CIT 2 JODHPUR V. K U M S DIDWANA

ITA/29/2010

AI Insights

The case revolves around the Commissioner of Income Tax-II, Jodhpur appealing against the decision of the Income Tax Appellate Tribunal, which had ruled in favor of the Krishi Upaj Mandi Samiti, Didwana. The primary legal question was whether the Samiti, which was registered under Section 12-A of the Income Tax Act, 1961 only from September 26, 2005, could be considered a charitable institution entitled to the benefits of Section 11 of the Act for the years prior to its registration. The Tribunal had found that the Samiti, established under the Rajasthan Agriculture Produce Market Act, 1961, was discharging public charitable functions from its inception and thus should be treated as a charitable institution from the start.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 687547 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 16-01-2015
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Rajasthan Agriculture Produce Market Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: M K GARG; PANKAJ GUPTA
• Assessee Lawyers: SUNIL BHANDARI
• Keywords: Charitable institution; Income Tax; Registration certificate; Public Charitable Functions
• Section: 11; 12(A)

Judgement Text

"-1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. J U D G M E N T Commissioner of Income Tax-II, Jodhpur v. Krishi Upaj Mandi Samiti, Didwana D.B. Income Tax Appeal No.29/2010 Date of Judgment :: 16th January, 2015 P R E S E N T HON'BLE MR.JUSTICE GOVIND MATHUR HON'BLE MR.JUSTICE ANUPINDER SINGH GREWAL Mr. Sunil Bhandari for Mr. K.K.Bissa, for the appellant. Mr. M.K.Garg ] Mr. Pankaj Gupta] for the respondent. .... BY THE COURT : (PER HON'BLE GOVIND MATHUR,J.) During the course of arguments learned counsel for the appellant pressed only one substantial question of law out of three questions framed and that reads as under:- “Whether on the facts and in the present circumstances of the case, the Tribunal was justified in treating the assessee Samiti as registered under Section 12-A of the Income Tax Act, 1961 for the year under consideration when the assessee got itself registered under Section 12-A w.e.f. 26.9.2005?” In brief, facts of the case are that the assessee is a Krishi Upaj Mandi Samiti established under the Rajasthan Agriculture Produce Market Act, 1961. For the -2- purposes of the Income Tax Act, 1961 the Samiti is a charitable institution registered under Section 12-A of the Act of 1961. The Assessing Officer computed income of the Samiti by holding that it does not qualify for deduction under Section 11 of the Act of 1961 prior to the date of issuance of the registration certificate under Section 12-A. The Commissioner of Income Tax (Appeals) affirmed the order passed by the Assessing Officer, however, by the judgment impugned learned Income Tax Appellate Tribunal held that the Krishi Upaj Mandi Samiti is a public charitable institution and, therefore, it is entitled to have computation of income by application of the provisions of Section 11 throughout. The only argument advanced in the instant matter is that a certificate as per provisions of Section 12-A of the Act of 1961 in favour of the assessee was issued at a later stage, therefore, income for the years prior to that is required to be computed without treating it a public charitable institution. We do not find any merit in the argument advanced. Section 11 of the Act of 1961 provides that subject to the provisions of Sections 60 to 63, the income derived from property held under trust wholly for charitable or religious purpose shall not be included in the total income of the previous year of the person in receipt of the income. The Krishi Upaj Mandi Samiti being created under a statute is discharging public charitable functions from the date of its establishment and as such merely the fact of certification at a belated stage will -3- not make it disentitled to have benefit of Section 11 ibid. Looking to peculiar fact that the instant assessee was created under the Rajasthan Agriculture Produce Market Act, 1961 with its statutory duties and liabilities, we are of the view that the Income Tax Appellate Tribunal was justified in holding that the Samiti is a charitable institution from inception and, thus, is entitled for getting its income computed by taking into consideration provisions of Section 11(1) of the Act of 1961, even for the years prior to having certificate under Section 12-A of the Act of 1961. The appeal is dismissed accordingly. (ANUPINDER SINGH GREWAL),J. (GOVIND MATHUR),J. kkm/ps. "