Improvement Trust, Abohar v. Commissioner Of Income Tax, Amritsar

ITA No. 140 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 140 of 2015 (O&M) Date of Decision: 21.9.2015 Improvement Trust, Abohar ....Appellant. Versus Commissioner of Income Tax, Amritsar ...Respondent. CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? PRESENT: Mr. K.L. Goyal, Senior Advocate with Mr. Sandeep Goyal, Advocate for the appellant. Mr. Denesh Goyal, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.Delay in refiling the appeal is condoned. 2.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 9.12.2013 (Annexure A-6) passed by the Income TaxAppellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as“the Tribunal”) in ITA No. 320(ASR)/2013, claiming the followingsubstantial questions of law:- i.Whether on the facts and in the circumstancesof the case and in view of the legal provisions the ITAT Amritsar was justified in confirming theorder of the CIT Bathinda in cancelling theregistration of the appellant- Trust u/s 12AA ofthe Income Tax Act, 1961 on the grounds of itscarrying out the activities in accordance withstatutes and thereby holding it to be carryingout activities of trade, business or commercewith a profit motive? ii.Whether on the facts and in the circumstancesof the case the ITAT Amritsar was justified incancelling the registration of the appellant-Trustu/s 12AA of the Income Tax Act, 1961 fromretrospective effect and holding that theappellant is liable to pay tax w.e.f. 1.04.2003?of the case the ITAT Amritsar was justified incancelling the registration of the appellant-Trustu/s 12AA of the Income Tax Act, 1961 fromretrospective effect and holding that theappellant is liable to pay tax w.e.f. 1.04.2003? 3.The facts, in short, necessary for adjudication of the instantappeal as narrated therein are that the appellant-Trust was constitutedunder the Punjab Town Improvement Trust Act, 1922 (for brevity, "the1922 Act"). Income of the Trust was exempt under section 10(20A) of theAct upto assessment year 2002-03. However, the said Section wasomitted by Finance Act, 2002 w.e.f 2003. The Trust was grantedregistration under Section 12AA of the Act w.e.f. 12.6.2003 on thedirections of the Tribunal issued in misc. application vide order dated4.3.2010 (Annexure A-1). The Commissioner of Income Tax, Bathinda(CIT) vide order dated 23.8.2010 (Annexure A-2) granted registration tothe Trust under Section 12AA of the Act on the directions of the Tribunal.The CIT issued notices dated 22.6.2012 (Annexure A-3) and dated23.10.2012 (Annexure A-4) to the Trust to show cause as to why the registration granted under Section 12AA of the Act be not cancelledunder Section 12AA(3) of the Act. Vide order dated 18.2.2013, the CITcancelled the registration under Section 12AA of the Act of the Trust byholding that its income was not exempted since 1.4.2003 and was,therefore, taxable. The registration was cancelled in view of theamended provision of Section 2(15) of the Act w.e.f. 1.4.2009 andholding that the Trust is engaged in the business, trade and commerce.Feeling aggrieved, the Trust filed an appeal before the Tribunal who videorder dated 09.12.2013 (Annexure A-6) upheld the order of the CIT anddismissed the appeal. Hence, the present appeal. 4.We have heard learned counsel for the parties. registration granted under Section 12AA of the Act be not cancelledunder Section 12AA(3) of the Act. Vide order dated 18.2.2013, the CITcancelled the registration under Section 12AA of the Act of the Trust byholding that its income was not exempted since 1.4.2003 and was,therefore, taxable. The registration was cancelled in view of theamended provision of Section 2(15) of the Act w.e.f. 1.4.2009 andholding that the Trust is engaged in the business, trade and commerce.Feeling aggrieved, the Trust filed an appeal before the Tribunal who videorder dated 09.12.2013 (Annexure A-6) upheld the order of the CIT anddismissed the appeal. Hence, the present appeal. 4.We have heard learned counsel for the parties. 5.Learned counsel for the assessee submitted that in view ofthe provisions of 1922 Act, the matter is required to be remanded to theTribunal to adjudicate whether the activities of the appellant werecovered within the meaning of 'charitable' in nature or not even after theinsertion of the proviso to Section 2(15) of the Act w.e.f. 1.4.2009 i.e. inrespect of the assessment years 2009-10 onwards. Learned counsel forthe revenue supported the order passed by the Tribunal. 6.Similar issue came up before this Court in ITA No. 73 of2013 (Improvement Trust through Shri APS Virk s/o Late Shri KartarSingh Virk, Chairman, Dr. Mela Ram Road, Bathinda, Punjab v.Commissioner of Income Tax, Aayakar Bhawan, Amritsar) wherein thisCourt vide order dated 6.8.2014 remanded the matter to the Tribunal todecide the same afresh keeping in view the proviso to Section 2(15) ofthe Act inserted w.e.f. April 1, 2009 with reference to the provisions of the1922 Act after affording an opportunity of hearing to the parties inaccordance with law. ITA No. 140 of 2015 -4- 7.In view of the above, the order dated 9.12.2013 (AnnexureA-6) passed by the Tribunal is set aside and the matter is remandedback to the Tribunal for fresh adjudication keeping in view the proviso toSection 2(15) of the Act inserted w.e.f. April 1, 2009 with reference to theprovisions of the 1922 Act after affording an opportunity of hearing to theparties in accordance with law. Needless to say that anything observedhereinbefore shall not be taken to be an expression of opinion on themerits of the case. However, the Tribunal shall make sincere efforts todecide the matter expeditiously. The appeal stands disposed of. (AJAY KUMAR MITTAL)JUDGE September 21, 2015(RAMENDRA JAIN) gbs JUDGE