TMI Blog2020 (10) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of Section 10(20A), the provisions of the other sections were not affected. They remained intact. An assessee could have been entitled to the provisions of Section 10(20A) and the other provisions simultaneously. The omission of one, however, does not affect the validity or the existence of the others. The two provisions are distinct and independent of each other. Thus the omission of Section 10(20A) did not affect the rights of the parties claiming the benefit of Sections 2(15), 11, 12, 12A and 12AA of the Act. - Decided in favour of assessee. - ITA NO.468/Chd/2018 ITA NO.847/Chd/2019 ITA NO.164/Chd/2019 - - - Dated:- 7-10-2020 - SHRI. N.K.SAINI, VP And SHRI. R.L. NEGI, JM Assessee by : Shri Ashok Goel, CA Revenue by : Dr. G.S. Phani Kishore, CIT ORDER PER RAM LAL NEGI ; JM The Revenue has filed the captioned appeals against the orders dt. 02/01/2018, 22/03/2019 and 28/11/2018 passed by the Ld. Commissioner of Income Tax(Appeals) (for short the CIT(A) ), Patiala pertaining to the A.Y. 2013- 14, 2014-15 and 2015-16 respectively, whereby the Ld. CIT(A) has allowed the appeals filed by the assessee against the assessment orders passed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue is in appeal before this Tribunal. 5. The Revenue has challenged the impugned order by raising the following effective grounds: i. That on the facts and circumstances of the case, the Ld.CIT(A) has erred in law in holding that the assessee is eligible for exemption u/s 11 whereas the assessee was not actual carrying on activities for the advancement of objects of general public utility. ii. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in ignoring the true intent and purpose behind the amendment in section 2(15) brought in w.e.f. 01.04.2009 and which was also clearly explained in CBDT circular No. 11 dated 19.12.2008 by providing that an assessee who claims that their object is 'Charitable purpose' within the meaning of s. 2(15) would be well advised to eschew any activity which is in the nature of trade, commerce or business or rendering of any service in relation to any trade, commerce or business. iii. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in ignoring the intent of amendment in 2(15) by relying on the objects of the assessee even when the said amendment had refocus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T ASR 153 which was further upheld by Hon'ble Supreme Court of India in special Leave to Appeal (C) No. 4990 of 2014 vide its order dated 21.07.2014. 6. The only grievance of the Revenue is that the Ld. CIT (A) has wrongly held that the assessee is entitled for exemption u/s 11 of the Act. At the outset, the Ld. Counsel for the assessee submitted that the issue involved in the present appeal is covered in favour of the assessee by the order of the coordinate Bench in assessee's own case in ITA No. 120/Chd/2017 for the A.Y. 2012-13. The Ld. Counsel further pointed out that the Tribunal has decided this issue in favour of the assessee by following the judgment of the Hon'ble Jurisdictional High Court in the case of Tribune Trust (2016) 76 taxmann.com 363 (P H) in which the Hon'ble High Court has decided the issue of applicability of Section 2(15) of the Act in favour of the Improvement Trust, Moga. 7. Ld. Counsel further pointed out that the Hon'ble Jurisdictional High Court has confirmed the decision of the Tribunal and dismissed the Revenue's appeal ITA No. 74/2018 in assessee's own case, by following its earlier judgment rendered in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at order is, therefore, of no assistance to the Revenue either. Hon'ble High Court of Punjab Haryana High Court vide order dt. 23/12/2016 in case of CIT(E), Chandigarh Vs. M/s Improvement Trust, Moga held as under: 73. The Tribunal also rightly held that an object of general public utility does not necessarily require the 66 of 74 ITA-62-2015 and ITA 147-2016 - 67 - activities to be funded or subsidized by the State. So long as the objects fall within the ambit of the words object of general public utility , it is sufficient. The achievements of those objects do not have to be as a result of State funding or State subsidy. The Tribunal accordingly rightly held that the authorities were not justified in denying the benefit of section 11 and holding that the assessee was not covered by the words advancement of any other object of general public utility in Section 2(15). The Tribunal, therefore, rightly directed the Assessing Officer to delete disallowance of exemption. 74. It cannot possibly be suggested that the Government of Punjab formed the trusts under the Punjab Town Improvement Act, 1922 because it wanted to carry on the business as colonizers or devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemes to lay out new streets, thoroughfares and open spaces or alter existing streets whenever it appears to the trust that it is necessary to do so for the purpose of providing building sites or remedying 68 of 74 ITA-62-2015 and ITA 147-2016 - 69 - defective ventilation or creating new or improving existing means of communication and facilities for traffic. 