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TMI Blog2019 (11) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... es relating to environment, local authority, fire protection, water, forest, police etc. Fees were charged for rendering this services as prescribed by the Tamil Nadu Government from the industrial organization. Assessee is duly registered u/s.12A. It is not the case of the assessee that it falls within the preview of first three limbs i.e. relief for poor, education and health but under public general utility. Therefore the provisions of Section 2(15) of the Act are squarely applicable. According to AO, proviso to Section 2(15) of the Act are applicable as it charges fees from the business organizations for the services rendered by it. CIT(A) confirmed the findings of the AO following the decision of the Co-ordinate Bench of the Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot appreciating the fact that the appellant is a state and as per article 289 of Constitution of India its income is not taxable. 3. Charitable 3.1 Ld. CIT (A) erred in mechanically following the decision of Hon. ITAT Chennai for AY 2009-10 even though it was demonstrated that the decision of tribunal was based on erroneous assumption of facts and an independent decision need to be taken. 3.2 Ld. CIT(A) has erred in not appreciating the fact that there is no commerciality or business motive involved at the point of time of receipt of income as there is no service rendered to any investor. 3.3 Ld. CIT(A) has erred in not appreciating the fact that a regulatory authority being a representative of the Govt., of Tamil Nadu can't emb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier years. 5.2 Ld. CIT(A) has failed to understand that once the assessee is assessed as AOP all provisions with respects to Block of Assets and Depreciation will become mandatorily applicable and denial of depreciation on the basis of section 11 & 12 is incorrect as these provisions are not applicable to AOP. The appellant craves for justice for these grounds and on additional grounds that may be adduced in future, for which leave may please be granted''. 3. The brief facts of the case are as under: The assessee namely ''Tamil Nadu Industrial Guidance & Export Promotion Bureau'' is a society formed by Government of Tamil Nadu for promoting Industrial growth and exports in the state of Tamil Nadu. It is registered u/s.12A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Representative contended that assessee society was instrumentality of the State as defined in Article 12 of the Constitution and discharging function as an extended arm of the State of Tamil Nadu and therefore excess of the income over expenditure cannot be brought to tax as it is not assessable entity, in support of this, he placed reliance on the decisions of Hon'ble Supreme Court in the cases of Rajasthan Electricity Board, 3 SCR 377, Sukhdev Singh & Others Vs. Bhagatram Sardhar Singh, 3 SCR 619 (1925) and Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology & Others 5 SCR 111 (2002). 6. On the other hand, the ld. Sr. Departmental Representative placed reliance on the orders of lower authorities. 7. We heard the rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made by the ld. Counsel cannot be accepted even the State Corporation Societies cannot be equated with State Government though it is instrumentality of the State as held by Hon'ble Supreme Court in the case of Arun Kumar and Others vs. Union of India and Others, (2006) 286 ITR 89. Further, the Bangalore Bench of the Tribunal in the case of National Diary Research Institute vs. ACIT (TDS), Circle 18(1), Bengaluru (2018) 171 ITD 271, wherein it was held as follow. ''7. We heard rival submissions and perused material on record. The only issue in the present case is, for the purpose of valuing perquisites of the accommodation, provided to employees of the assessee society should be done under clause (i) or clause (ii) of table 1 of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Article 12 of the Constitution of India. As by the learned DR before us, the meaning of the word "State" has been defined in Article 12 of the Constitution of India and the decision has to be confined to those cases and cannot extent to interpretation of Rule 3 of the IT Rules, 1962. Public corporations are established by Government to achieve purpose of welfare state. Financial autonomy and functional autonomy are required for such purpose. These corporations are commercial corporations, development corporations, social services corporations or Financial corporations. Such corporations have all trappings of Government but their, employees cannot be equated with employees either holding office or post in connection with the aff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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