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TMI Blog2017 (6) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2009-10 by which the learned tribunal has allowed the said Appeal preferred by the respondent - assessee and has quashed and set aside the order passed by the Director of Income Tax (Exemption), Ahmedabad dated 15/02/2010 under Section 12AA(3) of the Income Tax Act by which the Director of Income Tax (Exemption), Ahmedabad has cancelled the registration of the respondent under Section 12AA of the Income Tax Act retrospectively with effect from 2002 /2003, revenue has preferred the present Tax Appeal to consider the following substantial question of law; "Whether the learned tribunal below committed substantial error of law in cancelling the order of Director of Income Tax (Exemption) passed under Section 12-AA(3) of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act retrospectively with effect from 01/04/2002. [2.1] Feeling aggrieved and dissatisfied with the impugned order passed by the Director of Income Tax (Exemption), Ahmedabad under Section 12AA(3) of the Income Tax Act cancelling the registration under Section 12AA of the Income Tax Act retrospectively, the respondent - assessee preferred Appeal before the learned tribunal and by the impugned judgment and order the learned tribunal has allowed the said Appeal and has set aside the order passed by the Director of Income Tax (Exemption) dated 15/02/2010. [2.2] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned tribunal, revenue has preferred the present Tax Appeal to consider the aforesta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, and therefore, the object /activities of the respondent - assessee were more of commercial in nature and they are not involved in any charity, and therefore, the Director of Income Tax (Exemption) rightly cancelled the registration granted under Section 12AA of the Income Tax Act. It is submitted that as noted by the Director of Income Tax (Exemption) despite number of opportunities the respondent - assessee has not produce the details with respect to the plots sold and the amount realized by selling the plots. It is submitted that as the respondent - assessee was auctioning the plots at market rate and realizing the money, the activities of the respondent - assessee cannot be said to be charitable activity. It is submitted that therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned tribunal has rightly quashed and set aside the order passed by the Director of Income Tax (Exemption). [4.1] It is vehemently submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the revenue that merely because the respondent - assessee is selling the plots by auction and recovering the cost of the project by imposing levy on the area developed by it, it cannot be said that the activities carried out by the respondent - assessee is not in the nature of charity. It is submitted that as such whatever the amount is realized by the respondent - assessee by selling the plots the same is to be used by the respondent - assessee solely for the purpose of development and providing various facilities /public utility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Planning Act. To meet with the expenditure for development and providing other infra structure development for development under the Town Planning Scheme such as electricity, roads, drainage, water line etc. and to meet with other administrative expenses, under Section 40(3)(jj)(a) of the Income Tax Act, the respondent - assessee is permitted to sell upto 15% of the lands covered under the Town Planning Scheme for residential, commercial and industrial use depending upon the nature of development and as per Section 40(3)(jj)(b) the proceeds from sale of land referred to in para (iv) of sub clause (a) shall be used for the purpose of providing infrastructural facilities. Under the circumstances, merely because AUDA is selling the plots by ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject and purpose for which AUDA has been constituted and the activities to be carried out by AUDA, which is in the nature of public utility services, the learned tribunal has rightly quashed and set aside the order passed by the Director of Income Tax (Exemption) cancelling the registration under Section 12AA of the Income Tax Act. Cogent reasons have been given by the learned tribunal while quashing and setting aside the order passed by the Director of Income Tax (Exemption). As rightly observed by the learned tribunal, Director of Income Tax (Exemption) had not given any specific reasons how the activities of AUDA can be said to be beyond the object and purpose of the Act. [5.1] Considering the aforesaid facts and circumstances of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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