The Dy. Commissioner Of Income Tax, 1(1) Raipur, Chhattisgarh v. Raipur Development Authority, Bajrang Market, G.e. Road, Raipur,Chhattisgarh

(Tax Case No.81/2019) Digitallysigned bySISTASISTASOMAYAJULUSOMAYAJULUDate:2025.04.1618:04:36+0530 2025:CGHC:17353-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 81 of 2019 {Arising out of order dated 16-4-2018 passed by the Income TaxAppellate Tribunal, Raipur Bench, Raipur, in ITA No.212/RPR/2014} --Order reserved on: 1732025 --Order delivered on: 1542025 The Dy. Commissioner of Income Tax, 1(1) Raipur, Chhattisgarh... Appellant versus Raipur Development Authority, Bajrang Market, G.E. Road, Raipur,Chhattisgarh ... Respondent :For Appellant Mr. Amit Chaudhary and Mr. Vijay Chawla,Advocates. For Respondent : Mr. Ashish Shrivastava, Senior Advocate with Mr.Rohishek Verma, Mr. Rahul Ambast, Mr. UditKhatri and Mr. Ashutosh Shrivastava, Advocates. -Division Bench: Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Sanjay Kumar Jaiswal, JJ. (Tax Case No.81/2019) C.A.V. Order Sanjay K. Agrawal, J. 1. This tax appeal preferred under Section 260A of the Income Tax Act, 1961 was admitted for hearing on 15-3-2023 by formulating the following two substantial questions of law: - “1.Whether on facts and in the circumstances of thecase, the ITAT was justified in law in holding that theproviso to Section 2(15) of the Act is not applicable inthe case, even though the activities of the assessee societyare commercial in nature? 2.Whether on facts and in the circumstances of thecase, the ITAT was justified in law in holding the firstproviso to Section 2(15) is not applicable in the case ofthe assessee wherein as per records, the assessee isengaged in business of buying, developing and selling oflands, plots, flats and developed properties rendering theorder perverse?” 2. The aforesaid questions of law have arisen for consideration onthe following factual background: -the following factual background: - 3. The Raipur Development Authority, the respondent herein /assessee, is a statutory authority constituted by the State ofChhattisgarh in accordance with the provisions contained inSection 38(1) of the Chhattisgarh Nagar Tatha Gram NiveshAdhiniyam, 1973 (for short, ‘the Act of 1973’). The Act of1973 was enacted to make provision for planning anddevelopment and use of land; to make better provision for theassessee, is a statutory authority constituted by the State ofChhattisgarh in accordance with the provisions contained inSection 38(1) of the Chhattisgarh Nagar Tatha Gram NiveshAdhiniyam, 1973 (for short, ‘the Act of 1973’). The Act of1973 was enacted to make provision for planning anddevelopment and use of land; to make better provision for the (Tax Case No.81/2019) preparation of development plans and zoning plans with a viewto ensuring town planning schemes are made in a propermanner and their execution is made effective, to constituteTown and Country Planning Authority for Properimplementation of town and country development plan, toprovide for the development and administration of specialareas through Special Area Development Authority, to makeprovision for the compulsory acquisition of land required forthe purpose of the development plans and for purposesconnected with the matters aforesaid. The duties of thestatutory authority so constituted have been provided in sub-sections (2) and (3) of Section 38 of the Act of 1973, whichstate as under: - “(2) The duty of implementing the proposal in thedevelopment plan, preparing one or more towndevelopment schemes and acquisition and developmentof land for the purpose of expansion or improvement ofthe area specified in the notification under sub-section(1) shall, subject to the provision of this Act vest in theTown and Country Development Authority established forthe said area. “(2) The duty of implementing the proposal in thedevelopment plan, preparing one or more towndevelopment schemes and acquisition and developmentof land for the purpose of expansion or improvement ofthe area specified in the notification under sub-section(1) shall, subject to the provision of this Act vest in theTown and Country Development Authority established forthe said area. Provided that the duty imposed on the Town andCountry Development Authority shall, till that authorityis established for any area under sub-section (1), beperformed by the local authority having jurisdiction oversuch area as if it were a Town and Country DevelopmentAuthority established under this Act. (Tax Case No.81/2019) (3) On the establishment of the Town and CountryDevelopment Authority for the area to which the provisoto sub-section (2) applies, the following consequencesshall ensue in relation to that area, namely:— (i) all assets and liabilities acquired and incurred bythe local authority in the discharge of the duty underthe proviso to sub-section (2) shall belong to and bedemand to be the assets and liabilities of the Townand Country Development Authority established inplace of such local authority; (ii) all records and papers belonging to the localauthority referred to in clause (i) shall vest in and betransferred to the Town and Country DevelopmentAuthority established in its place.” 