AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 920
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.... exemption u/s. 10(23AAA) of the Act as claimed by the assessee was denied and total income chargeable to tax was assessed at Rs. 1,71,63,060/-. Assessee being aggrieved with the same filed an appeal before the Ld. CIT (A) -29, Mumbai, through his order Ld. CIT (A) upheld the order of AO passed u/s. 143(3) of the Act. Assessee being further aggrieved filed an appeal before the Coordinate Bench, where coordinate bench after considering the arguments of assessee restored the matter back to the file of AO for passing the order de-novo. 3. Matter of the assessee was taken up afresh on the directions of coordinate bench and assessee was asked to furnish the details again and specifically about its claim of being "State", which was being raised before the coordinate bench as additional ground. Again AO, disallowed all the claims made by assessee and assessed the income at Rs. 1,71,63,060/-. Assessee being aggrieved with this re-assessment order passed u/s. 143(3) r.w.s. 254 of the Act, preferred an appeal before the Ld. CIT (A), who in turn allowed the appeal of the assessee on the ground that assessee is eligible for exemption u/s. 11 and 12 of the Act without deciding the issue of e....
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....he objects. The Ld. CIT (A) convinced about the claim of the assessee as far as exemption u/s 11 and 12 are concerned. Hence, partly allowed the claim of the assessee and exempted the income of the assessee u/s 11 and 12 as assessee is eligible for the same in view of second proviso to section 12A (2) 6. In his order Ld.CIT (A) chosen not to comment on assesses claim of assessment being time barred u/s. 153(3) and status of the assessee as "State". It is found that assessee was fulfilling all the conditions as laid down for the purposes of section 11 to 13 of the act. Assessee is applying its income derived from property held under trust for the purposes approved in the registration certificate u/s 12A. The only reason for the denial of assessee claim by the AO is that such a claim has not been made in the original return filed before him hence he relied upon the judicial pronouncement on honorable supreme court in the case of M/s Goetze (India) Ltd. 284 ITR 323 (S.C) wherein it is provided that assessee cannot make any fresh claim before the assessing officer except by revising its return of income. As in this case no revised return has been filed by the assessee but the same c....
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....d and modified by the Bombay Labour Welfare Board (Reconstitution) Order, 1959‡ Adapted and modified by the Bombay Labour Welfare Board (Reorganisation) Order, 1960. Amended by Mah. 36 of 1961 " " " 22 of 1966. " " " 16 of 1971. " " " 2 of 1978 (1-7-1977) " " " 4 of 1984. (20-2-1984) " " " 10 of 1987 (1-5-1987) " " " 24 of 2003 (7-1-2002) " " " 24 of 2012 (22-8-2012) An Act to provide for the constitution of a Fund for the financing of activities to promote welfare of labour in the State of [Maharashtra] [for conducting such activities and for certain other purposes]. WHEREAS it is expedient to constitute a Fund for the financing of activities to promote 'welfare 'of labour in the State of 2[Maharashtra] 3[for conducting such activities and for certain other purposes]; It is hereby enacted as follows:- 1. (1) This Act may be called [the Maharashtra Labour Welfare Fund Act] [(2) It extends to the whole of the State of Maharashtra.] (3) It shall come into force in such area and on such date as the State Government may, by notification in the Official G....
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....een less than [five] such establishments shall cease to be an establishment for the purposes of this Act with effect from the beginning of the month following the expiry of the said period of three months, but the employer shall within one month from the date of such cessation, intimate by registered post the fact thereof to such authority as the State Government may specify in this behalf ] ; [Explanation.-For the removal of doubt, it is hereby declared that where an establishment has different branches or departments, all such branches or departments, whether situated in the same premises or different premises, shall be treated as parts of the same establishment ; ] [(5) "Factory" means a factory as defined in section 2 (m) of the Factories Act, 1948, and includes any place wherein five or more persons are employed or working, and- (i) Where in any manufacturing process is being carried on with the aid of power or is ordinarily so carried on ; (ii) Which is deemed to be a factory under section 85 of the said Act;] (6) "Fund" means the 2[Labour Welfare Fund] constituted under section 3; (7) "Independent member" means a member o....
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....y notification in the Official Gazette constitute the Board for the whole of the State of Maharashtra for the purpose of administering the Fund, and to carry on such other functions assigned to the Board by or under this Act.] The Board shall consist of the [following members, not exceeding twenty-six in number], namely:- (a) Such number as may be prescribed of representatives of employers and employees to be nominated by the State Government: Provided that both employers and employees shall have equal representation on the Board; (b) Such number of independent members as may be prescribed, nominated by the State Government; (c) Such number of independent members as may be prescribed, Nominated by the State Government to represent women; 7[(d) the Principal Secretary or Secretary (Finance) or his nominee shall be the ex-officio member; and (e) The Principal Secretary or Secretary (Labour) or his nominee shall be the ex-officio member.] (2) The members of the Board shall elect one of its independent members as the Chairman of the Board. (3) Save as otherwise expressly provided by this Act, the term of office of ....
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....he Board who- (a) is a salaried official of the Board ; or (b) is or at any time has been adjudged insolvent or has suspended payment of his debts or has compounded with this creditors ; or (c) is found to be a lunatic or becomes of unsound mind ; or (d) is or has been convicted of any offence involving moral turpitude. (2) The State Government may remove from office any member who- (a) is or has become subject to any of the disqualifications mentioned in sub-section (1) ; or (b) is absent without leave of the Board for more than three consecutive meetings of the Board. 6. (1) A member may resign his office by giving notice thereof in writing to the State Government, and on such resignation being accepted, shall be deemed to have vacated his office. (2) A causal vacancy in the office of a member shall be filled up, as soon as conveniently may be, by the authority concerned and a member so nominated shall hold office for the unexpired portion of the term of the office of his predecessor. (3) No act or proceedings of the Board shall be questioned on the ground merely of the existence of any vaca....
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....er that, if through inadvertence or otherwise, no deduction has been made from the wages of an employee for the months aforesaid, such deduction may be made from the wages of such employee for any subsequent month or months with the permission in writing of the Inspector appointed under this Act. (5) Notwithstanding any contract to the contrary, no employer shall deduct the employer's contribution from any wages payable to an employee or otherwise recover it from the employee. (6) Any sum duly deducted by an employer from the wages of an employee under this section shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted. (7) An employer shall pay the employer's and the employee's contribution to the Board by cheque, money-order or in cash, and he shall bear the expenses of remitting to the Board such contributions. (8) The Welfare Commissioner shall submit to the State Government as soon as possible after the end of July and January every year in the prescribed form a statement showing the total amount of [the employer's contribution and the employees' contributi....
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....pproved by the State Government. (4) If any question arises whether any particular expenditure is or is not debit able to the Fund, the matter shall be referred to the State Government and the decision given by the State Government shall be final. (5) It shall be lawful for the Board to continue any activity financed from the labour welfare fund of any establishment, if the said fund is duly transferred to the Board. 8. The Board may from time to time with the previous sanction of the State Government and subject to the provisions of this Act and to such conditions as may be specified in this behalf borrow any sum required for the purpose of this Act. 9. Where the Fund or any portion thereof cannot be applied at any early date for fulfilling the objects of the Act, the Board shall invest the same in any of the securities specified in clauses (a) to (d) and (f) of section 20 of the Indian Trusts Act, 1882. 10. The State Government may give the Board such directions as in its opinion are necessary or expedient in connection with expenditure from the Fund or for carrying out the other purposes of the Act. It shall be the duty of the Board t....
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.... be governed by the rules made under this Act in respect of conditions of service of the staff appointed by the Board under this Act and on his electing to do so the provisions of the first proviso shall cease to apply to him. [(2) On the commencement of this Act in any area to which it is extended by the Bombay Labour Welfare Fund (Extension and Amendment) Act, 1961, the Board shall take over and employ such of the existing staff under the control of the Commissioner of Labour, Bombay, as the State Government may direct and every such person so taken over and employed shall be subject to the like terms and conditions and to the same provisions as in sub-section (1), and to the other provisions of this Act and the rules made thereunder.] [Committed.] 18. (1) If the State Government is satisfied that the Board has made default in performing any duties imposed on it by or under this Act or has abused its power, the State Government may by notification in the Official Gazette supersede and reconstitute the Board 2[in the manner prescribed for constitution of the Board] : Provided that, before issuing the notification under this sub-section, the State Government will ....
