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2020 (10) TMI 1013
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.... to the Assessment year 2014-15, wherein the Revenue has challenged the action of the Ld. CIT(A) inter alia on the ground that the Ld. CIT(A) has erred in allowing the ground of appeal with respect to disallowance of donation expenditure of Rs. 4 crore, these appeals were clubbed, heard together and are being disposed of by this common order for the sake of convenience. ITA No. 468/Chd/2018 AY 2013-14 3. Brief facts of the lead case pertaining to the Assessment year 2013-14 are that the assessee society registered under section 12A of the Act, 1961 with the Ld. CIT-1, Amritsar vide No. CIT-I/ASR/2006-07/213 dated 24/04/2006 & vide order No. CIT-I/ASR/ITI(Tech)/07-08/PS-81, dt. 26/10/2007, subsequently withdrawn vide order F.No. CIT/PTA/Tech/12AA, dt. 13/10/2014, filed its return of income for the assessment year under consideration declaring nil income after claiming exemption u/s 11 of the Act. The AO noticed that during the year relevant to the assessment year under consideration the assessee carried on the business of sale and purchase of residential plots and commercial properties and earned huge net profit of Rs. 9,95,74,223/-, which does not fall within the ambit of the....
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....en activities in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business have been specifically precluded from the ambit of exemption clauses. v. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding the assessee eligible for exemption u/s 11 by holding that business activities being carried on by the assessee were incidental to the attainment of objects which predominantly were for town improvement whereas the assessee had not been able to demonstrate during the course of proceedings that any such activity was carried on. vi. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding the business activities as incidental even as the accounts of the entity reveal that this (sale/purchase of properties on commercial lines) has become the predominant activity to the detriment of the main mandate of the improvement Trusts namely town improvement. vii. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in not taking into account the amendment brought in section 2(15) w.e.f. 01.04.2016 wh....
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....dgment of the Hon'ble Jurisdictional High Court, however, supported the order passed by the A.O. on the ground that the Department has filed SLP against the order of the Hon'ble High Court in the Hon'ble Supreme Court. The Ld. DR further admitted that the Hon'ble Supreme Court has not stayed the operation of the impugned order. 9. We have heard the rival submissions of the parties and gone through the material available on the record including the order of the coordinate Bench rendered in assessee's own case pertaining to the assessment year 2012-13 as well as the judgment of the Hon'ble jurisdictional High Court delivered in assessee's own case. As pointed out by the Ld. Counsel for the Assessee, the Coordinate Bench has decided the identical issue in favour of the assessee in assessee's own case for the A.Y. 2012-13. The findings of the coordinate Bench read as under: "9. Ld. AR relied on the order of the Ld. CIT (A) and the order in his own case. In the course of hearing on 07.06 2017, the Ld AR submitted the decision of Hon'ble Punjab and Haryana High Court in the case of Tribune Trust (2016) 76 taxmann.com 363 (P&H). In this case....
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....de inter- alia for the disposal of the land vested in or acquired by the trust including by lease, sale and exchange thereof. This, however, is not the predominant activity or responsibility of the trust. Nor for this assessee is making profits from this activity its predominant motive. 76. The power of the assessee to dispose of land conferred by Section 28(2)(iii) is not an absolute or independent power. It is conferred upon the assessee in the discharge of its statutory duties imposed on it by the PTI Act of framing schemes. Sub section (1) of Section 28 entitles the assessee to combine the various schemes referred to in Chapter-IV. Sub section (2) stipulates that the scheme 67 of 74 ITA-62-2015 and ITA 147-2016 - 68 - under the Act may provide for a variety of things including the disposal of land belonging to the assessee. This power is, therefore, in furtherance of, connected with and in relation to a scheme in Chapter-IV. It is not an absolute power independent of and unconnected with the assessee's statutory functions under the PTI Act. 77. The predominant activity of and the purpose for the establishment of the assessee is summed up in two words "town....
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....elopment of the plots and the construction of the premises for sale. The Trust must under the Act adopt a holistic approach for the betterment and advantage of the entire area within its jurisdiction. 80. Section 25 which provides for a housing accommodation scheme to be framed is similar. The trust is required to frame such a scheme if it is of the opinion that it is expedient and for the public advantage to provide housing accommodation for any class of inhabitants within its local area. The trust is, therefore, to be motivated not by personal but by public benefit. Such activities clearly fall 69 of 74 ITA-62-2015 and ITA 147-2016 - 70 - within the last category of cases in the proviso to Section 2(15) as it stood at the relevant time, namely, "advancement of an object of general public utility". 81. It can hardly be suggested that the Government of Punjab established the assessee's trust and conferred upon it public responsibilities and duties of the nature specified in the PTI Act as a camouflage for its commercial, trade and business ventures. The creation and incorporation of the trust under section 3 is for a public purpose. We have no doubt whatsoever....
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....by the Income Tax Appellate Tribunal, Amritsar, upholding the order withdrawing the status of Charitable Institution given to the appellant- assessee under Section 12AA(1)(b)(i)of the Act. The Tribunal has reached a categorical conclusion that the assessee-Jammu Development Authority cannot be regarded as an institution or trust which may have been set up to achieve the objects enumerated under Section 2 of the Act particularly in view of the addition of first and second proviso made by the Finance Act, 2008 w.e.f. 01.04.2009 to Section 12AA of the Act. There are findings of fact that the assessee-appellant has not been acting to advance any of the object concerning general public utility. Even otherwise the proviso which has been added by the Finance Act, 2008 w.e.f. 01.04.2009 stipulates that the advancement of any other object of the general public utility shall not be a charitable purpose, if it involves 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 or a cess or fee of any other consideration. 2. We find that no question of law much less a substantial ques....
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....hers. The two provisions are distinct and independent of each other. Thus the omission of Section 10(20A) did not affect the rights of the parties claiming the benefit of Sections 2(15), 11, 12, 12A and 12AA of the Act. 12. Following the same we do not find any infirmity in the order of the Ld. CIT(A) and deciding the identical issue in favour of the assessee the departmental appeal stands dismissed." 10. Further, as pointed out by the Ld. Counsel for the assessee, the Hon'ble jurisdictional High Court has dismissed the Revenue's appeal ITA No. 74 of 2018 filed against order dated 13.07 2017 rendered by the Tribunal in assessee's appeal pertaining g to the assessment year 2013-14 and confirmed the same. Admittedly, the Hon'ble Supreme Court has not stayed the operation of the impugned order dated 11. 07. 2018 passed by the Hon'ble jurisdictional High Court. Under these circumstances we deem it appropriate to dispose of this appeal by following the decision of the Hon'ble High Court rendered in assessee's case. 11. In our considered view, since the order passed by of the Ld. CIT(A) is in accordance with the judgment of the Hon'ble juris....