TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 272
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....the Act qualifying its income exempt from taxation as total expenditure (capital and revenue) incurred by the appellant is for "advancement of the object of general public utility". 2.Learned CIT (A) has erred in law and on facts in confirming the view taken by AO in holding that the appellant is covered by the first and the second proviso to Section 2(15) of the Act and hence, provisions of Section 13(8) would be applicable. 3.Learned CIT (A) has erred in law and on facts in upholding the contention of the AO that the activities carried out by the appellant are business in nature and erred further in not granting exemption benefit of 15% of its gross receipts. 4.Learned CIT (A) has erred in law and on facts in upholding the contention of the AO that the activities carried out by the appellant are business in nature and erred further in not granting deduction of "addition to assets" Rs. 145,96,81,521 as application of income. 5. Learned CIT (A) has correctly held that the Dividend income as exempt income of the appellant but erred in law and on facts in holding that the same was subject was appellant craves leave to add, amend, alter, edit, delete, modify or change all ....
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....sessment order including submission of the Appellant and the observation of the AO in the light of the provisions of the Act as applicable for the year under consideration. The effective ground is that the appellant is carrying out port service activity as per provisions of Gujarat Maritime Board Act, 1981, and therefore, it should be treated as 'charitable body' particularly when the registration under Section 12A is granted. In this connection, it is admitted position of law that definition of 'charitable purpose' is narrowed down by the Finance Act, 2008 by inserting first proviso- to that section. The relevant extract of the said provision is reproduced hereunder: "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 busine....
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....ng out activity in the nature trade, commerce of business by charging cess or fees. Therefore, in the light of aforesaid Circular of CBDT and provisions of amended Section 2(15), the activity of Appellant does not fall within definition of 'charitable purpose'. 6.4 The Appellant has relied on the decision Himachal Pradesh Environment Protection and Pollution Control Board v/s CIT 9 ITR (Trib) 604 [2011]. However, the facts of the said case are different from the facts of the Appellant's case as much as in that case the main object of the assessee was preservation of environment which is a fourth limb of definition of 'charitable purpose' inserted by the Finance (No. 2) Act, 2009, w.r.e.f. 1-4-2009 whereas in the present case of the Appellant the main object is of the advancement of other object of general public utility as discussed elaborately herein above. As already discussed above, in the case of first four limbs of definition of charitable purpose, first proviso to Section 2(15) shall not be attracted, and therefore in the light of the said provision Hon'ble I.T.A.T. has decided the issue in favour of assessee in the case of Himachal Pradesh Environm....
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....agents who were engaged in trading of certified seeds ; with profit motive hence activities were not for 'advancement of any other object of ' general public utility and hence not charitable in view of first proviso to Section , 2(15) of the Act. In the present case of the Appellant, it is admitted position that I there is a huge reserve & surplus and a/so Appellant earned substantial profit in the / year under consideration and therefore, profit motive of the Appellant is clear. Therefore, it is quite clear that the Appellant is engaged in trade, commerce or business and hit by first proviso to Section 2(15). 7. The Appellant has contended that as it is granted registration under Section 12A of the Act (which is in effect in the year under consideration), the deduction under Section 11 cannot be denied in view of the fact that it is carrying out activities as per its objects as enumerated in Gujarat Maritime Board Act, 1981. In this connection, it is pertinent to note the provision of sub-section (8) of Section 13 which reads as under: Section 13: Section 11 not to apply in certain cases. "13. - ...... (8) Nothing contained in section 11 or section 12 sha....
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....learner DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record before us. At the outset we note that the issue raised by the assessee in the present appeal has already been decided by this tribunal in favour of the assessee in its own case as contended by the learned AR for the assessee. The relevant extract of the order is reproduced below: 7. We have heard both the sides and perused the material on record. The assessee Gujarat Maritime Board is constituted under the provision of Gujarat Maritime Board, 1981 and established u/s. 3 of the act for the purpose of administering, controlling and managing minor ports in the State of Gujarat. As per section 4 of the act, the Board shall constitute of such member of board not being less than 5 and not more than 12 who shall be appointed by the State Government as mentioned in the section 4 of Gujarat Maritime Board Act, 1981. Section 73 for the Gujarat Maritime Act, 1981 state that all money received by it shall be credited to a fund called the general account of the miner ports and section 74 of the act state that amount cred....
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....ve that the assessee is a charitable trust carrying on activity of advancement of public utility without any profit motive and is required to be assessed as per the provisions of Section 11(1) of the Income-tax Act, 1961. Accordingly, this ground of the assessee is allowed." We have also gone through the decision of Co-ordinate Bench of the ITAT in the case of assessee itself vide ITA No. 36/Ahd/2011 pronounced on 28th Jan, 2012 wherein the issue was decided in favour of the assessee. The relevant part of decision is reproduced as under:- "4. Having heard the submissions of both the sides, the provisions of section 12AA(3) prescribes that once a trust or an institution has been granted registration u/s. 2AA(3) and subsequently if the Commissioner finds that one of the condition, viz. the activity of the trust is not genuine or that the activity of trust not been carried out, then the Commissioner has power to cancel the registration granted u/s. 2AA(l) of IT Act. In the above cited decision of Ahmedabad Urban Development(supra), it was held that when under the Act a specific provision for cancellation of registration is prescribed and the cancellation is possible under specif....
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....expenses as well as capital expenses to be able to sustain and continue in long run and the petitioner has to be substantially self sustaining in long term and should not depend upon Government. In other words, tax payers should not subsidize the said activities which nevertheless are charitable. In the concluding para in the case of CIT vs. Gujarat Industrial Development Corporation 83 taxman 363 (Guj) Hon'ble Gujarat High Court has adjudicated the issue in favour of the assessee wherein it is held as under:- "17. Applying the aforesaid decision to the facts of the case on hand and the objects and purpose for which the assessee-Corporation is established and constituted under the provisions of the Gujarat Industrial Development Act, 1962 and collection of fees or cess is incidental to the object and purpose of the Act, and even the case would not fall under the second part of proviso to Section 2 [15] of the IT Act. As the activities of the assessee is for advancement of any other object of general public utility, the same can be for "charitable purpose" and therefore, the assessee Corporation shall be entitled to exemption under Section 11 of the Act. No error has been com....
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....ot find any reason to interfere in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed. 16. Before we part with the issue/appeal as discussed above, it is pertinent to note that the clause (c) of rule 34 of the Appellate Tribunal Rules 1963 requires the bench to make endeavour to pronounce the order within 60 days from the conclusion of the hearing. However the period of 60 days can be extended under exceptional circumstances but the same should not ordinarily be further extended beyond another 30 days. In simple words the total time available to the Bench is of 90 days upon the conclusion of the hearing. However, during the prevailing circumstances where the entire world is facing the unprecedented challenge of Covid 2019 outbreak, resulting the lockdown in the country, the orders though substantially prepared but could not be pronounced for the unavoidable reasons within the maximum period of 90 days. In such circumstances we find that the Hon'ble Mumbai Tribunal in the case of JSW Limited Vs Deputy Commissioner of Income Tax in ITA No. 6103/MUM/2018 vide order dated 14-5-2020 extended the time for pronouncing the order within 90 days of ....
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....ue procedure...". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary" period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us ....