4. Furthermore, Chapter IX of the Act of 1973 deals with Control. By virtue of Section 72 of the Act of 1973, the StateGovernment shall have power of superintendence and controlover the acts and proceedings of the officers appointed underSection 3 and the authorities constituted under the Act of1973. Section 73 provides power of State Government to givedirections. Section 76 provides for dissolution of authorities.Sub-section (1) of Section 76 states that whenever in theopinion of the State Government the continued existence ofany authority constituted under the Act is unnecessary orundesirable, the State Government may, by notification, declarethat such authority shall be dissolved from such date as may be (Tax Case No.81/2019) specified therein and the authority shall stand dissolvedaccordingly. 5. The respondent/assessee filed return of income declaring totalincome as nil for the assessment year 2011-12. Return wasprocessed under Section 143(1) of the Income Tax Act, 1961on 30-3-2013 and the case was selected for scrutiny undercompulsory criteria with the approval of the ChiefCommissioner of Income Tax, Raipur. Accordingly, noticeunder Section 143(2) of the IT Act was issued on 26-9-2012and further notice under Section 142(1) was issued on 26-12-2013 with a questionnaire upon which in response to the saidnotice, the assessee through its representative attended thehearing and ultimately, on 30-3-2014, order under Section143(3) of the IT Act was passed by the Assessing Officer (AO)wherein the AO had made addition of 21,62,94,042/- as per₹the provisions contained in Section 2(15) read with Section13(8) of the IT Act taking into account the objects of theassessee Authority as contained in the Act of 1973. Therespondent/assessee was granted its registration under Section12AA of the IT Act on 16-1-2008. (Tax Case No.81/2019) (Tax Case No.81/2019) 6. Feeling dissatisfied with the order of the Assessing Officermaking an addition of 21,62,94,042/-, the assessee preferred₹an appeal before the CIT (Appeals) and ultimately, afterhearing the parties, the CIT (Appeals) by order dated 3-7-2014allowing the appeal held that the assessee is not carrying outoperations on commercial lines as envisaged under the provisoto Section 2(15) of the IT Act and thus, the benefit of theproviso to Section 2(15) was not available to the assessee, anddirected the Assessing Officer to allow exemption of Sections11 and 12 of the IT act as per law and accordingly, directed fordeleting the addition of ₹ 21,62,94,042/- made by theAssessing Officer. making an addition of 21,62,94,042/-, the assessee preferred₹an appeal before the CIT (Appeals) and ultimately, afterhearing the parties, the CIT (Appeals) by order dated 3-7-2014allowing the appeal held that the assessee is not carrying outoperations on commercial lines as envisaged under the provisoto Section 2(15) of the IT Act and thus, the benefit of theproviso to Section 2(15) was not available to the assessee, anddirected the Assessing Officer to allow exemption of Sections11 and 12 of the IT act as per law and accordingly, directed fordeleting the addition of ₹ 21,62,94,042/- made by theAssessing Officer. 7. The Revenue challenging the order dated 3-7-2014 passed bythe CIT (Appeals), preferred an appeal before the Income TaxAppellate Tribunal (ITAT) and by the impugned order, the ITATdismissed the appeal upholding the order of the CIT (Appeals)holding that there is no material which may suggest that therespondent assessee was conducting the affairs solely oncommercial lines with a motive to earn profit. The ITAT furtherheld that there is also no material brought on record whichcould suggest that the assessee deviated from its objects forthe CIT (Appeals), preferred an appeal before the Income TaxAppellate Tribunal (ITAT) and by the impugned order, the ITATdismissed the appeal upholding the order of the CIT (Appeals)holding that there is no material which may suggest that therespondent assessee was conducting the affairs solely oncommercial lines with a motive to earn profit. The ITAT furtherheld that there is also no material brought on record whichcould suggest that the assessee deviated from its objects for (Tax Case No.81/2019) which it has been constituted and finally held that the provisoto Section 2(15) of the IT Act is not applicable in the case ofthe assessee and answered the question against the Revenueleading to filing of the present appeal in which two substantialquestions of law have been formulated which have beencatalogued in the opening paragraph of this judgment. 8. Mr. Amit Chaudhary, learned counsel appearing for theappellant herein/Revenue, would submit that the CIT(Appeals) and the ITAT, both, have concurrently erred inholding that the proviso to Section 2(15) of the IT Act wouldnot be applicable in the case of the assessee/respondent hereinand the ITAT has failed to appreciate that institution of publicimportance like schools, community centres are created/developed, the assessee is charging the cost of it from thepublic at large and the money is coming from the jury of theGovernment. He would further submit that objects/activities ofthe assessee are more of commercialised nature and no charityis involved in it and at the time, if these facilities are notprovided, then nobody will purchase a plot. The objects of theassessee, though claimed to be charitable, but actually are ofpurely commercial nature where profit motive is involved. He (Tax Case No.81/2019) would rely upon the decision of the Supreme Court in thematter of Assistant Commissioner of Income Tax (Exemptions)v. Ahmedabad Urban Development Authority1 to buttress hissubmission and would also submit that the substantialquestions of law be answered in favour of the Revenue andagainst the assessee and the appeal be allowed. (Tax Case No.81/2019) would rely upon the decision of the Supreme Court in thematter of Assistant Commissioner of Income Tax (Exemptions)v. Ahmedabad Urban Development Authority1 to buttress hissubmission and would also submit that the substantialquestions of law be answered in favour of the Revenue andagainst the assessee and the appeal be allowed. 9. Mr. Ashish Shrivastava, learned Senior Counsel appearing forthe respondent herein/assessee Raipur Development Authority,would submit that the two authorities – CIT (Appeals) and theITAT have concurrently and rightly held that the proviso toSection 2(15) of the IT Act would not be applicable as theassessee Authority is constituted under Section 38(1) of the Actof 1973 and its functions are enumerated in Section 38(2) ofthe Act of 1973 and the State Government has completecontrol over the assessee Authority and it is not conducting itsaffairs solely on commercial line with a motive to earn profitand there is not an iota of evidence brought on record to holdthat the assessee Authority is involved in the commercialactivity with a motive to earn profit. He would further submitthat it is a case where without there being any basis, theAssessing Officer by suggesting amendment in Sections Page 9 of 20 (Tax Case No.81/2019) 10(23C), 13 and 143 of the IT Act, directed addition of ₹21,62,94,042/- which has rightly been set-aside by theappellate authority – CIT (Appeals) and further rightly beenaffirmed by the ITAT and as such, the appeal deserves to bedismissed by answering the substantial questions of law infavour of the assessee and against the Revenue. 10. We have heard learned counsel for the parties and consideredtheir rival submissions made herein-above and also wentthrough the record with utmost circumspection.their rival submissions made herein-above and also wentthrough the record with utmost circumspection. 11.Undisputedly, the assessee/respondent herein RDA wasconstituted under Section 38(1) of the Act of 1973 and theduty of the assessee Authority is to implement the proposal inthe development plan, to prepare one or more towndevelopment schemes and acquisition and development of landfor the purpose of expansion or improvement of the areaspecified in the notification under Section 38(1). By virtue ofSection 72 of the Act of 1973, the State Government has powerof superintendent and control over the acts and proceedings ofthe officers of the respondent/assessee Authority appointedunder Section 3 and the authorities constituted under the Act.Similarly, by virtue of Section 73 of the Act of 1973, the Stateconstituted under Section 38(1) of the Act of 1973 and theduty of the assessee Authority is to implement the proposal inthe development plan, to prepare one or more towndevelopment schemes and acquisition and development of landfor the purpose of expansion or improvement of the areaspecified in the notification under Section 38(1). By virtue ofSection 72 of the Act of 1973, the State Government has powerof superintendent and control over the acts and proceedings ofthe officers of the respondent/assessee Authority appointedunder Section 3 and the authorities constituted under the Act.Similarly, by virtue of Section 73 of the Act of 1973, the State (Tax Case No.81/2019) Government has power to give directions and also to dissolve it if its continuance is unnecessary or undesirable by virtue ofSection 76(1) of the said Act and the functioning of theassessee Authority is statutory in nature and in accordancewith the Act of 1973. 12.In order to consider the plea raised at the Bar, it would beappropriate to notice Section 2(15) of the IT Act. Section2(15) – which had been amended last, in 1983[2], was againamended, by the Finance Act, 2008, w.e.f. 1-4-2009. Someother amendments too were made, with effect from the samedate by the Finance Act, 2009 and Finance Act, 2010. With thesaid amendments, as on 1-4-2009, the provision read asfollows: - (Tax Case No.81/2019) Government has power to give directions and also to dissolve it if its continuance is unnecessary or undesirable by virtue ofSection 76(1) of the said Act and the functioning of theassessee Authority is statutory in nature and in accordancewith the Act of 1973. 12.In order to consider the plea raised at the Bar, it would beappropriate to notice Section 2(15) of the IT Act. Section2(15) – which had been amended last, in 1983[2], was againamended, by the Finance Act, 2008, w.e.f. 1-4-2009. Someother amendments too were made, with effect from the samedate by the Finance Act, 2009 and Finance Act, 2010. With thesaid amendments, as on 1-4-2009, the provision read asfollows: - “2. (15) “charitable purpose” includes relief of the poor,education, medical relief, preservation of environment(including watersheds, forest and wildlife) andpreservation of monuments or places or objects of artisticor historic interest, and the advancement of any otherobject of general public utility; Provided that the advancement of any other objectof general public utility shall not be a charitable purpose,if it involves the carrying on of any activity in the natureof trade, commerce or business, or any activity of 2Deletion of the expression “not involving the carrying on of any activity for profit” andthe resulting Section 2(15) read as follows: -the resulting Section 2(15) read as follows: - “2. (15) “charitable purpose” includes relief of the poor, education, medicalrelief, and the advancement of any other object of general public utility;” rendering any service in relation to any trade, commerceor business, for a cess or fee or any other consideration,irrespective of the nature of use or application, orretention, of the income from such activity; Provided further that the first proviso shall notapply if the aggregate value of the receipts from theactivities referred to therein is ten lakh rupees or less inthe previous year;” 13.In the second proviso, the reference to ten lakhs wassubstituted, and the figure of rupees twenty-five lakhs, wasinserted, by the Finance Act, 2011 (w.e.f. 1-4-2012). By the Finance Act, 2015 (w.e.f. 1-4-2016), the first two provisos toSection 2(15) were deleted, and instead, the following provisowas inserted:- “Provided that the advancement of any other objectof general public utility shall not be a charitable purpose,if it involves the carrying on of any activity in the natureof trade, commerce or business, or any activity ofrendering any service in relation to any trade, commerceor business, for a cess or fee or any other consideration,irrespective of the nature of use or application, orretention, of the income from such activity, unless— (i) such activity is undertaken in the course of actualcarrying out of such advancement of any other objectof general public utility; and (ii) the aggregate receipts from such activity oractivities during the previous year, do not exceedtwenty per cent of the total receipts, of the trust orinstitution undertaking such activity or activities, ofthat previous year;” Additionally, the same amendment also inserted “yoga” (after (Tax Case No.81/2019) “education”) as a listed category of charitable activity, in thesubstantive provision. 14.A careful perusal of Section 2(15) of the IT Act would revealthat the expression “charitable purpose” has been defined byway of an inclusive definition so as to include relief to the poor,education, yoga, medical relief, preservation of environment(including watersheds, forest and wildlife) and preservation ofmonuments or places or objects of artistic or historic interest,and the advancement of any other object of general publicutility. The expression “advancement of any other object ofgeneral public utility” has been considered by the SupremeCourt in number of judgments. Additionally, the same amendment also inserted “yoga” (after (Tax Case No.81/2019) “education”) as a listed category of charitable activity, in thesubstantive provision. 14.A careful perusal of Section 2(15) of the IT Act would revealthat the expression “charitable purpose” has been defined byway of an inclusive definition so as to include relief to the poor,education, yoga, medical relief, preservation of environment(including watersheds, forest and wildlife) and preservation ofmonuments or places or objects of artistic or historic interest,and the advancement of any other object of general publicutility. The expression “advancement of any other object ofgeneral public utility” has been considered by the SupremeCourt in number of judgments. 