TMI Blog2016 (8) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... be relevant in the context of Section 11(1)(d) or u/s 12(1). - Decided in favour of assessee - ITA. Nos. 657, 717 and 320 of 2007, 263 and 349 of 2008, 96 and 274 of 2009 And 533 of 2011. - - - Dated:- 29-8-2016 - Sudhir Agarwal And DR. Kaushal Jayendra Thaker JJ. For the Appellants : Manish Goyal, Dhananjay Awasthi , Senior Counsel And A. N. Mahajan, Shambhu Chopra For the Respondents : Ashish Bansal, Ashwani K. Misra, Ajay Kumar Mishra, Mahesh Narain Singh, Sujeet Kumar, Ashish Bansal And S. K. Garg JUDGMENT 1. Heard Sri Manish Goyal, learned counsel for the appellant and Sri Ashish Bansal for the respondents. 2. These appeals raise identical questions of law and relate to different assessment years concerning Hapur Pilkhuwa Development Authority (hereinafter referred to as HPDA ) passed by the Income-tax Appellate Tribunal, New Delhi G , New Delhi (hereinafter referred to as Tribunal ), are heard together and decided by this common judgment. 3. The appeal number, assessment year and dates of order are tabulated as below : Sl. IT Appeal Assessment Judgment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Indian Trusts Act, 1882 (hereinafter referred to as Act, 1882 ) or Societies Registration Act, 1860 (hereinafter referred to as Act, 1860 ). Further its activities are also not charitable, per se as it sells land on commercial rates and to fudge profit it does not follow commercial accounting principles. HPDA preferred appeal i.e. ITA No. 2735 (Del) of 2006 which has been allowed by Tribunal vide orders impugned in these appeals. 10. Tribunal has followed its earlier decision dated 31.07.2007 passed in ITA No. 2903 (Del) of 2006 in respect to Ghaziabad Development Authority which is also a body constituted under U.P. Act, 1973 and held that it was also entitled for registration under Section 12A. Tribunal has also referred to an earlier judgment dated 25.07.2005 in ITA No. 690 (Luc) of 2003 wherein registration for similar body was directed to be allowed. This appeal is also before us. 11. It is not in dispute that HPDA is an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities, towns and villages or for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to consider whether creation of HPDA is for advancement of general public utility. Tribunal has looked into objects and purposes of U.P. Act, 1973 and also the purpose of acquisition of land by HPDA, which is only for public purpose and not personal one. 16. Learned Counsel for appellant has submitted that Tribunal has ignored the fact that authority was engaged in activities other than those mentioned in its main object. It is further submitted that Tribunal has erred in coming to conclusion that authority carries on charitable work. It is submitted that Tribunal erred in considering definition of charitable purpose as defined under Section 2 (15) and definition of 'income' as given under Section 2 (24) read with Rule 17-A (a) and 1962 CBDT instruction No.1024 dated 9.11.1976. Learned Counsel has relied on judgment of this Court in ITA No.231/2006, U.P. State Industrial Development Corporation Ltd. Vs. Commissioner of Income Tax-II, Kanpur, decided on 5.7.20016. 17. Learned Counsel appearing for respondent has submitted that Tribunal has committed no error as it is duty of authority to formulate scheme in an area which is not developed and, therefore, applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Sections 60 to 63 that it is not so includible then such income does not qualify for any relief. 25. Further, it may be mentioned that Section 12AA of the Act lays down the procedure for registration in relation to the conditions 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 not apply in relation to income of a trust or an institution unless the conditions stipulated therein are fulfilled. Thus, granting of registration under Section 12AA denotes that the conditions laid down in Section 12A stand fulfilled. 26. The effect of such a certificate of registration under Section 12AAA, therefore, cannot be ignored or wished away by the Assessing Officer by adopting a stand that the trust or institution is not fulfilling the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable in nature. 30. 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 Section 11. The intention of the trustees and the manner in which the activities of the charitable trust institution are undertaken are highly relevant to decide the issue of applicability of proviso to Section 2(15). 31. There is no material/evidence brought on record by the revenue which may suggest that the assessee was conducting its affairs on commercial lines with motive to earn profit or has deviated from its objects as detailed in the trust deed of the assessee. In these facts and circumstances of the case, the proviso to Section 2(15) is not applicable to the facts and circumstances of the case, and the assessee was entitled to exemption provided under Section 11 for the relevant assessment year. 32. From the record, it also appears that the authority had been maintaining infrastructure, development and reserve fund IDRF as per the notification dated 15th January, 1998, the money transferred to this funds is to be utilized for the purpose of project as specified by the committed having con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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