IN HIGH COURT OF HIMACHAL PRADESH, SHIMLA ITA No.2 of 2010 Date of decision: 24.10.2017 Commissioner of Income Tax ..Appellant . .P Versus HP State Environment Protection & H Pollution Control Board Respondents Coram: of Hon ble Mr. Justice Sanjay Karol, Acting Chief Justice Hon ble Mr. Justice Ajay Mohan Goel, Judge Whether approved for reporting? rt For appellant: Mr.Vinay Kuthiala, Senior Advocate, with Mr.Diwan Singh Negi, Advocate. ou For respondent: Mr.Ajay Vaidya, Advocate. Sanjay Karol, Acting Chief Justice (oral) C Appeal came to be admitted on following substantial questions of law: h 1. Whether assessee, being Govt. Board ig carrying out purely regulatory functions on behalf of State Govt., can be said to be institution set up for charitable purposes as defined in Section 2(15) of H Income Tax Act? 2. Whether Tribunal was right in holding that registration granted to assessee under Section 12AA could not be cancelled, even though assessee was not carrying out its activities in accordance with objections for which it was set up? ::: Downloaded on - 09/11/2017 10:07:49 :::HCHP 2 3. Whether assessee could be said to be engaged in charitable activity especially since it was accumulating huge profits and surplus funds instead of utilizing same for fulfilling its objects? . 2. matter was argued extensively and during .P course of submissions, our attention was invited to H following decisions rendered by this Court: (i) CWP No.2066/2009, decided on 7.12.2008, of titled as M/s Himachal Pradesh State Environment Protection and Pollution Control Board vs. Chief rt Commissioner of Income Tax. (ii) ITA No.19 of 2012, decided on 25.10.2016, ou titled as Commissioner of Income Tax, Shimla vs. Himachal Pradesh Road Transport Corporation. C 3. Primarily, issue pertains to cancellation of h exemption granted in favour of assessee by appropriate authority under provisions of Section 12AA ig of Income Tax Act, 1961 (for short, Act ). H 4. According to Revenue, assessee was performing functions which were regulatory in nature; not engaged in advancement of objects of general public utility; not performing its duties, in accordance with objects for which it was established; was only carrying on monitoring and supervising activity; receiving grant from ::: Downloaded on - 09/11/2017 10:07:49 :::HCHP 3 Government and generating income in form of consent fee etc. Hence, activities of Board could not be termed to be charitable in nature. . 5. One finds Tribunal to have taken view .P contrary to view taken by Commissioner of Income H Tax. What weighed with Tribunal was definition of charitable purpose stipulated under Section 2(15) of Act. of 6. Significantly we find factual matrix not to have been considered or discussed by rt Tribunal/authorities below. Perusal of order passed by ou Appellate Authority demonstrates that there is no reasoning assigned as to on what basis it arrived at C conclusions mentioned in order. 7. As such, we deem it appropriate to remand h matter back to Commissioner of Income Tax for taking ig fresh decision, after considering rival contentions of parties. Needless to add, Commissioner of Income Tax shall H discuss factual matrix and also, as to whether case of assessee is covered by any one of decisions rendered by this Court in Pollution Control Board (supra) and Himachal Pradesh Road Transport Corporation (supra). 8. Parties agree to apprise Commissioner of Income Tax of passing of order and undertake to ::: Downloaded on - 09/11/2017 10:07:49 :::HCHP 4 appear before him on 23rd November, 2017. We clarify that Commissioner shall also consider amendment brought in statute as also circular No.21/2016, dated . 27th May, 2016, issued by Revenue. .P 9. Consequently, orders dated 26th December, 2008, H passed by Commissioner of Income Tax, Shimla (Annexure P-2) and 28th August, 2009, passed by Income Tax of Appellate Tribunal Chandigarh Bench (Annexure P-3) are quashed and set aside. Questions of law are left open to be rt decided in appropriate proceedings. ou With these observations, appeal stands disposed of, so also pending application(s), if any. C ( Sanjay Karol ) Acting Chief Justice h ig October 24, 2017 ( Ajay Mohan Goel ) (vt) Judge H ::: Downloaded on - 09/11/2017 10:07:49 :::HCHP Commissioner of Income-tax v. HP State Environment Protection & Pollution Control Board