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2017 (1) TMI 936 - ITAT JAIPUR

2017 (1) TMI 936 - ITAT JAIPUR - TMI - Eligibility of the assessee to claim exemption under section 11 and 12 - non-registration under section 12AA - Held that:- As decided by this very Bench for A.Y. 10-11, 2011-12 & 2012-13 nothing has been brought on record to suggest that besides non-registration under section 12AA, the assessee has failed to fulfil any other conditions as envisaged u/s 11, 12 and 13 of the Act by virtue of which it shall be denied the exemption under section 11 & 12 of the .....

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Singh Yadav, AM Assessee by : Shri Shyamlal Agarwal (CA) Shri Tarun Agarwal (CA) Revenue by : Shri H.V. Gurjar (CIT) ORDER Per Shri Vikram Singh Yadav, A. M. This is an appeal filed by the Revenue against the order of Ld. CIT(A)-III, Jaipur dated 25.07.2016 for A.Y. 2009-10 wherein following two grounds of appeal have been taken by the Revenue. (1) On the facts and circumstances of the case and in law the CIT(A) has erred in allowing the exemption u/s 11 of the Act by holding that the activitie .....

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/s 11. 2. Briefly the facts of the case are that the assessment was originally completed u/s 143(3) of the Act whereby the AO assessed income of the assessee as per normal provisions of the Act denying the exemption claimed by the assessee u/s 11, 12 &13 f the Income tax Act. The reason given by the AO was that in assessment year 2009-10, the definition of charitable purposes u/s 2(15) has been changed and CIT, Jaipur vide its order dated 29.12.2011 has withdrawn the registration u/s 12AA of .....

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alance set apart was to be brought to tax u/s 11(3)(c) of the Act. Accordingly the assessment proceedings were reopened u/s 147 of the Act and notice u/s 148 was issued on 29.03.2014. Subsequently, after considering the submission of the assessee, the assessment order u/s 147/143(3) was issued on 23.03.2015. During the course of reassessment proceedings, the assessee submitted that the ITAT, Jaipur Bench vide its order dated 30.09.2014 in ITA No. 182/JP/2012 has directed to grant registration u/ .....

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that it is registered u/s 12AA of the Act was not accepted by the AO. Further the AO stated that in subsequent years i.e A.Y. 2010-11 and 2011-12, the assessee has not been allowed the benefit of exemption u/s 11 due to invoking of proviso to section 2(15) of the Act and the same were relied upon by the AO for the year under consideration. Accordingly the assessee was held not eligible for claiming exemption u/s 11 and closing balance accumulated/ set apart of ₹ 79,76,39,913 was added to t .....

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e assessee. Regarding disallowance of benefit u/s 11(2) was concerned, the ld. CIT(A) noted that the AO denied the claim of the assessee for the reason that registration of the assessee u/s 12A had been withdrawn by the Commissioner and further the order of ITAT restoring the registration has been opposed by the department and an appeal u/s 260A of the Act is pending for decision before the Rajasthan High Court. The ld. CIT(A) thereafter referred to the decision of ITAT in ITA No.182/JP/2012 dat .....

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urther submitted that the Hon ble ITAT in the context of original proceedings u/s 143(3) of the Act for the impugned assessment year i.e 2009-10 has allowed the assessee the benefit of exemption u/s 11 & 12 of the Act and the ld AR took us through the relevant findings of the Coordinate Bench in ITA No. 427/JP/13 and ITA No. 447/JP/2013 for A.Y. 2009-10 dated 04.01.2016 which was pronounced subsequent to restoration of registration under section 12AA wherein the relevant findings are contain .....

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me basis which has been accrued to the assessee during the year under consideration. The appellant had changed method of accounting during the year under consideration but the same has been found more accurate and scientific to determine the assessee s income. Therefore, change of accounting is bonafide and same cannot be rejected on the ground that the assessee had claimed more expenses during the year under consideration. The case law relied by the assessee is squarely applicable. A change in .....

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d thereafter claiming depreciation on it. Accordingly, we allow the assessee s appeal and dismiss the revenue s appeal. 4. Further, the ld. AR drawn our reference the decision of this very Bench for A.Y. 10-11, 2011-12 & 2012-13 wherein again the matter was examined at great length and the assessee was held eligible for exemption u/s 11 & 12 of the Act. 5. The Ld. DR supported the order of the AO and stated that the department is in appeal against the earlier orders of the Coordinate Ben .....

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the Act. Apparently, the notice u/s 148 was issued on 29.03.2014 and thereafter reassessment proceedings were completed on 23.03.2015 much before the order was pronounced by the Coordinate Bench on 04.01.2016 and the AO was therefore not having the benefit of considering the decision of the Coordinate Bench where the assessee was held eligible for exemption under section 11 and 12 of the Act. Further, in the context of subsequent assessment years, this Bench has recently examined this subject m .....

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in the instant case. In order to determine whether the facts of the instant case are pari-materia with the facts brought up before the Hon ble High Court, we have gone through the Jaipur Development Authority Act, 1982. Section 16 of the JDA Act provides that the main objects of the Authority shall be to secure integrated development of the Jaipur Region and for that purpose functions of the Authority shall inter-alia include Urban Planning including preparation of Master Development Plan and Zo .....

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execution of any project or schemes the expenses of which in whole or in part are to be met from Jaipur Region Development funds; preparing schemes and advising the concerned authorities department and agencies in formulating and undertaking schemes for development of agriculture, horticulture, floriculture, forestry, dairy development, transport communication, schooling, cultural activities, sports, medicine, tourism and similar other activities; undertaking housing activity in Jaipur Region p .....

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raffic and matters connected therewith; and to do all such acts and things which are necessary for the furtherance of the objects for which the authority is established. Further, as per the provisions of section 55 of JDA Act, for the purpose of discharging the statutory functions, The Jaipur Region Development Fund is created to which all money received by the authority is credited including amount of contribution to be made by the State Government, such other money as may be paid to the author .....

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other property movable and immovable and other transactions including lease money, urban assessment, development charges and other similar charges and all money received by way of rents and profits or in any other manner or from any other source or from donations. Further, section 58 of the JDA Act provides that all property, funds and other assets vesting in the Authority shall be held and applied by it for the purposes and subject to the provisions of the Act. (14.1) It is thus noted that the .....

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applies to the Jaipur Development Authority where the Hon ble High Court has held that the predominant object of the JDA being to secure the integrated development of the Jodhpur Region which is undoubtedly falls within the expression advancement of any other objects of general public utility within the definition of section 2(15) of the Act of 1961 and therefore, on account of profit being earned by it through some of the activities undertaken by it, which are ancillary or incidental to the mai .....

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