TMI Blog2006 (7) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and the law laid down by the courts in this behalf. 3. That the appellant while executing this project has dealt with its members societies and as such the income derived therefrom is income from the members and as such shall fall otherwise within the purview of section 80P(2)(a)(i) of the Income-tax Act and whole of the income is entitle to deduction under the said provision. The learned CIT(A) has not considered the claim of the appellant made before him in appeal. 4. That the Assessing Officer has not afforded an opportunity to the appellant to initiate its claim under the provisos of section 80P(2)(a)(i) of the Income-tax Act or to claim the said income as income from capital gain after allowing necessary deductions therefrom. The learned CIT(A) while dismissing the appeal of the appellant has not considered the ground raised by the appellant in this behalf." 2. Although the assessee has preferred multiple grounds of appeal, which we shall deal herewith but essentially the grievance of the assessee is against the action of the CIT(A) in sustaining the stand of the Assessing Officer that the assessee was not eligible for exemption under section 10(20A) with resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce disallowed the claim of exemption under section 10(20A) with respect to the income from the Bathinda Project stating that the assessee is not an "authority" as envisaged under section 10(20A) of the Act. The assessee carried the matter in appeal before the CIT(A) who has since sustained the order of the Assessing Officer in this regard. Not being satisfied with the order of the CIT(A), the assessee is presently in appeal before us. 5. Before us Shri M.R. Sharma, learned counsel appearing on behalf of the appellant has made extensive arguments. Firstly, it was submitted that the activity resulting in the impugned income related to the purpose outlined in section 10(20A) and was, therefore, eligible for exemption. It was emphasized that the assessee was set up by the Government of Punjab by means of a co-operative society and its objects, inter alia, include framing and execution of housing projects and other developmental schemes. A reference was made to the bye-laws of the society, a copy of which is placed in the Paper Book filed before us. The learned counsel referred to the Paper Book to demonstrate that the project for construction of a housing complex at Bathinda was ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objectives and requirement are to be primary objects of an authority to qualify for exemption under section 10(20A). According to the learned Departmental Representative the assessee is a society incorporated under the Punjab Co-operative Societies Act, 1961 and is not an authority constituted by a special or general law. The learned Departmental Representative relied upon the judgment of the jurisdictional High Court in the cases of- (i) Ludhiana Co-operative Marketing Society Ltd. v. CIT [1989] 177 ITR 42, and also (ii) Vidarbha Irrigation Development Corpn. v. Addl. CIT [2005] 93 ITD 184 (Nag.) 7. With regard to the decisions cited by the learned counsel for the assessee, the learned Departmental Representative submitted that the same were distinguishable and were not attracted to the issue in question here. 8. We have examined the claim of the assessee for exemption under section 10(20A) of the Act with respect to the income derived by it from construction of a co-operative housing complex at Bathinda. It would be relevant to reproduce here the provisions of section 10(20A) which read as under:- "Any income of an authority constituted in India by or under any law ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of providing housing accommodation and, therefore, it was discharging the functions of a State and on that basis it be regarded as an "authority". This argument also deserves to be rejected in the face of the specific provisions of section 10(20A) of the Act. 12. The second requirement, in our view, in section 10(20A) is also not fulfilled in the present case. Section 10(20A) envisages that the "authority" must be constituted for the purpose of dealing with housing accommodation or the purpose of planning, development or improvement of cities, towns and villages. The bye-laws of the Society, a reference to which have been made earlier, do not show that it has been specially enacted for the aforesaid purposes. Thus, the other requirement of the section is also not fulfilled by the assessee-society. 13. Apart from the aforesaid reasons, we also find that the objects and purposes purported to section 10(20A) also does not envisage the assessee being entitled for exemption. The primary purpose of section 10(20A) appears to exempt income of an "authority" constituted primarily for dealing with housing accommodation or for the purpose of planning, development and improvement of ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A) of the Act. The fact situation in the instant case as we have noted earlier is distinguishable from the facts noted by the Hon'ble Courts in the aforesaid decisions. 16. We have also perused the other decisions cited by the learned counsel and find that the ratio therein are not in conflict with the conclusion drawn by us on the basis of phraseology, intent and purpose of section 10(20A) of the Act. 17. On the other hand the judgment of the Hon'ble High Court in the case of Ludhiana Co-op. Marketing Society Ltd. relied upon by the learned Departmental Representative squarely covers the issue on hand. In the case before the Hon'ble Punjab Haryana High Court the issue was as to whether the assessee therein could constitute an "authority" within the meaning of section 10(29) of the Act. The assessee before the Hon'ble Punjab Haryana High Court was a Co-operative Society registered under the Co-operative Societies Act, 1912. According to the Hon'ble High Court the Co-operative Societies Act, 1912 was not a law enacted by the State Legislature to create an "authority" within the meaning of section 10(29) of the Act. Therefore, the assessee therein, registered under the Co-op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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