Agricultural Market Committee , Tadepalligudem V. The Income Tax Officer, Ward-1, Tadepalligudem

ITA 693/VIZ/2019

• Counselvise Citation: [2022] 129 COUNSELVISE.COM (IT) 9802 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 03-08-2022
• Assessment Year: 2006-2007
• Appeal Filed On: 25-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12; 11; 142(1); 12AA; 143(2); 13

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.693/Viz/2019 (ननधधारण वर्ा / Assessment Year : 2006-07) Agricultural Market Committee, Tadepalligudem Market Yard Tadepalligudem [PAN : AAALA0358D] Vs. Income Tax Officer Ward-1 Tadepalligudem अपीलधथी की ओर से/ Appellant by : Shri GVN Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri ON Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 04.08.2022 घोर्णध की तधरीख/Date of Pronouncement : 13.10.2022 O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of the Commissioner of Income Tax [in short, [CIT(A)], Tirupati in ITA.No.371/2015-16/CIT(A)/TPT dated 09.10.2019 for the Assessment Year (A.Y.) 2006-07. 2. Brief facts of the case are that the assessee has filed its return of income on 19.02.2008 declaring Nil income. The same was processed u/s 143(1) of the Act, 1961 (in short ‘Act’) and converted to scrutiny. Subsequently, notice u/s 143(2) and 142(1) were issued. Consequent to 2 ITA No.693/Viz/2019, A.Y.2006-07 Agricultural Market Committee, Tadepalligudem repealing of the provisions of sec.10(29) from the statute by the Finance Act, 2002 with effect from 01.04.2003, the Agricultural Market Committees which hitherto were enjoying exemption of their income from tax have become taxable entities w.e.f. the assessment year 2003-04 onwards. Accordingly, keeping in view the detailed discussions made and decisions taken for the A.Ys 2003-04 and 2004-05 and also since departmental appeals are pending against such orders before the Hon’ble ITAT, the Assessing Officer (AO) adopted the same stand in the finalisation of assessment for the A.Y.2006-07 and passed an order u/s 143(3), taking excess of income over expenditure as shown by assessee itself, as the income of the assessee for the assessment year under consideration. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) after careful consideration of the orders submitted by the assessee along with written submissions and contentions, dismissed the appeal of the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal and raised the following grounds : 1. The order dt.09.1.2019 of the Commissioner of Income Tax (Appeals), Tirupati, in ITA No.371/2015-16/CIT(A)/TPT for the asst.year 2006-07 is contrary to law, the weight of evidence and probabilities of the case. 3 ITA No.693/Viz/2019, A.Y.2006-07 Agricultural Market Committee, Tadepalligudem 2. The Ld.CIT(A) ought to have seen that the appellant’s entire income was exempt under the provision of secs. 11 & 12 of the Act. 3. The Ld.CIT(A) should have allowed the alternative claim made before him in respect of the availability of registration u/s 12AA and exemption of income u/s 11 & 12 of the Act. 4. The ld.CIT(A) failed to see that subsequent to the filing of appeal for the year, registration u/s 12AA of the Act was communicated to the appellant. 5. The ld.CIT(A) ought to have considered the facts submitted before him in respect of the proceedings for the asst.year 2003-04 in the appellant’s own case, wherein proceedings were concluded in appellant’s favour under similar circumstances. 6. For these and others that may be urged at the time of appeal hearing, appellant prays the appeal may be allowed. 5. Ground No.1, 5 and 6 are general in nature, which do not require specific adjudication. 6. Ground No.2,3 and 4 are related to availability of registration u/s 12AA and exemption of income u/s 11 & 12 of the Act. The Ld.AR submitted before the Ld.CIT(A) that exemption u/s 11 of the Act is applicable for the A.Y.2006-07 as the department allowed exemption for the A.Y.2006-07 under the same section. Ld.CIT(A) found that the assessee has not raised specific ground before the CIT(A) for claiming exemption u/s 11 of the Act. The Ld.CIT(A) observed that when there is no specific ground raised by the assessee, the submissions and an alternative claim cannot be entertained by the appellate authority. The Ld.CIT(A) viewed 4 ITA No.693/Viz/2019, A.Y.2006-07 Agricultural Market Committee, Tadepalligudem that the eligibility of the assessee to claim exemption u/s 11 of the Act require satisfaction of the AO having regard to the provisions of section 11, 12AA and 13 of the Act. The AO has to satisfy that the assessee fulfilled the conditions prescribed regarding the application of income, accumulations, filing required forms etc. to grant exemption. The Ld.CIT(A) held that this aspect was not considered by the AO at the time of assessment and the simple claim made by the assessee cannot be a ground to direct the AO to grant exemption. Even no material was available before the Ld.CIT(A) for adjudication of the issue of claim u/s 11 of the Act, hence, the Ld.CIT(A) dismissed the appeal of the assessee on this ground. 7. On being aggrieved, the assessee preferred an appeal before the Tribunal and submitted that the said appeal was disposed off on 20.12.2017, wherein, it was held that the expenditure on account of payment to other department is allowable and sent the file back to the Assessing Officer for fresh consideration. He submitted that the assessee was granted registration u/s 12AA of the Act retrospectively as per the directions of Hon’ble ITAT. He further submitted that the AO by following the decision taken for the A.Y.2003-04 and 2004-05, finalized the assessment for the impugned assessment year also. He submitted that the 5 ITA No.693/Viz/2019, A.Y.2006-07 Agricultural Market Committee, Tadepalligudem Hon’ble ITAT remanded the matter back to the AO to consider the submissions and allow the expenditure as allowable one. 8. The Ld.Counsel for the revenue relied on the decision of the Ld.CIT(A) and pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. 9. We have heard both the parties and perused the material placed on record. In the instant case, Hon’ble Tribunal vide it’s order dated 14.07.2009 in I.T.A.No.129/Viz/2008 directed the Ld.CIT(A) to condone the delay in filing the applications for registration u/s 12AA of the Act and also grant registration with retrospective effect. Accordingly, registration u/s 12AA was granted to the assessee. Merely based on the fact that the revenue has preferred an appeal against the order of the Hon’ble Tribunal cannot be a reason for rejecting the claim u/s 11 or 12 of the Act for the assessee for the impugned assessment year. Pending adjudication of the appeal by the Hon’ble High Court, the assessee is entitled to exemption u/s 11 or 12 of the Act for the year 2006-07. We, therefore, remit the matter back to the file of the AO and direct the Ld.AO to grant exemption u/s 11 or 12 of the Act in accordance with law. 6 ITA No.693/Viz/2019, A.Y.2006-07 Agricultural Market Committee, Tadepalligudem 10. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 13 th October, 2022. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयकसदस्य/JUDICIAL MEMBER Dated : 13.10.2022 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Agricultural Market Committee, Tadepalligudem Market Yard, Tadepalligudem 2. रधजस्व/The Revenue – Dy.Commissioner of Income Tax, Circle-3(1), Visakhapatnam 3. प्रधान आयकर आयुक्त /The Principal Commissioner of Income Tax-1, Visakhapatnam 4. The Commissioner of Income Tax (Appeals)-1, Visakhapatnam 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 6.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam