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TMI Blog2020 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to allow the exemption u/sec. 11 and compute the income as per secs. 11 to 13 of the Act. Accordingly, appeals of the assessee are allowed. - I.T.A. Nos. 682 TO 685/VIZ/2019, I.T.A. Nos. 278 TO 280/VIZ/2015 - - - Dated:- 23-11-2020 - Shri V. Durga Rao, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For the Assessee : Shri M.V. Prasad, CA For the Department : Smt. M. Kiranmayee, Senior Standing counsel Shri D.K. Sonawal, CIT DR ORDER PER BENCH: I.T.A. Nos. 682 to 685/VIZ/2019 filed by the assessee are against the separate orders of ld. CIT(A)-2, Guntur, each dated 30/09/2019 for the A.Ys. 2005-06 to 2007-08 2010-11 and the I.T.A. Nos. 278 to 280/VIZ/2015 filed by the assessee are against the separate orders of ld.CIT(E), Hyderabad each dated 31/03/2015 for the A.Ys. 2005-06, 2006-07 2010-11. ITA Nos.682 683/VIZ/2019 2. Brief facts of the cases for the A.Ys. 2005-06 2006-07 are that the assessee filed its return of income declaring total income of Rs. NIL . The assessment was completed u/sec. 143(3) by an order dated 28/12/2007. Subsequently, the AO reopened the assessment by issue of notice u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on appeal before the ld. CIT(A) and the ld. CIT(A) upheld the order of the AO and dismissed the appeal of the assessee. Against the same, the assessee is in appeal before us. 3. During the appeal hearing, ld.AR submitted that the AO viewed the activities of the assessee are commercial in nature, therefore reopened the assessment without having any fresh information. The ld.AR further submitted that the assessment is reopened after the lapse of 04 years from the end of the relevant assessment year without having any fresh information, hence, the notice issued u/sec. 148 has no legs to stand and the same needs to be quashed. The ld.AR further argued that in the instant case, the AO reopened the assessment on the belief that the activities of the assessee are commercial in nature. The commercial activities specified by the AO in the notice issued u/sec. 148 are the sale of plots, constructed houses, saplings and development charges etc. which were examined by the AO at the time of original assessment. The ld.AR further submitted that the ld.CCIT (OSD) has passed the order cancelling the registration granted u/sec. 12AA vide order dated 04/05/2012 for the same reasons, which wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s erroneously in this case which is not applicable in the case of the trusts, thus held that assessment was erroneous and prejudicial to the interests of the revenue. Accordingly, passed the order setting aside the assessment made u/sec. 143(3) dated 30/03/2009 and directed the AO to redo the assessment denovo. The assessee went on appeal before the ITAT against the order u/sec. 263 and the ITAT in its order dated 08/08/2011 held that the quantification of losses in trust income do result in prejudice to the interest of revenue, therefore the ITAT upheld the setting aside of the order u/sec. 263. However, the ITAT modified the order u/sec. 263 and directed the AO to redo the assessment denovo duly examining the claim of the assessee. Accordingly, the AO for giving effect to the order of the ITAT issued show cause notice and called for explanation of the assessee. Meanwhile, ld.CCIT (OSD) passed an order u/sec. 12AA(3) cancelling registration vide order in F.No. Asst/VUDA/CIT-1/VSP2011-12, dated 04/05/2012. Consequent to the passing of the order cancelling the registration, the AO assessed the entire income as business income denying exemption u/sec. 11 of the Act. Against which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollection of various fees etc. From the assessment orders the reasons for reopening are ascertained to be sale of plots, constructed houses, sale of plants, saplings etc. and levying development charges for services rendered by it. The reasons for reopening was extracted by the ld. CIT(A) in page 19 of her order which reads as under:- VUDA is not pursing a charitable purpose as stipulated but it is actually a commercial concern. The goals of so-called public utility advanced by VUDA are not among the specific activities laid down by section 2(15) and it is conducting a commercial activity of sale of plots, constructed houses, sale of plants, saplings etc. and levying development charges for services rendered by it. Therefore, there is reason to believe that the assessee VUDA is wrongly claiming exemption under section 11 of the Act and there is escapement of income from tax. 9.1 Similarly from the assessment order it is found that more or less for the same reasons mentioned above the AO held that the assessee is not a charitable organization, but a commercial organization for collecting the following fee apart from sale of plots:- (i) Entry fee on parks (ii) Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore argued that on this ground also the order of the ld.CIT(E) needs to be set aside. Since we have allowed the exemption in this case on merits, we considered it is not necessary to adjudicate this issue. Accordingly, appeals of the assessee are allowed. ITA Nos.278 to 280/VIZ/2015 12. Facts of the case are that the AO passed the assessment order u/sec. 143(3) r.w.s. 147 of the Act for the A.Ys. 2005-06. The ld.CIT(E) called for the record and found that the assessee claimed the depreciation of ₹ 85,20,358/- and contribution to other agencies ₹ 28,84,300/- and held that the assessment order passed by the AO is erroneous and prejudicial to the interests of the revenue, since the assessee s registration granted u/sec. 12A was cancelled and the assessee was no more entitled for exemption u/sec. 11 of the Act. 13. For the A.Y. 2006-07, the reason for taking the case for revision u/sec. 263 was also in respect of contribution to the other agencies. For the A.Y. 2010-11, the reason for taking up the case for revision in allowing the expenditure in respect of contribution to other agencies, which includes a sum of ₹ 13.68 lakhs incurred on renovati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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