable purpose under Section 2(15) of the Act, that is a matter to be considered by the assessing authority to extend the benefit of exemption or not. Therefore he submits that, no case for interference is made out. 7. From the aforesaid facts and rival contentions, it is not in dispute that the assessee was granted registration under Section 12A of the Act. Now the said registration is cancelled by invoking the power conferred under Section 12AA(3) of the Act. Therefore, it is necessary to find out under what circumstances the registration granted earlier could be cancelled. Section 12AA(3) of the Act, reads as under: Section 12....
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....hat the assessee is conferred registration under Section 12A of the Act, unless the assessee falls within Section 2(15) of the Act, excluding the first proviso, the assessee would not be entitled to the benefit of exemption from the tax. If the case of the assessee falls with first proviso to Section 2(15) of the Act, the benefit of registration which flow from Section 12A of the Act is not available. Anyhow, that is a matter to be considered by the Assessing Authority. But on that ground, registration cannot be cancelled, which is precisely the Tribunal has held. In that view of the matter, we do not see any merit. The substantial questions of law are answered in favour of the assessee and against the revenue." We find that the assessee herein stands on a similar footing as Karnataka Industrial Area Development Board (supra). Therefore, the view taken by the Hon'ble jurisdictional High Court in the said case will apply here also. If the assessee falls within the first proviso to section 2(15) of the Act, the benefit of registration which flow from sec.12A of the Act, would not be available to it. However, as noted by their Lordships, this was a matter to be considered by the ass....