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2016 (7) TMI 1188 - ITAT DELHI

2016 (7) TMI 1188 - ITAT DELHI - TMI - Grant of registration under Section 12A - Held that:- We are in agreement with the contention of the Ld Senior Counsel of the appellant that the activities of the appellant are under complete control of State Government having no profit motive and for the purpose of charitable activities of general public utilities therefore, the CIT(E) was not justified and correct in dismissing application of the assessee. - CIT(E) dismissed application of assessee fo .....

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and developing facility for development of industries in the state and its legal existence is akin to a municipal corporation for development of facilities in the specified area which is a charitable activity for the welfare of public at large and thus the same is an activity of general public utility. We are satisfied that there is no prime object or aliment of earning profit as private developer or builder and activities acquiring of land and selling developed property is an incidental and pr .....

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the appellant authority. - Decided in favour of assessee. - Appeal No. 172/DEL/2016 - Dated:- 22-7-2016 - Sh. C.M. Garg, J.M And Sh. O.P. Kant, A.M For the Appellant : Sh. Balbir Singh, Sr. Adv alongwith Sh. Abinash Mehrotra, Adv, Sh. Sunil Kumar Gupta, CA, Sh. Dinesh Verma, CA, and Ms. Raj Rani Lakra, CA For the Respondent : Shri Rajesh Kumar, CIT- DR ORDER Per C.M. Garg, JM This appeal has been filed against the order of the Commission of the Income Tax (Exemptions) Lucknow dated 19.11.2015 b .....

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facts of the case and hence the order is liable to be quashed. 2. Because on the facts and in the circumstances of the case, the Ld CIT (Exemption,) grossly erre4d in law and facts in rejecting the application filed by the assessee, without lawfully appreciating that the assessee is a statutory authority constituted under section 3 of the Uttar Pradesh Industrial Development Act, 1976 (UPIDA) and is duly notified by the Hon ble Governor of Uttar Pradesh as an Industri9al Township under Article 2 .....

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ified under Article 243Q of the Constitution of India, is obliged to perform its functions as declared under Schedule XII prescribed under Article 243W of the Constitution of India and hence cannot be treated as Commercial/Business entity and hence the activities of the authority being in accordance with section 2(15) of the Income Tax Act, is liable to be granted registration under section 12AA of the Income Tax Act. 4. Because, the Ld CIT (Exemption), grossly erred in law and on facts in treat .....

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ATION 25 TAXMAN 63A (SC) is liable to be repelled being inferior observations in view of the final verdict of the Supreme Court and the assessee be granted registration U/s 12AA. 5. Because on the facts and in the circumstances of the case, the Ld CIT (Exemption) grossly erred in law in failing to apply and follow the binding judgment of the Hon ble Jurisdictional High Court in the case of Lucknow Development Authority and that of the Hon ble Jurisdictional ITAT Delhi in the case of Haridwar Dev .....

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herance of public policy and activities of the assessee have not been acknowledged/ taken note-off of the Ld CIT (Exemption), while adjudicating the claim of the assessee and hence the order is liable to be quashed. 7. Because on the facts and in the circumstances of the case, the LD CIT (Exemption), grossly erred in law and on facts, while passing the impugned order in placing reliance upon case law authorities that are clearly distinguishable and inapplicable to the facts and circumstances of .....

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details were not supplied by the assessee, whereas in contrast, all requisite details were supplied by the assessee before the Ld CIT (Exemption) and the Ld CIT (Exemptions) has rather passed he impugned order in a premeditated and biased manner, violating the principles of Natural Justice, as the order is passed on the same date on which the hearing was fixed and hence the order is liable to be quashed on this court. 9. Because on the facts and in the circumstances of the case, the LD CIT (Exe .....

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) to the contrary are liable to be rejected. 10. That the order passed by the Ld CIT (Exemption) is further liable to be quashed as the same is made in violation to the principles of Natural Justice as the Ld CIT (Exemptions) did not provide due and proper opportunity of hearing to the assessee and hence the order is liable to be quashed on this count as well. 11. Because on the facts and in the circumstances of the case, the Ld CIT (Exemptions), failed to perform its bounden legal obligation to .....

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fully perusal relevant materials placed on record of the Tribunal inter-alia, impugned order of the CIT(E) papers books filed by the assessee and other relevant record. 4. The Ld Senior Counsel first of all submitted that the main grievance of the appellant is covered by the order of the ITAT New Delhi in the case of Haridwar Development Authority, Vs CIT(E) Dehradun, order dated 25.07.2014 (assessee paper book page 52-67) wherein para 7 and 7.1 it has been categorically held that the activity c .....

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om such activity. 5. The Ld Senior counsel further pointed out that the prayer of the assessee further get support from the order of the Hon ble Jurisdictional High Court of Allahabad, in the case of CIT(E) Vs Lucknow Development Authority, (LDA) dated 16.09.2013 passed in ITA No. 149 of 2009 and other related appeals. The Ld. Senior Counsel, further drawn our attention towards relevant operative part of the said decision and pointed out that in that case it was held that the appellant (LDA) was .....

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provisions of (UP) Industrial Area Development Act, 1976 (for short UPIDA) and in this Act the provisions of Uttar Pradesh Urban Planning and Development Act, 1973 has been borrowed and used by the legislation and the Act of 1976 by which present appellant has been created and the provisions in both the acts are perimateria therefore, as per objects mentioned in Section 6 that the authority shall secure the planned development of industrial development areas which is an object of general public .....

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4-A (1 of the Act). The Ld Senior Counsel specially drawn our attention towards paragraphs No. 39 and 40 of the said decision and contended that the appellant has been granted a status of Municipality under Article 243-Q of the Constitution of India, which deals with the Constitution of a Municipality. It was also contended that the UP, state government issued a notification dated 24.12.2001 in exercise of power conferred under the proviso to clause 1 of Article 243-Q of the Constitution which p .....

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n the light of observations of Hon ble High Court of Allahabad, and as per ratio of decision of Hon ble Apex Court in the case of S.S. Dhanoa Vs Municipal Corporation Delhi, AIR 1981 SC 1395 it has to be accepted that the appellant will owe its existence to an act of the state i.e. UPIDA, 1976. 7. The Ld Senior Counsel further contended that as per decision of Hon ble Supreme Court, in the case of Shri Ramsetu Corporative Vs State of Maharashtra AIR 1970 SC 1771, it has been held that the corpor .....

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e provisions contained in section 616 of the Companies Act, the provisions of that Act will apply to a company governed by any special Act. The Ld Counsel vehemently contended that for the purpose of evaluation of objects and activities of the present appellant the provisions of UPIDA, has to be seen and the functions and powers of the appellant are to be gathered from the said Act, which created the existence of appellant for the development of industries in the UP state. 8. The Ld Senior Couns .....

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ant facts and circumstances regarding objects and activities of the appellant which has been created by the special Act of UP state i.e. UPIDA 1976 which is parematirea to the provisions of earlier UPUPDA Act of 1973. The Ld Senior Counsel also pointed out that the appellant is control by UP Government and after dissolution of authority all properties and funds shall vest in or we released by the State Government of UP, therefore, appellant is quite dissimilar with the other profit making compan .....

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order and submitted that the appellant could not produce details of activities undertaken during AY 2014-15 despite of many opportunities given to the appellant. The Ld DR further pointed out that in order to find out the facts regarding charitable activities of the appellant the CIT(E) granted several opportunities to provide the basis of costing of various plots/flats developed and soled by the appellant along with its sale price in order to ascertain the claim of the appellant regarding chari .....

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e impugned order and contended that the appellant is not carrying out any activity for advancement of any object of general public utility and is purely involved in commercial activities for the purpose of making profit by acquiring lands from the farmers and others at a low price and after development the same land is being sold at a premium at high price to the perspective buyers, therefore it is clear that the activities of the appellant are profit motive which cannot be said to a activity of .....

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mpugned order and submitted that although objects of the appellant claimed to be charitable, but in fact same are purely of commercial nature with a profit motive because the assessee has been acquiring land at a very low price selling developed properties at a very high rate by adding the premium, therefore motive of profit earning is clear from such activity. The Ld DR strenuously pointed out that after analyzing all facts and circumstances of the case in the light of relevant provisions the C .....

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s to establish that it is undertaking charitable activities of the nature of general public utility, therefore application for grant of registration under Section 12A of the Act, was rightly dismissed by the CIT(E). 12. During the subsequent hearing on behalf of the revenue a copy of decision of Hon ble High Court of Allahabad, in the case of New Okhla Industrial Development Authority Vs CCIT in Civil Misc. Writ Petition No. 1338/2005 dated 28.02.2011 was submitted and it was contended by the Ld .....

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e appellant prayer of interim relief has been rejected and the situation till date is that the appellant is not a local authority within the meaning of Section 10(20) of the Act. 13. The LD DR reiterated written synopsis filed by the revenue and vehemently argued that despite being repeatedly called for information, the appellant did not provide certain information, and also failed to support its contention that the activity carried out was charitable in nature. The Ld DR pointed out that the ap .....

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missioner. The Ld DR also contended that a speaking order has been passed refusing the registration and giving the details of business activity carried on by the appellant and reasons as to why the activity of the appellant cannot be considered to be a charitable activity. 14. During the last round of hearing the LD DR pointed out that as per decision of Hon ble Jurisdictional High Court dated 28.02.2011 (supra) the appellant is not a local authority under section 10(20) of the Act, and the asse .....

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a and thus application has been filed by the appellant before CIT(E) Lucknow, who has no valid jurisdiction to entertain the same, could not be allowed and the same was rightly dismissed. 15. However, on specific query from the bench the Ld DR fairly accepted that in the impugned order there is no mention of jurisdiction issue and application of the appellant has not been rejected on the jurisdiction ground. The Ld DR also fairly accepted that the assessee cannot file its Return of Income by cla .....

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not the basis for denial of registration by the CIT(E) therefore, this issue cannot be agitated by the revenue. The Ld Senior Counsel also placed reliance on the recent decision of Hon ble High Court of Delhi in the case of India Trade Promotion Organization Vs DGIT(E) reported as 371 ITR 333 (Delhi) and contended that the amendment of section 2(15) of the Act, inserted by the finance Act, 2008 has been read down by the High Court by observing that when primary and dominant object of the instit .....

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ch claims to have been established for charitable purpose, is profit making, whether its activities are directly in the nature of trade, commerce or business or indirectly in the rendering of any service in relation to any trade, commerce or business, then it would not be entitled to claim its object to be a charitable purpose on the flip side, where an institution is not driven primarily by a desire or motive to earn profits but to do charity through the advancement of an object of general publ .....

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profit motive then the assessee cannot be precluded from claming exemption under Section 11(1) of the Act, in the light of definition of words charitable purposes as defined under Section 12 (15) of the Act, even if it has ceased to be a local authorities under Section 10(20) of the Act, and in the similar facts and circumstances of the present case the appellant is ceased to be exist as a local authority under Section 10(20) of the Act, by the order of Hon ble High Court dated 28.02.2011 but it .....

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and other relevant provisions of the Act, it is necessary to get registered under Section 12A of the Act which has been denied on the basis of incorrect and irrelevant reasons. The Ld Senior Counsel strenuously argued that after establishing its position of an statutory authority created by the special Act of the state for charitable purpose without any profit motive for development of industrial areas in UP state, which is a general public utility activity, the appellant cannot be precluded fro .....

