Income Tax Appellate Tribunal - Delhi
M/S. Ghaziabad Development Authority, ... vs Acit (Excemption), Ghaziabad on 8 January, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'C': NEW DELHI
BEFORE
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
AND
SHRI A.N.MISSHRA, ACCOUNTANT MEMBER
ITA No.2037/Del/2017
(ASSESSMENT YEAR-2009-10)
M/s Ghaziabad Development ACIT- (Exemption),
Authority, Vs. Ghaziabad.
Vikas Path, Hapur Road,
Ghaziabad.
PAN -AAALG 0072C
(Appellant) (Respondent)
Appellant By Dr. Rakesh Gupta, Adv.
Respondent by Sh. Inder Pal Singh Bindra,
CIT-DR
Date of Hearing 02.01.2020
Date of Pronouncement 08.01.2020
ORDER
PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER:
This appeal has been preferred by the assessee against the order dated 28.02.2017 passed by the learned Commissioner of Income Tax (Appeals)-Ghaziabad {CIT(A)} for Assessment Year 2009-10. 2.0 The brief facts of the case are that the assessee is an authority constituted under the Uttar Pradesh Urban Planning and Development Act, 1973 to promote and secure the development of areas according to ITA No.2037/Del/2017 (Asst. Year: 2009-10) plan and for that purpose, the authority has been empowered to acquire, hold, manage and dispose land and other properties to carry out building activities, engineering, mining and other operations, to execute works in connection with the supply of electricity and water, to dispose of sewage and to provide and maintain other services and amenities and generally to do anything necessary or expedient for the purpose of such development. The assessee was enjoying exemption u/s 10(20A) of the Income Tax Act, 1961 (hereinafter called as 'the Act') till 01.04.2003 and, subsequently, the assessee was granted registration u/s 12A of the Act vide order dated 29.09.2010 w.e.f 31.03.2003. The return of income for the year under consideration was filed declaring 'Nil' income after claiming benefit of exemption u/s 12AA of the Act. The assessment u/s 143(3) of the Act was completed at a loss of Rs.1,33,17,11310/- by disallowing the assessee's claim u/s 12AA. Subsequently, the order of assessment was subjected to revision u/s 263 of the Act wherein the learned CIT, Ghaziabad set aside the assessment order and directed the Assessing Officer to re-compute the income of the assessee after considering the accrued interest on loan advanced by the assessee to Hapur Pilkhuwa Development Authority. This order u/s 263 was passed on 31.03.2014 and subsequent to the Page | 2 ITA No.2037/Del/2017 (Asst. Year: 2009-10) directions of the learned CIT, the assessment was revised to a loss of 1,27,17,11,310/- after making an addition of Rs. 6.0 crore on account of interest income. The learned CIT (Appeals), on appeal, allowed marginal relief to the assessee by directing that the interest be computed @ 9% instead of 12% as applied by the Assessing Officer. 2.1 Aggrieved by this order of the learned CIT (Appeals), the assessee is now before this Tribunal and has raised the following grounds of appeal:
" 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in not allowing the benefit of exemption u/s 11 and 12 as claimed by the assessee and further erred in observing as under: -
• That the assessee authority is covered under the proviso to section 2(15) • That the activities of the assessee authority are commercial in nature and are wholly or partially carried on with a motive of profit.
• That the assessee was engaged dominantly in the activity of development and sale of properties.
2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in denying the benefit of exemption u/s 11&12, is bad in law and against the facts and circumstances of the case and without observing the principles of natural justice.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deleting the addition of Rs.6,00,00,000/- fully as made by Ld. AO on account of interest received from HPDA and further erred in sustaining the same to the extent of Rs.4,50,00,000/- (i.e. 9% of Rs.50,00,00,000/-)
4. That in any case and in any view of the matter, action of Ld. CIT(A) in sustaining the addition to the extent of Rs.4,50,00,000/- (9% of Rs.50,00,00,000/-) on account of interest on loan of Rs. 50,00,00,000/-
Page | 3 ITA No.2037/Del/2017 (Asst. Year: 2009-10) given to HPDA, is bad in law and against the facts and circumstances of the case.
5. Without prejudice to the above grounds, that in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in not allowing the exemption u/s 11&12 on the amount of addition made in the assessment order.
6. Without prejudice to the above grounds, that in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in not treating the alleged income eligible for application, more so when the same amount having been applied for charitable purpose.
7. Without prejudice to the above grounds, Ld. CIT(A) has erred in law and on facts in not granting the benefit of expenses and in not computing the income as per generally accepted commercial accounting principles after rejecting the claim of registration u/s 12AA
8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
3.0 At the outset, the learned Authorized Representative (AR) submitted that the assessee had approached the ITAT against the order passed u/s 263 of the Act and the ITAT has since, vide order dated 10.06.2019 in ITA No. 2399/Del/2014, quashed the proceedings u/s 263. A copy of the said order of the Tribunal was filed before the Bench. It was submitted that in view of the revisionary order passed u/s 263 of the Act being quashed by the ITAT, the consequential assessment does not survive and the same is also liable to be nullified.
Page | 4 ITA No.2037/Del/2017 (Asst. Year: 2009-10) 4.0 The learned CIT-DR fairly accepted that the impugned assessment does not survive in view of the quashing of the order passed u/s 263 of the Act.
5.0 We have heard the rival submissions and have also perused the material on record. We agree with the contention of the learned Authorized Representative (AR) that the order passed u/s 263 of the Act has since been quashed by the Co-ordinate Bench of this Tribunal in ITA No. 2399/Del/2014, wherein the Tribunal has quashed the 263 order vide order dated 10.06.2019. This present appeal is against the consequential assessment order passed after the 263 proceedings and, therefore, when the very foundation of the revision has been demolished by the order of the Tribunal, the consequential assessment proceedings also do not stand. Accordingly, we direct the Assessing Officer to delete the impugned addition.
6.0 In the final result, the appeal of the assessee stands allowed.
Order pronounced in the Open Court on 08/01/2020.
Sd/- Sd/-
(A.N.MISSHRA) (SUDHANSHU SRIVASTAVA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 08/01/2020
PK/Ps
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ITA No.2037/Del/2017
(Asst. Year: 2009-10)
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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