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TMI Blog2017 (7) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee deviated from this principle. He has merely referred the extent of profit making activities without correlating the same to the other activities of the trust. As decided in Tribune Trust [ 2017 (1) TMI 53 - PUNJAB AND HARYANA HIGH COURT ] Section 2(15) and the corresponding sections including Sections 11, 12, 12A and 12AA are independent of Section 10(20A) of the Act. Upon the omission of Section 10(20A), the provisions of the other sections were not affected. They remained intact. An assessee could have been entitled to the provisions of Section 10(20A) and the other provisions simultaneously. The omission of one, however, does not affect the validity or the existence of the others. The two provisions are distinct and independent of each other. Thus the omission of Section 10(20A) did not affect the rights of the parties claiming the benefit of Sections 2(15), 11, 12, 12A and 12AA - Decided in favour of assessee. - SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER For the Assessee : Sh. Ashok Kumar Goel For the Revenue : Sh. Ravi Sarangal ORDER PER B.R.R. KUMAR A.M. This appeal has been filed by the Revenue against the order of the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it was not carrying on any business activity but the object of trust was planning, development and improvement of city. 6. The Assessing Officer further observed that the contention of the assessee was not correct in view of omission of section 10(20A) of the Income Tax Act, by the Finance Act, 2002, w.e.f 01/04/2003 and by way of amendment of Sec. 2(15) of the Income Tax Act, 1961 by the Finance Act, 2008 2010 w.e.f 01/04/2009 i.e A.Y. 2009-10. During the assessment proceedings, the AO noted that the registration u/s 12AA earlier granted was withdrawn by the Commissioner of Income Tax, Patiala vide their order F. No. CIT/PPPTA/Tech/12AA/2005-06/24 dated 13/10/2014. In view of this, the AO denied the deduction u/s 11 and treated net profit of ₹ 24,65,05,026.77 earned by the assessee as taxable, during the year under consideration. 6. The Ld. CIT(A) has deleted the addition based on the judgment of Coordinate Bench of ITAT Chandigarh in ITA No. 1135/Chd/2014 dt. 17/06/2016 in assessee s own case for AY 2011-12. 7. Before us during the hearing the Ld. DR submitted that the only issue raised by the Revenue through its various grounds of appeal listed at Sr.Nos. (i) to (vi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has also considered the decision of Hon'ble J K High Court in the case JDA and has tried to distinguish it by holding that: 'The judgment is of no assistance to the appellant for the Division Bench observed that there were findings of fact that the assessee/appellant had in that case not been acting to advance any object concerning general public utility. The judgment was, therefore, based on the facts of this case. It is obviously for this reason that the Division Bench held that no question of law much less a substantial question of law emerged from the order of the Tribunal. It is difficult to understand how this order can possibly be relied upon as laying down any law when Court itself records that the order impugned therein is based on the facts of that case. The dismissal of the Special Leave Petition filed against that order is, therefore, of no assistance to the Revenue either. Hon'ble High Court of Punjab Haryana High Court vide order dt. 23/12/2016 in case of CIT(E), Chandigarh Vs. M/s Improvement Trust, Moga held as under: 73. The Tribunal also rightly held that an object of general public utility does not necessarily require the 66 of 74 ITA-62-2015 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expansion of towns in Punjab . The Act in general and Chapter-IV thereof in particular indicates the reason for and the basis of the establishment of the trust. Almost every section in the Chapter indicates clearly that the trust is established for the purpose of advancement of the object of general public utility . This is the predominant purpose of the trust. 78. The language of the provisions of the Act are self explanatory in this regard. The trust must deal with the buildings unfit for human habitation, the danger caused or likely to be caused to the health of the inhabitants of the area on account of the congested conditions of streets or buildings or want of light, air, ventilation or proper conveniences in an area and sanitary defects. The trust is required to frame the street schemes to lay out new streets, thoroughfares and open spaces or alter existing streets whenever it appears to the trust that it is necessary to do so for the purpose of providing building sites or remedying 68 of 74 ITA-62-2015 and ITA 147-2016 - 69 - defective ventilation or creating new or improving existing means of communication and facilities for traffic. 79. The trust must also prepare develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities of the trust of a given year entitled it to the benefit of the Income Tax Act. Mere profit making on account of certain incidental or ancillary activities of the trust do not disentitle it to the exemptions. The Trust constituted under the PTI Act is likely to make profit on account of its commercial or business activities such as when it acts pursuant to the power under section 28(2)(iii) by disposing off its lands. That, however, does not take it out of the definition of 'charitable purpose' in Section 2(15). As we held earlier, trade, commerce and business in Section 2(15) must be such as to involve an element of profit. Profit, however, is not the predominant motive of such trusts. In our view considering the nature of the Act, selling of plots and premises by the trust is only incidental and ancillary to its main purpose which at the cost of repetition is town improvement in 70 of 74 ITA-62-2015 and ITA 147- 2016 - 71 -almost every respect. Even where the plots are developed and premises are constructed and sold at the market price, the activity is not commercial or business venture per se but one necessitated on account of the implementation of the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment is of no assistance to the appellant for the Division Bench observed that there were findings of fact that the assessee/appellant had in that case not been acting to advance any object concerning general public utility. The judgment was, therefore, based on the facts of this case. It is obviously for this reason that the Division Bench held that no question of law much less a substantial question of law emerged from the order of the Tribunal. It is difficult to understand how this order can possibly be relied upon as laying down any law when Court itself records that the order impugned therein is based on the facts of that case. The dismissal of the Special Leave Petition filed against that order is, therefore, of no assistance to the Revenue either. 86. The assessee, namely, Moga Improvement Trust is undoubtedly an authority constituted in India. It is also constituted by or under a law, namely, the Punjab Town Improvement Act, 1922. Further, it is engaged for the purpose of dealing with and satisfying the need for housing accommodation. It is also constituted for the purpose of planning, development of improvement of cities, towns and villages or for both as is evident fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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