15.In the matter of Commissioner of Income Tax v. GujaratMaritime Board3, the words in Section 2(15) of the IT Act,namely, “any other object of general public utility” have beenconsidered by their Lordships of the Supreme Court and it hasbeen held that the said expression would prima facie includeall objects which promote the welfare of the general public.Their Lordships further held that if the primary purpose andthe predominant object are to promote the welfare of thegeneral public the purpose would be charitable purpose. It has3(2007) 14 SCC 704 been observed by their Lordships of the Supreme Court asunder: - “13. We have perused number of decisions of this Courtwhich have interpreted the words in Section 2(15),namely, “any other object of general public utility”. Fromthe said decisions it emerges that the said expression is ofthe widest connotation. The word “general” in the saidexpression means pertaining to a whole class. Therefore,advancement of any object of benefit to the public or asection of the public as distinguished from benefit to anindividual or a group of individuals would be a charitablepurpose (CIT v. Ahmedabad Rana Caste Assn.[4]). The saidexpression would prima facie include all objects whichpromote the welfare of the general public. It cannot besaid that a purpose would cease to be charitable even ifpublic welfare is intended to be served. If the primarypurpose and the predominant object are to promote thewelfare of the general public the purpose would becharitable purpose. When an object is to promote orprotect the interest of a particular trade or industry thatobject becomes an object of public utility, but not so if itseeks to promote the interest of those who conduct thesaid trade or industry (CIT v. Andhra Chamber ofCommerce[5]). If the primary or predominant object of aninstitution is charitable, any other object which might notbe charitable but which is ancillary or incidental to thedominant purpose, would not prevent the institutionfrom being a valid charity (CIT v. Surat Art Silk ClothManufacturers' Assn.[6]).” 16. Furthermore, a three-Judge Bench of the Supreme Court in ’sAhmedabad Urban Development Authority case (supra) has considered all its earlier judgments qua Section 2(15) of the 4(1982) 2 SCC 542 : 1982 SCC (Tax) 151 : (1983) 140 ITR 1 5(1965) 55 ITR 722 6(1980) 2 SCC 31 : 1980 SCC (Tax) 170 : (1980) 121 ITR 1 (Tax Case No.81/2019) Act of 1961 and summed up the conclusions as under: - “IV. Summation of conclusions 269. In view of the foregoing discussion and analysis,the following conclusions are recorded regarding theinterpretation of the changed definition of “charitablepurpose” (w.e.f. 1-4-2009), as well as the lateramendments, and other related provisions of the IT Act. A. General test under Section 2(15) 270. It is clarified that an assessee advancing generalpublic utility cannot engage itself in any trade, commerceor business, or provide service in relation thereto for anyconsideration (“cess, or fee, or any other consideration”). 5(1965) 55 ITR 722 6(1980) 2 SCC 31 : 1980 SCC (Tax) 170 : (1980) 121 ITR 1 (Tax Case No.81/2019) Act of 1961 and summed up the conclusions as under: - “IV. Summation of conclusions 269. In view of the foregoing discussion and analysis,the following conclusions are recorded regarding theinterpretation of the changed definition of “charitablepurpose” (w.e.f. 1-4-2009), as well as the lateramendments, and other related provisions of the IT Act. A. General test under Section 2(15) 270. It is clarified that an assessee advancing generalpublic utility cannot engage itself in any trade, commerceor business, or provide service in relation thereto for anyconsideration (“cess, or fee, or any other consideration”). 271. However, in the course of achieving the object ofgeneral public utility, the trust, society, or other suchorganisation concerned, can carry on trade, commerce orbusiness or provide services in relation thereto forconsideration, provided that (i) the activities of trade,commerce or business are connected (“actual carryingout …” inserted w.e.f. 1-4-2016) to the achievement of itsobjects of GPU; and (ii) the receipt from such business orcommercial activity or service in relation thereto, doesnot exceed the quantified limit, as amended over theyears (Rs 10 lakhs w.e.f. 1-4-2009; then Rs 25 lakhs w.e.f.1-4-2012; and now 20% of total receipts of the previousyear, w.e.f. 1-4-2016). 272. Generally, the charging of any amount towardsconsideration for such an activity (advancing generalpublic utility), which is on cost-basis or nominally abovecost, cannot be considered to be “trade, commerce, orbusiness” or any services in relation thereto. It is onlywhen the charges are markedly or significantly above thecost incurred by the assessee in question, that they wouldfall within the mischief of “cess, or fee, or any otherconsideration” towards “trade, commerce or business”.In this regard, the Court has clarified through illustrations what kind of services or goods provided oncost or nominal basis would normally be excluded fromthe mischief of trade, commerce, or business, in the bodyof the judgment. 