TaxTMI 
TaxTMI 
2020 (12) TMI 12
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....g total income of Rs. 'NIL'. The assessment was completed u/sec. 143(3) by an order dated 28/12/2007. Subsequently, the AO reopened the assessment by issue of notice u/sec. 148. The reason for reopening the assessment was that the activities of the assessee are commercial in nature as against the claim of exemption made by the assessee u/sec. 11 on the ground that their objects are not charitable purpose. The income on which the assessee derived from entry fee on parks, general receipts, rents on offices/parks/shops, administration and supervision charges on deposit works, development works, house cost receipts, site cost receipts and interest on fixed deposits, sale of plots, houses etc. are found to be commercial in nature according to the AO. Further, the AO is of the view that the main issue in this case is whether the assessee, as a local authority is eligible for exemption u/sec. 11 in lieu of the activities of the local authorities, as the assessee is carrying out sale of sites and houses and earning profits on such real estate activities. The AO issued show cause notice calling for explanation of the assessee as to why the exemption claimed under section 11 should not be....
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....e ld.AR further submitted that the ld.CCIT (OSD) has passed the order cancelling the registration granted u/sec. 12AA vide order dated 04/05/2012 for the same reasons, which were mentioned in the reassessment order and the ld. CIT(A)'s order. The reasons for reopening the assessment were mentioned in page No. 19 of ld. CIT(A)'s order and from which it is found that assessee was carrying the commercial activities like sale of plots, constructed houses, sale of plants, saplings etc. which were mentioned in earlier paragraphs of this order. Subsequently, the assessee went on appeal before the ITAT against cancellation of registration u/sec. 12AA(3) and the Hon'ble ITAT passed a detailed order in ITA No.295/VIZ/2012, dated 20/03/2020 and restored the registration. The activities which were observed by the ld.CCIT(OSD) stated to be commercial in nature were examined by the Hon'ble ITAT in its detailed order in para 2.6 & 3.3. The ITAT also gave a finding in para 5 of its order that the above activities of the assessee does not fall under the commercial activities and hence, restored the registration. The ITAT considered the objects of the assessee, method for disposal of lands a....
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....nt to the passing of the order cancelling the registration, the AO assessed the entire income as business income denying exemption u/sec. 11 of the Act. Against which the assessee went on appeal before the ld.CIT(A) and the ld. CIT(A) upheld the order of the AO and dismissed the appeal of the assessee. ITA No. 685/VIZ/2019 6. For the A.Y. 2010-11, the assessee filed its return of income admitting total income at NIL and claimed exemption u/sec. 11 of the Act. The assessee declared excess of income over the expenditure to the extent of Rs. 19,64,93,528/- and after all the deductions declared gross total income of Rs. 17,78,55,338/-, out of the said amount of Rs. 17,78,55,338/- the assessee has claimed the set-off of excess of expenditure over income of earlier years amounting to Rs. 4,00,73,212/- and also claimed set-off of deficit arose due to acquisition of assets from earlier year's accumulation amounting to Rs. 7,60,04,257/-. However, the assessee has claimed exemption u/sec. 12AA and has shown that this amount was applied and accumulated as per section 11 of the Act. 6.1 Consequent to the order passed by the ld.CCIT (OSD) vide order in F.No. Asst/VUDA/CIT-1/VSP2011-12,....
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....e organization, but a commercial organization for collecting the following fee apart from sale of plots:- (i) Entry fee on parks (ii) General receipts (iii) Rents on offices/parks/shops (iv) Administration and supervision charges on deposit works (v) Administration and supervision charges on development works (vi) Administration and supervision charges on hose cost receipts. (vii) Administration and supervision charges on site cost receipts (viii) Interest on fixed deposits etc. For the same reasons, the ld.CCIT (OSD) in his order dated 04/05/2012 held that the assessee is in commercial activities and accordingly cancelled the registration. On appeal this tribunal has considered the above issues in detail in its order dated 20/03/2020 and held that the assessee is carrying on the activities in accordance with the objects and purpose for which it was established and there is no commercial activities. Accordingly, restored the registration and directed the AO to grant exemption u/sec. 11 to the assessee. Orders passed for the A.Ys. 2005-06 to 2007-08 & 2010-11 are covered by the order of this tribunal in ITA N....