Gujarat High Court
Ahmedabad Urban Devlopment Authority vs Deputy Commissioner Of Income Tax on 8 December, 2015
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
C/SCA/13713/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 13713 of 2015
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AHMEDABAD URBAN DEVLOPMENT AUTHORITY....Petitioner(s)
Versus
DEPUTY COMMISSIONER OF INCOME TAX,....Respondent(s)
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Appearance:
MR SN SOPARKAR, SR COUNSEL WITH MR B S SOPARKAR, ADVOCATE
for the Petitioner(s) No. 1
MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 08/12/2015
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The petitioner is Ahmedabad Urban Development Authority and has challenged the action of department of recovering full amount of penalty imposed by the Assessing Officer in connection with the assessment year 20102011.
2. Brief facts are that for the assessment year 20102011, the petitioner filed return of income disclosing nil income. The Assessing Officer however, disputed such computation on the ground that the petitioner is not entitled to exemption as a charitable institution and framed scrutiny assessment on 12.3.2013 making addition of Rs.327.68 crores (rounded off) and raising matching tax liabilities. The Page 1 of 3 HC-NIC Page 1 of 3 Created On Thu Dec 10 01:35:51 IST 2015 C/SCA/13713/2015 ORDER Assessing Officer also instituted penalty proceedings and passed a final order of penalty under section 271(1)(c) of the Income Tax on 31.3.2015 imposing penalty of Rs.101.24 crores (rounded off). The petitioner applied for stay against the recovery of the penalty. Pending such application, the Assessing Officer directed to make coercive recovery upon which this petition came to be filed.
3. Having heard learned advocates for the parties and having perused the documents on record, what emerges is that against quantum addition, the petitioner has already appealed before the Tribunal. The Tribunal has granted stay against recovery on the condition of depositing 50% of tax dues. The appeal against quantum addition is ripe for hearing before the Tribunal. Quite apart from these developments, it is hugely doubtful whether this would be a case for penalty under section 271(1)(c) of the Act which is imposable on the assessee furnishing inaccurate particulars of the income or concealing the particulars of income. The fact that the petitioner as a statutory authority is engaged in implementing town planning schemes and in developing of Ahmedabad urban area is well known to the department and all concerns. Whether such activity is a charitable activity and would qualify for exemption under section 12A of the Act and consequently the income from such activity would be exempted from tax under section 2(15) of the Act, is only a matter of interpretation. Even post amendment with effect from 1.4.2009, the petitioner's claim for exemption would be eligible or not, is purely a question of law. We fail to see what could be the omission on part of the assessee to Page 2 of 3 HC-NIC Page 2 of 3 Created On Thu Dec 10 01:35:51 IST 2015 C/SCA/13713/2015 ORDER disclose inaccurate particulars of the income or conceal the particulars of income in the present case so as to invite penalty. Facts would have to be viewed in light of ratio of decision in case of Commissioner of Incometax v. Reliance Petroproducts Pvt. Ltd reported in (2010) 322 ITR 158.
4. On such prima facie consideration, it is directed that pending the petitioner's appeal against the order of penalty imposed by the Assessing Officer, there shall be no coercive recovery of such penalty demand. Above observations would not come in way of the department in defending such order of penalty.
5. Petition is disposed of.
(AKIL KURESHI, J.) (MOHINDER PAL, J.) raghu Page 3 of 3 HC-NIC Page 3 of 3 Created On Thu Dec 10 01:35:51 IST 2015