M/S KHANNA IMPROVEMENT TRUST,KHANNA vs. CIT II, LUDHIANA

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ITA 406/CHANDI/2013Status: DisposedITAT Chandigarh21 February 20193 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that development activities by improvement trusts fall under objects of general public utility. While the quantum of income from such activities is subject to assessment, registration cannot be cancelled on this ground.

What were the facts?

The assessee, M/s Khanna Improvement Trust, appealed against the cancellation of its registration. The cancellation was based on the ground that its activities were hit by the first proviso to Section 2(15) of the Income-tax Act.

What were the issues?

Whether the registration granted to an improvement trust can be cancelled solely on the ground that its activities fall under the proviso to Section 2(15) of the Income-tax Act.

Which sections of the Income-tax Act were involved?

Section 2(15),Section 12A,Section 11

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आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 07.2.2013 of the Commissioner of Income Tax-II, Ludhiana.

2.

The present matter has been restored back by the Hon'ble High Court vide order dated 22.10.2018 for deciding afresh in accordance with law.

3.

The sole issue raised in this appeal is regarding cancellation of registration granted earlier to the assessee on the ground that the assessee’s activities are hit by first Proviso to section 2(15) of the Income- tax Act, 1961 (in short 'the Act').

4.

Both the parties have fairly agreed that the issue is now covered by the decision of the Higher Courts including of the Hon'ble Jurisdictional

ITA No. 406/Chd/2013- M/s Khanna Improvement Trust, Khanna 2

High Court in the case of ‘CIT Vs. Moga Improvement Trust’, (2017)

390 ITR 547 and of the Hon'ble Bombay High Court in ‘DIT (Exemptions)

Vs. M/s Khar Ghykhana’, ITA No. 2349 of 2013 order dated 6.6.2016

wherein, it has been held that the development activity carried out by

improvement trust falls within the definition of objects of general public

utility, however, taking into consideration the subsequent amendments in

the relevant provisions of the Act, the allowability of quantum income

from the activity of the assessee is a question of assessment of income

which can be considered while framing assessment u/s 11 of the Act. So

far as the issue relating to registration of the assessee ‘improvement trust’

is concerned, the issue is now settled that the registration cannot be

cancelled on this account. We, therefore, set aside the order of the lower

authorities in cancelling the registration and order to restore registration to

the assessee ‘improvement trust’. However, our findings given above are

restricted to the restoration of registration of the assessee Trust u/s 12A of

the Income Tax Act. However, the assessment of income shall be subject

to application of the relevant statutory provisions/law. No other ground

has been raised or pressed by the counsel.

In the result, the appeal of the assessee is treated as allowed

Order dictated and pronounced in the Open Court immediately on

completion of hearing.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

Dated : 21.02.2019 “आर.के.”

ITA No. 406/Chd/2013- M/s Khanna Improvement Trust, Khanna 3

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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