79. The trust must also prepare development schemes. This duty contained in Section 24 is not akin to that of a private developer or a colonizer as wrongly suggested by the Assessing Officer and confirmed by the CIT(A). The development scheme under section 24 is prepared for the purpose of development of a locality. Sub section (2) of Section 24 provides that the trust may if it is of the opinion that it is expedient and for the public advantage to promote and control the development of and to provide for the expansion of a municipality in any locality adjacent thereto within the local area of such trust prepare an expansion scheme . The development scheme, therefore, is for the public purpose of development of any locality and an expansion scheme is also prepared when it is expedient and for the public advantage as oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and premises by the trust is only incidental and ancillary to its main purpose which at the cost of repetition is town improvement in 70 of 74 ITA-62-2015 and ITA 147- 2016 - 71 -almost every respect. Even where the plots are developed and premises are constructed and sold at the market price, the activity is not commercial or business venture per se but one necessitated on account of the implementation of the provisions of the trust through statutory schemes. The main purpose of such schemes is driven by public requirements and not as a commercial venture per se. They are incidental to the main object of the trust. 83. In the present case, the Assessing Officer has not indicated any facts which indicate that the assessee deviated from this principle. He has merely referred the extent of profit making activities without correlating the same to the other activities of the trust. In our view, therefore, the order of the Tribunal must be upheld. 84. Mr. Goel relied upon the judgment of the High Court of Jammu Kashmir in Jammu Development Authority v. Union of India and another ITA No. 164 of 2012. The Division Bench dismissed the appeal with the following order:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to the Revenue either. 86. The assessee, namely, Moga Improvement Trust is undoubtedly an authority constituted in India. It is also constituted by or under a law, namely, the Punjab Town Improvement Act, 1922. Further, it is engaged for the purpose of dealing with and satisfying the need for housing accommodation. It is also constituted for the purpose of planning, development of improvement of cities, towns and villages or for both as is evident from Sections 22 to 28 of the PTI Act quoted above. The appellants, would, therefore, undoubtedly have been entitled to the benefit of Section 10(20A). The assessee would not have been entitled to the benefit of Section 10(20A) upon its omission by the Finance Act, 2002 with effect from 01.04.2003. Section 10(20A) of the Act did not contain any other requirement. It was wider than Section 2(15). However, Section 2(15) and the corresponding sections including Sections 11, 12, 12A and 12AA are independent of Section 10(20A) of the Act. Upon the omission of Section 10(20A), the provisions of the other sections were not affected. They remained intact. An assessee could have been entitled to the provisions of Section 10(20A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for claiming exemption u/s 11of the Act. Since we have decided the identical issue in favour of the assessee in Revenue's appeal ITA No. 468/chd/2018, pertaining to the Assessment year 2013-14 by following the judgment of the Hon'ble jurisdictional High Court discussed above, consistent with our findings in the said case we uphold the findings of the Ld. CIT (A) and dismiss ground No 1 to vi of the Revenue's appeal. 3. So for as the issue raised by the Revenue vide ground No (vii) is concerned, as pointed out by the Ld. DR, the Ld. CIT(A) has not discussed this issue separately in its order as to whether the donation in question is related to the objects of the assessee society so as to allow the same. In our considered opinion, there is merit in the contention of the Ld. DR that the Ld. CIT(A) ought to have discussed and decided the issue before allowing the claim of the assessee. The Ld. Counsel for the assessee also admitted that the Ld. CIT (A) has not dealt with this issue separately. Therefore, in our considered view, this issue requires adjudication by the first appellate authority. Hence, in all fairness, we set aside this issue to the file of the Ld. CIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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