GUJARAT STATE AGRICULTURE MARKETING BOARD,GANDHINAGAR V. THE ITO, WARD-1, GANDHINAGAR

ITA 1317/AHD/2025

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The case involves the Gujarat State Agriculture Marketing Board appealing against the orders of the Commissioner of Income Tax (Appeals), which upheld additions made by the Assessing Officer under section 69A of the Income-tax Act, 1961. The additions were based on interest income from Union Bank of India, which was treated as unexplained money. The primary contention was whether the income of the Agricultural Marketing Board, which is involved in implementing government schemes and disbursing subsidies, is exempt from tax under section 10(26AAB) of the Act. The Tribunal considered the provisions of the Income-tax Act, relevant CBDT Circulars, and previous acceptance of the Board's exempt status by the Department in other assessment years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790038 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 13-06-2025
• Other Referred Cases: APMC Vs. CIT, 173 taxman 115
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: ALPESH SHAH
• Keywords: Reassessment proceedings; TDS; FORM 26AS
• Section: 139; 10

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA Nos. 1316 & 1317/Ahd/2025 (Assessment Year: 2016-17 & 2017-18) Gujarat State Agriculture Marketing Board, 2nd Floor, Block No. 12, Dr. Jivraj Mehta Bhavan, Section 10, Gandhinagar-382010 [PAN :AAAAG 1417 G] Vs. Income-Tax Officer, Ward-1, Gandhinagar (Appellant) .. (Respondent) Appellant by : Shri Alpesh Shah, AR Respondent by: Shri Abhijit, Sr DR Date of Hearing 22.09.2025 Date of Pronouncement 26.11.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned These two appeals have been filed by the Assessee against the separate orders dated 20.11.2024 and 28.10.2024, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “Ld. CIT(A)”], under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short) relating to the Assessment Years 2016-17 & 2017-18. 2. Since common issues are involved in both the appeals, these were heard together and are being disposed of by this consolidated order for the sake of convenience. ITA No. 1316/Ahd/2025 : AY 2016-17 3. The assessee has taken following grounds of appeal:- “1. The learned A.O. has erred in law and on facts in making addition of Rs.38,57,519/-. Total addition of Rs.38,57,519/-made by adopting the interest amount from 26AS and treated it as unexplained money. Printed from counselvise.com ITA Nos. 1316 & 1317/Ahd/2025 – Gujarat State Agriculture Mktg Board Vs. ITO Asst. Year : 2016-17 & 2017-18 - 2– 2. The learned A.O. has erred in law and on facts in not considering the facts that the Income of assessee is exempt u/s 10(26AAB) of the Act. 3. The learned assessing officer has erred in law and on facts as states that assessee had not filed return for the relevant Assessment Year ignoring the fact that the assessee is not required to file its return of income according to the Circular No.18/2017 [F.NO.385/01/2015-IT(B)), dated 29.05.2017. 4. The entire addition made u/s 69A is unwarranted of facts and required to be deleted.” 4. The brief facts in respect of this year are that the assessee is an Agricultural Marketing Board recognized by the Government of Gujarat. Its primary functions include implementation of Central and State Government schemes and disbursement of subsidies to traders and farmers. As per CBDT Circular No. 18/2017 dated 29.05.2017, income of entities covered u/s 10 of the Act, including Agricultural Produce Marketing Committees / Boards referred to in section 10(26AAB), is unconditionally exempt, and such entities are also not required to file their return of income. The Circular further clarifies that no TDS is required to be deducted on payments made to such Boards. 4.1 For A.Y. 2014-15 and 2018-19, the Department accepted the assessee’s exempt status and passed orders accordingly. 4.2 For A.Y. 2016-17, reassessment proceedings were initiated u/s 147, based on information available in Form 26AS/AIR regarding interest income from Union Bank of India. The Assessing Officer completed the reassessment by making an addition of Rs. 38,57,588/- under section 69A of the Act. 5. The Ld. CIT(A) dismissed the appeal ex-parte, observing that no compliance was made by the assessee despite multiple opportunities. 5.1 Ld. Counsel for the assessee submitted that the assessee was entitled not to file return of income as the income of the assessee was treated as exempt u/s Printed from counselvise.com ITA Nos. 1316 & 1317/Ahd/2025 – Gujarat State Agriculture Mktg Board Vs. ITO Asst. Year : 2016-17 & 2017-18 - 3– 10(20) of the Act. On the other hand, Ld. DR referred to the judgment of the Hon’ble Supreme Court in the case of APMC Vs. CIT, 173 taxman 115 dated 21.08.2008 and argued that the AMCs are not entitled to exemption u/s. 10(20) of the 1961 Act after insertion of the said Explanation vide Finance Act, 2002 with effect from 01.04.2003. 6. We have heard both the parties and perused the material available on record. 6.1 The assessee is an Agricultural Marketing Board, whose income is exempt u/s10(26AAB) of the Act. The CBDT Circular No. 18/2017 clarified that the Agricultural Produce Marketing Committees/Boards covered u/s 10(26AAB) enjoy unconditional exemption, are not required to file returns of income, and no TDS is required to be deducted on payments made to them. The relevant paragraph of the said Circular reads as under:- \"4. Accordingly, it has been decided that in case of below mentioned funds or authorities or Boards or bodies, by whatever name called, referred to in section 10 of the Income-tax Act, whose income is unconditionally exempt under that section and who are also statutorily not required to file return of section 139 of the Income-tax Act, there would be no requirement for tax deduction at source, since their income is anyway exempt under the Income-tax Act - (i).... (ii).... (iii)… (xiii) Agricultural Produce Marketing Committee referred to in clause (26AAB); .......\" 7. In view of the above, the Assessing Officer was not justified in treating the non-filing of return as a ground to consider the interest reflected in Form 26AS as Printed from counselvise.com ITA Nos. 1316 & 1317/Ahd/2025 – Gujarat State Agriculture Mktg Board Vs. ITO Asst. Year : 2016-17 & 2017-18 - 4– unexplained u/s 69A, particularly when the assessee was legally not required to file a return, and when the Department has already accepted this exempt status in the assessee’s own cases for A.Ys. 2014-15 and 2018-19 with no change in facts or law being brought on record, and accordingly the very basis of the addition fails. In the result, the appeal of the assessee is allowed. ITA No. 1317/Ahd/2025 : AY 2017-18 8. The facts and issues involved in this year are identical to those in A.Y. 2016- 17. Following our decision in ITA No. 1316/Ahd/2025, the addition made in this year is also directed to be deleted. 9. In the result, both the appeals of the assessee are allowed. The order is pronounced in the open Court on 26.11.2025. Sd/- Sd/- (SUCHITRA R. KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 26.11.2025 **btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "