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TMI Blog2020 (6) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER For the Appellant : Shri S.N. Soparkar H.P. Singh, A.R. For the Respondent : Shri Virendra Ojha, CIT/ D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER 1. This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-9, Ahmedabad dated 10.07.2017 pertaining to A.Y. 2014-15. 2. The assessee has raised following grounds of appeal: 1. Learned CIT (A) has erred in law and on facts in confirming the view taken by AO in holding that the activities carried out by the appellant were in the nature of business and confirmed computation of the excess of income over expenditure of previous year arising out of charitable activity of appellant as Income from business as per the manner prescribed u/s. 11(4) of the Act. Both the lower authorities have not appreciated the fact that the appellant has been granted registration u/s. 12A of the Act qualifying its income exempt from taxation as total expenditure (capital and revenue) incurred by the appellant is for advancement of the object of general public utility . 2. Learned CIT (A) has erred in law and on fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on Hon ble SC judgment in case of Commissioner Sales Tax vs. Sai Publication [2002] 258 ITR 0070. 7. However, the AO disagreed with the contention of the assessee and held that the assessee is not carrying out any charitable activity as defined under section 2(15) of the Act. Accordingly, the AO denied the exemption to the assessee under section 11 of the Act. 8. Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO by observing as under: 5.2 I have carefully considered the rival contentions, observation of the A.O as well as the case law relied upon by the appellant. Identical issues with regard to applicability of proviso to sec.2(15) r.w.s. 13(8) of the Act were raised during the A.Y.2011-12 in the case of the appellant. CIT(A), Gandhinagar vide order No.CIT(A) GNR/383/2013-14 dated 7/5/2014 has dealt with the said issue. CIT(A), Gandhinagar has held as follows :- 6.1 I have considered the facts of the case, assessment order including submission of the Appellant and the observation of the AO in the light of the provisions of the Act as applicable for the year under consideration. The effective ground is that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat Maritime Board Act, 1981, it is observed that the main object of Appellant is to provide port service, which includes port infrastructure facilities and marine services, to the various business houses. None of the objects/activities of the Appellant falls within the definition of (a) medical (b) relief to poor (c) education: and (d) preservation of monuments or places or objects of artistic or historic interest. Meaning thereby, the main object of the Appellant is of the advancement of object of general public utility. Further on perusal of the various schedules of income and expenditure accounts as reproduced by AO at para-5 and 9 of the assessment order, it is undisputed fact that income of Rs. 191,88,05,258 includes income from port infrastructure facilities, marine services, clearing, forwarding and stevedoring, storage rental, equipment rental, income from other port services and GoG Administrative charges, which suggests that Appellant is carrying out activity in the nature trade, commerce of business by charging cess or fees. Therefore, in the light of aforesaid Circular of CBDT and provisions of amended Section 2(15), the activity of Appellant does not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table activities. In view of these facts that the Appellant is carrying out activities in the nature of trade, , commerce or business, as aforesaid, this decision is not applicable in its case. 6.7 In view of the aforesaid legal position, I am of the considered opinion that the activity of the Appellant is in the nature of advancement of other object of general public utility in the nature of trade commerce and business by charging fees and therefore is not in the nature of 'charitable purpose' as defined in Section 2(15) of the Act. I also rely on the decision of Hon'ble Andhra Pradesh High Court in case of Andhra Pradesh State Seeds Certification Agency v/s CCIT 212 Taxman 493 [2013] wherein petitioner was registered under Andhra Pradesh Public Societies Registration Act and was carrying on functions of certification agency under Seeds Act, 1966 and the Hon'ble High Court has held that as the assessee was rendering j its services directly to clients/agents who were engaged in trading of certified seeds ; with profit motive hence activities were not for 'advancement of any other object of ' general public utility and hence not charitable in view of first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as application of income. As far as ground no. 3 is concerned the income of the appellant would be computed as per the provisions of section 28 to 44 of the Act. Accordingly, appellant would eligible to claim depreciation on the block of assets. AO is directed to calculate the same and allow the depreciation. The quantum spent on fixed asset would be capitalized. Accordingly, the ground of, appeal Nos. 1, 2 3, are hereby dismissed. 9. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 10. The learned AR before us submitted that the issue involved in the case on hand has already been decided by this tribunal in the own case of the assessee in the ITA number 2991/Ahd/2013, 361, 1622/Ahd/2014, 829 and 830/Ahd/2017 for the A.Y. 2009-10 to 2013-14 vide order dated 30th July 2019 in its favour. Accordingly the learned AR prayed to allow the benefit of the exemption under section 11 and 12 of the Act. 11. On the other hand the learner DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record before us. At the outset we note that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 7.5 From going through the above decision of the Co-ordinate Bench which is relied on the decision of Hon'ble Apex Court, that too in assessee's own case, i.e., CIT vs. Gujarat Maritime Board, reported in (2007) 295 ITR 561 (SC), wherein the Hon'ble Apex Court has observed that the appellant is established for the predominant purposes of development of minor ports within the State of Gujarat, the management and control of the Board is essentially with the State Government and there is no profit motive, as indicated by the provisions of section 73, 74 and 75 of the 1981 Act. The income earned by the Board is deployed for the development of minor ports in the State of Gujarat and therefore, they are entitled to be registered as charitable trust u/s 12A of the Income-tax Act, 1961. Therefore, respectfully following the decision of Hon'ble Apex Court and the Co-ordinate Bench, Ahmedabad (supra) in assessee's own case, we are inclined to believe that the assessee is a charitable trust carrying on activity of advancement of public utility without any profit motive and is required to be assessed as per the provisions of Section 11(1) of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority vs. ACIT(E) 92017) 83 taxman.com 78, the Division Bench of the Hon'ble Jurisdictional High Court has held that the activity carried by the Ahmedabad Urban Development Authority cannot be said to be for commercial purpose and proviso to section 2(15) of the I.T. Ac shall not be applicable and that the said Ahmedabad Urban Development Authority shall be entitled to exemption u/s. 11 of the act. The Division Bench of the Hon'ble Gujarat High Court has also observed that merely because AUDA is charging fees and/or cess, the activities cannot be said to be in the nature of trade, commerce or business and consequently held that the proviso to section 2(15) of the act shall not be applicable and therefore the assessee is entitled to exemption u/s. 11 of the act. At para 27 of the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat Industrial Development Corporation, it is also held that the charitable activities require operational/running expenses as well as capital expenses to be able to sustain and continue in long run and the petitioner has to be substantially self sustaining in long term and should not depend upon Government. In other words, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral public utility and not hit by the proviso to section 2(15) of the act, therefore, the assessee is entitled for exemption u/s. 11 of the act. Therefore, this ground of appeal of the assessee is allowed. 13. In view of the above we find that the issue involved has already been decided by this tribunal in the own case of the assessee in its favour. Accordingly we set aside the finding of the learned CIT(A) and direct the AO to allow the benefit of the exemption to the assessee under section 11 and 12 of the Act. Hence the ground of appeal of the assessee is allowed. 14. The issue raised by the assessee in the additional ground of appeal is that learned CIT (A) erred in applying the provisions of section 13(1)(d) of the Act with respect to the investment made in various Public-Sector Companies/Corporation. 15. At the outset we note that, the learned AR at the time of hearing has not advanced any argument with respect to the impugned ground of appeal. Therefore we do not find any reason to interfere in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed. 16. Before we part with the issue/appeal as discussed above, it is pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly , and also observed that arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020 . It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officiall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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