Shimoga Urban Development Authority Vs ITO (ITAT Bangalore)
Urban Development Authority Wins Fresh Chance: ITAT Remands 11/12/13 & GPU Exemption Issue- CIT(A) Wrong on 12A Application Timing; AO Must Reassess Post 119(2)(b) Outcome
Assessee, an Urban Development Authority, filed NIL returns & sought set-off of losses, but AO denied exemption u/s 11 holding that Assessee had no valid 12A registration for relevant years & that its income was commercial. CIT(A) upheld denial, noting registration u/s 12AA dated 14.05.2020 applied only from AY 2020-21 & proviso to s.12A(2) could not assist as no earlier/provisional registration existed.
Before Tribunal, Assessee relied on the Supreme Court’s landmark ruling in ACIT(E) Vs Ahmedabad Urban Development Authority (449 ITR 1) holding statutory development bodies to be GPU charities even where they collect charges, subject to s.2(15) & 20% threshold. Assessee also filed condonation request u/s 119(2)(b) for delay in filing Form 10AB seeking registration for AYs 2016-17 to 2020-21, which is pending before CIT(Exemptions).
Tribunal held that proper assessment requires considering the SC AUDA tests only after the 12A condonation/registration decision. Therefore, orders of lower authorities were set aside & all three matters remanded to AO for fresh assessment in light of AUDA (SC) after CIT(Exemptions) disposes the 119(2)(b) petition.
