Appell v. M/S Patiala Improvement Trust Chhoti Baradari, Patiala (Panaaaji0034L

Gurbax SinghIN THE HIGH COURT OF PUNJAB AND HARYANA Ad 9747.40 |2018.08.27 10:43CHANDIGARH. ITA No. 74 of 2018Date of decision: 11.07.2018. The Commissioner of Income Tax (Exemptions), Chandigarh .--.--Appell Vs. M/s Patiala Improvement Trust Chhoti Baradari, Patiala (PANAAAJI0034L) ..-.Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL |HON’ BLE MR. JUSTICE AVNEESH JHINGANHON’ BLE MR. JUSTICE AVNEESH JHINGAN Present: Mr. Denesh Goyal, Senior Standing Counsel for the appellant-_TeEVenUE Ajay Kumar Mittal,J. 1,The appellant-revenue has filed the instant appeal under Section260A of the Income Tax Act, 1961 (in short, “the Act”) against the orderdated 13.07.2017, Annexure A.3, passed by the Income Tax AppellateTribunal, Chandigarh Bench (in short, “the Tribunal”) in ILT.A.No.120/CHD/2017, for the assessment year 2012-13, claiming followingsubstantial questions of law:-_ “(1) Whether the Hon’ble ITAT has erred in law by notconsidering the scope of proviso of Section 2(15), as it hadbeen directed by Hon’ble High Court, while adjudicating thematter afresh? (41) Whether the Hon’ble ITAT was wrong in law in drawing acorollary from circular No. 11 of 2008 of CBDT where the said circular while clarifying the issue had expressly indicated thatentities claiming charity under Section 2(15) should eschew anyactivity in the nature of trade, commerce or business? | (111) Whether the Hon’ble ITAT is right by ignoring the ratiolaid down in the cases of Punjab Urban Development Authorityand Jammu Development Authority by Hon’ble ITAT.Chandigarh and Hon’ble [TAT Amritsar respectively (to theextent improvement trusts carry out land development in aSimilar manner as Development Authorities do)? (iv)Whether|theHon’ble.ITATWadaWIOTL?1nNot|acknowledging that performing statutory functions does notabsolve a government created authority from paying taxes? (v) Whether on the facts and in the circumstances of the case,the Hon’ble ITAT was wrong in law in totally ignoring the ratio.laid down in the case of PUDA Vs. CIT reported as (2006) 103.TTJ CHD O88 in which the Hon’ble Tribunal has held that the|activities of the PUDA are of commercial nature and thus notentitled to exemption. The Hon’ble ITAT has failed to take notethat both PUDA and the assessee are engaged in identicalactivities? (vi) Whether on the facts and in the circumstances of the case,the order of the Appellant Tribunal is contrary to the evidenceand material on the record of the case and therefore, perverse? (vii) Whether on the facts and in the circumstances of the case,the order of the Hon’ble ITAT is suffering from non-applicationof mind and is unreasonable and arbitrary?” 2 A few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The respondent-assesseetrust is an authority formed by the Government of Punjab for the purpose ofplanning, development and improvement of District Patiala. It filed its returnof income declaring nil income after claiming exemption under Section 11 (vi) Whether on the facts and in the circumstances of the case,the order of the Appellant Tribunal is contrary to the evidenceand material on the record of the case and therefore, perverse? (vii) Whether on the facts and in the circumstances of the case,the order of the Hon’ble ITAT is suffering from non-applicationof mind and is unreasonable and arbitrary?” 2 A few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The respondent-assesseetrust is an authority formed by the Government of Punjab for the purpose ofplanning, development and improvement of District Patiala. It filed its returnof income declaring nil income after claiming exemption under Section 11 of the Act. The case was selected for scrutiny. During the course ofassessment proceedings, the Assessing Officer observed that the assesseewas calrying on business of sale and purchase of residential plots andcommercial properties by auction and earned huge net profit of|v24,65,05,026/- during the year under consideration, which was in the natureof trade, commerce and business and did not fall within the meaning ofwords “the advancement of any other object of general public utility” undersection 2(15) of the Act. The Assessing Officer completed assessment underSection 143(3) of the Act for the assessment year 2012-13 and assessed thetotal income of the assesseeat |424,65,05,026/- and exemption under Section11 of the Act was denied by holding that the activities carried out by theassessee during the year in question were clearly hit by the first proviso tosection 2(15) of the Act read with Section 13(8) of the Act and the assesseewas not entitled to exemption under Section 11 of the Act. Aggrieved by theorder, the assessee filed an appeal before the Commissioner of Income Tax(Appeals), [CIT(A)]. Vide order dated 06.10.2016, Annexure A.2, theCIT(A) allowed the appeal relying upon the orders passed by the Tribunaldated 13.06.2016 and 17.06.2016 for the assessment year 2011-12 in theassessee’s own case. The appellant-revenue challenged the order dated6.10.2016 before the Tribunal relying upon the judgment passed by thisCourt dated 23.12.2016 in|CIT (Exemption) Vs. M/s Improvement Trust,Mogain ITA No.147 of 2016. Vide order dated 13.07.2017, Annexure A.3,.the Tribunal dismissed the appeal filed by the revenue. Hence the instantappeal by the appellant-revenue. onWe have heard learned counsel for the appellant-revenue.4 At the outset, learned counsel for the appellant-revenue did notdispute that the issues raised in this appeal are covered by the decision of this Court inThe Tribune Trust Vs. Commissioner of Income Tax and| another and Commissioner ofIncome Tax (Exemption) Vs. Improvement Trust, Moga[2017] 390 ITR 547 where the similar issues have been decided against the revenue and in favour of the assessee. © 5 Accordingly, the appeal stands dismissed. July 11, 2018| Whether speaking/reasoned Whether reportable (Ajay Kumar Mittal) Judge (Avneesh Jhingan)Judge Yes.Yes