TMI Blog2022 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... pects. We further direct the assessee to provide details as may be required by the AO for complete adjudication of aforesaid aspects. Since, various aspects pertaining to section 2(15) of the Act have been remanded to the AO for de novo adjudication and once the assessee satisfies those aspects, it can be said to be eligible to claim exemption u/s 11 - The ground raised by the assessee pertaining to denial of exemption u/s 11 is also remanded to the file of AO for de novo adjudication in light of the conclusion reached in the remand proceedings. In these appeals, revolve around assessee s claim of exemption u/s 11 of the Act, therefore, these grounds are also remanded to the AO for de novo adjudication. Accordingly, all the grounds raised by the assessee, in these appeals, are allowed for statistical purpose. - ITA No.2075/Mum./2018, ITA No.1806/Mum./2015, ITA No.2240/Mum./2016, ITA No.5086/Mum./2017, ITA No.1077/Mum./2018, ITA No.700/Mum./2019, ITA No.1998/Mum./2020 - - - Dated:- 28-9-2022 - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Bharat Raichandani a/w Shri Aditya Navandar For the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee continued to claim the exemption under section 11 of the Act. 4. For the assessment year 2011 12, assessee filed its return of income on 28/09/2011, along with income and expenditure account, balance sheet and audit report in form No. 10B, declaring total income at Rs. Nil. During the course of assessment proceedings, upon perusal of details, it was observed that the assessee is engaged in various commercial activities, which prima facie are in the nature of business. Accordingly, assessee was asked to show cause as to why exemption under section 11 of the Act, as claimed, be not denied in view of amendment to section 2(15) of the Act. In reply, assessee submitted that proviso to section 2(15) was introduced with effect from assessment year 2009 10 and the issue of applicability of proviso was raised in earlier years in the course of assessment proceedings. However, the issue was dropped pursuant to reply of the assessee and the assessment was made without invoking proviso to section 2(15) of the Act. The assessee further submitted that there is no change in the facts of the case since earlier assessment years. The assessee also submitted that assessee is a statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the A.O has been reproduced in the foregoing paragraphs. The A.O has also examined the nature of charitable activity carried on by the appellant, falling under the category of 'general public utility' as in section 2(15) of the IT. Act, 1961 where proviso to the said section is also attached w.e.f. A. Y. 2009-10. It is in reference to activities of 'general public utility of the appellant that proviso to section 2(15) has been found applicable by the A.O. The appellant is neither claiming nor found to be engaged in other charitable activities of education, medical relief or relief to the poor as defined u/s. 2(15) of the I.T. Act, 1961 for this purpose, though at some stage appellant has claimed to providing relief to economically deprived sections, which is not synonymous to relief to poor. The functions and responsibilities of the appellant - to formulate schemes for rehabilitation of slum areas and to get such schemes implemented - and charging fees and levies for approval of plans from the Developers is an activity giving rise to receipts and income from the activity of planning, regulation and formulation of development of slum area development. It is impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly or indirectly facilitates the rendering of any service in relation to any trade, commerce or business, is carried on by trust, then it will be covered under proviso to section 2(15) . 5.3 I have considered the facts and circumstances of the case, the assessment order of the A.O and the submissions of the appellant. The arguments and submissions of the appellant on the issue of applicability of proviso to section 2(15) of the IT Act, 1961 is also that the amounts received from the developers is not in the nature of income as there is no transaction with a consideration. However, the receipt of fees for approval of projects etc. is accepted by the appellant. The argument of the appellant is erroneously confined to trading transactions where consideration for sale of goods takes place. In fact the income as defined under the Income Tax Act under section 2(24) is inclusive of various profit and gains, Capital Gains, voluntary contributions and any sums chargeable to income tax. Further, the income' appearing u/s. 11 has a commercial connotation and in that context the amounts received by appellant are falling within the meaning of income for this purpose. It is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition and lacks any such services or charities having been rendered so as to be specifically considered as 'relief to the poor' for the purpose of section 2(15) of the I.T. Act, 1961. Secondly, it is also on record that there is no such instance of any direct expenditure/application of income of the appellant which could be even remotely attributed to expenditure resulting in relief to economically deprived class of society. Therefore, this argument of the appellant is rejected. Even the expenditure under Schedule M 'Dharavi Redevelopment Project expenses is on advertisement and publicity, car hire charges etc. in the nature of establishment expenditure. The income of the appellant is 79.19 crores from fees and premium in the nature of arising out from approvals for extended facilities. The expenditure is mainly on payment to employees and administrative expenses. Thus it is apparent and clear that the appellant has not carried out any activity and has not incurred any expenditure resulting in relief to the poor. 5.4 The appellant has relied on the decision of the Hon'ble Tribunal in its own case for A. Yrs, 2005-06 and 2008-09, particularly Para 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he common grounds taken by the Revenue for the assessment years 2005-06 and 2008-09 are, therefore, rejected. 