AGRICULTURE PRODUCE MARKET COMMITTEE,GONDAL V. ITO (EXEMPTION), WARD-1, RAJKOT, RAJKOT

ITA 432/RJT/2023

AI Insights

The case involves the Agricultural Produce Market Committee Gondal, which appealed against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was directed against the rejection of a rectification application concerning the exemption claim under section 10(26AAB) of the Income Tax Act for the assessment year 2014-15. The committee, constituted under the Gujarat Agricultural Produce Market Act, 1963, and registered under section 12A of the Act, claimed an exemption of Rs. 10,81,76,704. The initial rejection by the AO and subsequent dismissal by the CIT(A) led to this appeal, where the tribunal found merit in re-evaluating the exemption claim based on the committee's compliance with the statutory conditions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 27279 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-08-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 15-12-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAMDEEP SINHA
• Assessee Lawyers: MEHUL RANPURA
• Keywords: Revised return; TDS; Benefit of exemption
• Section: 154; 143(1); 11; 12A

Judgement Text

" Page | 1 ITA No.432/RJT/2023 Agriculture Produce Market Committee Gondal CIN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.432/RJT/2023 (Ǔनधा[रण वष[ / Assessment Year: (2014-15) (Physical Hearing) Agricultural Produce Market Committee 8-B, National Highway Sardar Market Yard Gondal Bypas Gujarat - 360311 Vs. ITO (Exemption) Ward -1 Rajkot èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAALA0083H (Assessee) (Respondent) Assessee by : Shri Mehul Ranpura, AR Respondent by : Shri Shramdeep Sinha, CIT- DR Date of Hearing : 13/08/2024 Date of Pronouncement : 11/11/2024 आदेश / O R D E R PER DINESH MOHAN SINHA, AM: The appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘NFAC/Ld. CIT(A)’], dated 16.10.2023, u/s 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 25.10.2016 for Assessment Year 2014-15. 2. The assessee has raised following grounds of appeal: “1.The grounds of appeal mentioned hereunder are without prejudice to one another. Page | 2 ITA No.432/RJT/2023 Agriculture Produce Market Committee Gondal 2.The Id. Commissioner of Income- tax(Appeals), National Faceless Appeal Centre, Delhi erred on facts as also in law in holding that AO's action of rejecting rectification application is as per law, in total disregards to the facts of the case and issue involved in rectification. The AO be directed to rectify the mistake apparent from record as pointed out by the appellant. 3.The Id. CIT(A) / NFAC erred on facts as also in law in not deciding ground of appeal related to not giving benefit of exemption claimed u/s.10(26AAB) of the Act of Rs.10,81,76,704/- on the alleged ground that appellant need to file revise return in order to claim benefit exemption u/s.10(26AAB) of the Act as the same is out of purview of section 154 of the act. The AO' action in rejecting claim u/s.10(26AAB) of the Act is totally unjustified on facts as also in law and therefore disallowance deserves to be deleted and may kindly be deleted. 4.Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.” 3. The appellant, an Association of Person (Trust) is assessed to tax by the Income Tax Officer, Exemption Ward-1, Rajkot/Income Tax Officer, CPC, Bangalore (hereinafter referred to as the \"AO\"). Appellant an agriculture produce committee constituted under section 9 of Gujarat Agricultural Produce Market Act, 1963 and was treated as trust and was issued Registration u/s. 12A of the Income-tax Act, 1961 (hereinafter referred as to the \"Act\") and was assessed to tax as trust till assessment year 2008-09. With effect from 01.04.2009 i.e. from assessment year 2009-10 the income of the APMC was made specifically exempt u/s. 10(26AAB) of the I.T. Act, 1961. The appellant filed return of income for the assessment year under consideration on 22.07.2014 declaring income at Rs. Nil wherein it had claimed exemption of Rs.10,81,76,704/- u/s. 10(26AAB) of the Act being Agriculture Produced Market Committee. It is a marketing board established by a State Government with the- object that farmers are not exploited by Intermediaries who compel them to sell their produce at low rates. Regular Books of account are maintained which are supported by bills/vouchers and Books of account were duly audited as per the provision of Act. The appellant has been served with the notice of defective return u/s. 139(9) on 12.06.2015 with the remark that the \"No receipts have