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Kerala Industrial Infrastructure Development Corpn.

Kochi's order No.16/CIT(A)/TVM/2013-14 dated 14.02.2014, in proceedings u/s.143(3) of the Act.

Heard the parties at length. Case files perused.

2. It emerges at the outset with the able assistance coming from both the penalties that the identical sole substantive issue herein; be it in appeal ITA No.452/Coch/2014 for AY 1009-2010 or the Revenue's case ITA No.287/Coch/2014 for AY 2010-2011, preferred against the CIT's sec.263 revision directions solely to invoke sec.2(15) 1st proviso and the CIT(A)'s lower appellate discussion holding the taxpayer to have carried out charitable activities, respectively. The dispute in nutshell before us is that the assessee claims itself to be a state government body/undertaking only whereas the department wishes to hold its activities as services / commercial in nature attracting sec.2(15) 1st proviso in the Act.

3. We are informed in this backdrop that the tribunal's earlier learned co-ordinate bench had directed the Assessing Officer to carry out his afresh factual verification. The assessee preferred its Tax Appeal ITA 196/2015 and 71/2016 against the same before hon'ble jurisdictional high court in both these assessment years. Their lordships detailed discussion in the above lead case ITA No.196/2015 (AY 2010-11) remanded the same back to the tribunal, as under:-

"The fundamental issue which arises for decision in this appeal filed invoking Section 260A of the Income Tax Act is as to whether the appellant Kerala Industrial Infrastructure Development Corporation, duly constituted in terms of the provisions of the Kerala Industrial Infrastructure Development Act, 1993, hereinafter referred to as the 'KIID Act', is eligible for exemption under Section 11 read with Section 2(15) of the Income Tax Act or whether in terms of the first proviso to Section 2(15), they would become ineligible for such exemption. Thus, pithily put, the issue is as to whether its activity would be one which involves the carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business which would bring it within the trappings of that proviso.

ITA Nos.452 & 287/Coch/2014.

Kerala Industrial Infrastructure Development Corpn.

2. The Assessing Authority decided against the assessee. As rightly noted by the First Appellate Authority, that decision of the Assessing Authority was obviously without analysing the facts as well as merits of the case, particularly in relation to the factors which were projected by the assessee. The First Appellate Authority deleted the disallowance made by the Assessing Authority. The Department carried the matter before the Income Tax Appellate Tribunal, which, in turn, made reference to the contentions of the parties and the arguments advanced by the respective learned counsel and referred to the judgments, particularly that rendered by the Orissa High Court in CIT v. M.P.Bajaj I(1993) 200 ITR 131] and thereby noticed that the question raised could be treated as one covered by the decision of the Co-ordinate Bench of the Income Tax Appellate Tribunal rendered in Greater Cochin Development Authority in ITA Nos.792 & 793/ Coch/2013. By this time, the verdict 'in GCDA's case has found its approval through the judgment in ITA Nos.208/2014 and 210/2014 rendered by this Court on 19.12.2014. It is noticed that the Special Leave Petition filed by the GCDA before the Apex Court has been dismissed and thereafter, on an issue, which is totally different from what we are now addressing, this Court also dismissed an application for review of the judgment in GCDA's case.

ITA Nos.452 & 287/Coch/2014.

Kerala Industrial Infrastructure Development Corpn.

v. M/s. Hari Om Enterprises & Anr. [AIR 2009 SC 218], which, for reasons best known to the learned counsel who assisted the Bench while considering the GCDA's case, were not brought to the notice of this Court at that point of time. We say this quite cautiously because in those two decisions certain principles have been delineated by the Apex Court in relation to the statutory institutions which are more or less that constituted under the Income Tax Act. The learned Senior Counsel for the Revenue is justified in pointing out that Their Lordships of the Hon'ble Supreme Court were not considering a piece of taxation law. We notice, but we may also indicate that the very fact that those judgments were not rendered in relation to taxation law is not by itself suffice to deprive due value as a judicial precedent as part of the law laid down by the Apex Court under Article 141 of the Constitution of India. We think that these are all issues which have to be addressed by the last fact finding authority which is an authority in terms of the statute, to decide all issues of law and fact. Therefore, to give a quietus to the issue, particularly in relation to a statutory institution of the nature of Kerala Industrial Infrastructure Development Corporation constituted under the KIID Act, we vacate the impugned order of the Tribunal and remand the case to the Tribunal for re-consideration also pointing out that the Tribunal is duty bound within the sphere of its appellate jurisdiction to decide the case on the basis of the entire facts and law relating to each case, more particularly of that type that has arisen in hand. It is clarified that all issues as between the Revenue and the assessee are left open.