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prise and Anr Passed in Civil Appeal No. 1089/2008 dated 16.05.2008 and contended that corporation is a public sector undertaking which develops infrastructure for setting up of industrial units and in view of the object and purport for which the corporation had been constituted and incorporated it must be held to be a government function for charitable purposes of general public utility. The Ld Senior Counsel pointed out that the activities of the appellant are under complete control of State G .....

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ve part of the impugned order we observed that the application of the appellant has been rejected mainly on the following grounds: (i) that the applicant authority could not produce, book, bank statement and vouchers in respect of expenses claimed by the applicant for verification of the activities of the trust and in absence of same it could not be ascertained if the applicant is involved in any charitable activities as claimed by it. (ii) The CIT(E) also observed that the applicant authority i .....

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long with its sale price in order to ascertain claim of the applicant regarding charitable activities but the assessee failed to reply in this regard. (iv) It was also observed by the CIT(E) that in the return of income the assessee/applicant has shown nill income by making a provision for development and maintenance of infrastructure of utilities and claiming exemption under section 10(20) of the Act, which was not admissible to the assessee and at the same time applicant is seeking registratio .....

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blic utility and there is no charitable activities being done by the applicant at all. (vi) It was also alleged that the applicant has been acquiring land at a very low price and selling plots/ flats at a very high rate and is therefore earning profit from such activity and thus it can be clearly inferred that the applicant is not involved in any charitable activity and thus not eligible for registration under section 12A of the Act. (vii) The LD CIT(E) lastly alleged that the applicant is prima .....

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21. First of all we may point that as per provision of section 12A of the Act, that the pre-condition for applicability of section 11 and 12 of the Act, is that the claimant/assessee should be registered under section 12A of the Act, and procedure for grant of registration has been provided in section 12AA of the Act, which reads as follows: [Procedure for registration. 12AA. (1) The [Principal Commissioner or] commissioner on receipt of an application for registration of a trust or institution .....

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ering the trust or institution; (ii) shall if he is not so satisfied, pass an order in writing refusing to register the trust or institution. And a copy of such order shall be sent to the applicant: 22. In view of above provision, in our humble understanding for adjudication of application seeking registration under section 12A of the Act, the granting authority has to satisfy himself about the genuineness of the activities of the applicant and he may also make such inquiries as he may deem nece .....

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also make such enquiries as he may deem necessary on this behalf. In the present case, the CIT(E) first of all, proceeded to direct the assessee to provide the basis of costing of various flats/plots alongwith sale price in order to ascertain the claim of the assessee regarding charitable activities. Thereafter, he observed that despite of several opportunities the assessee failed to produce the required details and documents. In our understanding of relevant provision pertaining to procedure f .....

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ts utilization and application of surplus and incidental profits proceeded to verify the document and evidences pertaining to the activities conducted by the applicant in the A.Y. 20014-15 which is not a proper and justified approach as per mandate of relevant provisions. 22.1 Be that as it may, we have no hesitation to hold that the CIT(E) put cart before the horse by making enquiries regarding activities of the appellant and without giving heel of attention to the statutory provisions and act .....

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rocedure for registration and adjudication of application for registration u/s 12A of the Act. 23. In the light of above noted mandate when we proceed to analyze facts and circumstances of the present case then we find that the main contention of Ld CIT DR is that as per order of Hon ble High Court of Allahabad dated 28.02.2011 (Supra) after 01.03.2003 applicant authority is not a local authority within the meaning of section 10(20) of the Act. On this legal contention it has been submitted by t .....

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charitable purposes as defined under section 2(15) of the Act. In this decision Hon ble Supreme Court held that the assessee was establish for the predominant purpose of development of minor ports in the state of Gujarat, the management of control which was essentially with the state government and there was no profit motive, as per provisions of section 73, 74 and 75 of the Gujarat Maritime Board Act, 1981. It was also noticed by their lordship that the income earned by the board has to be depl .....

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, we are of the view that the order of Hon ble High Court dated 18.02.2011 does not, in any way, disentitle the applicant for seeking registration under section 12A of the Act as the CIT(E) could not controverted these facts that even if the appellant has seized to be a local authority under section 10(20) of the Act, then also it is entitled for registration under section 12A of the Act, provided it fulfills all required conditions as mandated by the said provision. 24. At this juncture, it wou .....

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as follows: 39. NOIDA has been granted a status of a Municipality under Article 243-Q of the Constitution of India which deals with the constitution of Municipality. The said Article provides that there shall be constituted in every state,- (a) a Nagar Panchayat for a transitional area, that is to say, an area in transition from a rural area to an urban area (b) a Municipal Council for a smaller urban area and (c) a Municipal Corporation for a larger urban area. The proviso to Article 243-Q, ho .....

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ause (1) of the Article 243-Q of the Constitution. The said notification provides that having regard to the size of NOIDA which has been declared to be an Industrial Development Area by a notification dated 17 April 1976 and the municipal services being provided by NOIDA, the Governor is pleased to specify that NOIDA would be an Industrial Township with effect from the date of publication of the notification. This clearly means that instead of Municipal Corporation providing services, NOIDA woul .....

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ate government has issued a notification dated 20.04.2011 in exercise of the powers conferred under the proviso to clause 1 of Article 243-Q of the Constitution and the said notification provides that having regard to the size of Noida i.e. applicant which has been declared to be an industrial development area by a notification dated 17.04.1976 and the Municipal services being provided by it thus the governor is pleased to specified that the Noida would be an industrial township with effect from .....

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takeholders. In this case it was the contention of the Revenue that assessee is not on different footing from private colonizer and was making huge profits by giving compensation for land which is less than the market value of the actual land owners. As regards the claim of providing public amenities, private colonizers were also providing similar facilities. It was contended that; assessee is a huge profit making agency for which it is taking money from general pubic; assessee did not engage in .....

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t was contended by the Revenue hat the ITAT has grossly erred in holding that the assessee authority was not established for commercial purposes, but for charitable purposes. The submission of the assessee on the other hand remained that as per section 4 of the Uttar Pradesh Planning & Development Act, 1973, the assessee s object is an act to provide for the development of certain areas of Uttar Pradesh according to plan and for matter ancillary thereto . The objects of the development autho .....

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do anything necessary or expedient for purposes of such development and for purposes incidental thereto. 27. In that case of Lucknow Development Authority, (Supra) it was also pointed out that as per section 58 of the said Act of 1973, in case of dissolution of the authority the entire assets will be vested in the state government so no profit of interest is involve. It was also noticed that upto AY 2002-03 the authority was enjoying exemption under section 10 (20A) of the Act, and in consequent .....

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was submitted by the assessee that the term objects of general public utility had been extensively dealt with and defined, to meant that where the objects of an institution cover the public at large or a section of public, the objects are to be held to the objects of general public utility as meant in section 2(15) of the Act. 28. The relevant operative part of the decision of Hon ble Allahabad High Court in the said case are being respectfully reproduced as follows: We have heard learned counse .....

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ion 12A. In view of the objects, there is no good reason for holding that statutory bodies could not be treated as "charitable" within the meaning of Section 2(15). The object of the "Authority" is to provide shelter to the homeless people, therefore, there is no objectionable material to treat these institutions as non-charitable. The registration under Section 12A is mandatory to claim exemption under Sections 11 & 13, but registration alone cannot be treated as conclus .....

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keeping in view the provisions of Sections 60 to 63 that it is not so includible then such income does not qualify for any relief. The contention that the assessee are earning profit has no merit as per the ratio laid down in the case Sarafa Association vs. CIT, [2007] 294 ITR 19 262 (MP), where it was observed that "the promotion of commercial trade is a charitable purpose under Section 2(15) of the Act". In the case of Director, ITO vs. Govinda, 315 ITR 237 (Mad), it was observed th .....

