Income Tax Appellate Tribunal - Ahmedabad
The Dy. Commissioner Of Income Tax ... vs Gujarat Industrial Development ... on 9 January, 2019
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'D'
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI WASEEM AHMED, ACCOUNTANT MEMBER
Cross Objection No.55/Ahd/2017
IN
आयकर अपील सं./ ITA No.2700/Ahd/2017
$नधा(रण वष(/Asstt. Year: 2012-13
Gujarat Industrial Development Vs. DCIT, Exemption, Cir.2
Corporation Ahmedabad.
2nd Floor, Block No.4, Udyog
Bhavan, Sector 11
Gandhinagar 382 011
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : Shri Biren Shah, AR
Revenue by : Shri Apoorva Bharadwaj, Sr.DR
सन
ु वाई क तार ख/Date of Hearing : 08/01/2019
घोषणा क तार ख /Date of Pronouncement: 09/01/2019
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Against order of the ld.CIT(A), Gandhinagar dated 31.8.2016 in the Asstt.Year 2012-13, the assessee has filed appeal bearing ITA No.2700/Ahd/2016. On receipt of notice, Revenue has filed CO bearing No.55/Ahd/2017. CO was presented on 28.4.2017. It is pertinent to note that Revenue has filed an appeal also against the impugned order of the ld.CIT(A) i.e. ITA No.2738/Ahd/2016. Cross appeals of the both the parties were decided by the Tribunal alongwith with their appeals for the Asstt.Year 2013-14 on 10.11.2017. It appears that parties have CO No.55/Ahd/2017 2 not brought to the notice of the Tribunal about the cross objection of the Revenue filed in the Asstt.Year 2012-13, hence CO remained un- adjudicated.
2. In the CO Revenue has taken the following grounds:
"I. The Appellant prays that the Hon'ble Tribunal be pleased to permit to admit the following grounds i. The respondent Assesses has violated the provisions of Section 11(5) of the Act and that provisions of Section 13(1)(d) of the Act were applicable.
ii. The respondent Assessee has failed to invest its funds as per the modes prescribed u/s 11(5) of the Income tax Act and therefore the provisions of Section 13(l)(d) of the Act are attracted.
iii. The exemptions claimed by the Assessee u/s 11 of the Act be disallowed in view of Section 13(l)(d) of the Act, since the respondent Assessee has violated the provisions of Section 11(5).
I. The Appellant prays that the above grounds be admitted in view of the ratio laid down by the Full Bench of Hon'ble Mumbai High Court in the case of Ahmedabad Electricity Co. Ltd vs CIT, 199 ITR 351.
II. The Appellant also seeks reliance upon decision of ITAT, Madras in the case of ACIT vs Amarnath Reddy 126 ITD 113 and set aside the Assessment to the files of the A.O for the issue to be re-examined.
III. The Appellant also prays to draw attention of the Hon'ble ITAT to the ratio laid down by the Hon'ble Apex Court in the case of Hukamchand Mills Ltd vs CIT (1967) 63 ITR 232.
"According to Supreme Court in Hukamchand Mills Ltd. Vs. CIT (1967) 63 ITR 232 (SC), the words of section 254(1) pass such orders thereon as it thinks fit include all the powers-except possibly the power enhancement which are conferred upon the Deputy Commissioner (Appeals) by section 251. The Income Tax Tribunal Rules, 1963 are not exhaustive of the powers of the Tribunal. The rules are merely procedural in character and do not in any way, circumscribe or control the power of the Tribunal."CO No.55/Ahd/2017 3
IV. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal."
