Agricultural Market Committee, Hyderabad V. DIT (Exemptions), Hyderabad

ITA 927/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69839 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C H GOPINATH
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. APPELLANT RESPONDENT 925/HYD/2013 AGRICULTURAL MARKET COMMITTEE, SULTANABAD, KARIMNAGAR DIST PIN 505 185 (PAN AAALA 0277 H) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 926/HYD/2013 AGRICULTURAL MARKET COMMITTEE, HUSUNABAD , KARIMNAGAR DIST PIN 505 467 (PAN AAALA 0278 J) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 9 33 /HYD/2013 AGRICULTURAL MARKET COMMI T TEE, MANTHANI, KARIMNAGAR DIST PIN 505467 (PAN A AALA 0291 P ) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 934/HYD/2013 AGRICULTURAL MARKET COMMITTEE, CHOPPADANDI, KARIMNAGAR DIST PIN 505415 (PAN AAALA 0276 G) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 935/HYD/2013 AGRICULTURAL MARKET COMMITTEE, KATARAM, KARIMNAGAR DIST PIN 505503 (PAN AAALA 0275 F) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 936/HYD/2013 AGRICULTURAL MARKET COMMITTEE, GANDHARI NIZAMABAD DSITRICT (PAN AAABC 0176 B) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 938/HYD/2013 AGRICULTURAL MARKET COMMITTEE, GANDHARA KARIMNAGAR DIST PIN 505 445 (PAN AAALA 0266 A) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 2 939/HYD/2013 AGRICULTURAL MARKET COMMITTEE, DHARMAPURI, KARIMNAGAR DIST PIN 505467 (PAN AAALA 0265 D) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 940/HYD/2013 AGRICULTURAL MARKET COMMITTEE, HUZURABAD, KARIMNAGAR DIST PIN 505468 (PAN AAALA 0269 R) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 941/HYD/2013 AGRICULTURAL MARKET COMMITTEE, MUSTABAD, KARIMNAGAR DIST PIN 505 404 (PAN AAALA 0262 E) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 942/HYD/2013 AGRICULTURAL MARKET COMMITTEE, GOLLAPALLY, KARIMNAGAR DIST PIN 505468 (PAN AAALA 0271 R) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 943/HYD/2013 AGRICULTURAL MARKET COMMITTEE, SIRCILLA, KARIMNAGAR DIST PIN 505 301 (PAN AAALA 0267 B) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 927/HYD/2013 AGRICULTURAL MARKET COMMITTEE, KAMAREDDY, NIZAMABAD DIST (PAN AAALA 0806 A) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD 928/HYD/2013 AGRICULTURAL MARKET COMMITTEE, ARMOOR, NIZAMABAD DIST (PAN AABTA 2584 J ) DIRECTOR OF INCOME - TAX (EXEMPTION) HYDERABAD A PPELLANTS BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI C.H.GOPINATH (CIT - DR) DATE OF HEARING 2 3 .0 9 .2013 DATE OF PRONOUNCEMENT 23.09.2013 ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 3 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS IS A BUNCH OF FOURTEEN APPEALS. THEY ARE DIRECTED SEPARATE ORDERS OF THE DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD, REJECTING THE APPLICATIONS OF THE ASSESSEE - AGRICULTURAL MARKET COMMITTEES FOR REGISTRATION UNDER S. 12AA OF THE ACT. SINCE THE FAC TUAL BACKGROUND AND ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF, WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.925 - 926; 