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TMI Blog2013 (12) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... stency - Decided against Revenue. Carry forward of deficit – Held that:- Following CIT vs. Institute of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court] - In case of charitable trust whose income is exempt under section 11 excess expenditure in the earlier years can be adjusted against income of subsequent years and such adjustment would be application of income for subsequent years – Decided against Revenue. - ITA No. 6752/Mum/2011 - - - Dated:- 15-3-2013 - I P Bansal and N K Billaiya, JJ. For the Appellant : Shri Pravin Varma For the Respondent : Shri S N Inamdar ORDER:- Per: I P Bansal: This is an appeal by the revenue. It is directed against the order passed by Ld. CIT(A)-I, Mumbai, dated 26/7/2011 for assessment year 2008-09. The grounds of appeal read as under: 1. Whether on the facts and circumstances of the case and in law Ld. CIT(A) was justified in allowing claim of exemption u/s. 11 of the Act when the Trust itself is not lawful Trust within the provision of Section 11,12, 12A, I2AA and 13 of the I. T. Act . 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in ignoring the rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of sections 11, 12, 12A, 12AA and 13 of the I.T. Act, 1961, it appears that the tax incentive proposed in the scheme of exemption from charge of income tax is more applicable to the cases of private individual and groups and association who create valid Public Trust and dedicate its income for the purpose of general public welfare. The scheme of section 11 to 13, specifically the restrictive provision of section 13 cannot be made applicable to the case of public enterprise / public sector undertakings / public sector utility service provider. The basic incentive provided in the exemption section canif5TFfhded for utilization of public property and application of income of public property administered through Government reaching the people as a (4) The absence of profit motive in the functioning of the MIDC does not by itself create a situation of total exemption from the charge of income tax in respect of income which has earned or likely to earn from its activities comprising of providing various infrastructural facilities and also deriving income ancillary to its principal activities such as rental income from let out property / sale and leasing out of commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in respect of another case relied upon by AO namely Calcutta State Transport Corporation Vs. CIT, 219 ITR 515 and Uttar Pradesh Forest Corporation, 230 ITR 945, wherein it has been held that under Article 12 of the constitution of India a Local Authority cannot by itself claim exemption under section 10(20) of the Act. Accordingly Ld. CIT(A) has held that assessee is having legal obligation by virtue of section 19 of the MID Act to provide services of public utility and legal obligation on the part of Corporation to hold and apply all its property income and assets for the purpose of the Act i.e. object of general public utility. Therefore, the assessee is eligible for claiming exemption under section 11 and AO has been directed to allow exemption to the assessee under section 11. Ld. CIT(A) has also placed reliance on the decision of Hon ble Supreme Court in the case of CIT vs. Andhra Pradesh State Transport Corporation, 159 ITR 1, wherein it has been held that a State Road Transport Corporation is one for charitable purpose and is entitled to exemption under section 4(3)(1) of 1922 Act as also section 11 of 1961 Act notwithstanding that it runs on business purpose. 6. On sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties and their contentions have carefully been considered. So far as it relates to first issue, after the assessee ceased to be Local Authority has claimed itself to be a charitable institution and after examining the objects of the assessee, a certificate under section 12A has been granted to the assessee which is subsisting till date and has not been withdrawn. The contention of Ld. DR cannot be accepted that on the basis of activities carried on by the assessee it should be held that assessee is not carrying out charitable activities. It is not the allegation of the AO that assessee is not spending the amount on the objects for which it has been created. Those objects have already been considered by Ld. CIT while granting registration. Similar type of institution created for public utility by the State Government has been held to be entitled for registration and grant of exemption under section 11 by Hon ble Supreme Court in the case of CIT vs. Gujarat Maritime Board in which it has been held that the Board established for predominant purpose of minor ports within the State of Gujarat, the management and control of the Board is essentially within the State Government; th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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