3. With the assistance of the ld.representatives, we have gone through the record carefully. It emerges out from the record that the assessee has filed its return of income on 26.9.2012 declaring a loss at Rs.18,17,39,45,398/-. An assessment order was passed under section 143(3) on 25.3.2015. The ld.AO did not grant benefit of sections 11 and 12 of the Act and computed income as per normal provision of the Income Tax Act. He made various additions and ultimately determined taxable income at Rs.16,76,42,10,676/-. On appeal, the ld.CIT(A) further upheld that income of the assessee is to be determined as per section 28 to 44 of the Act. According to the Revenue, assessee was not eligible for deduction under sections 11 and 12 of the Act. In this background, Revenue has raised grounds extracted (supra) in the CO. We find that the Tribunal has allowed appeal of the assessee and held that it is to be treated as charitable institution, which is entitled for exemption under sections 11 and 12. Its income has to be determined accordingly. Finding recorded by the Tribunal while adjudicating the appeal of both the parties read as under:
"7. We have considered the rival submissions. The core issue in controversy is correctness of applicability of proviso to s.2(1t) in due facts of the case. We find that the identical issue arose in assessee's own ITA Nos.2700/Ahd/16 & 427/Ahd/17 (by Assessee) ITA Nos.2738/Ahd/16 & 544/Ahd/17 (By Revenue) GIDC vs. DCIT/ACIT Asst.Years - 2012-13 & 2013-14 case in the preceding three assessment years. We find that the Coordinate Bench has determined the issue in favour of assessee and held that proviso to section 2(15) does not apply in the facts of the case. It consequently upheld the claim of the assessee that object of the assessee are for carrying out the activity for charitable purpose. The Revenue carried the aforesaid decision of the Coordinate Bench in appeal before the Hon'ble Jurisdictional High Court without any success. The catch- notes of the judgement of the Hon'ble Gujarat High Court are extracted hereunder:-CO No.55/Ahd/2017 4
Section 2(15), read with section 11, of the Income-tax Act, 1961 - Charitable purpose (Objects of general public utility)
- Assessment year 2009-10 - Whether where assessee- corporation was constituted under Gujarat Industrial Development Act, 1962, for purpose of securing and assisting rapid and orderly establishment and organization of industrial areas and industrial estates in State of Gujarat, and for purpose of establishing commercial centers in connection with establishment and organization of such industries it could not be said that activities carried out by assessee were either in nature of trade, commerce or business, for a Cess or Fee or any other consideration so as to attract proviso to section 2(15) and same could be said to be for charitable purpose and, consequently, assessee was entitled to exemption under section 11 - Held, yes [Paras 15 and 17] [In favour of assessee]."
8. The Hon'ble Jurisdictional High Court in essence upheld that assessee was not involved in the activities in the spirit of commercial accommodation and therefore falls within the ambit of definition of 'charitable purpose' contemplated under s.2(15) of the Act. In view of ITA Nos.2700/Ahd/16 & 427/Ahd/17 (by Assessee) ITA Nos.2738/Ahd/16 & 544/Ahd/17 (By Revenue) GIDC vs. DCIT/ACIT Asst.Years - 2012-13 & 2013-14 the foregoing, we find that the relief sought by the assessee to the extent that the activities carried on by the assessee should be recognized to be of charitable nature requires to be endorsed. However, all other issues raised in the respective appeals of the assessee and revenue would require re-examination in the light of conclusion drawn in favour of assessee towards applicability of section 2(15) of the Act as noted above. Thus, all other issues are kept open for re-examination at the end of the AO.
9. In the result, cross-appeals of the assessee as well as revenue in ITA No.2738/Ahd/2016 & 2700/Ahd/2016 relevant to AY 2012- 13 are allowed for statistical purposes in terms of directions noted hereinabove."
4. Since very basic for determination of assessee's taxable income has been changed, therefore, all consequential issues were to be examined by the AO while giving effect to order of the Tribunal. The issues agitated in the CO are no more relevant and no specific finding is required to be recorded in the present proceedings. All these things CO No.55/Ahd/2017 5 should be taken care of by the AO while passing fresh assessment order in pursuance of the Tribunal's order in the appeal of the assessee. Status of the assessee has been changed. It is to be treated as a charitable institution and its income is accordingly to be determined. Thus, no fresh directions are required to be issued to the AO, more so, the issues agitated in the CO are being not arisen from the assessment order. Hence, there is no force in the grounds taken in the CO. Cross Objection of the Revenue is dismissed.
5. In the result, Cross Objection of the Revenue is dismissed.
Order pronounced in the Court on 9th January, 2019 at Ahmedabad.
Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER