TMI Blog2005 (12) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 3. The learned CIT has further erred in holding that the appellant is a corporation body/company and its status cannot be considered as a public trust or charitable trust or trust of any other nature. 4. The learned CIT has grievously erred in considering the application filed under s. 12A as suffering from inordinate delay by considering the same in isolation with a total disregard to the fact that the appellant was legally entitled to exemption under s. 10 of the IT Act, 1961 by virtue of the legal position as pronounced by the Hon'ble Supreme Court in appellant's own case. 5. The learned CIT has grievously erred in ignoring the aspect of "absence of profit motive" in the functioning of the appellant corporation one hand, and on the other hand has erred in relying upon ratio of inapplicable decision of Supreme Court at Director of IT vs. Bharat Diamond Bourse (2003) 179 CTR (SC) 225 : (2003) 259 ITR 280 (SC) with the result that the ultimate finding and the conclusion of learned CIT is "vitiated" in the eyes of law and deserves to be struck down so as to entitle the appellant for being registered under s. 12A of the IT Act, 1961. 3. The assessee is a corporate body inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made applicable to the case of public enterprises/public sector undertakings/public sector utility service provider. The basic incentive provided in the exemption section cannot be intended for utilization of public property and application of income of public property administered through Government reaching the people as a whole. (6) The reliance on the Court decision are found to be applicable to the facts and circumstances of the case of the Board. (7) The provisions of Gujarat Maritime Board Act, 1981 have not specifically mentioned about the income of the port authority to be exempt from the charge of income-tax. (8) The absence of profit motive in the functioning of Board does not by itself create a situation of total exemption from the charge of income-tax in respect of income which it has earned or likely to earn from its activities comprising of providing various infrastructural facilities and also deriving income ancillary to its principal activities such as rental income from let out property/sale of goods like water, petroleum to its customers, income from investments, etc. (9) The extent of utilization of its income from different sources for any genuine c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derly establishment and organization of industries in industrial areas and industrial estates in the State of Gujarat. He in this regard referred to the Chapter II of the Gujarat Industrial Development Act, 1962. The provisions of s. 3 are as under: "Chapter II Establishment and constitution of the corporation 3.(1) For the purposes of securing and assisting in the rapid and orderly establishment and organization of industries in industrial areas and industrial estates in the State of Gujarat [and for the purpose of establishing commercial centres in connection with the establishment and organization of such industries], there shall be established by the State Government by notification in the Official Gazette, a corporation by the name of the Gujarat Industrial Development Corporation. (2) The corporation shall be a body corporate with perpetual succession and a common seal, and may sue and be sued in its corporate name, and shall be competent to acquire, hold and dispose of property, both movable and immovable and to contract, and do all things necessary, for the purposes of this Act." He further referred to the functions of the assessee as prescribed in s. 13 of Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s he contended that the object of the assessee was to support the industrialists and not to the public at large. Thus he pleaded that cases relied upon by the assessee do not support its case. Taking support from the order of CIT he pleaded that his order should be upheld. 6. We have carefully considered the rival submissions in the light of material placed before us. We do not find any force in the contention of learned Departmental Representative that activity of the assessee of promoting and assisting in the rapid and orderly establishment, growth and development of industries in the State of Gujarat is an activity not supporting the object of general public utility. Growth and development of industry is not only for the benefit of industrialists but it also creates many opportunities for the public at large for development. The industrial activity is equally important as it is in the case of development of ports and regulation of agricultural produce. Thus the contention of learned Departmental Representative that promotion and assistance given to industrial growth cannot be treated at par with the growth and development in ports and, growth and development in agricultural ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion falls within the definition of charitable purposes under s. 2(15) of the Act and the institution is genuinely carrying out such object, the CIT must register the institution. Therefore, the moot question to examine is whether the object of the assessee-institution is charitable or not? Sec. 2(15) of the IT Act defines the words "charitable purpose" as under: "2(15)-"charitable purpose" includes relief of the poor, education medical relief, and the advancement of any other object of general public utility." From the above definition of "charitable purpose", it is evident that advancement of any other object of general public utility is also charitable purpose. The above definition of "charitable purpose" is modified by the Finance Act, 1983 w.e.f. 1st April, 1984. Before the above amendment, the purpose, i.e., advancement of any other object of general public utility was qualified by the words "not involving the carrying on of any activity for profit". However, the Finance Act, 1983 has omitted the words "not involving the carrying on of any activity for profit". Therefore, after the omission of the above words, if an activity which is for the purpose of advancement of an ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is purpose assessee has placed reliance on the decision in the case of Market Committee vs. CIT. As per application in Form No. 10A, the date of creation/establishment of assessee is 9th Aug., 1962. It was mentioned before us that earlier upto 31st March, 2002 the income of assessee was exempt under s. 10(20A) of the Act. In the afore cited case of Market Committee vs. CIT in respect of condonation of delay it has been observed as under: "14. Under s. 12A of IT Act which has been quoted above, one of the condition for registration is the submission of application in the prescribed form within the time specified in cl. (a) of the section. In the present case, the learned CITs in most of the cases have condoned the delay and, therefore, this condition is fully satisfied. In certain other cases, their applications were treated as out of time. This approach in our view is not justified having regard to the fact that change in the statutory provision compelled the assessees to file applications for registration. In the light of above circumstances, we are of the view that delay in the submission of application is liable to be condoned in all cases. In view of the principle of consis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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