Chhattisgarh Housing Board Vs ACIT (ITAT Raipur)
The appeals before the Income Tax Appellate Tribunal Raipur Bench were filed by a statutory housing authority for Assessment Years 2011-12, 2012-13, 2013-14, 2016-17, and 2017-18 against orders dated 05.08.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre under Section 250 of the Income-tax Act, 1961. The central issue in all appeals was whether the assessee was entitled to exemption under Section 11 of the Act.
The tribunal treated Assessment Year 2011-12 as the lead case. The assessee is a corporate body created under the Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972 by the State Legislature to meet housing needs in urban areas of the State, particularly for lower income groups and weaker sections of society. Its statutory functions include undertaking housing schemes, executing housing projects for other bodies, providing infrastructure such as drainage, water supply, lighting, parks and open spaces, coordinating housing activities, and maintaining, allotting, and leasing plots and buildings. The assessee has been registered under Section 12A of the Act since 30 January 2008 with effect from 01.04.2006.
During assessment proceedings for AY 2011-12, the Assessing Officer observed that the assessee had activities similar to builders and developers because it sold residential units and plots and earned a surplus. According to the officer, housing units were not sold on a pure cost-to-cost basis and there existed an element of commercial and profit motive. The officer also observed that the housing units were sold to financially capable buyers rather than to the general public. Based on these observations, the Assessing Officer concluded that the assessee was engaged in activities akin to trade, commerce, or business and disallowed the exemption claimed under Section 11. The net surplus of ₹1,71,93,880 shown in the income and expenditure account was treated as taxable income from business or profession.