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.... Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall, from the date of publication of a notification in the Official Gazette of such decision, have effect only in such modified form, or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done or omitted to be done under that rule.] 20. the members of the Board, the Welfare Commissioner, Inspectors and all officers and servants of the Board shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code. 21. No suit, prosecution or other legal proceedings shall lie against any person for anything which is in good faith done or intended to be done under this Act. ....
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....ry, Energy & Labour Department Mantralay, Mumbai-400032 Date: 19/07/2017 Read: Please read GR dated 22/11/2012 Introduction: Maharashtra Labour Welfare Board is established under the provision of Mumbai Labour Welfare Fund Act, 1953. As per the provision of this act is getting Employer, Employee & Government contribution in order to achieve boards objectives, board has its own staff. In this connection board had submitted its resolution dated 14/08/2012 to the government for payment of sixth pay arrears to the fulltime & retired staff of the board. Government has already given its approval to the revised pay structure as prevailed in the sixth pay salary structure. But while providing this approval government in circular not permitted to pay arrears for the period from 1/1/2006 to 31/10/2012 Government Resolution: Maharashtra Labour Welfare Board is established under the provision of Mumbai Labour Welfare Fund Act, 1953 with regards to the pay revision as per the sixth pay for the period from 1/1/2006 to 31/10/2012. As per the terms & conditions as mentioned below: 1) Maharashtra Labour Welfare Board shall pay 82 month ....
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.... of the Income-tax Act, 1961, it had the blanket exemption under the Income Tax Act up to the assessment year 2002-03 as per the Provisions of Section 10(20) & 10(20A) The Finance Act, 2002 deleted the provisions of section 10(20A) and introduced a new definition of Local Authorities u/s. 10(20) wherein Panchayat,./ Municipality, Municipal Committee and District Boards and Cantonment Boards only are included u/s 10(20) of the IT. Act. In view of the deletion of Section 10(20A) and insertion of new definition of local authority u/s. 10(20) the so-called authorities, bodies like MHADA, MMRDA, SRA, etc. came into the tax net. It may be noted that the amendment to the above provisions rappers-to be a deliberate intention of the legislature to tax such Board / authorities /corporations. The assessee has also contended that it is the arm of Government of Maharashtra and its income is not taxable, in this regards following legal positions may be noted and relied upon. a) The contention of the assessee is not acceptable in view of decision of Hon'ble Supreme Court in the case of APSRTC (52 ITR 524) wherein it has been clearly bifurcated that the income of the state is differen....
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....he trading activity is run by the corporation and the profit and loss that would be made as a result of the trading activity would be the profit and loss of the corporation. There is no provision in the Act which has attempted to lift the veil from the face of the corporation and thereby enable the shareholders to claim that despite the from which the organization has taken, it is the shareholders who run the trade and who can claim the income coming from it as their own. Section 28 which provides for the payment of interest clearly brings out the duality between the corporation on the one hand and the state and Central Government on the other Take, for instance, the case of suppression of the corporation authorized by section 38. Section 38(2)(c) emphatically brings out the fact that the property really vests in the corporation, because it provides that during the period of suppression, it shall vest in the State Government Similarly section 39(2) which deals with the distribution of assets in case of liquidation, brings out the same feature: It has been urged before by the Advocate-General that section 30 contemplates that after provisions is made as required by section 28 and 29....
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....deration. Considering, the facts that the assessee Board is under complete superintendence, and control of the State Government financially as well as administratively falls under the definition of 'State' as per article 12 of the Constitution of India. And it is entitled for immunity from the taxation of its income under the provisions of Income-tax Act. This view is further got the support that CBDT vide its notification date 29-3-2016 which has granted exemption of taxation to the assessee board. [Para 34] 12. The ld. Counsel for the assessee submits that Article 289 exempts state income or property from taxation. On plain reading of above Article, it is clear that Union can (i) itself impose or authorize to impose (ii) any tax to such extent, as parliament may by law provide (iii) in respect of a trade or business of any kind carried on or on behalf of Government of a state. In the case of the appellant no such taxation is prescribed by the Union or authorized by the Union. 13. The ld Counsel submits that on perusal of the Article 289 (2), which is the exception to 289(1), it is important to note that parliament by law provide to tax the property or income in rela....