933 TO 936; AND 938 TO 943/HYD/2013 2. LET US FIRST TAKE UP FOR CONSIDERATION THESE TWELVE APPEALS . AT THE OUTSET, IT IS NOTICED THAT THERE WAS A DELAY OF 24 DAYS IN FILING FOUR OF THESE APPEALS, BEING ITA NOS.939, 940, 941 AND 943/HYD/2013, BEFORE THIS TRIBUNAL. LEARNED COUNSEL FOR THE ASSESSEE HAS FILED PETI TIONS, ACCOMPANIED BY AFFIDAVITS OF THE SECRETARIES OF THE RESPECTIVE AGRICULTURAL MARKET COMMITTEES. IT IS STATED IN THE CONDONATION PETITIONS THAT THE DELAY IN FILING THE APPEALS HAS OCCURRED ON ACCOUNT OF HEAVY PROCUREMENT OPERATIONS DURING THE MONTH OF MAY, 2013. CONSIDERING THE MARGINAL NATURE OF DELAY AND THE REASON EXPLAINED BY THE APPELLANTS FOR THE SAME, WE ARE INCLINED TO CONDONE THE DELAY. WE ACCORDINGLY CONDONE THE DELAY IN THE FILING OF THESE FOUR APPEALS AND PROCEED TO DISPOSE OF THESE APPEA LS AS WELL ON MERITS. 4. IN ALL THESE MATTERS, ASSESSEES WE RE IN APPEAL BEFORE THE TRIBUNAL EARLIER, AGGRIEVED BY THE ACTION OF THE DIRECTOR OF INCOME - TAX(EXEMPTION) IN NOT CON D ONING THE DELAY IN THE FILING OF THE APPLICATIONS FOR REGISTRATION , AND CONSEQUENTLY NOT GRANTING REGISTRATION AS PRAYED FOR BY THE ASSESSEE - COMMITTEES IN THEIR RESPECTIVE APPLICATIONS. THE TRIBUNAL WHILE DECIDING THE APPEALS, ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 4 DIRECTED THE DIRECTOR OF INCOME - TAX(EXEMPTION) TO CON S IDER THE ISSUE RE LAT ING TO CONDONATION O F DELAY, AFTER GIVING OPPORTUNITY TO THE ASSESSEES. THE DIRECTOR OF INCOME - TAX(EXEMPTION), IN PURSUANCE OF THE SAID EARLIER ORDERS OF THE TRIBUNAL, ON HEARING THE PARTIES, BY THE ORDERS IMPUGNED IN THESE APPEALS, ONCE AGAIN DID NOT CONDONE THE DELAY, AND ACCORDINGLY REJECTED THE APPLICATIONS, WITHOUT GOING INTO THE MERITS THEREOF. AGGRIEVED BY THE SAID ORDERS OF THE DIRECTOR OF INCOME - TAX(EXEMPTION), ASSESSEES ARE IN APPEAL BEFORE US. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT REGISTRATION HAS TO BE GRANTED TO THE ASSESSEES, AS SOUGHT FOR BY THEM IN THEIR RESPECTIVE APPLICATIONS FIELD FOR REGISTRATION UNDER S. 12AA OF THE ACT. IN THIS BEHALF, HE PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL DATED 30.3.2007 IN THE CASES OF AGRICULTURAL MA RKET COMMITTEE, ENUMAMULA WARANGAL DIST AND ELEVEN OTHERS (1130/HYD/2004 AND OTHERS) AND FURNISHED A COPY THEREOF TO US. THE TRIBUNAL IN THAT CASE FOUND THE REASON PUT FORTH BY THE ASSESSEES FOR THE DELAY IN THE FILING OF THE APPLICATIONS FOR REGISTRATION TO BE REASONABLE AND DIRECTED THE DIRECTOR OF INCOME - TAX(EXEMPTION) TO CONDONE THE SAME AND DISPOSE OF THE APPLICATIONS ON MERITS. IN THE CIRCUMSTANCES, IT IS PLEADED ON BEHALF OF THE ASSESSEES BY THE LEARNED COUNSEL THAT THE DELAY IN FILING OF THE APPLI CATIONS SHOULD BE CONDONED AND REGISTRATION SHOULD BE GRANTED AS PRAYED BY THE ASSESSEES IN THEIR RESPECTIVE APPLICATIONS. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDERS OF THE DIRECTOR OF INCOME - TAX(EXEMP TION) AND SUBMITTED THAT REJECTION OF THE APPLICATIONS FOR REGISTRATION IS IN ORDER. 