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TMI Blog2014 (12) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the trustees and the manner in which the activities of the charitable trust institution are undertaken are highly relevant to decide the issue of applicability of proviso to Section 2 (15). The CIT was not justified in rejecting the application of the assesee for registration u/s 12AA of the Act in the case of Khurja Development Authority even after the matter was set aside by the Tribunal with its finding in favour of the assessee – thus, the CIT is directed to grant the registration w.e.f. the requested date as per the provisions of the law in the case of Khurja Development Authority - So far as the appellant Bulandshahr – Khurja Development Authority is concerned, while setting aside the order, the CIT is directed to restore the registration w.e.f. 1.4.2008 – Decided in favour of assessee. - ITA No. 905/Del/2011, ITA No. 3875/Del/2009 - - - Dated:- 29-4-2014 - SHRI I. C. SUDHIR AND SHRI T.S. KAPOOR, JJ. For The Appellant : Shri Kapil Goel, Advocate For The Assessee : Ms. Sulekha Verma, (CIT) DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER The appellants have questioned action of the Ld. CIT whereby he has rejected the application of the appellant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in view of insertion of proviso to section 2 (15) w.e.f. 1.4.2009 with this factual difference that in the case of the appellant Khurja Development Authority the application for registration was rejected and in case of the appellant Bulandshahar-Khurja Development Authority the registration granted earlier was cancelled/withdrawn invoking provisions u/s 12AAof the Act, however on the common basis in case of both the appellants that their activities are not charitable in nature but in the return of the trade within the meaning of section 2(15) of the Act. We have thus heard both the appeals together and these are being disposed off vide a consolidated order. 7. On the issue involved, the Ld. AR submitted that the Delhi Bench of the Tribunal in the case of Meerut Development Authority in ITA No. 2037/Del/2013, vide order dated 27.8.2013 has held the appellant as eligible for registration. In this regard the Tribunal has followed several decisions on the basis of which in the first round of the appeal, the Tribunal vide its order dated 14.7.2009 had set aside the matter for fresh consideration of the Ld. CIT. 8. The Ld. AR submitted that the Ld. CIT while adjudicating upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear, however this temporary phase in one year may not be treated as altering the very nature of the trust or institution so as to lead to cancellation of registration or withdrawal of approval or rescinding of notification issued in respect of trust or institution. He pointed out that in the case of the appellant Bullandshahar Khurja Development Authority, the Tribunal in the first round vide order dated 15.2.2007 in ITA No. 4429/D/2009 had set aside the rejection of application for registration by the Ld. CIT and had directed the Ld. CITn to grant the registration. In compliance the Ld. CIT had granted registration which has been now canceled in view of the proviso to section 2(!5) of the Act inserted w.e.f. 1.4.2009. He has withdrawn the registration w.e.f. 1.4.2008. He submitted that it is not mentioned in the provisions of section 12AA(3) that the registration can be withdrawn prior to the date when first notice was issued by the Commissioner. The LD. AR pointed out that in the present case first notice was issued by the Commissioner on 24.12.2008 whereas registration has been withdrawn by him w.e.f. 1.4.2008. He submitted that in his order the Ld. Commissioner has not mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... she placed reliance on the following decisions :- i) Jammu Development Authority vs. Union of India, ITA No. 164/JK/2012, Hon ble High Court of Jammu and Kashmir ii) Jammu Development Authority vs. CIT, ITA No. 30/Asr/2011, ITAT Amritsar Bench, Amritsar iii) NOIDA vs. C.CIT, 2011-TIOL-187-HC-All-IT iv) Jalandhar Development Authority vs. CIT (2010) 35 SOT 15 (Amritsar) v) Improvement Trust vs. CIT (2013) 30 Taxman.Com 58 (Asr.) vi) Punjab Urban Planning Development Authority vs. CIT, 103 TTJ 998 (Chand.) She also referred :- i) CBDT Circular No. 11/2008, dated 19.12.2008 ii) Explanatory notes of Finance Act, 2008 on Section 2 (!5) iii) Object of the Authority iv) Dissolution clause of the Authority 13. Having gone through the decisions relied upon, we find that the appellant as per situs of the Assessing Officer is situated within the territorial jurisdiction of Hon ble Allahabad High Court, hence decision of the jurisdictional High Court is binding upon it. The Hon ble Allahabad High Court in the case of CIT vs. UP Housing and Development and Ors. (supra) has been pleased to hold the activities of the assessee as charitable in nature. 14. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same could not be treated to be belonging to the Authority or the receipt is taxable nature in its hands. For this reason also, it appears that the funds are utilized for general utility. Moreover, in the instant case, the Assessing Officer has not given any defective in computation of income as per section 11 as submitted in form-XB, but observed that the activities of the assesee are not charitable. The activities of the assesees are genuine. So, then we find no reason to interfere with impugned orders passed by the Tribunal. The same are hereby sustained along with reasons mentioned therein. The answer to the substantial questions of law are in favour of the assesee and against the department. In view of the above of above, all the appeals filed by the department are dismissed, as stated above. 15. The Hon ble Supreme Court in the case of Surat Art Silk Cloth Manufactures Association 121 ITR (SC) has been pleased to hold as under :- The test which has, now to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to sub serve the charitable purpose or to earn profit. Where profit making is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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