ITAT Allahabad Judgments — January 2025

The Tribunal held that ADA's activities, primarily town planning and development, are for 'general public utility' and thus charitable, making it eligible for exemption under Section 11, in line with the Supreme Court's ruling in Ahmedabad Development Authority case. It found that property sales and betterment charges, when part of statutory objectives and not solely profit-driven, do not render the activities commercial. The Tribunal also ruled that the Infrastructure Development Reserve Fund (IDRF) and other grants/funds are not the assessee's income to be taxed directly, as they are held in a trustee capacity. However, it remanded the matter back to the AO to re-examine whether these receipts are capital or revenue in nature. The alleged violation of Section 13(3) for employee benefits was also not upheld.

The ITAT found that both the AO and CIT(A) had passed ex-parte orders without affording the assessee a reasonable opportunity to present its case. It emphasized the CIT(A)'s statutory duty under section 250(6) to pass a speaking order on the merits of the appeal. Consequently, the ITAT set aside the CIT(A)'s order and restored the matter to the Assessing Officer for a de novo assessment in accordance with law, ensuring reasonable opportunity to the assessee.