TMI Blog2020 (12) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of assessee. - ITA No. 220/CHD/2020 (Assessment Year : 2016-17) - - - Dated:- 24-8-2020 - SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by: Shri Pariskhit Aggarwal, CA Revenue by: Smt. C Chandrakanta, CIT DR ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 31.01.2020 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as CIT(A) ]. 2. The assessee in this appeal has taken following grounds of appeal:- 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 10567/2/18-19has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961. 2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he erroneously treated IDC IAC receipts amounting to ₹ 228.10 crores as income of the assessee ignoring the fact that the assessee is only entitled to only 1% of the receipts and the balance money belongs to the State Government which is highly unjustified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-15 1. That the Ld. CIT(A) has erred in law and facts of the case in upholding IDC IAC receipts amounting to ₹ 596.70 crores as income of the appellant ignoring that the appellant is entitled to only 1% of the receipts and the balance money belongs to state government which is highly unjustified and uncalled for. 2. That the ld. CIT(A) has erred in law and facts of the case in upholding interest income from FDR's amounting to ₹ 163.21 Crores as income of the appellant which is highly unjustified and uncalled for. 3. That under the facts and circumstances of the case, the CIT(A) has erred in not allowing the accumulation u/s 11(2) of the Income Tax Act which is highly unjustified uncalled for. 4. That the appellant craves the leave to add, amend or modify any ground of appeal on or before the disposal of the same. 13. Taking up first the issue of taxability of IDC IAC receipts and interest on FDR's created therefrom in the hands of the assessee raised in Ground No. 1 2 respectively, the arguments, it was common ground between both the parties was identical as in earlier years appeal dealt with us above, with the assessee con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board shall have perpetual succession and a common seal with power to acquire, hold and dispose off property and to contract, and may by the said name sue or be sued. The Board being separate and distinct from the State is further established by the provisions of section 4 of the HDRUA Act ,enabling and empowering the Board to possess its own property assets , have its own fund augmented by borrowing money ,enter into contracts and undertake various activities on its own account. The relevant provision are as under: (4) In order to carry out its functions consistent with the provisions of this Act, the Board shall have the powers to do all or any of the following, namely:- (i) acquire, hold, develop or construct such property, both movable and immovable, as the Board may deem necessary for the performance of any of its activities related to the development of infrastructure sectors or infrastructure projects; (ii) advise or recommend to the Government acquisition of land under the Land Acquisition Act, 1894 for the purposes of infrastructure projects; (iii) lease, sell, exchange, or otherwise make allotments of the property referred to in clause (i) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case we find that the Board was not merely implementing/supervising and channelizing funds to specific schemes and projects of infrastructure developed by the government, but was in fact the apex body responsible for planning and development of the infrastructure projects including those involving private participation and funding, and their implementation. All aspects relating to developing and implementing infrastructure projects alongwith private sector, beginning with identifying such projects and thereafter ensuring its implementation by promoting private participation, identifying technology initiatives to be taken, formulating policies to identify risks ,identifying bottlenecks ,formulating policies for the sector, identifying and recommending concessions to be offered to the participants, determining the level and structuring of investments of the Government in the projects, creating an SUV for implementing a project , all were in the domain of the functions of the Board. The administration of the Fund was only one of the manifold functions of the Board. This is clearly brought out by subsection (2) of section 3AA of the HDRUA Act, 1975 as under: 3A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist in determining the level and structuring of investments of the Government and public bodies into infrastructure projects with private participation including holding the investment or part thereof; (vi) create a special purpose vehicle for implementation of any infrastructure project in co-ordination with the Government or public infrastructure agencies; and (vii) administer the Fund and projects under this Act. (3) The Board shall not play any role in the infrastructure projects undertaken by the Government exclusively through its budgetary provisions. The Statement of Objects and Reasons for the amendment made to section 3A and introduction of section3AA to the HDRUA Act,1975, also clearly bring out this fact of the Board being created as a dedicated agency for the development of infrastructure projects in the State alongwith private participation , in its own right and not merely as a nodal agency of the State, as under: NOTES Statement of Objects and Reasons-The Section 3A of the Act 8 of 1975 provides for creation of a Fund from the receipts on account of Infrastructure Development Charges (IDC) and Infrastructure Augmentation Charges (IAC). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various procedures to be adopted for efficient administration of the Board. Hence this BILL66 * The Board thus, we hold, is not a mere nodal agency of the State. 16. The case laws relied on by the Ld. Counsel for the assessee supporting its contention that it was a mere nodal agency of the State are all distinguishable on facts where funds were found to have been created for specific projects to be executed on behalf of the government with the assessee having no control over of its utilization. In the case of Delhi State Industrial Development (supra) the Funds were found transferred to the assessee by the Delhi administration for a specific project of development of Narela Industrial Complex . The Honble court found that the assessee was only required to execute the project for the Delhi administration. Accordingly it was held that the fund belonged to the Delhi administration and not the assessee who was only a nodal agency of the Delhi administration for the project. Similarly in the case of Karnataka Urban Infrastructure Development Finance Corporation (supra) the assessee was found to be have been created for a specific scheme for development of a megacity and a fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case. 21. The Ld. Counsel for the assessee has argued that the mandate for filing notice of accumulation in Form No.10 before the due date of filing return of income was brought on the statute only on 01-04-2016 and hence not applicable for the impugned year, i.e A.Y 2014-15. That there were judicial decisions holding that filing the requisite form during assessment proceedings was sufficient compliance with section 11(2) of the Act. That the assessee having filed electronically form No.10 during assessment proceedings on 29-12-2016, the denial of benefit of accumulation was not as per law .The written submissions in this regard filed before us are as under: ISSUE (AY2013-14 2014-15) Accumulation of Income u/s 11(2) SUBMISSION It is an admitted fact that the assessee could not utilize 85% of the receipts during the year and amounts which were less utilized were accumulated by the assessee to be utilized in future years. However, the assessee could not file the Form 10 before the AO at the time of filing the return of income. As per proviso to the Rule 12(2), the form 10 has to be filed electronically on or after 01.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated fund, form No.10 filed during assessment proceedings showed accumulation of ₹ 382,08,83,404/- That no plausible explanation was given of the difference except for stating that the figure in the audit report was of the auditors while in form 10 it was that of the governing council of the assessee fund. That the figure in Form No.10 was therefore not reliable. It has also been contended that the assesee did not specify the purpose of accumulation of ₹ 20 Crs reported in audit report filed in Form 10B,which is mandatory for claiming benefit of accumulation and therefore also the benefit has been rightly denied by the Ld.CIT(A) .Our attention was drawn to the findings of the Ld.CIT(A) at para 10.3.11 of the order as under: 10.03.11 The details of accumulation shown in the Form 10 filed during assessment proceedings were not in conformity with the figures mentioned in Original Audit Report which clearly indicate that the details put forth by the appellant in the Form No 10 were reliable and the correct picture was not put up before the assessing officer as required for claiming exemption u/s 11 of the Act. More importantly the Audit Report in farm 10B filed electro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o .That the assessee had filed the prescribed form during assessment proceedings is not denied. In identical facts and circumstances, the coordinate Bench of the ITAT has held in a number of decisions that the assessee can file Form No.10 at any time during assessment proceedings and which has to be considered for granting benefit u/s 11(2) of the Act and the non filing of the same is a mere irregularity and technical lapse which needs to be condoned. The ITAT has categorically held so in the following case laws aptly relied upon by the Ld.Counsel for the assessee: ADDITIONAL DIRECTOR OF INCOME TAX (EXEMPTION) vs. MANAV (2008) 20 SOT 0517 (Del) MOTI RAM GOPI CHAND CHARITABLE TRUST vs. ADDITIONAL COMMISSIONER OF INCOME TAX (2013) 59 SOT 0197 (Delhi) JOINT COMMISSIONER OF INCOME TAX vs. SEWA EDUCATION TRUST 27ITR (Trib) 0292 (Agra) V. RAMAKRISHNA CHARITABLE TRUST vs. DEPUTY DIRECTOR OF ;INCOME TAX (EXEMPTIONS)-II (2015) 155 ITD 0727 (Chennai) In view of the same, we hold, that the denial of benefit of accumulation for delayed filing of Form No.10 is not as per law. 4. At this stage, the Ld. DR has submitted that the case laws relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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