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TMI Blog2020 (10) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO-15(1)(3) u/s. 143(3) on 28.12.2017 is erroneous in so far as it is prejudicial to the interest of revenue, following the omission of section 10(20A) of the I.T. Act 1961, the income of the is taxable as per the provisions of the IT. Act under various heads. That the order by the ITO-15(1)(3) u/s. 143(3) on 28.12.2017 is erroneous in so far as it is prejudicial to the interest of revenue. Accordingly notice to assessee u/s. 263 was issued. 4. After receiving the response of the assessee learned CIT passed the following order :- "I have carefully considered the submission of the assessee that tax cannot be levied as the assessee is considered as an agent of the State. I find that by virtue of Article 289(1) of the Constitution, 4he property and income of the State is exempt from Union Taxation. Therefore, in my view, before concluding that the income of the is not taxable, it is necessary to arrive at the conclusion that the assesses is the surrogate of the State Government and surrogate is performing the tasks of the Government and, therefore, the surplus accruing to the State Government are not taxable as per the provisions of section 289(1) of the Constitution of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fact riot prove that the tasks performed by this company are the of the Government, Even if the company is fully owned by the Government, it cannot be held that it is performing the tasks of the Government. Development of new towns during the contemporary India is not the exclusive task of the Government. It is the task which is being performed by the private with efficiency and competence. As per provisions of the Competition Act, 2002, no favourable treatment could be given even if the company is owned by the Government, it is the provisions of the Competition Act 2002, Once the company is incorporated by the Government, it will have to compete with other in the and the playground should be even and for this it is necessary that ail the conditions including taxability of income should be same without any discrimination with the companies owned by the Government or in private sector. 8.1 Therefore, development of the township cannot be considered as the task of the Government. It is not reserved for the Government alone. There are various models for development of townships in India. Some are State owned, yet others are by the non Government and yet others are joint ventures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the company must be subject to the provisions of the Income Tax Act, 1961 and income Tax Rules, 1962. 13. The company is stated to be appointed as a New Town Development Authority for developing the Navi Mumbai Area u/s. 113(3A) of the Maharashtra Regional and Town Planning Act of 1966 (i.e.MRTP Act) and as Special Planning Authority for other notified u/s.40(1)(b) with 113(3A) of MRTP Act for carrying out its as New Town Authority and Special Planning Authority as per the provision of 113(3A) 40(1)(b) r.w.s.113(3A) and various Government Resolutions (GRs) and Notification by the Government of Maharashtra. In for A ,Y 2007-08, it was mentioned that the Government Resolution 24.01.1972 and 11,01.1974 were passed appointing the company as the New Town Development Authority for Navi Mumbai, However, the Government Resolutions nowhere speak of appointing the company as an agent of the Government of Maharashtra. In the instant case, the company claiming exemption u/s,10(20A) of the Act till A.Y. 2002-03, With the deletion/omission of the said section, no exemption remained to the company Return of income have been filed by the company for A.Y, 2003-04 to 2008-07 either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is prejudicial to the interest of revenue and, therefore, the order passed by the Assessing Officer is set with a direction to pass the order denovo after giving an opportunity of being heard before passing an order in determining the total income of the assessee under various heads of income. The Assessing Officer will not hold the task performed by the assessee as actions of the Government and, therefore, the provisions of Article 289(1) of the Constitution of India will not be applicable in this case. The order u/s.263 is passed accordingly." 5. Against this order assessee is in appeal before us. 6. We have heard both the counsel and perused the records. Learned Counsel of the assessee Shri Madur Agarwal submitted that in identical 263 order passed in the case of the same assessee for A.Y. 2014-15 this Tribunal has set aside the order of learned CIT dated 16.10.2019. 7. Per contra, learned CIT-Departmental Representative Shri A. Mohan could not dispute the proposition submitted by learned AR. 8. Upon careful consideration and perusal of record, we note that this Tribunal has set aside the order of learned CIT for A.Y. 2014-15 by holding as under :- "23. Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d declared income earned from the Govt. of Maharashtra as an agent. As per the resolution passed by the Govt. of Maharashtra, the remuneration fixed at Rs. 5 lakhs per annum and the same was declared by the assessee over the years and the department has accepted the stand taken by the assessee from AY 2003-04 to 2013-14 other than AY 2006-07 and 2007- 08 in which department is in appeal before High Court. When the AO accepted the assessee is an agent and completed the assessment u/s 143(3) over the years, it means that the AO completed the assessment with one particular view, whereas Pr. CIT intends to correct the above view and presumed that the case of assessee falls under Article 289(1) and come to a conclusion that assessee is not comes under Article 289 and subjected to tax under Income Tax Act, therefore, in our view, this is another view in the case of assessee. Therefore, Pr. CIT cannot invoke the provision of section 263 of the Act when two views are possible as held in the case of CIT vrs. Max India Ltd, wherein it was held as under:- 1. In our view at the relevant time two views were possible on the word "profits" in the proviso to Section 80HHC(3). It is true that vid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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