I. T. A. No. 489 of 2007 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.
Case No. : I. T. A. No. 489 of 2007
Date of Decision : October 31, 2008.
The Commissioner of Income
Tax-III, Ludhiana .... Appellant
Vs.
Improvement Trust, Moga .... Respondent
CORAM : HON’BLE MR. JUSTICE ADARSH KUMAR GOEL
HON’BLE MR. JUSTICE L. N. MITTAL
* * *
Present : Mr. Rajesh Sethi, Senior Standing Counsel,
Mr. Vivek Sethi, Standing Counsel,
Ms. Savita Saxena, Standing Counsel,
Mr. Yogesh Putney, Senior Standing Counsel,
Ms. Urvashi Dhugga, Standing Counsel
for the revenue.
Mr. Rajesh Garg, Advocate
Ms. Radhika Suri, Advocate
Mr. R. S. Khosla, Advocate
Mr. Amit Goyal, Advocate
Mr. S. P. Garg, Advocate
Mr. R. P. Sawhney, Senior Advocate
with Mr. Saurav Khurana, Advocate
for the respondent.
* * *
ADARSH KUMAR GOEL, J. (Oral) :
1. The Commissioner of Income Tax, Ludhiana has preferred this
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appeal under Section 260-A of the Income Tax Act, 1961 against the order
of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in
I.T.A. Nos. 194 and 195 (ASR)/2006 on 15.06.2007 (w.e.f. 1.4.2002 &
1.4.2003). proposing to raise following substantial question of law :-
“Whether the Hon’ble ITAT is justified to
declare the assessee as charitable institution
entitled for registration u/s 12AA disregarding the
fact that the activities of the Institution are not of
charitable nature and that the income of the
assessee is not the income as described in the
Sections 11 and 12 of the Income Tax Act, 1961?”
2. The respondent is an Improvement Trust constituted under the
provisions of the Punjab Town Improvement Trust Act, 1922. The principal
object of the Trust is to bring about improvement in the town by providing
streets, housing facilities or making provision for drinking water etc. The
Trust was earlier granted exemption under Section 10(20A). On account of
amendment dated 01.04.2003, the assessee applied for registration under
Section 12A (b) (ii), which was declined. The Tribunal upheld the claim of
the assessee and held that activities of the Trust were charitable. The
finding recorded by the Tribunal is as hereunder :-
“A perusal of the above Section 22 of the
Punjab Town Improvement Trust Act, 1922, shows
that it empowers the trust, when the conditions
prescribed in the said are prevailing, to frame a
general improvement scheme for the public utility
of a local area or part thereof. It is in pursuance of
this provision, that the assessee is undisputedly
carrying on its activities. Sections 23 to 26 of the
said Act provided for street schemes, development
I. T. A. No. 489 of 2007 3and expansion scheme, housing accommodation
schemes and rehousing scheme. The activities of
the assessee trust are also in consonance with these
statutory schemes. It is evident from this that the
object of the assessee trust is to provide benefit to
the public with its local limits, rather than to itself.
This apart, it is on record, that the same learned
CIT as who has passed the impugned order, has, on
similar facts and circumstances, granted
registration to the Improvement Trust, Jalandhar,
vide order dated 12/13-4-2006, holding that the
activities of that trust were with an object of
“general public utility”. Similarly, registration was
also granted to the Improvement Trust, Sangrur
and the Improvement Trust, Patiala.”
3. We have heard learned counsel for the parties and perused the
record.
4. Learned counsel for the assessee has drawn our attention to
judgment of Hon’ble Apex Court in the case of “Commissioner of Income
Tax vs. Gujarat Maritime Board – (2007) 295 ITR 561 (SC)”, wherein
the question for consideration was the meaning to be assigned to expression
“any other object of general public utility” in Section 2(15) of the Act. It
was held that the said expression includes all objects which promote welfare
of general public. Gujarat Maritime Board, for development of minor ports
in the State of Gujarat, was held to be charitable institution.
5. Learned counsel for the assessee has also drawn our attention to
a Division Bench judgment of this Court in the case of “Commissioner of
Income Tax vs. Market Committee – [2007] 294 ITR 563”. It was held
that even if assessee was not a trust, if its objective was to promote general
I. T. A. No. 489 of 2007 4
public interest, Section 2(15) of the Act was attracted and the assessee is
entitled to registration under Section 12A of the Act.
6. It is not the case of the appellant C.I.T. that the assessee is not
carrying on activities of general welfare covered by the expression “any
other object of general public utility” in Section 2(15) of the Act.
7. In view of judgment of Hon’ble Supreme Court in the case of
Gujarat Maritime Board (supra) and the Division Bench judgment of this
Court in the case of Market Committee (supra), we are of the view that the
question sought to be raised is covered against the revenue.
8. The appeal is accordingly dismissed.
(ADARSH KUMAR GOEL)
JUDGE
October 31, 2008 ( L. N. MITTAL )
monika JUDGE