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.... (31) of the General Clauses, Act refers to authorities like Municipalities, District Boards, Panchayats, Improvement Trust and Mining Settlement Boards. 16. In Article 12 the expression 'other authorities' is used after mentioning a few of them such as, the Government, Parliament of India, the Government and Legislature of each of the States and all local authorities. In Article 12 the bodies specifically named are the Government of the Union and the States, the Legislature of the Union and the states and local authorities. There is no common genus running through these named bodies nor can these bodies so have placed in one single category on any rational basis. 17. The ld Counsel for assessee submits the decision of Hon'ble Apex Court in Electricity Board v. Mohan Lal AIR 1967 Raj 1857, wherein the Hon'ble Supreme Court held that the expression 'other authorities' is wide enough to include all authorities created by the constitution or Statue on whom powers are conferred by law. It is not necessary that the statutory authority should be engaged in performing Governmental or Sovereign function. In effect the Rajasthan Electricity Board's decision....
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....l such activities are covered by notification must be treated as exempted. The source of income of assessee consists of grant from State Government, fees collected from candidate to appear in various examinations, receipt from printed education material, receipt from other government bodies for conducting courses and exams like Common Entrance Test (CET) or interest on deposits. None of these items can be said to be carrying of any activities in the nature of trade, commerce or business. The assessee is not rendering any services in the nature of trade, commerce or business for a fee or any other consideration. The assessee engaged in regulation of educational activities. In support of his submission the ld AR for the assessee relied on the decision of Hon'ble Supreme Court in Novopan India Ltd. v. Collector of Central Excise and Customs [1994] Supp. (3) SCC 606, for the preposition that once the provision is found applicable to a subject, full effect i.e., liberal interpretation must be given to it and strict construction of any exemption provision should be applied only at the threshold stage. The decision of Kolkata Tribunal in Narayan Rice Mill v. CIT (ITA No. 732/Kol/2015 ....
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.... therefore, of the opinion, that in the light of our above discussion, the plea of the assessee need reconsideration by the Ld. CIT (Appeals). We, therefore, set aside the issue in respect of the disallowance made u/s. 40A (3) to the file of the Ld. CIT (A) to decide the same de novo in the light of our above observations and discussion. Accordingly, the relevant Grounds taken by the assessee in all these appeals are allowed for statistical purposes. Needless to say, the Ld. CIT (A) is directed to give opportunity of being heard to the assessee as per the principles of natural justice.' 22. A bare perusal of Article 12 shows that the definition of "the State" given in Article is inclusive and not exhaustive. "The State" includes: (a) the Government and Parliament of India; (b) the Government and the Legislature of each of the States; (c) all local and other authorities within the territory of India; and (d) All local and other authorities under the control of the Government of India. 23. The expression "other authorities" used in Article 12 is neither defined in the Constitution of India nor in any other statute. Therefore, the Hon'....
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....se the Central Government provided the money to the assessee for implementing the said scheme. The money so received from the Government of India was parked by the assessee in various bank deposits during the unutilised period. The interests earned during the year on these deposits were transferred to the Mega-city scheme account directly with an appropriate disclosure in the notes to the accounts. The assessee also performed the other projects of development of infrastructure apart from the activity as a nodal agency for the implementation of the Mega-city scheme undertaken by the Government of India from time to time. The Assessing Officer treated the interest earned and received by the assessee out of the amount which it had received from the Central and State Governments and deposited in various banks, as income of the assessee and brought the aforesaid amounts to tax. The aforesaid view of the Assessing Officer was upheld by the Commissioner of Income-tax (Appeals). The assessee preferred an appeal before the Tribunal. The Tribunal looked into the guidelines which provided the background of the scheme. The Tribunal while setting aside the Orders of the Assessing Officer and Co....
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....ved for implementation of the scheme which is for a public purpose and the said scheme is implemented as per the guidelines of the Central Government and, therefore, the assessee is only acting as a nodal agency of Central Government for implementation of these projects. It is not the case of the revenue that the assessee was carrying on any business or activities of its own while implementing the scheme in question. The unutilised money, during which the project could not be fully implemented, is deposited in a bank to earn interest. That interest earned is also again utilised for the implementation of the Mega-city scheme which is also permitted under the scheme. Therefore, in computing the total income of the assessee for any previous year the interest accrued on bank deposits cannot be treated as an income of the assessee as the interest is earned out of the money given by the Government of India for the purpose of implementation of Mega-city scheme." 26. The Income-tax Authorities under the Act cannot assess all receipts; they can assess only those receipts that amount to 'income' and, therefore, before they assess a receipt, they must find that to be the income of ....
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....hus, until and unless the statute, under which the instrumentality has been brought into existence, provides that such an instrumentality shall be the agent of the State, the instrumentality shall not be a State. The pertinent observation in regard thereto, made by the Supreme Court in the case of Heavy Engg. Mazdoor Union v. State of Bihar reads as under: "The question whether a corporation is an agent of the State must depend on the facts of each case. Where a statute setting up a corporation so provides, such a corporation can easily be identified as the agent of the State as in Graham v. Public Works Commissioners, [1901] 2 KB 781 where Phillimore, J. said that the Crown does in certain cases establish with the consent of Parliament certain officials or bodies who are to be treated as agents of the Crown even though they have the power of contracting as principals. In the absence of a statutory provision, however, a commercial corporation acting on its own behalf, even though it is controlled wholly or partially by a Government department, will be ordinarily presumed not to be a servant or agent of the State. The fact that a minister appoints the members or directors o....
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....e Corporation and therefore, the income derived by the Corporation from its trading activities cannot be said to be the income of the Andhra Pradesh State under Article 289. The Supreme Court for reaching the aforesaid conclusion referred to the following observations which had been made by Lord Denning in the case of Tamlin v. Hannaford [1950] 1 KB 18: "The corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government." 30. Thus, on the basis of the aforesaid observations, that a trading activity carried on by the corporation is not a trading activity carried on by the State departmentally, nor is it a trading activity carried on by a State through its agents appointed in that behalf, the Hon'ble Supreme Court held that the incom....
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....ncy of the Government. 33. In the result, appeals of the Revenue are dismissed and Cross objections of the assessee are allowed. Order pronounced in the open court on 25th day of September, 2023. ============= Document 1 कारà¥à¤¯à¤•à¥à¤°à¤®à¤¨à¤¿à¤¹à¤¾à¤¯ तपशील, २००६-२००ॠTotal Budget Estimates, 2005-2006 Re In thousands) ld, t Revised Estimates, 2005-2006 Budget Estimates, 2006-2007 Programme Revenue (9) Capital Total (10) (15) Revenue (120 fot Capital (13) Total C14 (2) 0.00 86,60,00 86,60,00 86.00.00 86,60,00 (C) Non-Plan Interest Payment 5,00 25,19 25,19 15,00 5.51 16,72,15,75 16,72,15,75 12,09,48,79 1,17,23,53 1,17,23,53 4,30,33,00) 15,00 (V) Non Plan 12,09,46,79 (V) Non-Plan 4,30,33,00 (V) Plan Social Security and Welfare Power 3.65 0,00 38.33.65 1,00,00,00 1,00,79,43 $8,33,65 1,00,00,00 1.00,79.43 (V) Non-Plan (C) Plan. 1,19,00 1.19.00 (V) Plan 3,69 0,00 6,48,181 6,48,18 4.86.67 1.02....
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....,65,32,00 (V) 4801, Capital Outlay Power Project 75,00 (V) 4851, Capital Outlay on Village and Small Industries. 3,00,00 (1) 4885, Other Capital Outlay on Industries and Minerals 94,29,86 (V) 6801, Loans for Power Projects (C) 6885, Other loans to Industries and Minerals 7,94,00 7,94,00 (V) 8,60,00 8,60,00 (V) 7610, Loans to Government servant. 27,26,20,77 12,31,06,32 39,57,27,09 13,33,90,46 9,78,69,86 23,12,50,32 Total-Gross .. Deduct-Recovery 27,26,20,77 12,31,06,32 39,57,27,09 13,33,90,46 9,78,69,86 23,12,50,32. Total-Net Shown under Finance Department 27 (III) FINANCIAL REQUIREMENTS TABLE gene Revised Estigates, 2005-200 Budget Retinates, 2006-2007 er heden ठNem-Plan Plan (B (10) मगर Total Nun-Plan (12) à¤à¤•à¥‚ण shesinin Plan Total (13) (12) Charged 27.34.66.01 11,31.06,32 30,65,72,33 13,33,0046 9,78,39,86 23,12,50,32.. Voted reremy in thudas Cismistion 13 (A) Activity Classification 27,34,68,0 12,31,00,32 39,65,72.15 10,33,00,46 9,78,60,66 3,19,60,32 Charged Voted 'A' Gross Total - Deduct-Recover....