JUDGMENT :

A.S. BOPANNA, J.

Heard Dr. Ashok Saraf, learned senior counsel assisted by Mr. P. Baruah, Mr. P. Das and Mr. S.P. Sharma, learned counsel for the appellant. Also heard Mr. Sanjay Sarma, learned standing counsel, Finance and Taxation Department for the respondents.

2. The appellant in these appeals are assailing the assessment orders dated 29.12.2011, the order passed by the CIT (Appeals) dated 2.7.2013 and the order dated 31.5.2017 passed by the Income-tax Appellate Tribunal relating to the Assessment Years 2009-10 and 2010-11. Since the consideration ultimately was made by a common order in ITA No. 496 and 497/Kol/2013 and these two appeals arise out of the said common order, we have taken up these appeals together, heard and disposed of by this common order.

3. The substantial question of law framed in these appeals is also common to both these appeals, which reads as hereunder:

(i) Whether on the facts and in the circumstances of the case, the appellant-Corporation is not entitled to the benefit of exemption under section 10(26B) of the Income-tax Act, 1961?

(ii) Whether the finding arrived at by the Income-tax Appellate Tribunal, Guwahati Bench, Guwahati in its order dated 31.5.2017 in ITA No. 496/Kol/2013 is perverse and thereby the impugned order dated 31.5.2017 is liable to be set aside and/or quashed?

4. For the purpose of narration of facts, we have referred to the facts as in ITA No. 231 of 2017, which relates to the Assessment Year 2009-10. All other aspects would be similar in ITA No. 232 of 2017 except for the Assessment Year being 2010-2011.

5. The brief facts are that the appellant-Corporation is established and registered based on the memorandum of association and articles of association as at Annexure-A to the memo of appeal. In that light, considering that the appellant-Corporation is set-up in the name and style, Arunachal Police Housing & Welfare Corporation Ltd. and the benefit derived is by the police personnel serving in Arunachal Pradesh, the appellant has sought exemption of the income-tax by invoking the provision as contained in section 10(26B) of the Income-tax Act, 1961, (‘IT Act’).

6. In order to appreciate the matter in its correct perspective, it would be profitable to extract and take note of section 10(26B), which reads as hereunder:

“10. Incomes not included in total income.— In computing the total income of a previous year of any person, any income falling within any of the following causes shall not be included—

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(26B) any income of a corporation established by a Central, State or Provincial Act or of any other body, institution or association (being a body institution or association wholly financed by Government) where such corporation or other body or institution or association has been established or formed for promoting the interests of the members of the Scheduled Castes or the Scheduled Tribes or backward classes or of any two or all of them.

Explanation: For the purpose of this clause,—

(a) “Scheduled Castes” and “Scheduled Tribes” shall have the meanings respectively assigned to them in clauses (24) and (25) of article 366 of the Constitution;

(b) “backward classes” means such classes of citizens, other than the Scheduled Castes and the Scheduled Tribes, as may be notified—

(i) by the Central Government; or

(ii) by any State Government,

as the case may be, from time-to-time;”.

(emphasis supplied)

7. In that background, what arises for consideration is as to whether the benefit as provided in the said provision is admissible in respect of income-tax payable by the appellant herein by considering the same to have been formed for promoting the interest of the Scheduled Castes or the Scheduled Tribes or backward classes or of any two or all of them, as provided under the provision relating to exemption?

8. Learned senior counsel for the appellant while assailing the orders passed by the Assessing Officer, CIT (Appeals) and the Income-tax Appellate Tribunal would contend that in the in