TMI Blog2015 (12) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... Even if the Board has ceased to be a "local authority", it is not precluded from claiming exemption under Section 11(1) of the 1961 Act. Therefore we have to read Section 11(1) in the light of the definition of the words "charitable purposes" as defined under Section 2(15) of the 1961 Act.. - interest earned by parking the funds received from the Government also assumed the character of funds provided by the Government and cannot be brought to tax as Income from other sources. In the premise, we are of the considered view that the argument advanced on behalf of the Revenue that assessee was not entitled for exemption under Section 11 of the Act for the reasons recorded by the Commissioner of Income Tax, is untenable and deserves to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment is completed ignoring the mandatory time limit provided in the said rule which is held to be mandatory and assessment for this reason cannot be reopened by the Assessing Authority as held by the Hon ble Supreme Court in Nagpur Hotel s case supra. 4. Whether, in law and on facts, the ITAT is correct in holding that the Form No.10 as required by Income Tax Rule 17 can be filed after completion of assessment during the pendency of appeal. (sic) 2. Heard Sri Y.V. Raviraj, learned Counsel for the appellant and Sri Parthasarathi, learned Counsel for respondent-assessee. 3. Though the Revenue has raised aforementioned questions of law for consideration of this Court, learned Counsel for the Revenue has limited his argument fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposits to the tune of ₹ 15,80,86,596/- were made in the Banks and it was claimed that the said deposit was meant for charitable purpose and whereas in the opinion of the Commissioner, the amount in deposit was not applied towards the objects. Accordingly, a show-cause notice was issued, which was duly replied. After considering the reply, the Commissioner of Income Tax held that the assessee had shown an income of ₹ 47,66,36,982/- and had applied a sum of ₹ 31,85,50,386/- for charitable purposes. In terms of Section 11(2) of the Act, assessee was required to apply 85% of the income which shall be ₹ 40,51,41,434/-. Thus, he held that the difference of ₹ 40,51,41,434/- and ₹ 31,85,50,386/- which work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent/assessee supporting the order of the Tribunal prayed for dismissal of the appeal. 7. Careful consideration of the rival contentions and perusal of material papers lead us to following irrefutable inferences:- (i) Respondent/assessee is a statutory authority created under Karnataka Improvement Boards Act,1976; (ii) The purpose and intent of creation of respondent/authority is to carry out Rehabilitation Resettlement of Displaced Persons due to construction of Almatti Dam; (iii) Assessee has placed deposits in the Banks as per the directions of Government of Karnataka vide communication No.HRD 26/REH/2006 dated 25.2.2006 and No.HRD 100/REH/2010 dated 21.06.2010; (iv) Assessee acts as an agent of the Government to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s application under Section 12-A of the 1961 Act. In the light of the above case of the Department, we are required to consider the expression any other object of general public utility in Section 2(15) of the 1961 Act. 12. At the outset, we may point out that Section 10(20) and Section 11 of the 1961 Act operate in totally different spheres. Even if the Board has ceased to be a local authority , it is not precluded from claiming exemption under Section 11(1) of the 1961 Act. Therefore we have to read Section 11(1) in the light of the definition of the words charitable purposes as defined under Section 2(15) of the 1961 Act. 13. We have perused number of decisions of this Court which have interpreted the words in Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quarely covered by the judgment of this Court in CIT v. A.P. SRTC [(1986) 2 SCC 391: 1986 SCC (Tax) 393 : (1986) 159 ITR 1] in which it has been held that since the Corporation was established for the purpose of providing efficient transport system, having no profit motive, though it earns income in the process, it is not liable to income tax . 9. In instant case also assessee is a statutory authority created under the Karnataka Improvement Boards Act to carry out public purposes. Therefore, ratio of above judgement is applicable to the facts of this case. Consequently, assessee shall entitle for exemption of tax. 10. In the premise, we are of the considered view that the argument advanced on behalf of the Revenue that assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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