Income Tax Appellate Tribunal - Chandigarh
H.P. State Environment Protection & ... vs Assessee on 10 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIG ARH BENCH ' A', CHANDIG ARH
BEFO RE SHRI T. R. SOOD, A.M AND Ms. SUSHM A CHOWL A, JM
ITA No. 835/Chd/2012
Assessment Year : 2009-10
A.C.I.T. Shimla V M/s HP State Environment
Protection & Pollution
Control Board,
Him Parivesh
Phase III, New Shimla
AAALH 0191 B
Cross-objections No. 30/Chd/2012
Arising out of ITA No. 835/Chd/2012
Assessment Year : 2009-10
M/s HP State Environment V A.C.I.T. Shimla
Protection & Pollution
Control Board,
Him Parivesh
Phase III, New Shimla
AAALH 0191 B
(Appellant) (Respondent)
Department by Smt. Jyoti Kumari
Assessee by: Shri Nitin Kumar
Date of hearing 11.4.2013
Date of Pronouncement 16.4.2013
O R D E R
PER T.R.SOOD, A.M
ITA No. 835/Chd/2012 - Revenue's appeal
This appeal is directed against the order passed by the ld. CIT(A), Shimla dated 10.5.2012.
2. In this appeal the Revenue has raised the following grounds:
2
"1 On the facts and in the circumstances, the ld. CIT(A) has erred in deleting the addition of Rs. 18,33 crores on account of surplus income.
2 It is prayed that the order of the ld. CIT(A) be set aside and that of the Assessing Officer restored."
3. After hearing both the parties we find that the assessee field a return declaring income of Rs. 57,14,022. The assessee is constituted for a period of three years and renewed from time to time by the State Government under the W ater Prevention and Control of Pollution), Act, 1974 with the main object of performing the delegated power and function to provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water.
4. The Assessing Officer noticed during the assessment proceedings that the assessee had shown gross receipts of Rs. 18,33,49,901/- which included fee and other receipts, miscellaneous receipts and interest on investments and shown excess of income over expenditure of Rs. 13,52,87,764/-. In the computation of income attached with the return of income, the assessee had shown income of Rs. 57,14,022/- which is on account of unspent accumulated amount of Assessment year 2003-04. in the computation of income the assessee had added back the amount of interest accrued but not due f or the Assessment year 2007-08, 2008-09 and 2009-10. Thus the gross receipts had been worked out at Rs. 24,90,19,804/- out of which Rs. 2,40,62,138/- had been shown as applied u/s 11(1)(a&b) - applied in India as application of income and Rs. 16,36,04,694/- u/s 11(2) - amount accumulated for specified purpose - Income set apart for application for the objects of 3 the Assessee Board Rs. 57,14,022/- unspent accumulated for the Assessment year 2003-04 has been shown as deemed income u/s 11(3) of the Income-tax Act.
5. On enquiry it was submitted that the assessee board was granted registration u/s 12A of the Act by the ld. CIT, Shimla which was subsequently withdrawn. The withdrawal order was challenged before the Income Tax Appellate Tribunal in appeal and the Tribunal has allowed the appeal of the assessee. However, the Assessing Officer did not accept the submissions by observing that the Revenue has filed appeal against the order of the Tribunal before Hon'ble Himachal Pradesh High Court. Thereafter the Assessing Officer did not treat the assessee board as charitable institute and accordingly added the interest accrued for three years as well as excess income over expenses and assessed the income of the assessee at Rs. 20,66,71,688/-.
6 On appeal the ld. CIT allowed the relief on the basis of order of the Tribunal.
7 Before us, the Ld. DR for the revenue submitted that the assessee was charging fee for the services rendered and therefore, the assessee-board cannot be said to be existing for charitable purposes as defined in Section 2(15) which has specifically provided that any object of general public utility shall not be a charitable and if it involves carrying of any activity in the nature of business by charging cess or fee. 4 8 On the other hand, the ld. counsel of the assessee simply submitted that the issue is covered in view of the earlier order of the Tribunal.
