COMMISSIONER OF INCOME TAX CHANDIGARH vs. M/S PATHANKOT IMPROVMENT TRUST

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ITA/81/2016HC Punjab & HaryanaPHHC01110677201614 May 2018Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE TEJINDER SINGH DHINDSA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that at the outset, learned counsel for both parties were in agreement that the issues raised in the present appeal were covered by the decision of the High Court itself in The Commissioner of Income-Tax (Exemptions) Chandigarh v. M/s Pathankot Improvement Trust, Pathankot, ITA No. 89 of 2016, decided on 23.12.2016. In that prior decision, similar issues had been decided against the Revenue and in favour of the Assessee. Consequently, based on this prior binding precedent, the High Court dismissed the present appeal. The specific reasoning of the ITAT or the detailed analysis of the legal provisions by the High Court in this particular judgment is not elaborated, as the decision hinges entirely on the prior ruling.

What were the facts?

The Commissioner of Income Tax (Exemptions), Chandigarh (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against the order dated 10.09.2015 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The appeal pertains to Assessment Year 2005-06 and concerns the assessee, M/s Pathankot Improvement Trust, Pathankot. The Revenue sought to challenge the ITAT's decision which had set aside an order in favour of the assessee trust. The core of the dispute revolves around the interpretation and application of Section 2(15) of the Act, particularly its proviso, and whether the activities of improvement trusts are akin to those of development authorities.

What were the issues?

The Tribunal was asked to decide the following questions of law: 1. Whether the ITAT erred in law by ignoring specific directions of the High Court to discuss the scope of the proviso to Section 2(15) of the Act. 2. Whether the ITAT was right in law by ignoring the ratios laid down in the cases of PUDA and JDA, to the extent that improvement trusts carry out land development similarly to development authorities. 3. Whether the ITAT was right in law in wrongly deciding the issues and setting aside the impugned order in favour of the assessee trust, thereby conflicting with its own binding judgments. 4. Whether the ITAT was right in law by failing to consider that judgments like PUDA vs. CIT and Jalandhar Development Authority vs. CIT, which were followed by the Amritsar Bench in Jammu Development Authority vs. CIT and upheld by the Jammu & Kashmir High Court and the Supreme Court, were applicable. Assessee's Contentions: The assessee did not present specific arguments as the parties were ad idem that the issues were covered by a previous decision of the High Court in a similar case involving the same assessee. Revenue's Contentions: The Revenue argued that the ITAT erred in ignoring the High Court's directions, the precedents set by PUDA and JDA, and its own previous judgments. It also contended that the ITAT failed to consider the binding nature of the Jammu Development Authority judgment, which had been upheld by higher courts.

Which sections of the Income-tax Act were involved?

Section 260A,Section 2(15)

AI-generated summary — verify with the full judgment below

[ 1 ] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : May 14, 2018 The Commissioner of Income Tax (Exemptions), Chandigarh .............................................................................. Appellant Versus M/s Pathankot Improvement Trust, Pathankot.......... Respondent CORAM : HON'BLE MR. JUSTICE AJAY KUMAR MITTAL, ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE TEJINDER SINGH DHINDSA ... Present: Mr. Denesh Goyal, Senior Standing Counsel for the appellant-Revenue. Mr. Rohit Sud, Advocate for the respondent-Assessee. ...

AJAY KUMAR MITTAL, ACJ. (Oral) The Revenue is in appeal under Section 260A of the Income Tax Act, 1961 claiming that the following questions of law arise out of order dated 10.09.2015 passed by the Income Tax Appellate Tribunal (for brevity 'ITAT'), Amritsar Bench, Amritsar, in ITA No. 200 (Asr)/2010 for the Assessment Year 2005-06:- (i) Whether the Hon'ble ITAT has erred in law in ignoring the specific directions of this Hon'ble Court to discuss the scope of proviso to Section 2 (15) of the Act, while deciding the cases. (ii) Whether the Hon'ble ITAT is right in law by ignoring the Rupinder Kaur 2018.05.21 14:49 I attest to the accuracy and integrity of this document [ 2 ] ratios laid down in the cases of PUDA and JDA (to the extent that the Improvement trusts carry out land development in a similar manner as development authorities do). (iii) Whether the ITAT is right in law in wrongly deciding the issues and wrongly setting aside the impugned order in favour of the assessee trust while conflicting from its own judgments in above cases, which are even otherwise binding on it. (iv) Whether the Hon'ble ITAT is right in law while failed to Section 2 (15) of the Act w.r.t. “business, trade and commerce” has been interpreted, which judgment in Jammu Development Authority has been upheld firstly by Hon'ble J&K High Court in ITA No. 164 of 2012 vide its order dated 07.11.2013 and also by Hon'ble Supreme Court in Special Leave to Appeal (C) No. 4990 of 2014 vide its order dated 21.07.2014. At the outset, learned counsel for the parties are ad idem that the issues raised in this appeal are covered by the decision of this Court in The Commissioner of Income-Tax (Exemptions) Chandigarh v. M/s Pathankot Improvement Trust, Pathankot, ITA No. 89 of 2016 decided on Rupinder Kaur 2018.05.21 14:49 I attest to the accuracy and integrity of this document [ 3 ] 23.12.2016, where the similar issues have been decided against the Revenue and in favour of the Assessee. Accordingly, this appeal is dismissed. ( AJAY KUMAR MITTAL ) ACTING CHIEF JUSTICE ( TEJINDER SINGH DHINDSA ) 14.05.2018 JUDGE rupi Note: Whether speaking/reasoned Yes / No Whether Reportable: Yes / No Rupinder Kaur 2018.05.21 14:49 I attest to the accuracy and integrity of this document

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