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TMI Blog2010 (7) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that every Town Country Development Authority shall have a CEO who shall act as secretary of such authority. Since CEO is statutorily appointed secretary of IDA, he is a Principal Officer , the requirement of sec. 2(35) of the I.T. Act is fulfilled. Even otherwise, the department has assessed IDA as local authority except for exemption u/s 10(20) of the Act. The mode of making an application is prescribed in Rule 17A, according to which, an application for registration shall be made in Form 10A. Section 12A/12AA does not prescribe any mode of signing the application. Under these circumstances, one may refer to the provisions for signing of return enjoined u/s 140 of the Act. As mentioned earlier, the returns signed by the CEO were duly assessed and accepted by the department, therefore, for signing application u/s 12A/12AA by a person/authority who is competent to sign a return of such authority cannot be said to be invalid. Moreover, the Chairman of IDA has specifically authorized the CEO to take necessary/appropriate steps towards application for registration u/s 12A/12AA which would naturally include signing of prescribed form, therefore, the order of the ld. CIT dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge/fact that the assessee authority is selling the developed plots on auction to the highest bidder and one such example is sale to Reliance near Sayaji Hotel as asserted by the learned CCIT DR which was not controverted by the assessee. Now a days because of this trend of auction, it has become very difficult for a common man to purchase a plot for shelter from the assessee authority. It is pertinent to mention here that the legislature in their wisdom amended sec. 2(15) through the Finance Act, 2008 in the case of Trade Association claiming both to be charitable institution and mutual organization by adding a proviso which states that advancement of any other object of general public utility shall not be a charitable purposes if it involves the carrying on of (a) any activity in the nature of trade, commerce or business or (b) any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of huge or application or retention or the income from such activity. By circular no.11 of 2008 dated 19.12.2008, it has been further clarified whether the assessee has for its object, the advanceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it being eligible had made a valid application for registration after complying with all the conditions as contemplated u/s 12AA of the IT Act, 1961. 3.a) That, without prejudice to the above, the ld. CIT grossly erred in holding that the application for grant of registration u/s 12AA filed by the appellant authority on 27.12.2007 was invalid for the only reason that such application was signed by the Chief Executive Officer (CEO) and not by the Chairman of the appellant authority. b) That, without prejudice to the above, the ld. CIT grossly erred in not considering the material fact that the application signed by Chairman of the appellant authority having been furnished subsequently would relate back to the date of the original application. 4.a) That, without prejudice to the above, the ld. CIT grossly erred in rejecting the application of the authority on various irrelevant grounds without considering the provisions of the law that at the time of grant of registration u/s 12AA, ld. CIT has to be satisfied only about the objects of the application and genuineness of its activities. b) That, the ld. CIT grossly erred in law in enquiring into application of income of the appellant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and further whether the ld. CIT is also right in coming into conclusion that the fresh application duly signed by Chairman of IDA filed on 19/06/2008 does not cure the defect (if any) in the original application and such filing of fresh application would not relate back to the date of original application? (Relevant Grounds on this issue from above are ground nos. 3(a) 3 (b)). 2. Whether the ld. CIT is justified in rejecting the application of the IDA for registration u/s 12A /12AA on the ground that the IDA is not entitled to such registration and also whether the activities of the assessee are in conformity with the objects for advancement of the objects of the general public utility within the meaning of section 2 (15) of the IT Act and whether the ld. CIT is correct in coming to a conclusion that the IDA is a commercial organization established with profit motive and only supposed to inquire about the genuineness of activities of objects of the assessee after placing reliance upon the decision in 283 ITR 97 (SC)? (Relevant Grounds on this issue Ground Nos. 1, 2, 4(a), 4(b), 4(c), 4(d), 4(e), 4(f), 5 6) 3. Now, we shall take up the summarized ground no.1 regarding the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Authority. The CEO is appointed by the State Govt. u/s 46(2) from amongst the members of Development Authority Services belonging to State cadre or from amongst the members of the State Technical/Administrative Services. It was specifically pointed out that the CEO so appointed by State Govt. is the member Secretary of the authority (IDA) by virtue of section 40(h) of the said Act. Since, the CEO of IDA is a statutorily appointed secretary of IDA, he is the Principle Officer of IDA as defined in section 2(35) of the IT Act, 1961. The question, therefore, required to be considered is whether the application for registration signed by the CEO of IDA could be held to be invalid. As already stated above, IDA is a local authority for all purposes, except for exemption u/s 10(20). A strong plea was raised that even the department has assessed IDA, as Local Authority. In the context of position of CEO qua IDA, it was submitted that a reference may be made to the provisions of section 12A/12AA according to which, the person in receipt of income of the assessee authority is required to make an application for registration. The mode of making an application is duly prescribed in rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 497. CIT vs. Hope Textiles Limited, 287 ITR page 321 (M.P.). Prime Securities Ltd. vs. Varinder Mehta, CIT(Inv.) Circle- I(1) reported in (2009) 182 Taxman page 221 (Bom). It was further submitted that even with regard to signing of return, although the courts in above decisions have held that signing of return in the manner prescribed by section 140 is mandatory but the courts are of the view that after insertion of sub-section (9) in section 139, the defect regarding non-signing of the return by proper person makes the return a defective return and the return can be treated as invalid only if the defect is not cured within specified time even after grating opportunity to cure the same. The impugned order of CIT, therefore, deserves to be set aside on this issue. 5. On the other hand, Mr. Girish Dave, the ld. CCIT, DR strongly defended the impugned order and submitted that there are two aspects for consideration of the Bench on this issue, (1) first being the argument canvassed by ld counsel that neither the substantive nor the procedural provisions require signing of the application for the grant of registration under section 12AA, and (2) Second being that there is no prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Tribunal, in the case of M P State Agro Industries Ltd vs. ACIT, this is a curable irregularity and once cured, the date of filing of revised Form No 10A, would relate back to the date of filing of original application. Thus, the period for the grant of registration would be reckoned from the date of filing of the original application. The respondent ld. CIT has considered this issue at pages 1 to 4 of the order. The contention that the CEO was duly authorized as per the note-sheet submitted by and on behalf of the appellant-authority has duly been considered by the ld. CIT and found the explanation incorrect. The ld. CIT has sought to distinguish the case cited by the appellantauthority with the facts of the present case and held that the appellant-authority has not adduced any evidence as regards the authority given to the CEO, or anything explained to ld. CIT in the relevant Act concerning the duties and responsibilities of the CEO. It was submitted that subsequent to the decision in the case of M P State Agro Industries Ltd (supra), Hon ble High of Madhya Pradesh had an occasion to consider this issue in the case of Khialdas sons vs. CIT reported in [1997] 94 Taxman 39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in the past and those returns have been acted upon is no argument as one invalid action acted upon cannot validate invalidity. 8. The ld. CCIT/DR explained as to who can file the application under section 12A? Crucial aspect of the matter is that section 12A begins with the phrase The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the commissioner-------------. Therefore at the threshold stage itself there is a requirement that such a person can claim exemption only when the recipient of the income makes an application to the Commissioner. Even if the rules made there under do not provide who should sign the application, it is evident from the substantive provisions that the person recipient of the income alone can make such application if it has to claim exemption under section 11 and 12 of the Act. If a person other than the said person files application for registration under section 12A, it shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the statute by the Finance Act, 2002 with effect from 1st April 2003 relatable to assessment year 2003- 04. From the said assessment year, that is, 2003-04 onwards, it started filing its returns of income and paid taxes on the income returned for these years. Assessments for assessment years 2003-04, 2004-05, 2005-06 and 2006-07 have already been completed which are placed in the paper book filed by the department. The appellant-authority filed appeals for these years and ld. CIT(Appeals) have after hearing the appellant-authority passed appellate orders in respect of assessment years 2003-04, 2004-05 and 2005-06. The assessment year-wise position of status claimed, income returned, status in which assessment made, nature and amount of addition made to the returned income, income assessed, date of assessment order and revised income consequent to appellate order of the ld CIT(Appeal) is given at page of (5) of the impugned order under section 12AA of the Act passed by the respondent. It shall be interesting to find that the appellant-authority preferred application under section 12AA of the Act only after a notice under section 210(3) was issued to it for deposit of advance ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2009-10, section 2(15) has further been amended so as to exclude such entities who are engaged in trade, commerce or business from exemption under section 11of the Act. 10. At page 231 of its compilation, the appellant-authority has enclosed a copy of the letter dated 3rd June 2008 addressed to the respondent-CIT. In this letter, inter alia, it has sought to explain the reasons for the delay in filing application for registration under section 12AA and excerpts from Para 2.2 of this letter is reproduced hereunder: It was only after a serious thought given to the issue that the applicant-authority came out of the aforesaid bonafide ignorance of the relevant legal provisions and this transformation arose after an opinion in that behalf was sought from our present representative Shri Anil Garg, FCA. He, after going through the judicial pronouncements from various benches of income-Tax Appellate Tribunals and also authoritative decisions from higher judiciary i.e. from the Hon High Courts and the Apex Court, apprised this applicant-authority of the correct legal position about the eligibility of exemption u/ss 11and 12, as aforesaid. It was on receipt of such an opinion that the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption or should file an application under section 12AA, but when income rose to a substantially high level with the sale of big chunk of land on a purely commercial basis, it was reminded of exemption which it may like to claim. 11. We have considered the rival submissions of ld. representatives of both sides on the issue of validity of signing of application for grant of registration u/s 12A/12AA of the Act by the CEO. We have also perused the material available on the file. Brief facts are that the appellant Indore Development Authority (hereinafter referred to as IDA ) is a statutory authority established by the Government of MP in exercise of its powers conferred under section 38(1) of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973( Act No. 23 of 1973) vide Notification No. 1668 XXXII-77, w.e.f. 13th May, 1977 for the area comprised within the Indore Planning Area as specified in the prior notification issued by Town Country Planning Department as referred to in the above Notification (Copy of Notification regarding establishment of the authority has already been filed in the Paper Book compilation at Page No. 4 Annexure A-1.02). The IDA applied for a registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt about the genuineness of its activity. (Refer Page No. 8 to 13 and Page No. 14 to 30 of the compilation) 12. The aforesaid application along with annexures/documents was followed by letter dated 24.3.2008 (Page No. 223 of compilation) and a further letter dated 28/04/2008 requesting the ld CIT to dispose off the application at an early date in light of the latest decision of the Apex Court in the case of CIT Vs Gujrat Maritime Board reported in (2008) 214 CTR (SC) 81 (Refer Page No 224 to 226 of the compilation). 1) The appellant received notice dated 30/05/2008 from the office of ld. CIT requiring to explain certain points (Refer Page No 227 228 of compilation). 2) The above letter was replied by the appellant vide reply dated 03/06/2008 Point wise reply given to the query letter (Refer Page No. 230 to 240 of compilation). Copy of Audited Financial Statements and copy of Audit Report in prescribed Form No. 10B for last three financial years were also submitted along with the letter (Refer Page No. 100 to 210 211 to 222 of our compilation). 3) Thereafter, a second query vide letter dated 13.6.2008 was issued by ld. CIT asking the assessee to submit its reply on various queries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic utility. 14. If the totality of the facts are analysed, we have found that the ld. CIT treated the application for registration as invalid because the same was signed by CEO of the assessee. According to the ld. CIT, the CEO, not being the head of the institution and also not being the person at the helm of the affairs of the IDA is not competent to sign application on Form No.10A for getting registration u/s 12A/12AA of the Act. In this respect, the contention of the appellant is two fold. Firstly, the appellant desires to contend that in absence of any specific requirement of law regarding signing of application u/s 12A/12AA by Chairman, the CEO who is the principle officer, being statutorily appointed Secretary of IDA, is competent to sign and file an application for registration u/s 12A/12AA on behalf of IDA and hence such application signed by CEO cannot be treated as invalid. Chief Executive Officer, appointed under section 46 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973, being the Secretary of the IDA, is the Principal Officer of the IDA within the meaning of section 2(35) of the Income-Tax Act, 1961 and as such CEO is competent to file an application 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding signing of the Return enjoined under section 140 of the IT Act. According to sub-clause (d) of the said section, a Return of Income in case of local authority is to be signed and verified by the principal officer thereof. Similarly, according to sub-clause (e) a return in case of any other association is required to be signed by any member of the association or the principal officer thereof. And, return in case of any other person not falling in the above clauses, is required to be signed by that person or by some person competent to act on his behalf. In the instant case, the CEO, who is the principal officer being the Secretary of the IDA, is competent to sign the Returns on behalf of the IDA and has actually filed returns on behalf of IDA which have duly been accepted by Department and IDA has been assessed on the basis of such returns. Under the circumstances, if an application under section 12A/12AA is signed by a person who is competent to sign the Return of such authority, cannot be treated as invalid. With this legal position, it was argued that the ld. CIT has clearly committed an error in treating the application signed by CEO as invalid. Moreover, the Chairman o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rule 45 r.w.s. 140 of the Act, it was held to be directory and not mandatory, therefore, the Hon ble jurisdictional High Court affirmed the decision of the Tribunal in remanding the case to ld. CIT for giving opportunity to the assessee to sign memo of appeal in confirmation with Rule 45 r.w.s. 140. The Hon ble Court held that such requirement is only directory requiring grant of an opportunity to get proper signature. In view of this fact, we are not in agreement with the conclusion of the ld. CIT that signing of application only by the Chairman is mandatory especially when it was duly signed by the CEO of the assessee who is also member secretary to Indore Development Authority (in short IDA). Even otherwise, the returns filed by IDA and duly signed by the CEO were accepted without raising any objection, therefore, we are of the considered opinion that the application for grant of registration u/s 12A/12AA cannot be said to be invalid. It is pertinent to mention here that instead of granting an opportunity to cure the defect, the ld. CIT did not take on record the duly signed application by the Chairman from the date of original application. Thus, the decision of the CIT is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chairman was filed by the assessee, therefore, on this ground, it can be said that in view of the ratio laid down in the aforesaid decision, though on validity of return, the ld. CIT is not justified to reject the application. The Hon ble Apex Court in the case of Narendra Kr. J. Modi vs. CIT(105 ITR 109) (SC) clearly held that return of HUF can be signed by junior member. The Hon ble Calcutta High Court in Sri Sri Sridhar Jiew vs. ITO (63 ITR 192) held that the concept of a Hindu deity is such that it must be taken that the signature of the shebait is the signature of the deity itself. Even otherwise, there is no specific requirement under the Act for signing the application u/s 12A/12AA that it can only be signed by the Chairman. Since the CEO, being statutorily appointed secretary of the IDA, is a Principal Officer , therefore, very much competent to sign and file an application for registration u/s 12A/12AA on behalf of the IDA, hence, such application, signed by the CEO, cannot be treated as invalid. CEO, appointed u/s 46 of Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1993, being the secretary of the IDA, is the Principal Officer of the IDA within the meaning of sec. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication u/s 12A/12AA of the IT Act for registration as a charitable institution. The IDA is a successor to the Indore Improvement Trust which was established under the Town Improvement Trust Act, which has been repealed with the coming into force of the MP Nagar Tatha Gram Nivesh Adhiniyam, 1973 by virtue of section 87. Thus, there is a statutory legal obligation upon the authority constituted/established under the said provision to carry on the activities in accordance with Act. The registration, if allowed, would entitle the appellant to claim exemption under ss. 11 12 in respect of its income subject to the conditions of the said section. Section 12A provides that provisions of sec.11 12 will not apply unless the person in receipt of income has made an application for registration of the trust or institution and such trust or institution is registered u/s 12AA. Section 12AA lays down procedure for registration and requires the ld. CIT to examine the genuineness of the activities of the trust /institution and its objects. The institution is thus required to satisfy that its activities are wholly for charitable or religious purposes. 18. It was explained that the expression Chari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 38 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973. According to the applicant, the object of establishment of the IDA is advancement of the causes of general public utility. In this respect, the appellant has already placed on record a detailed note on the various activities undertaken by it IDA (Refer Page No. 8 to 13) along with a detailed note on the admissibility of its claim regarding grant of registration under section 12A/12AA (Refer Page No. 14 to 30). For determining the object for which the institution has been established/created, a reference was made to the preamble of the statute which has been reproduced at Page No. 14 of the compilation (Also given at top of the Page No. 31 of the Compilation). The Act namely, the Madhya Pradesh Nagar tatha Gram Nivesh Adhiniyam has been enacted by the State of Madhya Pradesh for making a provision for planning and development and use of land; to make better provisions for preparation of development plans and zoning plans with a view to ensuring that town planning schemes are made in proper manner and their execution is made effective, to constitute Town and Country Planning Authority for Proper implementatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is necessarily required to be deployed for its objects only and no part of the surplus can be distributed to any person or agency by way of profit or dividend. The ld. Counsel for the assessee took us to the provisions of the Act of the IDA by explaining the relevant section, which will be discussed while disposing of the issue. It was further submitted that the analysis of the Act and the provisions regarding constitution of the town and country development authority would enable this Hon ble Tribunal to appreciate the object of the legislation and the object with which the authority has been established. It would be clear that the object of the legislation is only advancement of general public utility. The act aims at welfare of the public as a whole by planned development of cities, towns etc, by allocating land for various purposes. 19. It was submitted that the aim of the assessee is to determine the land use for overall development in the interest of general public. The object of legislation is not to carry on any activity in the nature of real estate business as alleged by ld. CIT in order refusing to grant registration. In this respect, it is submitted that whenever a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nouncements the apex court has laid down the test for determining whether the object of an institution are for charitable purpose as defined in section sec.2(15) of the Act . The Courts have interpreted the expression advancement of objects of general public utility in the context of statutory authorities. It has also been held that where the predominant object is to carry out charitable purpose and not to earn profit, it would not loss its charitable character merely because some profit arises from the activity. The following cases were relied upon: - (i) Decision of the Supreme Court in the case of CIT vs. Gujarat Maritime Board reported in 295 ITR page 561 = (2008) 214 CTR (SC) page 81 = (2008) 166 Taxman page 58 (Refer Page No. 1 to 5 of Judgment Compilation Book, in short JCB). It was pleaded that their Lordships, while considering the similar case of Gujarat Maritime Board established under the provisions of Gujarat Maritime Board Act, 1981, have held that the Board has been established for predominant purpose of development of minor ports within the State of Gujarat with no profit motive management and control of the Board is essential with the Government and it is under a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able purpose. It has further been held when an object is to promote or protect the interest of a particular trade or industry, that object becomes an object of public utility but not so if it seeks to promote the interest of those who promote or conduct the said trade or industry. Their Lordships after applying the ratio of the earlier decisions and in particular the ratio of decision in the case of Andhra Pradesh State Road Transport Corpn (supra) came to the conclusion that the Gujarat Maritime Board was established for the dominant purpose of development of minor ports within the State of Gujarat, the management and control of board is essential with the Government and there is no profit motive. The income of the board is deployed for the development of the ports in India and hence according to Their Lordships, the board was entitled to registration as a charitable institution. 21. It was submitted by the ld. Counsel for the assessee that the decision of the Supreme Court squarely applies to the case on hand. An analysis of the preamble and other provisions of the Act clearly shows that the object of enactment is to promote the welfare of general public and there is no object to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases are also in favour of the assessee: - (i) CITvs. Improvement Trust, Moga (2008) 15 DTR (P H) 217 (ii) Lucknow Development Authority vs. ITO (Tech.) (Luck) unreported judgment copy. (iii) Improvement trust vs. CIT(2007) 12 SOT Page 307 (Del.) (iv) Mormugao Port Trust vs. CIT(2007) 112 TTJ (Panaji) 681. KRISHI UPAJ MANDI SAMITIS CONSTITUTED UNDER THE STATUTORY PROVISIONS HAVE BEEN HELD TO BE ENTITLED TO REGISTRATION UNDER SECTION 12A BY THE JURISDICTIONAL HIGH COURT AND THE JURISDICTIONAL ITAT. (i) CIT vs. Krishi Upaj Mandi Samiti 170 Taxman page 515 (MP-Indore Bench of the High Court of Madhya Pradesh), (Refer Page No. 107 to 110 of JCB) after analyzing the preamble of the statute under which the krishi upaj Mandi samitis are established, held that the object of Mandi samiti is benevolent and as such it is entitled to registration under section 12A/12AA. Their Lordships have in para 4 observed, that merely because Mandi Samiti is charging fees it does not militate against the altruistic purpose for which the mandis are established. (ii) Decision of M.P. High Court, Jabalpur Bench (Main Seat) of the Madhya Pradesh High Court in the case of CIT vs. Krishi Upaj Mandi Samiti repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if the impugned order passed by ld. CIT is examined in the light of these principles laid down by the judicial pronouncement , it would be clear that the order suffers from the vice being affected by irrelevant considerations rather than deciding the applications according to ratio of these decisions. The ld. CIT has not at all applied its mind to the object of legislation under which IDA has been established but laid unnecessary stress upon the fact that the IDA sells developed plots of land at prevailing market value as if sell of real estate is the only activity carried on by IDA. The CIT has completely lost sight of the fact that apart from development sell of developed land etc IDA as a part of its of development of the planning area within its jurisdiction, carries on many other projects for the overall development of the entire area. The details of such activities have already been placed on record by the appellant. 25. A query was raised by the Bench regarding the activities of the assessee, the ld. Counsel for the assessee explained the same as under: i) Construction of bridges and such construction has even been made at places where the IDA has not developed any proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also been mainly deployed for above activities. 26. The Bench directed the ld. Counsel for the assessee to differentiate the activities of the assessee as from a private colonizer, these were explained as under: Sno. Particulars Qua a private colonizer Qua IDA 1 Constitution May be a sole proprietorship firm, partnership firm, AOP or a company A statutory authority constituted under an enactment of the State 2 Pre-dominant object Is to make maximum profit by selling its properties Is to implement proposal for planning and development of notified area. It is instrumental to achieve the objects of the State to make better provision for planning and development and use of land with no profit motive. In three years, earlier to the year of application for registration i.e. F.Y. 2004- 05 to F.Y. 2006-07, it has utilized its entire funds for its activities and a very meager surplus was generated [Refer Page No. 235 of Compilation]. Even, the surplus accruing during the F.Y. 2007-08, which is mainly attributable to sale of property at a handsome price to Reliance Industries, has been utilized for public utility purposes during the subsequent years. 3 Social objects Has no social obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit. IDA under s. 55 is entitled to acquire land for public purposes. If the object is not to serve the public than IDA cannot acquire any land. Further, if the land is not used for the purpose it was acquired then it has been to be returned to previous owner. 