Commissioner Of Income-Tax Gandhinagar v. Gujarat Industrial Developmentcorporation....opponent(S

O/TAXAP/1370/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1370 of 2006 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME-TAX GANDHINAGAR....Appellant(s) Versus GUJARAT INDUSTRIAL DEVELOPMENTCORPORATION....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Date : 02/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ITAT) dated 23.12.2005 in ITA No. 3877/Ahd/03, the revenue has preferred the present Tax Appeal. 1.1This Court while admitting the present appeal formulated the following substantial question of law for consideration: Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that Gujarat Industrial Development Corporation fulfils the conditions as envisaged in Section 12AA of the Income Tax Act, 1961 , which are necessary for its registration u/s 12A of the said Act?” 2. The assessee firm was previously filing its return as a company and thereafter it filed application for registration u/s 12A of the Act. The same was rejected. On appeal before the ITAT by the assessee, by impugned order, ITAT reversed the decision of the appellant and directed him to grant registration u/s 12A of the Act. Being aggrieved and dissatisfied with the impugned order passed by the ITAT, the revenue has preferred the present Tax Appeal for consideration of the aforesaid substantial question of law. 3. Mr. Sudhir Mehta, learned Counsel appearing on behalf of the appellant – revenue has submitted that the Tribunal has erred in not appreciating that in light of the correct interpretation of section 12A of the Act, the State Government has not created a lawful trust within the meaning of Trust used in the aforesaid section. 3. Mr. Sudhir Mehta, learned Counsel appearing on behalf of the appellant – revenue has submitted that the Tribunal has erred in not appreciating that in light of the correct interpretation of section 12A of the Act, the State Government has not created a lawful trust within the meaning of Trust used in the aforesaid section. 4. We have heard Shri Mehta, learned Counsel appearing on behalf of the Department. A similar question came up before this Court in the case of Commissioner of Income-Tax vs. Gujarat Maritime Board rendered in Tax Appeal No. 1433 of 2005 and this Court while deciding the said issue has upheld the view of the Tribunal that the object of the assessee was to develop and maintain minor ports in the State of Gujarat which was an object of general public utility and therefore benefit of section 12A is required to be given. The said decision was challenged before the Apex Court and the Apex Court upheld the view taken by this Court and the said decision viz. Commissioner of Income-Tax vs. Gujarat Maritime Board is reported in [2007] 295 ITR 561 (SC). We are not giving any elaborate reasons for the same as in the case of Gujarat Maritime Board (Supra) it is held by this Court that though the management and control of the Board was essentially with the State Government, when there is no profit motive, benefit of section 12A is required to be extended. 5.The Tribunal in the impugned order has observed that the assessee is carrying on activities for general public utitlity. The Tribunal has followed the decision of this Court in Gujarat Maritime Board (supra) and accordingly allowed the claim of the assessee. We are in complete agreement with the reasonings adopted by the Tribunal on facts also. 6. In view of the above, the present Tax Appeal is held in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is confirmed. Hence, the present Tax Appeal is dismissed. No costs. (K.S.JHAVERI, J.) divya (K.J.THAKER, J)