TaxTMI 
TaxTMI 
2020 (1) TMI 857
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....Assessee Appeal and ITAno937/B/2015 Revenue 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....
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....of Income-tax (Appeals) is not justified in law in not deleting the excess of income over expenditure a sum of Rs. 132,59,11,000/- 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 exe....
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....missioner of Income Tax (Appeals) failed to appreciate that the order of the learned assessing officer is bad in law as the entire functions of the Bangalore Development Authority is that of a State and the 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 ....
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....d by legislature with the consent of Governor in the year 1976. In the impugned Assessment Year 2009-10, the assessee filed Return of Income on 25.09.2009 within time allowed under Section 139(1) of the Act. As per the financial statements, the assessee has disclosed surplus 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 r....
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.... claim of the assessee that the objectives are wholly charitable could not be accepted and surplus is taxable and along with other additions Assessed total income of Rs. 191,59,13,950 and passed the order under Section 143(3) of the Act dt.22.11.2011. Aggrieved by the order, 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 gran....
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....der of DIT (Exemptions). The contention of the ld. AR that the Registration under Section 12AA of the IT Act is operative and the exemption under Section 11 cannot be denied by the Assessing Officer. Further, these facts were brought to the Knowledge of the CIT(Appeals), on the pendency 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....
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....76,18,544 By sale of application forms 1,11,91,886 Administrative expenses 15,42,79,785 Reconvenes of fines and penalties 7,01,51,481 Water and electricity charges 10,61,92,021 Interest received 1,31,17,52,356 special and other charges 9,43,78,709 other receipt 14,16,03,730 Depreciation 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....
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....e, commerce or business or at any rate activity of rendering any services in relation to any trade, commerce or business and the aggregate value of the receipts from the said activities exceeds Rs. 25,00,000/- and therefore, it squarely falls under the first proviso to Section 2(15) of the Act and therefore it ceases to be an institution for charitable purpose. Therefore, rightly the 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 fa....
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....fect from 1.4.2009 categorically provides that, nothing contained in Section 11 or Section 12 shall operate so as to exclude any income from the total income of the previous year or any receipt there of. If the provisions of the first proviso to Clause 15 of Section 2 becomes applicable in the case of such person in the said previous year, the Statute has protected the interest of revenue. Not withstanding the fact that 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 simi....
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....Hence the disputed issues in the Revenue Appeal are also restored to the file of CIT(Appeals) for adjudication afresh and allow grounds of appeal of revenue for statistical purposes. 7. Similarly, the assessee appeal ITA No.742/Bang/2015 and Revenue Appeal ITA No936/Bang/2015 filed against the order giving effect to the order of CIT(A) order dt.19.03.2015 and We found the CIT(Appeals) has passed the order, when the appeal against cancellation of Registration under Section 12AA of the Act was pending before the co-ordinate Bench of the Tribunal . we have taken a decision in the appeal No.600/Bang/2014 in restoring to the CIT(Appeals) to adjudicate afresh considering the Registration U/sec12A of the act. Since the order giving effect is consequent to the decision of CIT(Appeals) order dt.25.2.2014, we consider it proper and appropriate to restore this appeal also to the file of CIT(Appeals) to adjudicate as directed in ITA No.600/Bang/2014. Since the assessee's appeal is restored to the file of CIT(Appeals), The revenue's appeal No.936/Bang/2015 is also restored to the file of CIT(Appeals) for fresh adjudication and allow the grounds of appeal of assessee and revenue for statistic....