5.5 It is on record that the appellate order of the Hon. Higher judicial authority relates to A.Y. 2005-06 and 2008-09 when proviso to section 2(15) was not in the statute. The amendment in section 2(15) by way of its proviso is w.e.f. 2009-10 and is liable to be considered from A.Y 2009-10 onwards. Therefore, the reliance placed by the appellant on the appellate order of earlier assessment years is irrelevant and not applicable to the issue of applicability of proviso to section 2(15) of the I.T. Act, 1961. It is further seen that the activities of the appellant for the earlier years in appellate orders also have been held to be in the field of 'general public utility of charitable purpose and since amendment by way of proviso to section 2(15) is on the very same field of 'general public utility', therefore, the findings of the A.O. and applicability of proviso to section 2(15) of the I.T. Act, 1961 is affirmed in the context of the order referred and relied by the appellant. 5.6 The order of Hon. High Court, Bombay for A.Y. 2005-06, 2007 08 and 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before us. 6. During the course of hearing, learned Authorised Representative ( learned AR ) referred to various provisions of Maharashtra Slum Area (Improvement, Clearance and Rehabilitation) Act, 1971 under which the assessee is created. Further, by reference to the preamble of the aforesaid statute, learned AR submitted the assessee was created for improvement and clearance of slum areas in the state and for the redevelopment and for the protection of occupiers from eviction and distress warrants. The learned AR submitted that the assessee has to rehabilitate slum dwellers without receipt of any fees from them and whatever assessee charged from the developers/builders is for rehabilitation of slum dwellers. The learned AR also submitted that the funds collected by the assessee went back to the state government only, on dissolution of assessee. Further, all the activities undertaken by the assessee are within the purview of the aforesaid statute and therefore the same cannot be considered to be in the nature of trade/business. The learned AR by reiterating the submissions made before the lower authorities submitted that in earlier years functions of the assessee was held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity in the nature of trade, commerce or business, or any activity of rendering any services in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity; 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 10. In this regard, it is also pertinent to note that the aforesaid provisos were incorporated in the Act w.e.f. 01/04/2009 and the term object of general public utility was further qualified by few more conditions. From the perusal of orders passed in the case of the assessee for assessment year 2009 10, forming part of the paper book, we find that applicability of proviso to section 2(15) of the Act was not in consideration before the coordinate bench of the Tribunal in first-round of proceedings, as the AO denied exemption under section 11 of the Act on the basis that assessee is not a trust and was created as local authority. However, proceedings under section 263 of the Act were initiated by the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in the case of the assessee as the same only qualifies the term any other object of general public utility . It is no doubt true that the term relief of the poor encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. Further, it will also include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. In the present case, apart from placing reliance upon the preamble of Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 nothing has brought on record to show that assessee has in fact undertaken activities in order to grant relief to the poor so as to be covered under this limb of section 2(15) of the Act. Reference was made to the financials of the assessee for the year ending 31st March 2011. However, from the same it is not evident as to what all activities were undertaken and expenditure was incurred by the assessee in order to satisfy this condition of section 2(15) of the Act. We further find that even the learned CIT(A), merely on the basis of some tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f circulars issued under the power given to it by the various statutes: S.R.A. Schemes Fees Penalty Circular of SRA 138,104,1 47 Revalidation Fee of IOA + C + TRANSIT Circular of SRA 138,1 47 Scrutiny Fee LOI Amended, Amalgamated Circular of SRA 138, 1 47 Revalidation fee of LOI Circular of SRA 138, 1 47 Revalidation Fee Circular of SRA 47 Scrutiny Fees Amended Plan Circular of SRA 1 47 Scrutiny Fees Layout Proposal + Amended Circular of SRA 1 47 Scrutiny Fees Temporary Transit Fee + Amended Circular of SRA 104, 1, 47 138 Change of Developer charges Circular of SRA 19 Infrastructural Development Charges SRA s Share (1/3) Circular of SRA 85 + Govt Order dated 20/07/2009 DCPR 9 Infrastructural Development Charges SRA s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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