TMI Blog2016 (2) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Assessee : Shri A.V. Raghuram, AR. For The Revenue : Shri Th. Lucas Peter, DR ORDER PER V. DURGA RAO, Judicial Member: This appeal is filed by the assessee against the order of CIT-1, Visakhapatnam dated 1.10.2013. 2. Facts are in brief that the assessee Visakhapatnam Kakinada Petroleum, Chemical and Petro chemical Investment Region, Special Development Authority (VK PCPIR SDA) created by Government of Andhra Pradesh, under section 3 of Andhra Pradesh Urban Areas Development Act, 1975 through a GOMS no.373 dated 24.5.2008. The assessee has filed an application before the Commissioner of Income Tax for grant of registration u/s 12AA of the Income-Tax Act, 1961 (hereinafter called as the Act ) along with form no.10A. 3. In the application filed by the assessee before the Ld. Commissioner of Income Tax, it was stated that the organization started its operation actively from the financial year 2008-09 and onwards. No individual is benefitted by the objectives and activities of the organization and it is not carrying out any commercial activity covered by sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chemical and Petrochemical projects and submitted that no commercial activity is involved. Therefore, the assessee is entitled for registration u/s 12AA of the Act. 6. He also submitted that the purpose for which the institute is created by the state is for protection and conservation of environment, as per environmental norms and therefore submitted that the assessee is not engaged in any commercial activity and proviso to section 2(15) of the Act, has no application and submitted that the assessee is eligible for registration u/s 12AA of the Act. 7. The Ld. Counsel further submitted that once the assessee is discharging its duty on behalf of the sovereign authority as an instrumentality/agency for protection of ecology and environment, it falls under the definition of general public utility and therefore the proviso to section 2(15) of the Act has no application. To support his argument, the Ld. Counsel relied on the decision of the Hon'ble Delhi High Court in the case of Bureau of Indian Standards (BIS) Vs. Director General of Income Tax vide W.P. (C)No.1755 of 2012 dated 27.9.2012. 8. On the other hand, the Ld. D.R. has submitted that the sole purpose for which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the reference 9th read above, the Principal Secretary and CIP., Industries and Commerce Department has sent proposals to the Government for declaring the Visakhapatnam Kakinada Petroleum, Chemical and Petrochemical Investment Region (PCPIR) Corridor for a total area of 603.58 Sq.Kms. comprising 110 Revenue villages in 10 Mandals of Visakhapatnam and East Godavari Districts (stretching from Visakhapatnam to Kakinada) as a Special Development Authority to achieve the objectives of the Government of India, VIZ., development activities relating to Petroleum, Chemical and Petrochemical Investment Region (PCPIR) and address the concomitant issues of land use control, preparation of Master Plan, enforcement and regulatory functions besides promoting and improving circulation network in surrounding areas, and various other activities like developing the social infrastructure, housing, impact on the livelihood of the people in the area and quality of life, environmental issues on account of Petroleum, Chemical and Petrochemical Investment Region (PCPIR). 3. Government, after careful examination of the issue, and in exercise of powers conferred under section 3 of the Andhra Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the above, it is very clear that whatever the fee is collected by the assessee shall be utilized for the benefit of public at large and only 15% shall be utilized for the purpose of administration. We find that the assessee neither involved in any trade, commerce or business nor rendering any service relating to trade, commerce or business. Therefore, the proviso to section 2(15) of the Act has no application. 12. So far as case law relied by the Ld. Counsel for the assessee is concerned, in the case of Bureau of Indian Standards Vs. DGIT (supra), the Hon ble Delhi High Court has observed that Rendering any service in relation to trade, commerce or business cannot, in the opinion of the court, receive such a wide construction as to enfold regulatory and sovereign authorities, set up under statutory enactments, and tasked to Act as agencies of the State in public duties which cannot be discharged by private bodies. Often, apart from the controlling or parent statutes, like the BIS Act, these statutory bodies (including BIS) are empowered to frame rules or regulations, exercise coercive powers, including inspection, raids; they possess search and seizure powers and are invar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10(23C) . In the present case, the assessee is entrusted various works by the State of Andhra Pradesh such as approval of plans, controlling usage of land, water, maintenance of bridges, creation parks and environmental concerns. Therefore, the above case law relied by the Ld. DR has no application to that of the fats of the case in hand. 16. The Hon ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Gujarat Maritime Board 295 ITR 561 has considered the expression any other object of general public utility in section 2(15) of the Income-Tax Act, 1961 and observed that the expression is of the wide connotation. That the expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would seize to be charitable if public welfare is intended to be served. If the prima facie purpose and the predominant object are to promote welfare of the general public, the purpose would be a charitable purpose. 17. In view of the above, we find that the assessee neither or nor involved directly rendering any service relating to trade, commerce or business. The activity undertaken by the authority com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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