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Facts
The assessee, Delhi Development Authority (DDA), a statutory body, was granted registration under Section 12A of the Income-tax Act. The Assessing Officer assessed income, which was upheld by the CIT(A) despite the assessee claiming NIL income. The grounds for appeal included eligibility for exemption, applicability of Section 2(15) proviso, disallowance of expenditure under Section 40A(9), and levy of interest under Section 234B.
Held
The Tribunal, following the decisions of the Hon'ble Supreme Court in Ahmedabad Urban Development Authority and a co-ordinate bench in Jhansi Development Authority, found it appropriate to remit the issue of taxability of DDA under Section 2(15) back to the Assessing Officer for fresh examination.
Key Issues
Whether the activities of the Delhi Development Authority are for charitable purposes as per Section 2(15) and eligible for exemption under Sections 11 and 12, and whether certain expenditures are allowable.
Sections Cited
12A, 143(3), 2(15), 13(8), 40A(9), 234B, 11, 12
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 30.06.2023 for A.Y 2011-12.
The grievances of the assessee read as under:
“1. That on the facts and in circumstances of the case, the order dated 30-12-2018 passed by Assistant Commissioner of Income- tax Exemptions, Circle 1(1) (hereinafter referred to as "Ld. AO"] under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"] and as upheld by the Ld. Commissioner of Income-tax (Appeals) -40, New Delhi (hereinafter referred to as "the CIT(A)"] is bad at law and void ab initio.
2. That the Ld. AO and Ld. CIT (A) erred in upholding:
a) That the Appellant is not eligible for the exemption/benefits as envisaged in section 11 and 12. b) The case of the Appellant falls under the last limb of section 2(15) and is hit by the proviso of section 2(15) of the Act; and c) That the provisions of section 13(8) are applicable to the facts of the Appellant.
3.1 That the Ld. CIT(A) erred in upholding that the expenditure incurred by the Appellant to the tune of Rs. 2,25,72,08,800/- is not allowable u/s 40A(9) of the Act.
3.2 That without prejudice to ground no 3.1, the Ld. CIT(A) erred in not allowing Rs 26.70 crore paid to employees on post-retirement medical expenditure during the year out of the accumulative liability.
4. That on facts and in law the Ld. AO erred, and Ld. CIT (A) upheld in levying interest u/s 234B of the Act.”
Page 2 of 6 granted registration u/s 12A of the Income-tax Act, 1961 [the Act, for short] w.e.f. 01.04.2002 dated 12.01.2006. The assessee, Delhi Development Authority (DDA) is a statutory body created by Delhi Development Act, 1957. As per the assessee, it is a city development agency constituted by the Parliament Act, viz. Delhi Development Act, 1957 with the object of development of Delhi. It encompasses Development of land, buildings and infrastructure in the city like water, sewer, roads, flyovers, greens, etc. It has to cater to the need or shelter of people of all walks of life.
The assessee filed its Return of Income on 14.10.2016 declaring NIL income. Return was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. The Assessing Officer assessed the income of the assessee at Rs. 5,12,80,66,351/-.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who finding no infirmity in the order of the Assessing Officer, dismissed the appeal of the assessee on both the grounds.
Aggrieved further, the assessee is in appeal before us.
Before us, the ld. counsel for the assessee submitted that the issue whether the activities of the authority, as per section 2(15) of the Page 3 of 6 decision of the Hon'ble Supreme Court in the case of Ahmedabad Urban Development Authority 449 ITR 1 be remanded back to the file of the Assessing Officer with a direction to consider the same afresh. The ld. counsel for the assessee relied on the decision of ITAT in Jhansi Development Authority to 2693 of 2013 order dated 8.07.2024 and prayed for setting aside the matter to the file of the Assessing Officer for examining the same afresh.
Per contra, the ld. DR fairly conceded to the same.
We have heard the rival submissions and have perused the relevant material on record. We find that the co-ordinate bench of ITAT Delhi in the case of Jhansi Development Authority to 2693 of 2013 order dated 8.07.2024 has relied on the guidelines framed in the decision of the Hon'ble Supreme Court in the case of Ahmedabad Urban Development Authority [supra] and remitted the matter to the file of the Assessing Officer to consider the same afresh and pass order strictly in light of the observation of the hon’ble Supreme Court.
After considering the facts and submissions and perusing the orders of the co-ordinate bench and the Hon'ble Apex Court [supra], we are of the considered opinion that the issue of taxability of the DDA u/s 2(15) of the Act be remitted to the file of the Assessing Officer for examination
Page 4 of 6 guidelines/observations made by the Hon'ble Apex Court on identical issue after allowing reasonable opportunity of being heard to the assessee. We order accordingly. Grounds raised by the assessee are allowed for statistical purposes. is allowed for statistical purposes.
The order is pronounced in the open court on 21.11.2025.