TMI Blog2020 (7) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... tantially from the business held under trust for the development of minor ports in the state of Gujarat. Further after following the decision of Hon'ble Gujarat High Court in the case of AUDA [2017 (5) TMI 1468 - GUJARAT HIGH COURT] and GIDC, [2017 (7) TMI 811 - GUJARAT HIGH COURT] the fees collected by the assessee is incidental to the object and purpose of attainment of the main object for development of mining ports as enumerated in the provision of the Gujarat Maritime Board Act, 1981,therefore, we consider that activity of the assessee is for advancement of any other object of general public utility and not hit by the proviso to section 2(15) of the act, therefore, the assessee is entitled for exemption u/s. 11. Issue involved has already been decided by this tribunal in the own case of the assessee in its favour. Accordingly we set aside the finding of the learned CIT(A) and direct the AO to allow the benefit of the exemption to the assessee under section 11 and 12 of the Act. Hence the ground of appeal of the assessee is allowed. - ITA. No: 2526/AHD/2017 (Assessment Year: 2014-15) - - - Dated:- 1-6-2020 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and maintenance of small port in the state of Gujarat. The AO observe that the clause 38 and 39 of Gujarat maritime Board Act 1981 entitles the assessee to fix rate of services provided by it. Further AO observed that the assessee has earned income under the head as detailed below: 1. Port Maintenance Facilities 2. Marine Services 3. Clearing, forwarding and stevedoring, 4. 4. Storage Area and land rentals 5. Equipment and Harbour Craft rentals] 6. Ship Recycling Yard 7. Ship Building yard 8. Income from Other Port Services 9. GOG Administrative Charges @ 15% 5. Accordingly the AO opined that the receipt describes above represent the activities carried out are in the nature of advancement of any other object of general public utility Therefore same is covered by the proviso to section 2 (15) of the Act. 6. The assessee contended that it does have any business undertaking and the proceeds collected against services were utilized for the furtherance of it charitable objective. Therefore the provision of proviso to section 2(15) does not apply. The assessee in this regard placed its reliance on Hon ble SC judgment in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year As per the aforesaid amended definition of charitable purpose it is quite clear that an assessee whose main activity is of object of general public utility in the nature of trade, commerce or business by charging cess or fees cannot be regarded as 'charitable body'. 6.2 The aforesaid position of law is confirmed by Central Board of Direct Taxes'(CBDT) vide its Circular No. 11 of 2008 dated 19th December, 2008. In the said circular, CBDT has clarified that the activities in the nature of advancement of any other object of general public utility in the nature of trade, commerce or business, by charging cess or fee shall be excluded from the definition of 'charitable purpose, as provided in Section 2(15) of the Act. Further, CBDT has also directed to verify each fact of the case to arrive at the decision that such activity is not charitable in nature. 6.3 On careful consideration of details submitted by appellant along with audited accounts and Gujarat Mariti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e coaching classes and other diploma courses conducted by the assessee were held to be ancillary and incidental to the main object of providing main activity of providing education of chartered accountancy course. In that perspective, the Hon'ble High Court has decided the case in favour of ICAI. However, in the lights of the fact that the Appellant is carrying out advancement of other object of public utility in the name of trade, commerce or business by charging cess/fee, ratio of the said decision cannot be applied in the present case. 6.6 Further Appellant has relied on the decision of Hon'ble Ahmedabad I.T.A.T. in the case of Sabarmati Ashram Gaushala Trust (supra). In that case, the main object of the Trust was of relief to poor i.e. one of the first four limbs of definition of 'charitable purpose'. Therefore, the Hon'ble I.T.A.T. has decided the issue in favour of the assessee. Further, it is pertinent to note that the Hon'ble I.T.A.T. has categorically mentioned that the this decision is delivered in peculiar ; facts and circumstances of the case, and shall not be taken as a precedent for f charitable trusts doing business or trade under the ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me applicable in the case of such person in the said previous year. As I have already decided the issue against the appellant with respect to applicability of first' proviso to Section 2(15) of the Act, as per provision referred herein above i.e. Section 13(8), the provision of section 11 is not applicable and no exemption can be granted under Section 11. On holistic consideration of the facts discussed herein above, the AO was correct in computing total income treating the Appellant's activity as business income and denying benefits available under Section 11 of the Act. Thus, all the 5 grounds of appeal herein above are dismissed. 5.3 Respectfully agreeing with the decision taken by the CIT(A) for A.Y.2011- 12, I am of the considered opinion that the appellant is covered by the first and second proviso to section 2(15) and hence sec. 13(8) would be applicable to the appellant. Accordingly, the appellant cannot get the benefit of sec.11 12 of the Act. The appellant will also not be eligible for accumulation @ 15% u/s 11(1)(a) of the Act. As the appellant is being treated as AoP and taxed as per the provisions of section 28 to 44 of the Act, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81 rules and regulations has been established for the establishment of Gujarat Maritime Board, staff of the board, property and contract works and services to be provided at miner ports by the board, imposition and recovery of rates at ports, borrowing power of board, revenue expenditure, supervision and control of state government, penalties, miscellanous etc. After perusal of the various provisions of the Gujarat Maritime Board Act, 1981, it is observed that management and control of the assessee trust was with the state government and there was no profit motive which is categorically clear from the provision of section 73, 74 and 75 of the Gujarat Maritime Board Act, 1981. We have also gone through the judicial pronouncements referred by the ld. counsel on the issue in the appeal. In the case of the assessee itself, the Co-ordinate Bench of the ITAT vide ITA No. 2933/Ahd/2009 for assessment year 2003-04 adjudicated on 27th April, 2016 held that assessee is a charitable trust engaged in the advancement of any other object of general public utility enumerated in section 2(15) of the Income Tax act, is not business undertaking. The relevant part of the decision of the Co-ordinate B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration was that the definition of charitable purpose u/s. 2(15) has been amended therefore the assessee has not carried out the activity as per the definition of charitable purposes . This very issue has already been dealt with by the Respected Benches, therefore respectfully following these decisions we hereby reverse the view taken by the Id.Commissioner and direct not to cancel the registration u/s. 21AA(3) of the I. T. Act. Grounds raised by the assessee are hereby allowed. We have also gone through the decision of Hon'ble Gujarat High Court Vide 83 taxman.com 366 (Guj) CIT vs. Gujarat Industrial Development Corporation dated 28th June, 2017 wherein after following decision of Ahmedabad Urban Development Authority vide 83 taxman.com 78 it is held that claim of fees or cess is incidental to the object and purpose of the act and even the case would not fall under the second part of proviso to section 2(15) of the act. It is further held that as the activities of the assessee is for advancement of any other object of general public utilities, the same can be of or charitable purpose and therefore the asssessee corporation shall be entitled to exemption u/s. 11 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and findings, it is clear that the activities carried out by the assessee is for advancement of any other object of general public utility without any intention of the profit motive after considering the provision of the Gujarat Maritime Board Act, 1981 and fact of the case, it cannot be said that the activities carried out by the assessee are in the nature of trade commerce or business. It is observed that predominant object of the assessee is to administer control on miner ports in the State of Gujarat and there is no profit motive as demonstrated by the provision of section 73, 74 and 75 of the Gujarat Maritime Board Act, 1981. The Gujarat Maritime Board is under legal obligation to apply the income which arises directly and substantially from the business held under trust for the development of minor ports in the state of Gujarat. Further after following the decision of Hon'ble Gujarat High Court in the case of AUDA and GIDC, the fees collected by the assessee is incidental to the object and purpose of attainment of the main object for development of mining ports as enumerated in the provision of the Gujarat Maritime Board Act, 1981,therefore, we consider that activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made timebound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suo motu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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