been shown in the return of income, however, TDS/TCS has been claimed\" (error Page | 3 ITA No.432/RJT/2023 Agriculture Produce Market Committee Gondal code 62). Therefore, appellant has filed return of income in response to notice issued u/s. 139(9) on 23.07.2015 by rectifying mistake as stated in the said notice. However, appellant again served with the another notice of defective return u/s. 139(9) of the Act on 01.08.2015 with remark that \"As per section 12A(1) (B), if the total income of the trust/institution before claim of exemption u/s. 11 or 12, exceeds the maximum amount not chargeable to tax, account of such trust or institution are to be compulsory audited. Hence, please ensure the same and file the corrected return of income incorporation the details of such audit report, failing to which the return filed in ITR will be treated as invalid.\" Therefore appellant has again filed revised return on 14.10.2015 in response to notice issued u/s. 139(9) after filing form no.10B online being statement of application of income for charitable or religious purpose certified by the chartered accountant. The NFAC, CPC, Bangalore issued order u/s. 143(1) of the Act dated 16.03.2016 assessed the income of appellant at Rs. 10,81,76,704/- whereby rejected appellant's claim of exemption u/s. 10(26AAB) of Rs. 10,81,76,704/-. Appellant has filed rectification application u/s. 154 of the Act on 06.04.2016 which was rejected by the NFAC, CPC Bangalore order u/s. 154 of the Act dated 25.10.2016 on the alleged ground that fresh claim of addition/reduction of income or other details in the return shall not be made in rectification request. Appellant filed an appeal against the order of Ld. CIT(A) disposed off the appeal on 16.10.2023 and dismissed the appeal of the appellant. The appellant is in appeal before us. 4. Ld. AR submitted that the assessee claimed exemption u/s 10(26AAB) of the Act since the assessee is an Agricultural Produce Committee constituted under section 9 of Gujarat Agricultural Produce Market Act 1963 and this trust was issued registration u/s 12A of the Act and the assessee trust was assessed to tax since 2008-09. In response to notice, assessee filed online reply and statement of application of income for Page | 4 ITA No.432/RJT/2023 Agriculture Produce Market Committee Gondal charitable or religious purpose certified by the chartered accountant. The CPC, Bangalore has refused the exemption and taxed Rs.10,81,76,704/-. The assessee filed an application for rectification on 06.04.2016 same was also dismissed. The assessee prayed that one more opportunity given to explain the case before the AO/ZAO. Since the assessee was not given opportunity to explain the case. 5. On the other hand, Ld. CIT-DR has relied upon the order of the CIT(A) however, not objected to the prayer of the appellant. 6. We have heard both the parties and perused the material available on record. We note that the assessee is an Agricultural Produce Committee constituted under section 9 of Gujarat Agricultural Produce Market Act 1963. We further note that the assessee is a society/ trust being registered under Gujarat Government and this trust is also registered u/s 12A of the Act. the assessee trust has submitted audit report. According to section 10(26AAB) the entire income is exempt from tax under section 10(26AAB) of the Act is reproduced as under: “any income of an agricultural produce market committee or board constituted under any law for the time being in force for the purpose of regulating the marketing of agricultural produce.” Therefore, keeping in mind the above views, we direct the AO to examine the condition to grant exemption u/s 10(26AAB) of the Act, and to examine the conditions with reference to assessee’s facts and if the assessee fulfills the prescribed conditions, the benefit should be given to assessee in accordance with law. For statistical purposes, the assessee’s appeal is treated to be allowed. Page | 5 ITA No.432/RJT/2023 Agriculture Produce Market Committee Gondal 7. In the result, the appeal of the assessee is Allowed for statistical purpose in above terms. Order is pronounced in the open court on 11 /11/2024 Sd/- Sd/- (Dr. A.L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Patel, Sr. PS Rajkot True Copy Ǒदनांक/ Date: 11/11/2024 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot Date Initial 1. Draft dictated on (dictation sheet is enclosed with main file.) 12.11.24 } PS 2. Draft placed before author 12.11.24 PS 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Draft dictation sheets are attached PS "