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2016 (2) TMI 396 - ITAT VISAKHAPATNAM

2016 (2) TMI 396 - ITAT VISAKHAPATNAM - TMI - Entitlement to registration u/s 12AA - Held that:- The assessee neither or nor involved directly rendering any service relating to trade, commerce or business. The activity undertaken by the authority comes within the object of the general public utility but, it cannot be concluded that it involves the carrying on of any activity in the nature of trade, commerce or business. Unless the activity undertaken by the assessee comes within the ambit of tra .....

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of the Act. - Decided in favour of assessee. - I.T.A.No. 728/Vizag/2013 - Dated:- 8-1-2016 - 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 Inve .....

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ated 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 section 2(15) of the Act and submitted that the assessee comes within the ambit of general public utility and prayed for registration u/s 12AA of the Act. When this appeal was taken up for hearing by the Ld. Commissioner, the assessee has submitted that .....

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ecisions for industrial development of the region only with reference to petroleum, chemical and petrochemical industries together with development of surface communication including construction of bridges, without, however, leaving unaddressed the environmental concerns of the entire region. To that effect, it draws master plans, identifies the areas and zones of industrial, development, screens, qualified and eligible entrepreneurs and permits them to set up industrial units and industry rela .....

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sioner came to a conclusion that the assessee is not eligible for registration u/s 12AA of the Act on the ground that the activity of the assessee attracted by the proviso to section 2(15) of the Act. 4. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 5. The Ld. Counsel for the assessee has submitted that the assessee is created by the Sovereign authority i.e. State of Andhra Pradesh by issuing a GOMS no.373 dated 24.5.2008 and the assessee is instrumentality/agenc .....

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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 .....

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rity (VK PCPIR SDA). Though directly not involved in trade or commerce or business, it is rendering service in relation to the trade, commerce or business, would come within the purview of proviso to section 2(15) of the Act, and therefore not eligible for registration u/s 12AA of the Act and strongly supported the order passed by the Ld. Commissioner. The Ld. D.R. also relied on the decision of Chandigarh bench in the case of Punjab State Seed Certification Authority Vs. CIT-I Chandigarh 144 IT .....

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hra Pradesh, Municipal Administration and Urban Development Department issued a GOMS no.373 in which it has explained the purpose for which the above GO was issued. The relevant portion of the GO is extracted as und er: Government have constituted Special Urban Development Authorities for certain priority areas under the aegis of the AP Urban Areas (development) Act, 1975 which will help in achieving special objectives of orderly growth and environmental upgradation in such areas. These areas ar .....

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one among such identified PCPIRs by the Government of India. Government have appointed the Andhra Pradesh Industrial Infrastructure Corporation Limited as the Nodal Agency for development of PCPIR in Andhra Pradesh. 2. 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 .....

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on 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 Pradesh Urban Areas (Development) Act, 1975, decided to notify the areas for a total area of .....

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e of Andhra Pradesh as a Special Development Authority to achieve the objectives entrusted by the Government of India relating to Petroleum, Chemical and Petrochemical industry for the purpose of orderly growth and environmental upgradation in such areas. It is the duty of the assessee that to control the land usage, preparation of Master plan, enforcement and regulatory functions, besides other functions such as development of social infrastructure, housing, impact on the livelihood of the peop .....

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ho are intended to establish/established their industries as per the norms laid down by the assessee or not. The assessee is collecting development charge from the industries/entrepreneurs, who opt for setting up of industries/entrepreneurship in the assessee s corridor, for use of land/assets etc. 11. Further the collection of the development charges has been statutorily authorized u/s 27 of the Andhra Pradesh Urban Development Act, 1975 (APUDA) and the rates of development charges are governed .....

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ion. 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 t .....

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bly subjected to Parliamentary or legislative oversight. The primary object for setting up such regulatory bodies would be to ensure general public utility. The prescribing of standards, and enforcing those standards, through accreditation and continuing supervision through inspection etc., cannot be considered as trade, business or commercial activity, merely because the testing procedures, or accreditation involves charging of such fees. It cannot be said that the public utility activity of ev .....

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for the purpose of controlling the use of the land and enforcement of regulations. Therefore, it cannot be said that the proposed collection of fee is amounting to neither in relation to trade, commerce and business nor rendering any service relating to trade, commerce and business. The above decision of the Hon ble Delhi High Court, in our opinion squarely applies to the facts of the case in hand. 14. So far as case laws relied by the Ld. D.R. is concerned, in the case of Punjab State Seed Cert .....

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elied by the Ld. D.R. and has no application to the facts of the case. 15. In another case law, Ld. D.R. has relied in the case of Andhra Pradesh State Seed Certification Agency Vs. CCIT & Others (supra). In this case the Hon'ble Andhra Pradesh High Court has held that Seed Certification work of a State agency is a business activity and not entitled to exemption under section 10(23C) . In the present case, the assessee is entrusted various works by the State of Andhra Pradesh such as app .....

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