Agricultural Market Committee, Kollapur, Mahabubnagar, Hyderabad V. ITO, Ward-1, Mahabubnagar, Hyderabad

ITA 1118/HYD/2015

• Counselvise Citation: 111822514 RSA 2015
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A(SMC), HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT ITA NO.1117/HYD/2015 : ASSESSMENT YEARS 2005- 06 ITA NO.1118/HYD/2015 : ASSESSMENT YEARS 2006- 07 ITA NO.1119/HYD/2015 : ASSESSMENT YEARS 2007- 08 AGRICULTURAL MARKET COMMITTEE, KOLLAPUR, MAHABUBNAGAR DIST. (PAN AABAA 0025 F) V/S INCOME TAX OFFICER , W A RD - 1, MAHABUBNAGAR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI M.SITARAM DATE OF HEARING 23.12.2015 DATE OF PRONOUNCEMENT 23.12.2015 O R D E R THESE THREE APPEALS ARE FILED BY THE AGRICULTURAL MARKET COMMITTEE KOLLAPUR, MAHABUBNAGAR DISTRICT, AND THEY PERTAIN TO ASSESSMENT YEARS 2005-06 TO 2007-08. SINCE THE ISS UES INVOLVED IN ALL THESE APPEALS ARE COMMON, I PROCEED TO DISPOSE OF T HESE APPEALS BY A COMBINED ORDER, FOR THE SAKE OF CONVENIENCE. 2. AT THE OUTSET, LEARNED COUNSEL SUBMITTED THAT THERE IS DELAY OF FIFTEEN DAYS IN FILING OF THESE APPEALS AN D THE SAME IS SUPPORTED BY SUFFICIENT CAUSE AND THEREFORE, REQUES TED FOR CONDONATION OF DELAY. HE HAS FILED DETAILED EXPLANATION OF SEC RETARY, AGRICULTURAL MARKET COMMITTEE, SUPPORTED BY AN AFFIDAVIT, WHEREI N IT WAS SUBMITTED THAT THOUGH THE ASSESSEE INTENDED TO FILE THE APPEA LS WITHIN TIME, DUE TO ILL-HEALTH OF THE ASSESSEES COUNSEL, SHRI S.RAM A RAO, THE APPEAL PAPERS COULD NOT BE FILED IN TIME. LEARNED COUNSEL , SHRI S.RAMA RAO ALSO FILED A LETTER STATING THAT DURING THE RELEVAN T POINT OF TIME, HE HAD TO UNDERGO CORONARY ANGIOGRAPH AND THEREAFTER HE WA S ADVISED BED ITA NO.1117 TO 1119/HYD/2015 AGRICULTURAL MARKET COMMITTEE, KOLLAPUR, MAHABUBNA GAR DIST. 2 REST TILL 21.8.2015. THUS, HE COULD NOT ATTEND TO D AY TO DAY WORK, WHICH RESULTED IN DELAY IN THE FILING OF THE APPEAL S OF THE ASSESSEE. 3. I HAVE ALSO HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. HAVING REGARD TO THE EXPLANATION T ENDERED BY THE ASSESSEE, I AM OF THE VIEW THAT THE DELAY IS SUPPOR TED BY SUFFICIENT CAUSE AND THEREFORE, THE DELAY IS CONDONED AND I TA KE UP THE APPEALS FOR DISPOSAL. 4. THE ASSESSEE IS A LOCAL AUTHORITY, I.E. AGRICU LTURAL MARKET COMMITTEE AND HAS DECLARED NIL INCOME IN RESPONSE TO NOTICES ISSUED UNDER S.148 OF THE ACT. IT MAY BE NOTICED THAT EAR LIER, THE COMMITTEE WAS EXEMPT FROM PAYMENT OF TAX UNDER S.10(20) OF TH E ACT. THIS PROVISION WAS REPEALED WITH EFFECT FROM 1.4.2003 WH ICH NECESSITATED THE ASSESSEE TO APPLY FOR REGISTRATION UNDER S.12A OF THE ACT. IT WAS GRANTED BY THE ASSESSING OFFICER WITH PROSPECTIVE E FFECT AND THUS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, REGISTRA TION UNDER S.12A WAS NOT GRANTED. ASSESSEE ALSO CLAIMED EXEMPTION UN DER S.10(26AAB) OF THE ACT, WHICH WAS ALSO DENIED AND THUS, THE ASS ESSMENTS WERE COMPLETED BY THE ASSESSING OFFICER BY TAKING THE EX CESS OF INCOME OVER EXPENDITURE AS ASSESSABLE INCOME. 5. BEFORE THE LEARNED CIT(A), ASSESSEE CONTENDED THAT THOUGH REGISTRATION WAS GRANTED BY THE DIRECTOR OF INCOME- TAX(EXEMPTION) WITH PROSPECTIVE DATE, HE SHOULD HAVE GRANTED REGIS TRATION WITH EFFECT FROM 1.4.2002 AND IN FACT, ITAT HAD SET ASIDE THE I SSUE OF REGISTRATION TO THE DIRECTOR OF INCOME-TAX(EXEMPTION). IT WAS AL SO CONTENDED THAT EXEMPTION UNDER S.10(26AAB) OUGHT TO HAVE BEEN GRAN TED. THE LEARNED CIT(A) REJECTED THE CONTENTIONS OF THE ASS ESSEE BY OBSERVING AS UNDER- ITA NO.1117 TO 1119/HYD/2015 AGRICULTURAL MARKET COMMITTEE, KOLLAPUR, MAHABUBNA GAR DIST. 3 6 IT IS SEEN THAT THE HONBLE ITAT HAS SET ASIDE THE ISSUE OF REGISTRATION U/S. 12A TO DDIT(EXEMPTION) AND NO ORDER ACCORDING TO REGISTRATION HAS BEEN PLACED ON RECORD BY THE APPELLANT. REGARDING THE EXEMPTION U/S. 10(26AAB) THE ISSUE STANDS DECIDED AGAINST THE APPELLANT BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F AP STATE SEED CERTIFICATION AGENCY AND OTHERS IN WP NO.31640 OF 2011, WHICH HAS HELD THAT ACTIVITY OF AGRICULTURAL MARKET COMMITTEE DOES NOT COME UNDER THE PURVIEW OF CHARITABLE PURPOSES. IN VIEW OF THE ABOVE, THE ACTION OF THE ASSESSING OFFICER IS UPHELD AND THE GROUNDS OF APPEAL RAISED BY THE APPELLANT ARE REJECTED. 6. FURTHER AGGRIEVED, ASSESSEE PREFERRED THE PRES ENT APPEALS BEFORE THE TRIBUNAL. 7. THOUGH THE ITAT SET ASIDE THE ISSUE OF REGISTR ATION UNDER S.12A LONG BACK, SINCE NO ORDER HAS BEEN PASSED TIL L DATE, ITAT SMC BENCH PASSED AN INTERIM ORDER DATED 30.10.2015, WHE REIN THE BENCH OBSERVED AS UNDER- 3. I AM SURPRISED TO NOTE THAT DIT(E) HAS NOT PASSED ORDERS, EVEN THOUGH THE MATTERS WERE CRYSTAL LISED BY THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE C ASE OF AGRICULTURAL MARKET COMMITTEES ALLOWING REGISTRATIO N UNDER SECTION 12A OF THE ACT. THE ITAT IS ALSO PASSI NG VARIOUS ORDERS DIRECTING THE DIT(E) TO GRANT REGISTR ATION. IN SPITE OF CLEAR DIRECTIONS FROM THE BENCH TO GRA NT REGISTRATION W.E.F. 01.04,.2002, I AM SURPRISED TO NOTE THAT DIT(E) HAS NOT GRANTED REGISTRATION SO FAR. TH ERE SEEMS TO BE NO PROCEEDINGS PENDING IN ANY APPELLATE FORUM ON THIS ISSUE OF GRANTING FROM 01.04.2002. THI S SHOWS EITHER CONTEMPT OF ITAT OR SHEER IGNORANCE OF THE PENDING FILES. WHATEVER MAY BE THE CIRCUMSTANCES, ASSESSING OFFICER COULD HAVE REQUESTED THE DIT(E) BE FORE FINALIZING THE ASSESSMENT DENYING THE BENEFIT. A. O. HAS NOT BROUGHT TO THE NOTICE OF THE DIT(E) ABOUT THE P ENDING PROCEEDINGS AND BUT PREFERRED TO RAISE DEMAND DENYI NG EXEMPTION. EVEN LD. CIT(A) HAS NOT TAKEN ANY STEPS I N ITA NO.1117 TO 1119/HYD/2015 AGRICULTURAL MARKET COMMITTEE, KOLLAPUR, MAHABUBNA GAR DIST. 4 POINTING OUT TO DIT(E) ABOUT THE PENDING REGISTRATI ON, AS PER THE DIRECTIONS OF ITAT. ASSESSEES ARE UNNECESSAR ILY DRIVEN TO THE ITAT FOR RELIEF ON A ISSUE WHICH IS AL READY CRYSTALLISED IN THEIR FAVOUR AND DIT(E) HAS TO SIMP LY PASS THE ORDERS GRANTING SUCH REGISTRATION. SINCE THE PR ESENT APPEALS ARE PENDING NO USEFUL PURPOSE WOULD BE SERV ED IF THE MATTER ARE SET ASIDE TO THE A.O. I HEREBY DIRE CT THE DIT(E)/CIT(E) TO PASS NECESSARY ORDERS IN THIS CASE IMMEDIATELY AND SEND THE COPY OF SUCH ORDER TO THIS FORUM ON OR BEFORE 15 TH DECEMBER, 2015, SO THAT THESE APPEALS CAN BE DISPOSED OF ACCORDINGLY. DIT(E)/CIT( E) IS ADVISED TO COMPLETE OTHER PENDING PROCEEDINGS IN SI MILAR CASES ON PRIORITY. 