[2026:RJ-JP:2869-DB]

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 150/2017 Commissioner Of Income Tax (Exemptions), 3Rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur.

----Appellant Versus Jaipur Development Authority, J.l.n. Marg, Jaipur.

----Respondent Connected With D.B. Income Tax Appeal No. 284/2010 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus Jaipur Urban Development Authority J.L.N. Marg, Jaipur ----Respondent D.B. Income Tax Appeal No. 151/2017 Commissioner Of Income Tax (Exemptions), 3Rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur ----Appellant Versus Jaipur Development Authority, J.l.n. Marg, Jaipur ----Respondent D.B. Income Tax Appeal No. 152/2017 Commssioner Of Income Tax (Exemptions), 3Rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur ----Appellant Versus Jaipur Development Authority, J.l.n. Marg, Jaipur ----Respondent For Appellant(s) : Mr. Sandeep Pathak with Mr. Dhairya Agarwal For Respondent(s) : Mr. Rohan Chatter &

Ms. Satwika Jha for Mr. Siddharth Ranka HON'BLE THE ACTING CHIEF JUSTICE MR. SANJEEV PRAKASH SHARMA HON'BLE MRS. JUSTICE SANGEETA SHARMA

Judgment

22/01/2026 ORAL

1. These cases have been remanded back by the Hon’ble Supreme Court on the basis that earlier two appeals i.e. D.B. Income Tax Appeal Nos. 218/2017 and 113/2016, which were decided by this Court on 06.09.2017, had come up before the Supreme Court and vide order dated 08.09.2022, the said appeals have been remanded back by the Supreme Court. After remand, this Court on 02.08.2024 decided D.B. Income Tax Appeal No. 218/2017. This Court admitted the D.B. Income Tax Appeal No. 218/2017 on the following substantial questions of law, which read as under:

“i) Whether on the facts and circumstances of the case and in law the Hon’ble ITAT has erred in law in allowing the exemption u/s 11 of the Act by holding that the activities of the assessee are charitable in nature even though the amended provision of section 13(8) r.w. 1st and 2nd proviso of section 2(15) are attracted?

ii) Whether on the facts and in circumstances of the case and in law the Hon’ble ITAT has erred in law in allowing the benefits of set apart u/s 11(2) of the Act, deleting the additions of Rs. 79,76,39,913/- as unspent amount in spite of the fact that the provision of section 11(2) r.w.s. 11(3)(c) are attracted as assessee is not granted exemption u/s 11 & 12 of the Act?

iii) Any other question of law as deemed fit in the facts and circumstances of the case may also be framed by the Hon’ble Court in the interests of justice.”

2. This Court further proceeded to examine the question in light of the judgment passed by the Supreme Court in the case of Assistant Commissioner of Income Tax (Exemption) vs. Ahmedabad Urban Development Authority reported in [(2022) 449 ITR 1 (SC)] and answered the substantial question No.1 against the Department. Considering that the question No. 1 was answered against the department, the action of treating the income to be a taxable income under Section 11(3) of the Income Tax Act, 1961 (for short ‘the Act’) was also held to be consequential and needed no adjudication.

3. We were told that the judgment dated 02.08.2024 passed by this Court has attained finality and the department has not challenged the same before the Supreme Court.

4. This Court, while admitting D.B. Income Tax Appeal No. 150/2017 framed the following substantial questions of law:

“(ii) Whether on the facts and circumstances of the case and in law the Hon’ble ITAT was justified in allowing the development expenditure of Rs.1,52,05,67,555/- by relying on the decision of Hon’ble ITAT in earlier year inspite of the fact the assessee has changed method of accounting.

(iii) Whether on the facts and circumstances of the case and in law the Hon’ble ITAT was justified in allowing a sum of Rs.16,07,46,872/- on account of disallowing 5% of administrative expenditure related to change in accounting policy.

(iv) Whether on the fact