Surat Urban Development Authority (SUDA) Vs DCIT (ITAT Ahmedabad)
The issue under consideration is that whether the activities carried out by Surat Urban Development Authority are considered as Charitable Activities and hence entitled to the exemption under section 11 of the Income Tax Act or not?
The assessee is a regulatory body created by State Government u/s 22 of Gujarat Town Planning and Urban Development Act, 1976 for proper development of specified area in the state which is supposed to be ensured by the State. It was submitted that the assessee is just like a government body functioning for and on behalf of State Government. The very purpose of the above Act is to ensure the development of various areas of the state in a phased and planned manner.
It was further submitted that as per Section 2(15) of the 1961, an assessee is considered as a charitable institution if it is involved in any of the following purposes, namely Relief of the poor, Medical, Preservation of environment (including watersheds, forests and wildlife), Preservation of monuments or places or objects of artistic or historic interest, Advancement of any other object of general public utility.
The Surat Urban Development Authority (SUDA) is the umbrella organization of Gujarat The Authority takes over the new infrastructure developments, residential projects for people falling in low and middle income group. Since the assessee trust is engaged in providing easily affordable residence to low and middle income group, hence the assessee comes under the purview of “Relief to Poor” within the definition of Charitable Purpose.
In the light of the decision rendered by the Honorable Gujarat High Court and applied by the co- ordinate bench in Vadodara Urban Development Authority (supra) and Gandhinagar Urban Development Authority DCIT ITA No. 3621/ Ahd/ 2015 order dated 23.07.2019, ITAT find merit in the plea raised on behalf of the assessee for holding the activities of assessee to be for charitable purposes under section 2 (15 ) of the Act and consequence eligibility of benefits under section 11 & Section 12 of the Act. The order of the CIT( A) is thus set aside and the AO is directed to grant relief claimed under s.11( 2) and 11 (1 )(a) of the Act to the assessee in accordance with law.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeals by the Assessee and Revenue are directed against the Commissioner of Income Tax (Appeals)-9, Ahmedabad. The relevant details are tabulated as under:
