Agricultural Market Committee, Srikakulam V. THE ITO, WARD - 2, Srikakulam

ITA 30/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6591 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Assessee Lawyers: B V RAO
• Section: 12A; 12AA; 12; 10; 11

Judgement Text

ITA NO.30/VIZAG/2014 AGRICULTURAL MARKET COMMITTEE, SRIKAKULAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.30/VIZAG/2014 ( / ASSESSMENT YEAR: 2008-09) AGRICULTURAL MARKET COMMITTEE SRIKAKULAM ITO, WARD - 2, SRIKAKULAM [PAN NO. AAALA0385J ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI B.V. RAO, A.R. / RESPONDENT BY : SHRI K.C. DAS, DR / DATE OF HEARING : 16.10.2017 / DATE OF PRONOUNCEMENT : 18.10.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), {CIT(A)}, VIS AKHAPATNAM VIDE ITA NO.210/12-13/ITO,WD-2/SKLM/2013-14 DATED 15.11.2 013 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.30/VIZAG/2014 AGRICULTURAL MARKET COMMITTEE, SRIKAKULAM 2 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE REJ ECTION OF EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CAL LED AS 'THE ACT') FOR NON FURNISHING THE COPY OF REGISTRATION U/S 12AA OF THE ACT AND ALSO FOR NON FURNISHING THE AUDIT REPORT U/S 12A(1)(B) OF TH E ACT. THE ASSESSEE IS A LOCAL AUTHORITY CONSTITUTED UNDER LAW FOR THE REGULATION OF AGRICULTURAL PRODUCES AND LIVESTOCK. CONSEQUENT TO THE INTRODUCTION OF EXPLANATION TO THE EXPRESSION LOCAL AUTHORITY IN SE CTION 10(20) OF THE INCOME TAX ACT, 2002, THE ASSESSEE IS LIABLE TO TAX FROM ASSESSMENT YEAR 2003-04 ONWARDS. WITH THE INTRODUCTION OF SUB- SECTION 26AAB TO SECTION 10 OF THE ACT, W.E.F. 1.4.2009, THE INCOME OF AGRICULTURAL MARKET COMMITTEES ARE EXEMPTED PROSPECTIVELY FROM ASSESSME NT YEAR 2009-10 AND THE JURISDICTIONAL HIGH COURT CLARIFIED THAT TH IS AMENDMENT IS PROSPECTIVE IN NATURE IN THE ASSESSEES OWN CASE FO R THE ASSESSMENT YEAR 2004-05 TO 2005-06. FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSEE FURNISHED RETURN OF INCOME CLAIMING DEDUCT ION U/S 10(26AAB). SINCE EXEMPTION IS ALLOWABLE FROM THE ASSESSMENT YE AR 2009-10 PROSPECTIVELY, THE A.O. DISALLOWED THE EXEMPTION CL AIMED U/S 10(26AAB) OF THE ACT AND ALSO DID NOT ENTERTAIN THE ASSESSEE S CLAIM FOR EXEMPTION U/S 11 OF THE ACT. THE A.O. BROUGHT TO TAX THE SUM OF ` 49,77,062/- AFTER ALLOWING THE EXPENDITURE OF ` 2,55,890/-. ITA NO.30/VIZAG/2014 AGRICULTURAL MARKET COMMITTEE, SRIKAKULAM 3 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) CONFIRMED THE ORDER OF THE A.O. AND DISMISSED THE APPEAL OF THE ASSESSEE. BEFORE T HE CIT(A), THE ASSESSEE RAISED PLEA FOR GRANT OF EXEMPTION U/S 11 OF THE ACT. THE LD CIT(A) OBSERVED THAT THE ASSESSEE HAD MADE THE CL AIM U/S 11 OF THE ACT BEFORE THE A.O. AFTER REJECTING THE EXEMPTION U /S 10(26AAB) AND DID NOT FURNISH THE AUDITED FINANCIAL STATEMENTS AS RE QUIRED U/S 12A (1B) OF THE ACT. THE ASSESSE DURING THE APPELLATE PROCEEDIN GS ALSO FAILED TO FURNISH THE AUDIT REPORT AND THE CERTIFICATE OF REG ISTRATION U/S 12AA OF THE ACT. THEREFORE THE LD. CIT(A) REJECTED THE CLA IM OF THE ASSESSEE FOR EXEMPTION U/S 11 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE FILED THE APPEAL BEFORE THIS TRIBUNAL. APPEARING FOR THE ASS ESSEE, THE LD. A.R. ARGUED THAT THE ASSESSEE WAS GRANTED REGISTRATION U /S 12AA OF THE ACT W.E.F. 1.4.2007 AND FURNISHED COPY OF REGISTRATION DT 4.11.2007. THE LD. A.R. FURTHER ARGUED THAT THE ASSESSEE HAS MAINTAINE D THE BOOKS OF ACCOUNTS AND THE BOOKS OF ACCOUNTS ARE DULY AUDITED AND IT WAS ALSO SUBMITTED BEFORE THE CIT(A). IN SUPPORT OF HIS SUB MISSION, THE ASSESSEE FILED COPY OF LETTER DATED 6.11.2012 ADDRESSED TO T HE CIT(A), WHICH WAS ITA NO.30/VIZAG/2014 AGRICULTURAL MARKET COMMITTEE, SRIKAKULAM 4 DULY ACKNOWLEDGED BY THE OFFICE OF THE CIT(A) AND R EQUESTED TO REMIT THE MATTER BACK TO THE FILE OF THE A.O. TO CONSIDE R THE EXEMPTION U/S 11 OF THE ACT. 5. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE OR DERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. AT THE TIME OF COMPLETION OF ASSESSMENT, THE ASSESSEE WAS GRANTED REGISTRATION U/S 12AA OF THE ACT W.E.F. 1.4.2007 RELEVANT TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE ALSO FURNISHED THE COPIES OF THE AUDITED FINANCIAL STATEMENTS AND AUDIT REPORT BEFORE THE CIT(A) ON 6. 11.2012, WHICH WAS SKIPPED FROM THE ATTENTION OF THE LD. CIT(A). THER EFORE, THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT SUBJECT TO THE SATISFACTION OF TERMS AND CONDITIONS OF SECTION 11 & 12 OF THE ACT, THEREFORE, WE DEEM IT FIT TO REMIT THE MATTER BACK TO THE FILE OF THE A.O. TO CONSIDER THE ENTIRE MATERIAL AND DECIDE THE ISSUE AFRESH ON MERI TS. ITA NO.30/VIZAG/2014 AGRICULTURAL MARKET COMMITTEE, SRIKAKULAM 5 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18 TH OCT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 18.10.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT AGRICULTURAL MARKET COMMITTEE, SR IKAKULAM 2. / THE RESPONDENT THE ITO, WARD-2, SRIKAKULAM 3. + / THE CIT-2, VISAKHAPATNAM 4. + ( ) / THE CIT (A), VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM