Commissioner Of Income Tax v. M/S Truck Operators Association, Hansi

ITA No. 382 of 2009 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income Tax Versus M/s Truck Operators Association, Hansi ITA No. 382 of 2009Date of Decision: 12.8.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Sanjeev Kaushik, Advocate for the appellant. None for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been filed by the revenue under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 3.10.2008 passed by the Income Tax Appellate Tribunal, DelhiBench “H”, New Delhi (hereinafter referred to as “the Tribunal”) in ITANo. 436/Del/2008 for the assessment year 2002-03 proposing followingquestion of law:- “Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal haserred in law in dismissing the appeal of revenue andholding the income of the assessee exempt underSection 11 and 12 of the Income Tax Act, 1961 ignoring the facts that activities carried out by theassessee are not for the public at large but restrictedto a particular community only, i.e. drivers andconductors and also for preventing the outsiders ornon-members to carry on the business oftransportation within the area of Hansi Town and theactivities of the assessee do not come within theambit of the definition of charitable purpose undersection 2(15) of the Income Tax Act, 1961?” 2.Facts necessary for adjudication as narrated in the appealmay be noticed. The assessee filed its return on 31.10.2002 declaringnil income. The said return was processed under Section 143 (1) of theAct on 12.3.2004 on the returned income and notice under Section 148of the Act was issued on 7.9.2005 on the ground that the total receiptsas declared in the income tax return did not correspond to the TDSclaim. During the course of re-assessment proceedings, the assesseecontended that it was acting as transport booking agent and facilitatedtransportation of trucks on behalf of its members and out of totalreceipts of Rs.85,64,762/-, it charged commission of Rs.7,80,824/- asper bye-laws and after applying the above commission income forcharitable purpose under Section 11 of the Act, there was deficit ofRs.80,025/-. The Assessing Officer observed that the activities carriedout by the Truck Operators Association were not for the purpose ofpublic at large but restricted to a particular community only and,therefore, the assessee was not entitled to exemption of its income andthe entire income amounting to Rs.85,64,762/- was held to be taxable and added to the taxable income vide order dated 27.11.2006. Theassessee filed an appeal before the Commissioner of Income Tax(Appeals) [in short “the CIT (A)”] who allowed the appeal holding thatthe Assessing Officer should have followed the order of the Tribunaland should have allowed exemption to the assessee when there wasregistration granted to it by the CIT. Feeling aggrieved, the revenuefiled an appeal before the Tribunal who dismissed the same vide orderdated 3.10.2008. Hence, the present appeal. 3.Vide order of even date passed in ITA No. 542 of 2006 (Commissioner of Income Tax Versus M/s Truck OperatorsAssociation) it has been held that the respondent-assessee was notcovered under Section 2(15) of the Act as it was not a CharitableInstitution. 4.Accordingly, the appeal is allowed and the substantialquestion of law as claimed is answered in favour of the revenue andagainst the assessee. Consequently, setting aside order dated3.10.2008 passed by the Tribunal, the matter is remitted to the CIT (A)to decide the same afresh in accordance with law after issuing notice tothe assessee. (AJAY KUMAR MITTAL) JUDGE August 12, 2010gbs (ADARSH KUMAR GOEL) JUDGE