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2017 (4) TMI 1154 - HC - Income TaxEligibility for registration under Section 12A (1)(a) - whether Greater Noida Industrial Development Authority ( GNIDA ); Yamuna Expressway Industrial Development Authority ( YEIDA ); and New Okhla Industrial Development authority ( NOIDA ) are eligible for registration under Section 12A (1) (a)? - Held that - It is true that IDAs being not very clear about provisions under which they are exempted, made attempts to refer and rely one or other provisions but a mistake of law in pleading status or claiming a particular advantage under a provision is neither an admission nor will attract principle of estoppel or acquiescence. When law requires something and provides a particular status with particular description, it is to be treated accordingly. A mistaken claim will not make any difference, either for affirmence or denial. When CIT (E) was required to consider application for registration, in our view, it should have concentrated only to the requirement of Section 12A and 12AA, as the case may be, and not other provisions like Section 10(20) or 10(20A) etc. The factum that IDAs would be covered or not, under Section 10(20), would make no difference for the reason, if these authorities satisfy requirement of Section 12A(1), then are entitled for registration after following procedure laid down under Section 12AA. A mere wrong claim on the part of these authorities will not be of any disadvantage to them. The consideration on the part of CIT (E), it appears, is more influenced by concept of first three heads of charitable trusts. Apparently, it has lost objectivity in looking into thrust, ambit and spirit of 4th head i.e. advancement of any other object of general public utility . This is a sheer ignoring scope and ambit of statutory provisions of UPID Act, 1976 beyond which respondents-authorities cannot function, being statutory bodies constituted under said Act. They have to function within the provisions of said Act. Mere recital of objects or activities without cogent or corroborative evidence are not sufficient by themselves to enable a registering authority to arrive at the satisfaction mandated by law. The applicant, in this case is primarily carrying out its business activities for making profit, just like any other private builder/developer. The applicant is neither a local authority, nor carrying out any charitable activity, as such. Like any other private builder or developer is acquiring land at a very low price and then developing the land along with other public utilities, in order to attract the buyers and sell the developed plots/flats with high margin or profit. In the instant case, the documents on record do not suffice to establish the genuineness of activities. The Applicant did not file any specific reply to queries raised and Books of accounts and Vouchers etc were also not produced under the pretext of being Voluminous , so the claim of the Applicant regarding charitable activities could not be ascertained or verified. As such the findings of fact regarding its charitable activities or rather the lack thereof arrived at on the basis of the evidence filed and arguments addressed stand uncontroverted. This is fatal to the claim of the applicant. Observations made in para-11 of the order passed by CIT (E), in our view, are nothing but an irrational, illogical and misconceived approach so as to exclude respondents-authorities from the ambit of definition of charitable purposes . Therefore, in all the matters, where appeal is provided to Tribunal, its power is coextensive with the authorities whose orders are appealed before Tribunal. There is no reason to read power of Tribunal, in a manner so as to linger on a matter between different authorities, particularly when there is no such restriction under the statute and on the contrary, statute confers widest power upon Tribunal. Looking from all angles and giving our serious thoughts and utmost consideration to the arguments advanced on behalf of both sides and in the light of discussions made above, we have no hesitation in answering questions 1 and 2 in favour of respondents-authorities and against appellant-Revenue.
Issues Involved:
1. Eligibility for registration under Section 12A(1)(a) of the Income Tax Act, 1961. 2. Whether the activities of the respondent-assessees were charitable. 3. Jurisdiction of the Income Tax Appellate Tribunal, New Delhi. Issue-Wise Detailed Analysis: 1. Eligibility for Registration under Section 12A(1)(a) of the Income Tax Act, 1961: The Tribunal held that the Greater Noida Industrial Development Authority (GNIDA), Yamuna Expressway Industrial Development Authority (YEIDA), and New Okhla Industrial Development Authority (NOIDA) are eligible for registration under Section 12A(1)(a) of the Income Tax Act, 1961. The High Court affirmed this, stating that these authorities perform statutory functions under the Uttar Pradesh Industrial Area Development Act, 1976 (UPIAD Act, 1976), which are for the development of industrial areas and urban townships. The High Court emphasized that these functions align with the "advancement of any other object of general public utility," thus qualifying them as charitable purposes under Section 2(15) of the Income Tax Act, 1961. The Court also noted that the authorities are statutory bodies and must use their funds solely for the purposes outlined in the UPIAD Act, 1976, which supports their eligibility for registration. 2. Whether the Activities of the Respondent-Assessees were Charitable: The High Court examined whether the activities of GNIDA, YEIDA, and NOIDA were charitable. It was argued by the appellants that these authorities were engaged in business activities similar to private builders and developers. However, the High Court found that the primary and predominant objects of these authorities are to conduct sovereign and statutory functions assigned to them, which are charitable in nature. The Court referenced various judgments, including CIT vs. Andhra Pradesh State Road Transport Corporation and CIT vs. Krishi Utpadan Mandi Samiti, to support the view that incidental profit-making does not negate the charitable nature of an institution if its predominant objective is the welfare of the public. The Court concluded that the authorities' activities fall under the "advancement of any other object of general public utility," thereby qualifying them as charitable. 3. Jurisdiction of the Income Tax Appellate Tribunal, New Delhi: The High Court addressed the issue of jurisdiction, noting that the appeals were filed before the Delhi Bench of the Income Tax Appellate Tribunal. The appellants contended that the appeals should have been filed at the Lucknow Bench, as the orders under appeal were passed by the Commissioner of Income Tax (Exemptions) in Lucknow. However, the High Court clarified that jurisdiction is determined by the location of the office of the Assessing Officer, not the place where the order was passed. Since the Assessing Officer for the respondents is located in Gautam Budh Nagar, the Delhi Bench had proper jurisdiction to entertain the appeals. Conclusion: The High Court upheld the Tribunal's decision to grant registration to GNIDA, YEIDA, and NOIDA under Section 12A(1)(a) of the Income Tax Act, 1961, affirming that their activities are charitable and fall within the scope of "advancement of any other object of general public utility." The Court also confirmed that the Delhi Bench of the Income Tax Appellate Tribunal had the appropriate jurisdiction to hear the appeals. All appeals by the Revenue were dismissed with costs.
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