273. Section 11(4-A) must be interpreted harmoniouslywith Section 2(15), with which there is no conflict.Carrying out activity in the nature of trade, commerce orbusiness, or service in relation to such activities, shouldbe conducted in the course of achieving the GPU object,and the income, profit or surplus or gains must,therefore, be incidental. The requirement in Section11(4-A) of maintaining separate books of account is alsoin line with the necessity of demonstrating that thequantitative limit prescribed in the proviso to Section2(15), has not been breached. Similarly, the insertion ofSection 13(8), seventeenth proviso to Section 10(23-C)and third proviso to Section 143(3) (all w.r.e.f. 1-4-2009),reaffirm this interpretation and bring uniformity acrossthe statutory provisions. B.Authorities, corporations, or bodies established bystatute 274. The amounts or any money whatsoever charged bya statutory corporation, board or any other body set upby the State Governments or Central Government, forachieving what are essentially “public functions/services”(such as housing, industrial development, supply ofwater, sewage management, supply of foodgrain,development and town planning, etc.) may resembletrade, commercial, or business activities. However, sincetheir objects are essential for advancement of publicpurposes/functions (and are accordingly restrained byway of statutory provisions), such receipts are primafacie to be excluded from the mischief of business orcommercial receipts. This is in line with the larger Benchjudgments of this Court in Shri Ramtanu Coop. HousingSociety[7] and NDMC[8]. 274. The amounts or any money whatsoever charged bya statutory corporation, board or any other body set upby the State Governments or Central Government, forachieving what are essentially “public functions/services”(such as housing, industrial development, supply ofwater, sewage management, supply of foodgrain,development and town planning, etc.) may resembletrade, commercial, or business activities. However, sincetheir objects are essential for advancement of publicpurposes/functions (and are accordingly restrained byway of statutory provisions), such receipts are primafacie to be excluded from the mischief of business orcommercial receipts. This is in line with the larger Benchjudgments of this Court in Shri Ramtanu Coop. HousingSociety[7] and NDMC[8]. 7Shri Ramtanu Coop. Housing Society Ltd. v. State of Maharashtra, (1970) 3 SCC 3238NDMC v. State of Punjab, (1997) 7 SCC 3398NDMC v. State of Punjab, (1997) 7 SCC 339 275. However, at the same time, in every case, theassessing authorities would have to apply their minds andscrutinise the records, to determine if, and to whatextent, the consideration or amounts charged aresignificantly higher than the cost and a nominal markup.If such is the case, then the receipts would indicate thatthe activities are in fact in the nature of “trade, commerceor business” and as a result, would have to comply withthe quantified limit (as amended from time to time) inthe proviso to Section 2(15) of the IT Act. 276. In clause (b) of Section 10(46) of the IT Act,“commercial” has the same meaning as “trade,commerce, business” in Section 2(15) of the IT Act.Therefore, sums charged by such notified body, authority,board, trust or commission (by whatever name called)will require similar consideration — i.e. whether it is atcost with a nominal markup or significantly higher, todetermine if it falls within the mischief of “commercialactivity”. However, in the case of such notified bodies,there is no quantified limit in Section 10(46). Therefore,the Central Government would have to decide on a case-by-case basis whether and to what extent, exemption canbe awarded to bodies that are notified under Section10(46). 277. For the period 1-4-2003 to 1-4-2011, a statutorycorporation could claim the benefit of Section 2(15)having regard to the judgment of this Court in theGujarat Maritime Board case (supra). Likewise, thedenial of benefit under Section 10(46) after 1-4-2011does not preclude a statutory corporation, board, orwhatever such body may be called, from claiming that itis set up for a charitable purpose and seeking exemptionunder Section 10(23-C) or other provisions of the Act.” 17.In paragraph 277 of the report in Ahmedabad Urban’sDevelopment Authoritycase (supra), relying upon GujaratMaritime Board’scase (supra), it has been held by their Page 17 of 20 (Tax Case No.81/2019) Lordships that for the period 1-4-2003 to 1-4-2011, a statutorycorporation could claim the benefit of Section 2(15) having Maritime Board’s caseregard to the judgment in Gujarat(supra). 17.In paragraph 277 of the report in Ahmedabad Urban’sDevelopment Authoritycase (supra), relying upon GujaratMaritime Board’scase (supra), it has been held by their Page 17 of 20 (Tax Case No.81/2019) Lordships that for the period 1-4-2003 to 1-4-2011, a statutorycorporation could claim the benefit of Section 2(15) having Maritime Board’s caseregard to the judgment in Gujarat(supra). 18.Coming to the facts of the case in light of the principles of lawlaid down by their Lordships of the Supreme Court in GujaratMaritime Board’scase (supra) followed in Ahmedabad Urban’sDevelopment Authoritycase (supra), it is quite vivid that inthe instant case, the Assessing Officer held that the proviso toSection 2(15) of the IT Act would be applicable to the assesseeAuthority and also suggested to amend Sections 10(23C), 13 &143 of the IT Act and further held that the aggregate of receiptis ₹ 1,30,19,74,412/- would attract the proviso to Section2(15) of the IT Act and therefore directed addition of ₹21,62,94,042/- which was overturned by the CIT (Appeals)holding that there is no material on record that the assesseewas conducting its affairs solely on business lines with a motiveto earn profit and further held that the first proviso to Section2(15) of the IT Act would not be attracted which has beenaffirmed by the ITAT by holding that in absence of tangiblematerial on record that the assessee Authority is conducting its (Tax Case No.81/2019) affairs solely on commercial lines with a motive to earn profit,the proviso to Section 2(15) of the IT Act is not applicable onthe facts of the case. In our considered opinion, the twoauthorities have concurrently held that the assessee RDA isengaged in preparation of development plan and selling ofhouses which falls within the advancement of any other objectof general public utility in accordance with the Act of 1973 andthere is no material on record that it involves the business ofcarrying on of any activity in the nature of trade, commerce orbusiness and the Assessing Officer without there being anymaterial available on record only recorded a finding whilecourse of assessment that it has received ₹ 1,30,19,74,412/-from rent, premium, interest, etc. and straightway proceededto hold that first proviso to Section 2(15) of the IT Act wouldattract without recording any specific finding that therespondent/assessee Authority is involved in carrying out ofthe activity in the nature of trade, commerce or business, orany activity of rendering any service in relation to any trade,commerce or business, which the appellate authority CIT(Appeals) has corrected by holding that the respondent/assessee Authority is not carrying out any operations oncommercial lines with a motive to earn profit and which the (Tax Case No.81/2019) ITAT has rightly affirmed and further held that the assessee’spredominant object is charitable and the Government hascomplete power to control and dissolve the assessee Authorityand also that the first proviso to Section 2(15) would not beattracted. The finding recorded by the two authorities that theobject of the assessee Authority is statutory and is not carryingout any operation on commercial lines with a motive to earnprofit and there is no material in this regard that the assesseeAuthority is involved in commercial lines with a motive to earnprofit, is the correct finding of fact based on the evidenceavailable on record. (Tax Case No.81/2019) ITAT has rightly affirmed and further held that the assessee’spredominant object is charitable and the Government hascomplete power to control and dissolve the assessee Authorityand also that the first proviso to Section 2(15) would not beattracted. The finding recorded by the two authorities that theobject of the assessee Authority is statutory and is not carryingout any operation on commercial lines with a motive to earnprofit and there is no material in this regard that the assesseeAuthority is involved in commercial lines with a motive to earnprofit, is the correct finding of fact based on the evidenceavailable on record. 19.In that view of the matter, in our considered opinion, the ITATis absolutely justified in affirming the order of the CIT(Appeals) holding that the first proviso to Section 2(15) of theIT Act would not be applicable in the case of the respondentherein/assessee Authority in line with the decision of the’sSupreme Court in Gujarat Maritime Boardcase (supra). Assuch, the substantial questions of law are answered against theRevenue and in favour of the assessee. In consequence thereof,the appeal filed by the Revenue deserves to be and isaccordingly dismissed leaving the parties to bear their own cost(s). Sd/- (Sanjay K. Agrawal)JUDGE (Tax Case No.81/2019) Sd/- (Sanjay Kumar Jaiswal)JUDGE