TMI Blog2006 (6) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... inal rates and after developing the same, the same land (is sold) on high profit which cannot be said to be a charitable activity. Even just for argument sake, under the present facts, if registration is granted, then every private colonizer will claim charity. The facilities which are provided to the plot holders are incidental to the commercial activity carried out by the PUDA and if certain facilities like parks, community center, school are provided is not only basic requirement, rather a tool of attracting the investors wherein the hidden cost of these facilities is already included. In the absence of these facilities, normally the purchaser may not invest and the prices may be less. Thus, we are of the view that the application of the assessee has been rightly rejected by learned CIT. The stand of the learned CIT is upheld. Appeal of the assessee is, therefore, dismissed. - Hon'ble N.K. Saini, A.M. And Joginder Singh, J.M. For the Appellant : Ajay Vohra, Adv. For the Respondent : R.K. Goyal, Adv. ORDER JOGINDER SINGH, J.M. 1. This appeal is by the assessee challenging the order of the learned CIT dt. 30th Sept., 2003 on the following groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is that the assessee was constituted under the Punjab Regional and Town Planning Development Act, 1995 for the planned development of the State. The learned counsel invited our attention to the purpose and objects of the Act. A strong plea was raised that on identical facts Patiala Urban Planning Development Authority was granted registration by the learned CIT, Patiala, vide order dt. 28th Sept., 2005, the copy of which was furnished by the learned counsel. It was also contended that on identical facts the Department of Revenue granted registration to Maharashtra Housing Area Development Authority (MHADA). Mr. Vohra further contended that the objects of the assessee are of charitable nature. The method of acquiring the land by the authority/Government was explained. As per the objects of the assessee it was contended that the assessee is constituted to regulate well planned development within the State. Mr. Vohra further tried to distinguish the private colonizers with the assessee by contending that the objects of the private colonizers is to earn maximum profit and they are not developing bigger projects like flyover, drainage, etc. and their field is very small. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the rival submissions. 4. In the present appeal there is no dispute to the fact that the assessee moved application in Form No. 10A and furnished relevant information to the learned Asstt. CIT. There is also no dispute that the assessee was constituted under the Act of the Government for making better planning and regulating development and use of land in planning areas delineated for the purpose, preparation of regional plans/master plans and implementation thereof and also for guiding and directing the planning and development process in the State. The major thrust of argument on behalf of the learned counsel for the assessee is that PUDA is of general public utility and was established to satisfy the need for housing accommodation of various sections of the people of Punjab and specially for planning and development in the cities, town and villages and is of charitable nature. 5. Before coming to any conclusion, we are supposed to see the meaning of the word 'charitable purpose' which has. been defined in s. 2(15) of the Act which includes relief to the poor, education, medical relief and advancement of any other object of general public utility. A strong conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises should not deter the Court from overruling an earlier decision, if it is satisfied that such decision is manifestly wrong or precedes upon a mistaken assumption in regard to the existence or continuation of a statutory provision or is contrary to another decision of the Court. However, two views reasonably may be possible. Perpetuation of error is not a heroism. However, we make it clear that this observation of ours should not be treated to bear any effect in the case of Patiala authority. At the same time, the order passed by a lower authority is not binding on the Tribunal. However, it may be a good arguable point by the parties. 7. This issue requires deliberation from a different angle whether the assessee was constituted to provide any charity to the public at large or to satisfy the needs for housing accommodation for the people of Punjab and also planning and development of the cities, towns and villages or whether the development in such a way is of charitable nature. A plea was raised by the learned counsel for the assessee that funds are provided by the Punjab Government or generated by the assessee itself. To generate its funds for carrying out its objects, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturers Association (1979) 13 CTR (SC) 378 : (1980) 121 ITR 1 (SC) and CIT vs. Bar Council of Maharashtra (1981) 22 CTR (SC) 106 : (1981) 130 ITR 28 (SC), it was held that what is predominant object of the activity-whether, it is to carry out a charitable purpose and not to earn profit-the purpose should be that it should not lose its charitable character. 9. The major thrust of the learned counsel for the assessee is that PUDA is of general public utility as it satisfies the need for housing accommodation for the section of the people of State of Punjab and is also doing planning and development of the cities, towns and villages. We are not agreeable with the argument of the learned counsel because a charitable institution provides services for charitable purposes free of cost and not for a gain. In the present scenario, the similar activities are performed by big colonizers/developers who are earning a huge profit. If this registration is granted, then we will open a pandora box and anybody will claim the exemption from tax. If the accounts of the assessee are analysed, it has turned into a huge profit-making agency for which it is taking money from the general public. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w silk, cotton yarn, art silk cloth, silk cloth and cotton cloth as set out in cl. (a) and the object specified in cls. (b) to (e) and the object was found to be public utility not involving the carrying on of any activity for profit within the meaning of s. 2(15), the assessee was held to be entitled for exemption under s. 11(1)(a) of the Act, However, Hon'ble Justice Sen passed a dissenting order but in the present case there is a profit motive of the assessee, so will not help in any manner. 11. Reliance was also placed on the decision of the Hon'ble apex Court pronounced in the case of CIT vs. Andhra Pradesh State Road Transport Corporation (1986) 52 CTR (SC) 75 : (1986) 159 ITR 1 (SC) wherein the object of the assessee was development of roads, improving facilities for road transport and providing efficient and economical system of road transport service, the entire capital was provided by the State Government and the profits were utilized for providing amenities to the passengers and welfare of labour and approved expansion program and the remainder to be made over to the State Government for road development, it was held to be of charitable purposes and thus incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then came to a particular conclusion. In view of these facts and judicial pronouncements, we are supposed to see the predominant object of the assessee. If all the objects and activities actually carried out by the assessee are analysed and kept in juxtaposition with the aforesaid judicial pronouncements, we are of the view that activities of the assessee are more of commercial nature with profit-oriented intent, so no leniency should be shown to the assessee. The Department may also get support from the decision of the Hon'ble Patna High Court as pronounced in the case of Bihar State Forest Development, Corporation vs. CIT (1997) 224 ITR 757 (Pat) where the Government company was formed for promotion and development of forestry. The assessee-corporation was permitted under memorandum of association to engage in commercial activities and there was no restriction on application of money, the corporation was not held to be a charitable trust and consequently not entitled to exemption. Similar is the case in the present appeal of the assessee. During arguments, the learned counsel for the assessee invited our attention to the case of Maharashtra Housing Area Development Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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