9 Price for purchase/ acquisition of land A private colonizer can buy land for any price as is negotiated between him and the seller. Under s. 56, IDA can acquire the land only at the rates prescribed as per the rules of Land Acquisition Act, 1894. Such price is determined by the Collector and it is subject to upward revision by the Courts from time to time. 10 Sale of property A private colonizer would always attempt to sale his property for maximum price. There is no restriction for a private colonizer to sale a plot to a person who is already owning more than one plot. IDA can dispose of its property only in accordance with the rules framed by State Government as per section 50 of the Act. IDA sales property to poor section of the society at concessional / subsidized rate by way of lottery or any other prescribed procedure. It also provides plots to housing societies for allotment of the same to their registered members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as the activities of colonizers were not considered to be for public purposes. Income of the IDA was exempted under s. 10(20)/ 10(20A) up till A.Y. 2002-03. 18 Recovery of dues A private colonizer cannot recover his dues as arrear of land revenue. IDA can recover its arrear as land revenue under s. 63-A. Such a right is conferred to it only because it is carrying on objects of the State. 19 Distribution of funds on dissolution On dissolution of the entity, the owners take away entire funds generated by them from the activities In case of dissolution, the entire funds of IDA would vest with the local Municipal Corporation only 27. The assessee was directed to produce the relevant record of rates of acquisition of lands from the landowners/farmers and the rates at which these lands were sold/allotted to various persons, the assessee deliberately and reasons best known to it did not furnish such details inspite of opportunities provided to the assessee. On the objects and genuineness of the activities of the assessee, following cases were relied upon by Mr. Choudhary: CITvs. Red Rose School (2007) 212 CTR (All.) page 394 Sanjivamma Hanumanthe Gowda Charitable Trust vs. DIT (Exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot applicable to the facts of the present appeal. Placing of reliance in the case of Aditypur Industrial Area Development Authority vs. UOI (supra) by ld. CIT was strongly defended. It was further pointed out that the facts in the case of Punjab Urban Development Authority and Jalandhar Development Authority are directly applicable to the facts of the present appeal. 30. We have considered the rival submissions of ld. representatives of both sides and perused the material available on the file. Before coming to any conclusion, we are reproducing hereunder the provisions of sec. 12A of the Act which prescribes certain conditions for applicability of sec. 11 12 which are to be fulfilled: 91 12A. 92[(1)] 93 The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form94 and in the prescribed manner to the 95 [***] Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust or institution made under clause (a) 7[or clause (aa) of sub-section (1)] of section 12A, shall- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. 10 [(1A) All applications, pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter a notice under section 210(3) was issued to it for deposit of advance tax on 11th December 2007 on the basis of calculation of its liability towards advance tax indicated in the said notice and on the basis of information whereby the department came to know that the assessee had had sold a commercial plot in a prime location adjacent to Sayaji Hotel for a consideration of about ₹ 270 Crores. A notice was issued to the assessee which was replied by the IDA on 14th December 2007 objecting to the notice and filed Form No 28B on the same date estimating its income at ₹ 2, 78, 00, 000/- and tax payable thereon at ₹ 93, 92, 570/-. In this estimate, it indicated its liability towards tax at ₹ 63, 92, 570/- after deducting ₹ 30, 00, 000/- towards prepaid taxes, such as TDS and further reduction of ₹ 40, 00, 000/- paid by way of advance tax. The balance liability was shown at ₹ 23, 92, 570/- as against the demand of ₹ 90, 88, 06, 287/- worked out by the department. The assessee authority chose to file an application u/s 12AA of the Act on 27.12.2007 and before that, might be examining the possibility of registration. It was explained befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id. It was on receipt of such an opinion that the subject application was submitted on 27- 12-2007. 33. There is no evidence led for such a situation existing nor has it been affirmed by any responsible /authorized person. It is a fact that after withdrawal of exemption in Clause (20) and (20A) by the amendments brought out by the Finance Act, 2002, a number of such entities made application for the grant of registration under section 12AA on the basis of some statement made by the then Finance Minister but were denied registration by the department, Appeals filed by such entities before various benches of the Hon ble Tribunal decided such appeals on the merits of the matter. Therefore to argue that the appellantauthority was ignorant of the effect of changes by the Finance Act, 2002 is unbelievable. In fact, appellant-authority is under the guidance, instructions and advice of a chartered accountant from so many years and it is rather unbelievable that it is only after the issue of notice under section 210(3) of the Act for the payment of advance tax that the appellant-authority woke from slumber. Moreover, one Chartered Accountant, namely, Shri Anil Garg, has also been advising t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the Group and I have come to the conclusion that some of these exemptions are indeed unnecessary. I, therefore, propose to withdraw or discontinue the exemptions which are not required any longer. In the memorandum explaining the provisions in the Finance Bill. 2002, in Clause 4(1), 4(m), 4(y), clauses 150, 152, and 153, we find that a number of such exemptions have been withdrawn and many more such organizations have been brought under the tax net. All these clauses have been incorporated under the Chapter WIDENING OF TAX BASE . Thus the legislative intent is very clear that such authorities are to be brought in to the tax net. CBDT consequently issued a Circular No 8 of 2002, dated 28th August, 2002 explaining it further in Para No 12 under the heading Income of certain authorities to become taxable . In Para 12.1, it has been stated that under the existing provisions contained in clause (20) of section 10, the income of the local authority chargeable under the head Income from House Property , Capital Gains , Income from Other Sources or from the trade or business carried on by it which accrues or arises from the supply of a commodity or service within its jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any authority referred to in clause (20A) of section 10. 