AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 281
X X X X Extracts X X X X
X X X X Extracts X X X X
....arned Pr. CIT has erred in passing the order u/s. 263, although the assessment order passed u/s. 143(3) r.w.s. 144B of the I. T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 2. It is therefore prayed that above order passed by Pr. CIT u/s. 263 may please be quashed or set aside as your honour deems it proper. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 3. We have heard both the parties and gone through the orders of the authorities below, and also through various documents and case laws referred to before us from the paper book filed by the assessee during the course of hearing before us. 4. As is derived from the order of the ld.CIT, the assessee-trust i.e. Surat Urban Development Authority filed return for the impugned assessment year i.e. Asst.Year 2018-19 declaring NIL income after claiming exemption under section 11 of the Act. This return was subjected to scrutiny assessment under section 143(3) of the Act accepting the returned income at NIL. The ld.CIT noted from the case records that this assessment order passed was erroneous causing prej....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment proceedings, pointing out specific queries raised by the AO in this regard and the response of the assessee giving details of all capital receipts and expenditure. The reply of the assessee in this regard is reproduced at para-3.1 of the order. The assessee further contended that the Hon'ble Apex Court in the case of ACIT Vs. AUDA in Civil Appeal No.21762 of 2017 had already decided the issue on merits in favour of the assessee and following the same, all additions in the case of the assessee for Asst.Year 2016-17 and 2017-18 had been deleted. Copies of the orders were placed before the ld.Commissioner. The assessee further submitted that the assessee's case before the Hon'ble Apex Court had been heard and judgments passed in favour of the assessee, pointing out that at page no.147, para-2 and 3 of its order, the Hon'ble Apex Court had held all the Revenue's appeal in the case of the assessee/SUDA to be rejected. The assessee pointed out that the facts of the present case were identical to that dealt with the Hon'ble Apex Court. 6. The ld.PCIT, however, noted that the decision of the Hon'ble Apex Court in the case of the assessee relied upon by the ld.counsel for the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Apex Court in Para Nos. 133 to 136, wherein the Hon'ble Apex Court has discussed the position with respect to what kind of activities GPU charities could legitimately undertake was in a state of flux till 2015 and for the sake of convenience the same is reproduced hereunder. "133. The position, therefore, with respect to what kind activities GPU charities could legitimately undertake, was in a state of flux till 2015. However, the amendments cumulatively point to prohibitions that were constant: (1) the prohibition applicable to such charities involved in carrying on activities "in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration " (2) "irrespective of the nature of use or application, or retention, of the income from such activity" (i.e. activity in the nature of trade, commerce or business for a cess, fee or Other consideration). 134. By retrospective amendment, in Section 2(15), after the proviso, a second proviso was inserted with effect from 01.04.2009: "Provided further that the fist proviso shall not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evious year, do not exceed twenty percent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year. " Further, in Para 190(iii) of the above referred decision of this Hon'ble Court it has been held that "Such statutory corporations, boards, trusts authorities, etc. may be involved in promoting public objects and also in the course of their pursuing their objects, involved or engaged in activities in the nature of trade, commerce or business." Therefore, it is evident that even such statutory corporations, boards etc, can be engaged in activities in the nature of trade, commerce or business. Further, in Para 190(iii) & (i v)(c) &(f) of the above referred decision of this Hon'ble Court, it has been held that: 190(iii):Such statutory corporations, boards, trusts authorities, etc. may be involved in promoting public objects and also in the course of their pursuing their objects, involved or engaged in activities in the nature of trade, commerce or business 190(iv)(c) : Rendition of service or providing any article or goods, by such boards, authority, corporation, etc.,on cost or nominal mark-up basis wou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issues, for various organizations in relation to the assessment years in question, -whereas in Para 253 (F), the court remitted the matter for examination and orders by the assessing officer. Similarly, the conclusion in Para 253 C, was conclusive with respect to the claim of private trusts; the appeals were dismissed. These conclusions are accurately reflected in the final, operative directions in Para 254. In Para 254 (i) to (iv), the conclusions recorded are against the revenue. However, in Para 254 (v),(vi), (vii) and (vii), the conclusions, are in favour of the revenue. 5. The reference to application of the law declared by this court's judgment, therefore, has to be understood in the context, which is that they apply for the assessment years in question, which were before this court and were decided: wherever the appeals were decided against the revenue, they are to be treated as final. However, the reference to future application has to be understood in this context, which is that for the assessment years which this court was not called up onto decide, the concerned authorities will apply the law declared in the judgment, having regard to the facts of each of e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mined the activities carried out by the assessee-trust in the light of the law laid down by the Hon'ble Apex Court in the case of AUDA (supra) and in the case of the assessee itself, and the assessment order was erroneous causing prejudice to the interest of the Revenue. The relevant finding of the ld.Commissioner at para 5.3 of its order is as under: 5.3 Therefore, the order of Assessing Officer is erroneous and prejudicial to the interest of revenue because: (i) The ratio laid down by Hon'ble Supreme Court in ACIT(E) vs AUDA & Ors as discussed above is squarely applicable in the case of the assessee which has not been taken into cognizance by the Assessing officer. The decision of Hon'ble Supreme Court in the case of ACIT(E) vs AUDA & Ors as discussed above was not before the AO at the time of finalisation of assessment order but is clarificatory in nature and retrospectively applicable. As such the issue was already in dispute since the department had not accepted orders of Hon'ble High Court and had filed SLPs before the Hon'ble Supreme Court which was pending as on the date of finalisation of assessment order. The AO having concluded that the Assessee was operating....