2022 (7) TMI 1235 - AT - Income Tax

Exemption u/s 11 - exemption was denied by virtue of proviso to section 2(15) r.w.s. 13(8) - HELD THAT - On perusal of the case laws relied on by the CIT(A) for taking a decision in favour of the assessee, we find the activities of the assessee s in the said cases and that of the assessee in the instant case are identical. As in the case of M/s Karnataka Industrial Area Development Board ( 2020 (11) TMI 483 - KARNATAKA HIGH COURT and the order of the Bangalore Bench of the Tribunal in the case of Bangalore Development Authority ( 2019 (6) TMI 429 - ITAT BANGALORE had held that the assessee is not hit by the proviso to section 2(15) and hence, cannot be denied the benefit of exemption u/s 11 - DR was unable to point out any distinguishing features as regards the activities of the assessee and that of the activities of the assessee s in the case laws relied on by the CIT(A). We see no reason to interfere with the orders of the CIT(A) and we affirm the same as correct and in accordance with law. Appeals filed by the Department are dismissed.

Summary

Issues:
Appeals against CIT(A) orders denying exemption u/s 11 of the I.T. Act based on proviso to section 2(15) r.w.s. 13(8) for assessment years 2012-2013 to 2015-2016 and 2017-2018.

Analysis:
1. The appeals by the Revenue contested the denial of exemption u/s 11 of the I.T. Act by CIT(A) for the mentioned assessment years. The Assessing Officer had held that the assessee, an AOP engaged in infrastructural development, was ineligible for exemption due to proviso to section 2(15) r.w.s. 13(8) of the I.T. Act, despite being registered u/s 12AA. The A.O. referred to a pending appeal before the High Court challenging a related ITAT order.

2. The assessee appealed to the CIT(A), who ruled in their favor citing precedents like the judgment of the jurisdictional High Court and the Tribunal's decision in similar cases. The CIT(A) concluded that the assessee's activities did not fall under the proviso to section 2(15) of the I.T. Act, thereby allowing the exemption u/s 11.

3. The Revenue, dissatisfied with the CIT(A)'s orders, filed appeals for the mentioned assessment years. During the hearing, the Departmental Representative relied on the original assessment orders and grounds raised, while the assessee was absent.

4. The ITAT, after considering the arguments and case laws, found the activities of the assessee to be akin to those in the cited cases. Given the consistent legal interpretation, the ITAT upheld the CIT(A)'s decision, stating that the assessee was not impacted by the proviso to section 2(15) and thus entitled to the exemption u/s 11. The ITAT dismissed the Revenue's appeals accordingly.

In conclusion, the ITAT affirmed the CIT(A)'s decision, emphasizing the similarity of activities with previously adjudicated cases and the absence of distinguishing features. The ITAT upheld that the assessee was eligible for exemption u/s 11 of the I.T. Act for the relevant assessment years, dismissing the Revenue's appeals.