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connotation. The word "general" in the said expression means pertaining to a whole class. Therefore, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose [CIT vs. Ahmedabad Rana Caste Association, [1983] 140 ITR 1 (SC)]. The said expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose .....

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722 (SC)]. If the primary or predominant object of an institution is charitable, any other object which might not be charitable but which is ancillary or incidental to the dominant purpose, would not prevent the institution from being a valid charity [Addl. CIT vs. Surat Art Silk Cloth Manufacturer Association [1980] 121 ITR 1 (SC)]." 20 Applying the ratio laid down in the case of CIT vs. Andhra Pradesh State Road Transport Corporation [1986] 159 ITR 1 (SC), where of in the present case, th .....

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ions for applicability of Sections 11 & 12 as provided in Section 12A. Therefore, once the procedure is complete as provided in sub- section (1) of Section 12AA and a certificate is issued granting registration to the trust or institution the certificate is a document evidencing satisfaction about (i) the genuineness of the activities of the trust or institution, and (ii) about the objects of the trust or institution. Section 12A stipulates that the provisions of Sections 11 & 12 shall n .....

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In the case of Gestetner Duplicators P. Ltd. vs. CIT [1979] 117 ITR 1 (SC), the Apex Court was called upon to determine as to whether the contribution made by the employer should be treated as a business expenditure, the requirement being contribution should be made to a recognized provident fund. Needless to mention that this Hon'ble Court in the case of CIT vs. M/s. U.P. Forest Corporation Ltd., in Income Tax Appeal No. 70 of 2009 observed that the Forest Corporation being an statutory en .....

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ide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated u .....

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o earn profits, for fulfillment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to section 2(15). The aims and objects of the assessee-trust are admittedly charitable in nature. Mere selling some product at a profit will not ipso facto hit assessee by applying proviso to Section 2(15) and deny exemption available under 22 Section 11. The intention of the trustees and the manner in which the activities of the ch .....

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nces of the case, and the assessee was entitled to exemption provided under Section 11 for the relevant assessment year. From the record, it also appears that the "Authority" had been maintaining infrastructure, development and reserve fund IDRF as per the notification dated 15.01.1998, the money transferred to this funds is to be utilized for the purpose of project as specified by the committed having constituted by the State Government under the said notification and the same could n .....

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rfere with impugned orders passed by the Tribunal. The same are hereby sustained along with reasons mentioned therein. The answer to the substantial questions of law are in favour of the assessee and against the department. 23 In view of above, all the appeals filed by the department are dismissed, as stated above. OrderDate:16/09/2013. 29. In the case of CIT VS Andhra Pradesh State Road Transport Corporation 1986, 25 TAXMAN 63A (SC) the assessee was a road transport corporation established for .....

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was entitle to exemption under section 4(3) (i) of the Income Tax Act, 1922 which is paremateria to the provisions of section 11 of the Act of 1961 notwithstanding that in carrying on its activities the assessee would act on business principals. 30. During the arguments a copy of the relevant notifications dated 24.12.2001 and 17.04.1976 has been placed on record along with UP Industrial Area Development Act 1976, and schedule twelfth to Article 243- W and 243-Q of Constitution of India, at page .....

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(c) to demarcate and develop sites for industrial, commercial and residential purpose according to the plan; (d) to provide infrastructure for industrial, commercial and residential purposes; (e) to provide amenities; (f) to allocate and transfer either by way of sale or lease or otherwise plots of land for industrial, commercial or residential purposes; (g) to regulate the erection of building and setting up of industries; and (h) to lay down the purpose for which a particular site or plot of .....

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the authority regarding its funds would be conducted and operated in following manner: 20. Fund of the Authority- (1) The authority shall have and maintain its own fund to which shall be credited- (a) all moneys received by the Authority from the State Government by way to grants, loans advances or otherwise; (b) all moneys borrowed by the Authority from sources other than the State Government by way of loans or debentures; (c) all fee, tolls and charges received by the Authority under this Act; .....

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d Bank such sum of money out of its funds as it may think necessary for meeting its expected current requirements and invest any surplus money in such manner as it thinks fit. (4) The state government may after due appropriation made by Legislature by law in that behalf, make such grants, advance and loans to the Authority as that Government may deem necessary for the performance of the functions of the authority under this Act, and all grants, loans and advances, made shall be on such terms and .....

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any other purpose. 33. In the list of above provision regarding management of the funds of the authority it is amply clear that the funds of the authority shall be applied towards meeting of expenses incurred by the assessee for the administration of the affairs of the authority under the said act and not for any other purposes. As per section 58 of the UPIDA, 1976 where the State Government is satisfied that the purposes for which the authority was established under the Act have been substanti .....

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in or realized by the authority shall waste in or be realized by the state government. It is also provided that the entire nazul lands placed at the disposal of the authority shall revert to the state government. It has been further provided that all liabilities which are enforceable against the authority shall be enforceable against the state government and for the purpose of carrying out any development which has not been duly carried out by the authority and for the purpose of realizing prop .....

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ns as a entity of self-government and such law may also contends provisions for the devolution of the powers and responsibilities imposed upon the municipalities, subject to such conditions as may be prescribed their with respect to the preparation of plans for the economic development and social justice for the public at large. It has been also provided that the performance of functions and implementation of the schemes as may be entrusted to them including those in relation to the matters list .....

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e publication of the said notification in the official gazette. In this notification, it has been mentioned that having regard to the size of Greater New Okhla Industrial Development Area which has been declared as an industrial development area by the government notification dated 28.01.1991 and the municipal services are being provided by the Greater New Okhla Industrial Development Authority in that area. 36. In view of above notification and provisions of the UPIDA, 1976, it is amply clear t .....

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ng utilized as per objects of the authority then it cannot be alleged that the assessee is carrying out activities like a private builder or developer who is conducting activities with the profit motive. We may also point out that the assessee during conduct of its activities in pursuant to the objects mandated by the Act, might be acquiring and purchasing lands and subsequently selling the same to the respective beneficiaries at the prevailing market rate through option after the required devel .....

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with the profit motive but the same an incidental activity to sub-serve and to achieve the charitable objects of general public utility as per mandate of the UPIDA Act, 1976. 37. At this juncture, the ratio of the decision of Hon ble high Court of Delhi in the case of India Trade Promotion Organization VS DGIT(E) (supra), as relied by the appellant, supports the contentions of the assessee wherein it has been held that the amendment of section 2(15) of the Act, inserted by the finance Act, 2008 .....

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ing irrelevant facts and conclusion drawn thereafter cannot be held as sustainable. In our consider pinion if the dominant and the main object of the authority is to develop industrial areas in the state working as a municipal corporation for that specified area with charitable purposes and with the object of creation of infrastructure of general public utility then the authority should be regarded as established for charitable purposes and thus the same would be entitled for registration under .....

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le purposes of general public utility. Thus we are in agreement with the contention of the Ld Senior Counsel of the appellant that the activities of the appellant are under complete control of State Government having no profit motive and for the purpose of charitable activities of general public utilities therefore, the CIT(E) was not justified and correct in dismissing application of the assessee. 39. It will also be relevant to consider ratio of the decisions of Hon ble High Court of Allahabad .....

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inant object of the appellant is the development of the specified area of the district by providing housing, roads, development and maintenance of roads, parks sewerage system and plantation of the specified area and all these activities are being carried out for the welfare of the pupil of the specified area with the charitable purposes for development of infrastructure facilities of general public utility without any profit motive therefore it was held that the predominant object of the author .....

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