CIT Vs Khurja Development Authority (Supreme Court of India)
The Supreme Court of India heard two connected appeals stemming from separate orders of the High Court of Judicature at Allahabad, dated January 12, 2015, and January 7, 2019. These appeals were filed by the Revenue under Section 260A of the Income Tax Act, 1961, challenging High Court orders that dismissed the Revenue’s appeals. The issue concerned the registration of the assessee (Khurja Development Authority) regarding its charitable purpose to avail benefits under the Act.
The High Court had dismissed the Revenue’s appeals by holding that the issue was squarely covered by earlier High Court and Tribunal decisions, specifically citing Commissioner of Income Tax vs. Lucknow Development Authority.
The counsel for the Revenue argued before the Supreme Court that the High Court had failed to examine the specific facts of the case to determine if the precedent law applied. Furthermore, they submitted that the law regarding the determinative tests to be adopted for ascertaining a charitable purpose has since been settled by a three-Judge Bench of the Supreme Court in Assistant Commissioner of Income Tax (Exemptions) vs. Ahmedabad Urban Development Authority (AUDA), decided on October 19, 2022, and clarified on November 3, 2022.