8. THE CASE WAS POSTED FOR HEARING TODAY. 9. AT THE TIME OF HEARING, LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT IN THE LIGHT OF THE DIRECTIONS OF TH E ITAT, THE CIT(EXEMPTION) GRANTED REGISTRATION WITH EFFECT FRO M 1.4.2002 INSTEAD OF 1.4.2007. HE, THEREFORE, SUBMITTED THAT FOR ALL THE THREE YEARS UNDER CONSIDERATION, THE ASSESSEE HAVING BEEN GRANT ED REGISTRATION UNDER S.12A OF THE ACT, THE INCOME RECEIVED BY THE ASSESSEE IS NOT ASSESSABLE TO TAX. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRL Y ADMITTED THAT THE CIT(EXEMPTION) HAVING GRANTED REGISTRATION WITH EFFECT FROM 1.4.2002, THE ASSESSEE IS ENTITLED FOR EXEMPTION FO R THESE YEARS. HE, HOWEVER, SUBMITTED THAT THE MATTER HAS TO BE SET AS IDE TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION OF THE IS SUE IN THE LIGHT OF THE ORDER DATED 3.12.20015 OF THE CIT(EXEMPTION). 11. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE RECORD. AS COULD BE NOTICED FROM THE G ROUNDS URGED IN THESE APPEALS, THE MAIN ISSUE IS WHETHER THE ASSESS EE IS ENTITLED FOR REGISTRATION UNDER S.12A OF THE ACT, IN WHICH EVENT THE INCOME OF THE ITA NO.1117 TO 1119/HYD/2015 AGRICULTURAL MARKET COMMITTEE, KOLLAPUR, MAHABUBNA GAR DIST. 5 ASSESSEE IS EXEMPT UNDER S.11 OF THE ACT. THOUGH VIDE GROUND NO.8, ASSESSEE CONTENDS THAT IT IS ENTITLED TO EXEMPTION UNDER S.10(26AAB), THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ADMITTE D THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE JU RISDICTIONAL HIGH COURT AS REFERRED TO IN PARA 6 OF THE ORDER OF THE CIT(A). SINCE THE ISSUE OF REGISTRATION HAS BEEN CLARIFIED BY THE CIT (EXEMPTION) VIDE ORDER DATED 3.12.2015, I HEREBY SET ASIDE THE MATTE R TO THE FILE OF THE ASSESSING OFFICER, WHO IS DIRECTED TO RECONSIDER TH E ISSUE IN ACCORDANCE WITH LAW. GROUND NO.9 IS WITH REGARD TO CHARGING O F INTEREST UNDER S.234A, S.234B AND S.234C, WHICH ARE CONSEQUENTIAL AND THEREFORE, NEED NOT BE CONSIDERED SEPARATELY. 12. IN THE RESULT, APPEALS FILED BY THE ASSESSEE A RE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY IN THE OPEN COURT. SD/- (D.MANMOHAN) VICE PRESIDENT DT/- 23 RD DECEMBER, 2015 0 COPY FORWARDED TO: 1. AGRICULTURAL MARKET COMMITTEE,( KOLLAPUR, MAHABU BNAGAR DIST) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S E LEGANCE, NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 50 0029 2. INCOME TAX OFFICER WARD 1, MAHABUBNAGAR 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) 4 , HYDERABAD COMMISSIONER OF INCOME-TAX-4, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.