36. It may be seen that some of the authorities like Panchayats, Municipality, Municipal Committee and District Boards, Cantonment Board were included in clause (20) of section 10 which were otherwise claiming exemption under clause (20A) of section 10 and those engaged in developmental work for cities, towns and villages were brought in section 80G. Circular No 8 of 2002 dated 27th August 2002: (2002) 258 ITR (St.) 13 explains the object of this omission as under: 13. Income of certain Housing Boards, etc., to become taxable- 13.1 Under the existing provisions contained in clause (20A) of section 10, income of the Housing Boards or other statutory authorities set up for the purpose of dealing with or satisfying the need for housing accommodations or for the purpose of planning, 5-development or improvement of cities, towns and villages is exempt from payment of income-tax. 13.2 Through the Finance Act 2002, clause (20A) of section 10 has been deleted so as to withdraw exemption available to the above mentioned bodies . The income of Housing Boards of the States and of Development Authorities would therefore, also becomes ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration by the entity within one year and has also removed the power vested with the commissioner for condonation of delay in respect of any application made on or after 1st day of June 2007. A new clause (aa) to sub-section (1) of section 12A of the income-tax Act, 1961 has been inserted in this regard. Consequent to this, in order to harmonize existing Rule 17A and the Form No 10A Appendix II to the said Rule with the new provision, notification has been issued on 30th May 2007 amending this rule and Form to enable filing of application for registration by charitable and religious entities on or after the 1st day of June, 2007. 38. From the above, it would be seen that these changes were necessitated to redress the mischief/ inconvenience caused to charitable trusts/ institutions due to varying decisions by the ld. CITs with the exercise of the discretion vested in them to condone the delay in the filing of applications for the grant of registration. These changes were made to withdraw the discretionary power of the CITs and to avoid the compulsion of such entities of filing applications within one year. The purpose of the amendments would get defeated if such an abuse of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) for the assessment years 2003-04 2004-05 and not under clause (20A) of section 10 of the Act. The learned CIT(A) has confirmed additions made by the assessing officer on a number of issues on the ground that proper records and basis of accounting are found to be lacking. Similarly, additions made to the total income in relation to the assessment year 2005-06 have been confirmed by the learned CIT(A) on similar basis. (ii) Filing of audit reports under section 44AB: The appellant-authority has filed copies of its accounts for the year ending on 31st March, 2005, 31st March, 2006 and 31st March, 2007 along with its application in Form 10A for the grant of registration under section12AA of the Act. It has enclosed copies of the audit reports in Form No 3CB under Rule 6G (1) (b) read with Section44AB of the Act for these years. Rule 6G for the sake of convenience is reproduced as under: 6G. (1) The report of audit of the accounts of a person required to be furnished under section 44AB shall- (a) in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No 3CA; (b) in the case of a perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s law, it is stated to be, An Act for planning and development and use of land; to make better provision for the preparation of development plans and Zoning plans with a view to ensuring town planning schemes are made in a proper manner and their execution is made effective, to constitute Town and Country Planning Authority for proper implementation of town and country development plan, to provide for the development and administration of special areas through Special Area Development authority, to make provision for the compulsory acquisition of land required for the purpose of the development plans and for purposes connected with the matters aforesaid. With the promulgation of this Act, the Madhya Pradesh Town Planning Act, 1948 and the Madhya Pradesh Town Improvement Trust Act, 1960 were repealed. The Act is divided into several chapters. It proceeds on the basis that steps are required to be taken before a town planning scheme is given effect to. The State Government is in overall control of the matter relating to town and country planning. The Director of Town and Country Planning, however, subject to the control and supervision of the State, exercises such statutory powers wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon it under Sections 58 and 85 of the 1973 Act made rules known as Madhya Pradesh Nagar Tatha Gram Nivesh Vikasit Bhoomiyo, Griho, Bhavano tatha Anya Sanrachnaon Ka Vyayan Niyam, 1975 . Rules 3, 4, 5, 19 and 20 of the 1975 Rules which are material for our purpose read as under: 3. No Government land vested in or managed by the Authority shall be transferred except with the general or special sanction of the State Government given in that behalf. 4. All other land (hereinafter called the Authority land ) shall be transferred in accordance with the following rules. 5. Transfer of the Authority land shall be as under: (a) By direct negotiation with the party; or (b) By public auction; or (c) By inviting tenders; or (d) Under concessional terms. 19. The Authority may with the previous approval of the State Government lease out on concessional terms any land to any public institution or body registered under any law for the time being in force. 20. Ordinarily, no lease on concessional terms shall be allowed for the purposes of other than charitable purposes such as for hospital educational institutions and orphanages. The State in terms of the provisions of the 1973 Act and the 1975 Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers, servants or other persons including chairman and State Government can order such person to make good such of the loss as well in addition to recovery, it may initiate any other action against such person as it may deem fit. 10. Authority land can be transferred by way of direct negotiations with the party, public auction, inviting tenders or under concessional terms. 44. In this scenario, the issue arises whether the appellant-authority being a mere implementing authority can be treated as an institution though it is a body corporate with a perpetual succession, common seal and with power to acquire and hold property, It can sue and be sued in its own name, It has its own fund and an annual budget and It can borrow money in its own name from State Government or open market but the overall control lies either with the Director of Town and Country Planning appointed under the Act and with the State Government in terms of sections 72 to 76 contained in Chapter IX of the Act. In a way, the appellant-authority sub serves the functions as an agency only on behalf of the State Government under its supervision and control which is exercised either through the Director of Town Planni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e institutions including a funeral house or an animal welfare organization or a superbazar charges large sums and makes huge profits. It is true that they render services of general public utility. Take another example of a blood bank which collects blood on payment and supplies blood for a higher price thereby making profit. Undoubtedly, the blood bank may be said to be a general public utility but if it advances its public utility by sale of blood as an activity for (making) profit, it is difficult to call its purpose charitable. It is just blood business. So is the situation in the case of the appellant-authority, it is just land business as can be seen from its accounts as well. 47. Whether reliance by the appellant-authority, being placed on certain decisions purportedly rendered in similar cases need to be followed? Now, we shall briefly deal with the cases relied upon by the ld. Counsel for the assessee. In so far as the cases of market committees and Agriculture Produce marketing committees are concerned, the ratio of these cases is distinguishable in the sense that the context is entirely different. The Act under which these entities are established and the purpose for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order. We are making it clear that while rendering this decision, it has been observed as under: where an object of general public utility is not a mere mask to hide true purpose or rendering of any service in relation thereto, and where such services are rendered as purely incidental to or as sub subservient to be main object of general public utility, the carrying on of bona fide activities in furtherance of such object is not hit by the proviso to sec. 2 (15). Further, there is a finding that the activities of the assessee were genuine and preservation of environment has specifically been included in charitable purposes in the Act itself and since the Himachal Pradesh Environment Protection and Pollution Board is actively engaged in protecting the forest/environment, therefore, in that situation, the Chandigarh Bench in the aforesaid case decided in favour of the assessee. However, in the case of the present assessee, some objects/activities, though have been mentioned, but practically the assessee is not doing any charity and is working like a businessman with the intention to earn maximum profit in a commercial manner. 48. This appeal was fixed and re-fixed on various dates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... American Color Lab Page no. 395 Under JNNURM Plan A.Yr. 2007-08 0.32 Crores A.Yr. 2008-09 18.82 Crores A.Yr. 2009-10 10.49 Crores A.Yr. 2010-11 16.97 Crores 46.60 Crores 383-409 M/s. Niraj Pratibha JV, Mumbai 13. BRTS 06.50 km. Corridor*** Photographs Page No. 410-414 Page no. 415 410-423 M/s. Niraj Cement Strictures Pvt. Ltd., Mumbai 14. BRTS 04.75 km. Corridor*** Photographs Page No. 424-427 Page no. 428 Under JNNRUM Plan 30% is contributed from own sources A.Yr. 2007-08 0.08 Crores A.Yr. 2008-09 2.34 Crores A.Yr. 2009-10 3.26 Crores A.Yr. 2010-11 3.11 Crores 8.79 Crores 424-439 M/s. Niraj Cement Strictures Pvt. Ltd., Mumbai 15. Western Ring Road*** A.Yr. 2009-10 (No further details) 440-441 16. Building for Old Aged Homes*** Photographs Sr. No. 207 Page No. 442 American Color Lab Page no. 443 A.Yr. 2008-09 0.76 Crores A.Yr. 2009-10 0.18 Crores 0.94 Crores 442-450 M/s. Aditi Builders, Indore 17. Building for Slums Inhabitants*** Photographs Sr. No. 54, 48 American Color Lab Page No. 451-452 Page no. 453 A.Yr. 2006-07 1.34 Crores A.Yr. 2007-08 4.07 Crores A.Yr. 2008-09 1.19 Crores 6.60 Crores 451-456 No work order issued to M/s.Dharam Das Tirath Das Construction Pvt.Ltd., Indore. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned plot sold to the Reliance industries Ltd. It is pertinent to mention here that on earlier occasion also the Bench directed the assessee to furnish the details of cost of acquisition of the said plot paid by the Authority to the original owner(s), the purpose for which it was earmarked in the Master Plan of the city at the time of acquisition, whether any change was made in the stated purpose subsequently and if so when. The assessee was also directed to furnish the details of cost of acquisition of land from the farmers at-least in the recent past, cost of development charges incurred by the assessee and at what rate, after development was sold. The assessee perhaps deliberately or reasons best known to it did not furnished these details, therefore, this proves the mala-fide intention of the assessee. 49. The Chandigarh Bench of the Tribunal in the case of Punjab Urban Planning and Development Authority (2006) 156 Taxman 37 (Chd) wherein one of us (Judicial Member) is signatory to the order, identically, deliberated upon the issue. The relevant portion of the order is reproduced hereunder: 5. Before coming to any conclusion, we are supposed to see the meaning of the word charit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st demands that the previous decision be reviewed and re-considered. The doctrine of stare decises should not deter the court from overruling an earlier decision, if it is satisfied that such decision is manifestly wrong or precedes upon a mistaken assumption in regard to the existence or continuation of a statutory provision or is contrary to another decision of the court. However, two views reasonably may be possible. Perpetuation of error is not a heroism. However, we make it clear that this observation of ours should not be treated to bear any affect in the case of Patiala authority. At the same time, the order passed by a lower authority is not binding on the Tribunal. However, it may be a good arguable point by the parties, This issue requires deliberation from a different angle whether the assessee was constituted to provide any charity to the public at large or to satisfy the needs for housing accommodation for the people of Punjab and also planning and development of the cities, towns and villages or whether the development in such a way is of charitable nature. A plea was raised by the ld. counsel for the assessee that funds are provided by the Punjab Govt. or generated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Surat Art Silk Cloth Manufactures Association and Bar Council of Maharashtra cases, it was held that what is predominant object of the activity whether r it is to carry out a charitable purpose and not to earn profit the purpose should be that it should not loose its charitable character ---------. The major thrust of the ld. counsel for the assessee is that PUDA is of general public utility as it satisfies the need for housing accommodation for the section of the people of state of Punjab and is also doing planning and development of the cities, towns and villages. We are not agree with the argument of the ld counsel because a charitable institution provides services for charitable purposes free of cost and not for a gain. In the present scenario, the similar activities are performed by big colonizers/developers who are earning a huge profit. If this registration is granted, then we will open a Pandora Box and anybody will claim the exemption from tax. If the accounts of the assessee are analysed, it has turned into a huge profit making agency for which it is taking money from the general public. In such a situation, we are of the view that no charity is involved and if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject specified in Clauses (b) to (e) and the object was found to be public utility not involving the carrying on of any activity for profit within the meaning of Section 2(15), the assessee was held to be entitled for exemption under section 11 (1)(a) of the Act. However, Hon'ble Justice Sen passed a dissenting order but in the present case there is a profit motive of the assessee, so will not help in any manner. Reliance was also placed on the decision of the Hon'ble Apex Court pronounced in the case of CIT Vs. Andhra Pradesh Road Transport Corporation wherein the object of the assessee was development of roads, improving facilities for road transport and providing efficient and economical system of road transport service, the entire capital was provided by the State Govt. and the profits were utilized for providing amenities to the passengers and welfare of labour and approved expansion program and the remainder to be made over to the state govt. for road development, it was held to be of charitable purposes and thus income was exempted but it is not so in the case of the present assessee. The Hon'ble Apex Court in the case of CIT Vs. Bar Council of Maharashtra (130 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The department may also get support from the decision of the Hon'ble Patna High Court as pronounced in the case of Bihar State Forest Development Corporation Vs. (224 ITR 757) where the govt. company was formed for promotion and development of forestry. The assessee Corporation permitted under Memorandum of Association to engage in commercial activities and there was no restriction on application of money, the Corporation was not held to be a charitable trust and consequently not entitled to exemption. Similar is the case in the present appeal of the assessee. During arguments, the ld. counsel for the assessee invited our attention to the case of Maharshtra Housing Area Development Authority wherein registration was granted. The ld CIT DR contended that in the case of Market Committee, the ownership remains with the Committee but in the case of the assessee it goes to individual and the ld CIT was not satisfied with the explanation of the assessee. Likewise, in the judicial pronouncements in 165 CTR 446 as relied by the assessee, it can be said that it is a religious Trust, so not applicable to the present facts as the assessee is auctioning the plots on huge profits and eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee is therefore dismissed. 50. In the aforesaid case, the Chandigarh Bench of the Tribunal on identical facts has considered various judicial pronouncements and ultimately decided the issue in favour of the revenue. Likewise, the Amritsar Bench of the Tribunal in the case of Jalandhar Development Authority vs. CIT(ITA No.562/Asr/2008) placed reliance upon the aforesaid decision of the Chandigarh Bench in the case of PUDA and also considered various other decisions like Gujarat Maritime Board (295 ITR 561) (SC), CITvs. Market Committee (294 ITR 563) (P H), CIT vs. Improvement Trust (308 ITR 361 (P H) and CIT vs. Market Committee (294 ITR 563) and ultimately, decided the issue in favour of the revenue. The Hon ble P H High Court in the case of Market Committee (supra) held: The sources of income of a market committee are statutorily defined under sections 10 and 23 of the Markets Act. The manner of utilization of the funds of the market committees, namely, the market committee fund, has been statutorily expressed in section 28 of the Markets Act. The obligations discharged by a market committee include the regulation of purchase, sale, storage and processing of agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object of public utility, but not so, if it seeks to promote the interest of those who conduct the said trade or industry CIT v. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC). If the primary or predominant object of an institution is charitable, any other object which might not be charitable but which is ancillary or incidental to the dominant purpose, would not prevent the institution from being a valid charity Addl. CIT v. Surat Art Silk Cloth Mfrs. Association (1980) 121 ITR 1 (SC) 15. The present case in our view is squarely covered by the judgment of this Court in the case of CIT v. Andhra Pradesh State Road Transport Corpn. (1986) 159 ITR 1 in which it has been held that since the Corporation was established for the puirpose of providing efficient transport system, having no profit motive, though it earns income in the process, it is not liable to incometax. 16. Applying the ratio of the said judgment in the case of Andhra Pradesh State Road Transport Corpn. (supra), we find that, in the present casae, Gujarat Maritime Board is established for the predominant purpose of development of minor ports within the State of Gujqaarat, the management and control of the Board is es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Finance Act, 1983 w.e.f. 1.4.1984 in section 2(15) and profits and gains from business or profession were made expressly taxable through insertion of sub-section (4A) in section 11. Therefore, the case of the assessee is not on sound footing because of amendment. The Hon ble Apex Court in the case of Surat Art Silk Cloth Manufactures Association (supra) further held (Head Note): The income and property of the assessee were liable to be applied solely and exclusively for the promotion of the objects set out in the memorandum and no part of such income or property could be distributed amongst the members in any form or utilised for their benefit either during its operation existence or on its winding up or dissolution. The assessee s income was derived primarily from two sources; (i) an annual subscription collected from its members at the rate of 3 per powerloom, in regard to which it was conceded by the Department that it was exempt from tax; and (ii) commission of a certain percentage of the value of licenses for import for foreign yarn and quotas for purchase or indigenous yarn obtained by the assessee for its members. This commission was credited separately in a building ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Surveying vs. CIT(1994) 208 ITR 608 (Pat). Even otherwise, the onus on the assessee to prove that the objects are of charitable nature as was held by Hon ble Apex Court in Indian Chamber of Commerce vs CIT(101 ITR 796) (SC). The word general public utility though very wide, would exclude objects of private gain, such as an undertaking for commercial profit though all the same it would serve general public utility [All India Spinners Association vs. CIT (1994) 12 ITR 482) (PC)]. The ratio laid down in following cases further fortifies the case of the revenue: a. CITvs. Indian Sugar Mills Association (97 ITR 486) (SC), the income of a trade union, however, exempt u/s 10(24). b. Madras Hotel Association vs. CIT(111 ITR 241) (Mad), an association of hotel proprietors formed for procuring articles on permit and supply them to its members and protecting the interest of its members. c. Bangalore Race Club vs. CIT(77 ITR 435) (Mys). d. Cricket Association of Bangal vs. CIT(37 ITR 277) (Cal). e. South Indian Athletic Association vs. CIT( 107 ITR 108) (Mad). f. CITvs. Andhra Pradesh Riding Club (168 ITR 393) (AP). g. Delhi Stock Association vs. CIT(91 Taxman 273) (SC). h. CITvs. Ernakulam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the highest bidder and one such example is sale to Reliance near Sayaji Hotel as asserted by the learned CCIT DR which was not controverted by the assessee. Now a days because of this trend of auction, it has become very difficult for a common man to purchase a plot for shelter from the assessee authority. As far as the contention of the ld. Counsel for the assessee that the IDA is providing roads, schools, parks, clubs, etc., these facilities are provided by private builders rather these have become a source of attraction for getting maximum application that too on a high premium. Even when applications are invited by the assessee authority, lacs of people are applying and the cost of the application form which may be in thousand/thousands, is never returned to the applicants who do not get the plots. Even the security/advance money taken with the application forms is returned after a long time without interest to the persons not getting plots, resulting into huge profit to the assessee authority and loss the public at large. In such a situation, what charity the assessee is doing is not known/beyond imagination. If registration is granted to the assessee, it will open a pand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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