9 After hearing both the parties we find that this issue has been decided by the Tribunal in favour of the assessee in ITA No. 74/Chd/2009. W e further find that through para 12, the Tribunal has already held that despite of the amendment in Section 2(15) the assessee is required to be treated as charitable institute. Para 12 of the order reads as under:-
"No doubt until the Assessment year 2009-2010 the assessee board was cove red only by this residuary clause of definition of 'charitable purposes', but as a result of the retrospective amendment introduced by the Finance Act, 2009, as new category of activity entitled to be treated as charitable activity u/s 2(15) has been introduced which extends the definition of charitable purposes to "preservation of environment (including watershed, forest and wildlife) and preservation of monuments of places of artistic or historic interest)". In our considered view, the assessee is now covered by this specific category set out u/s 2(15) and therefore, residuary clause does not come into play. It is only elementary that a general provisions has to give way to the specific provision, as aptly summed up in the maxim "generalia speialbus non derogant". In the case of Sought India Corp Pvt Ltd V. Secretary, Board of Revenue (1964 SC 205 @ 215), Hon'ble Supreme Court has observed that, " a special provision should be given effect to the extent of its scope, leaving general provisions to cover the cases where specific provisions do not apply". A special provision thus normally excludes the operation of general provisions, and the said principle will have application here as well. The assessee being covered by the specific clause set out above, and the residuary clause no longer being applicable, the proviso to Section 2(15) does not come into play at all. Therefore, it is wholly immaterial as to whether or not the assessee was rendering a service to the trade commerce or business. Given he present legal position and on the facts of the present case, even this objection taken by the Ld. Commissioner is wholly irrelevant."
Following the above order, we decide this issue in favour of the assessee and upheld the order of the ld. CIT(A). 5 10 Appeal of the revenue is dismissed.
Cross-objections No. 30/Chd/2012 11 Following grounds have been raised by the assessee- board in this Cross-objections.
"1 The ld. CIT(A) has rightly allowed relief on the basis of the order dated 28.8.2009 of the Hon'ble ITAT Bench in respondent's case ITA No. 74/Chd/2009 which was ignored by the Assessing Officer wh8le making assessment u/s 143(3).
"The Assessing Officer is holding back the refund, even after the order of the ld. CIT(A) giving necessary reliefs to the Assessing Officer merely on the ground that the Department has filed appeal against the decision of Hon'ble ITAT, Chandigarh Bench wherein the registration u/s12AA has been restored and consequent reliefs have been allowed."
12 Ground No. 1 - This is basically in support of the order of ld. CIT which we have upheld while adjudicating the revenue's appeal in above noted paras and therefore, this Cross- objection has become infructuous and accordingly the same is dismissed as infructuous.
13. Ground No. 2 - Though not many arguments were made by both the parties and this issue does not pertain to any particular action of the Assessing Officer under a particular provision of the Act. Therefore, the Tribunal normally speaking can not adjudicate this issue. However, at the same time, it is to be noted that the revenue has no right to withhold the refund of the assessee simply because the revenue has not accepted the decision of the Tribunal. The revenue is required to give effect to the orders passed by the Tribunal and if same are reversed by the Hon'ble Himachal Pradesh High Court then appeal effect can be given again, therefore, the revenue should 6 not hold back the refund because the same is not permissible under law.
14 Cross-objections of the assessee is partly allowed. 15 In the result, appeal of the revenue is dismissed and the Cross-objections of the assessee is partly allowed.
Order pronounced on 16.4.2013
Sd/- Sd/-
(SUSHMA CHOWLA) (T.R. SOOD)
JUDICI AL MEMBER ACCOUNTANT MEMBER
Dated : 16 .4.2013
SURESH
Copy to: The Appellant/The Respondent/The CIT/The CIT(A)/The DR