Income Tax Appellate Tribunal - Ahmedabad
Ahmedabad Foundry And Engineering ... vs Dit (Exemp.), Ahmedabad on 10 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH AHMEDABAD
BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER,
AND SHRI S. S. GODARA, JUDICIAL MEMBER.
ITA No.186/Ahd/2014
Ahmedabad Foundry And
Engineering Cluster,
Lal Bunglow, Amrut Industrial
Estate, Opp. Water Tank,
Dudheshwar, Ahmedabad Appellant
Vs.
Director of Income-Tax (Exemption),
2nd Floor, Vasant Nature View
Building, Ashram Road, Ahmedabad Respondent
PAN: AAICA7560J
आवेदक क ओर से/By Assessee : Shri S. N. Divatia, A.R.
राज व क ओर से/By Revenue : Shri Jagadish, Sr. D.R.
सन
ु वाई क तार ख/Date of Hearing : 09.03.2017
घोषणा क तार ख/Date of
Pronouncement : 10.03.2017
ORDER
PER S. S. GODARA, JUDICIAL MEMBER
This assessee's appeal arises against DIT (E)'s order dated 18.12.2013, in file no. DIT(E)/AHD/12AA/171/2013-14/132, refusing its registration sought u/s.12AA of the Income Tax Act, 1961; in short "the Act".
ITA No. 186/Ahd/2014 (Ahmedabad Foundry & Engineering Cluster vs. DIT(E)) -2-2. This assessee is a "Section 25" company. It filed for Section 12AA registration. The DIT(E) sought for its objects particular. The assessee's main object clause inter alia read as under:
"To promote and develop, plan, survey, design, study, conceive, evaluate and to carry out all steps, process, techniques and methods for setting and developing up of all types of infrastructure facilities for the benefit of members engaged or intending to engage in the activities pertaining to foundry and engineering in Ahmedabad and to set up foundry park and to promote and to facilitate the activities of foundry in localized manner with no profit motive."
3. We notice that the DIT(E) observed in view of the above extracted clause that the assessee aimed to benefit its members only. He was thus of a view that it was more in the nature of a mutual company of foundry and engineering industries whose benefits would not be going to public at large since its activities did not come under the "general public utility" enshrined u/s.2(15) of the Act. All this leaves the assessee aggrieved.
4. We have heard both the parties reiterating their respective stands. Case file perused. We notice first of all that assessee's objects at page 14 of the paper book clearly stipulate that no portion of its income would be transferred; directly or indirectly, to its members by way of dividend, bonus or otherwise. It is further evident that the very page at the end contains assessee's dissolution clause stating that its assets or property would not be distributed amongst its members but the same shall be transferred or given to such other company having similar objects. All this makes it clear that neither the assessee's income or its assets before or after its dissolution are intended to be enjoyed by its members. Shri Divatia quotes before us a co- ordinate bench decision in ITA No.2654/Ahd/2014 Kalol GIDC Industries Association vs. CIT, Gandhinagar decided on 01.09.2016 granting a similar ITA No. 186/Ahd/2014 (Ahmedabad Foundry & Engineering Cluster vs. DIT(E)) -3- Section 12AA registration after concluding that the said assessee's principal objective was to set up anti-pollution measures whose registration stood denied on similar analogy to be granting benefit to members only. This co- ordinate bench further distinguishes the case law of Madhavrao Scindia Enclave Resident Welfare Society vs. CIT 52 SOT 125 (as relied upon by the DIT(E) in the instant case as well) after holding that there was no public cause to be served in said assessee's case. Yet another co-ordinate bench in Indian Ice Cream Manufacturers' Association vs. DIT(E) ITA No.2279/Ahd/2014 decided on 29.04.2015 also appears to have adopted the same reasoning in accepting identical Section 12AA registration claim after considering hon'ble apex court's judgment in Addl.CIT vs. Surat Art Silk Cloth Manufacturers Association 121 ITR 1(SC) and as well as in case of Gujarat State Plastic Manufacturers' Association vs. CIT 150 CTR 97 (Guj). Learned Departmental Representative invites our attention to another co- ordinate bench decision in Panoli Industrial Infrastructure Projects Ltd. vs. CIT ITA No.469/Ahd/2014 denying Section 12AA registration on the very analogy that the real benefits of the charitable activity in question were intended for the benefit of members only. We however notice that the said assessee's object clauses which form the foundation of Section 12AA registration claim are not on a similar footing as facts of the instant case wherein there is clear cut stipulation that assessee's income before or after dissolution would in no manner devolve upon its member. We thus distinguish the said case law as well. It is accordingly concluded that the assessee's principal object seeking to promote and develop, plan, survey, design , study, conceive, evaluate and to carry out all steps, process, techniques and method for setting and developing up of all types of infrastructure facilities comes well within general public utility limb of Section 2(15) of the Act. We accordingly accept assessee's sole substantive ITA No. 186/Ahd/2014 (Ahmedabad Foundry & Engineering Cluster vs. DIT(E)) -4- ground. Learned DIT(E), Ahmedabad is directed to grant it Section 12AA registration in question.
5. This assessee's appeal is allowed.
[Pronounced in the open Court on this the 10th day of March, 2017.] Sd/- Sd/-
(PRAMOD KUMAR) (S. S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad: Dated 10/03/2017
True Copy
S.K.SINHA
आदे श क त ल
प अ े
षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आय!
ु त / Concerned CIT
4. आयकर आयु!त- अपील / CIT (A)
5. )वभागीय ,-त-न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड3 फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद ।