IN THE INCOME TAX APPELLATE TRIBUNAL
           CHANDIGARH BENCH 'A', CHANDIGARH

      BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
         AND SHRI T.R.SOOD, ACCOUNTANT MEMBER


                    ITA No. 1074/Chd/2014
                    (Assessment Year : 2010-11)


The D.C.I.T.,            Vs.         H.P.State Environment Protection
Circle Shimla.                       & Pollution Control Board,
                                     New Shimla.
                                     PAN: AAALH0191B
(Appellant)                          (Respondent)


      Appellant     by         :     Smt.Jyoti Kumari, CIT DR
      Respondent by            :     Shri Rajinder Prasad

      Date of hearing                :       09.04.2015
      Date of Pronouncement          :       10.04.2015



                               O R D E R

PER BHAVNESH SAINI, J.M. :

This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax(Appeals), Shimla dated 4.9.2014 for assessment year 2010-11, challenging the order of the learned CIT (Appeals) in allowing registration under section 12A of the Income Tax Act inspite of the fact that the receipts of the assessee are in contravention to the amended provisions of section 2(15) of the Income Tax Act. 2

2. Briefly, the facts of the case are that the assessee challenged the order of the Assessing Officer before the learned CIT (Appeals) in ignoring the order of the I.T.A.T., Chandigarh Bench dated 28.8.2009 in ITA No.74/Chd/2009 wherein the registration of the assessee under section 12AA of the Act was restored and, therefore, the assessee was entitled for all benefits available under sections 11 and 12 of the Act. It was further stated that the Assessing Officer has denied the benefits merely on the ground that the above decision of the Tribunal has been challenged in the Hon'ble H.P. High Court, which is pending for adjudication. The Assessing Officer, therefore, added the entire surplus to the declared income of the assessee and framed the assessment accordingly. The assessee was constituted for a period of three years and renewed from time to time by the State Government under the Water (Prevention & Control of Pollution) Act with the main object of performing the delegated power and function to provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water. The assessee filed return of income and claimed refund. The assessee was granted registration under section 12A of the Act which was subsequently withdrawn. The withdrawal order was challenged by the assessee before the I.T.A.T. Chandigarh Bench, who vide order dated 28.8.2009 in ITA No.74/Chd/2009 allowed the appeal of the assessee. The 3 assessee was informed that the said order is sub-judice as the department has filed an appeal before the Hon'ble H.P. High Court, which is pending for adjudication. The Assessing Officer required the assessee to show cause as to why its entire income be not taxed as per the normal provisions of the Income Tax Act. The assessee submitted that the issue of cancellation of registration as well as on merits, addition on account of accumulation, etc. has been decided in their favour by the I.T.A.T., Chandigarh Bench as well as by the learned CIT (Appeals) for assessment year 2009-10. The order of the learned CIT (Appeals) has been challenged by the Assessing Officer before the Tribunal, which is pending. The Assessing Officer, however, in the assessment order held that the assessee was not carrying out the activities for which registration under section 12AA had been granted. The excess of income over expenditure was considered as income and addition was accordingly made.

3. The assessee submitted before the learned CIT (Appeals) that the I.T.A.T., Chandigarh Bench has already decided the appeal of the assessee in ITA No.74/Chd/2009 wherein registration has been restored. Therefore, the assessee is entitled for deduction under sections 11 and 12 of the Act. The submissions on merits were also made. The learned CIT (Appeals) following the order of the Tribunal in ITA No.74/Chd/2009 decided the issue in favour of the 4 assessee and held that the assessee would be treated as registered under section 12AA of the Act.

4. After hearing the rival submissions we do not find any merit in the appeal of the Revenue. The Revenue has raised only ground that the learned CIT (Appeals) has allowed registration under section 12AA of the Act. This issue has already been considered in detail by I.T.A.T., Chandigarh Bench in the case of the assessee in ITA No.74/Chd/2009, against which the appeal of the Revenue is pending before the Hon'ble High Court. Similarly, the I.T.A.T., Chandigarh Bench in ITA No.835/Chd/2012 for assessment year 2009-10 vide order dated 16.4.2013 dismissed the departmental appeal by following the same order of the Tribunal in ITA No.74/Chd/2009. Therefore, there is no infirmity in the order of the learned CIT (Appeals) in following the order of the Tribunal through which the assessee was conferred the registration under section 12AA of the Act and consequentially the assessee would be entitled for deduction under sections 11 and 12 of the Act. Merely because the departmental appeal is pending in Hon'ble High Court against the order of the Tribunal, is no ground to take different view at the stage. We do not find any infirmity in the order of the learned CIT 5 (Appeals). The departmental appeal has no merit and is dismissed.

5. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on this 10th day of April, 2015.

          Sd/-                                          Sd/-
     (T.R.SOOD)                                  (BHAVNESH SAINI)
ACCOUNTANT MEMBER                                JUDICIAL MEMBER

Dated : 10 t h April, 2015

*Rati*

Copy to: The Appellant/The Respondent/The CIT(A)/The CIT/The DR.

Assistant Registrar, ITAT, Chandigarh