7 . WE HAVE CON S I DE RED THE RIVAL SUBMI S SION S AND PERUSED THE ORDERS OF THE DIRECTOR OF INCOME - TAX(EXEMPTION) IN THESE MATTERS IN THE LIGHT OF THE DECISION OF THE TRIBUNAL RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEES. ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 5 THE REASON FOR THE DELAY IN FILING THE APPLI C ATION S FOR REGISTRATION IN TH E SE MATTES, AS EXPLAINED BY THE ASSESSEES, IS THE SAME AS THE ONE CON S I D ERED BY THE TRIBUNAL IN THE CASES OF AGRICULTURAL MARK ET COMMITTEE, ENAMAMULA AND OTHERS, IN ITS ORDER DATED 30.3.2007 IN ITA NO.1130/HYD/2004 AND OTHERS , RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE TRIBUNAL IN THAT CASE HAS CONDONED THE DELAY AND DIRE C TED THE DIRECTOR OF INCOME - TAX(EXEMPTION) TO DEAL WITH THE APPLICATIONS FOR REGISTRATIONS ON MERIT, FOLLOWING DECISIONS OF THE TRIBUNAL IN THE FOLLOWING THE E A RLI E R DECISION OF THE TRIBUNAL DATED 28.2.2007 IN ITA NO.556/HYD/2005 IN AGRICULTURAL MARKET COMMITTEE, KARIMNAGAR, WHEREIN DELHI BENCH DECI SION OF THE TRIBUNAL IN MARKET COMMITTEE V/S. CIT(2005)3 SOT 98(DEL); GUJARAT MARIT I ME BOARD V/S. CIT(94 TTJ 1103)(AHD); AND AGRICULTURAL PRODUCE AND MARKET COMMITTEE, TELHARA V/S. CT(97 TTJ 165(NAG), HAVE BEEN FOLLOWED. THE RELEVANT OBSERVATIONS OF THE T RIBUNAL VIDE PARA S 3 AND 4 OF THE SAID ORDER DATED 30.3.2007 , ARE EXTRACTED BELOW - 3 . IT IS AGREED BY THE PARTIES THAT EXACTLY IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CA S E OF A G RICULTU R AL MARKET COMMITTEE, KARIMNAGAR IN ITA NO.556/HYD05 DATED 28.2.2007.. IDENTICAL ARE THE FACTS IN ALL TH E APPEALS BEFORE US AND BASED ON TH E R EASONING GIVEN IN THE ABOVE ORDER IN THESE ASSESSEES ALSO, THE DI IS DIRE C TED TO GRANT REGISTRATION TO THE ASSESSEES UNDER S. 12AA OF THE ACT. 4. BEFORE PARTING, IT MAY BE NO T ED THAT TEN OUT O F THE TWELVE APPEALS ARE BARRED BY LIMITATION. PETITION E RS PRAYING FOR CON D ONATION OF DELAY HAVE BEEN FILED. THE DELAY RANGES FROM MORE THAN 300 DAYS TO MORE THAN 700 DAYS. THE DELAY IS STA T ED TO HAVE OCCURRED ON ACCOUNT OF THE FACT THAT INITIALLY, THE ASSESSEE S HAD FILED WRIT PETITION S BEFORE THE HONBLE HIGH COU R T WHEN ASSESSMENT PROC E EDIN G S W E RE INITIATED BY T H E HE REVENUE AUTHORITIES, THEREBY DENYING THEM THE EX E MPTION UN D ER S .10(2 0 ) OF TH E AC T. THESES PETITIONS WERE DIS MIS SED BY THE HIGH COURT ON THE GROUND OF IT BEIN G PREMATURE. SUBSEQUENTLY, THE GOVERNMENT OF ANDHRA PRADESH ISSUED A CIRCULAR TO THE COMMITTEE DIRECTING TH E M TO CLAIM EXEMPTION UNDER S.10(20) BEFORE THE ASSESSING AUTHORITY. SUB S EQUENTLY, A CIRCULAR DATED 13.2.2007 WAS ISSUED TO CLAIM EXEMPTION UNDER S.11 OF THE AC T. IT IS STATED THAT THE SECRETARY OF EACH COMMITTEES IS A SUBORDINATE OFFICIAL WORKING U N D ER THE COMMISSION E R AND DIR E CTOR OF MARK E TING, GOVERNMENT OF ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 6 AN D HRA PRADESH, AND HENCE, IS BOUND BY THE IN S TRU CT IONS ISSUED BY THE SAID AUTHORITY. SIN C E THE INSTRUCTION CAME LATE, THE APPLI C ATION S FOR R E GI S TRATION WERE ALSO DELAYED AND HENCE, THE DELAY IN FILIN G THESE APPEALS AS WELL. SIN C E THERE WAS A REASONABLE CAUS E FOR THE DELAY, WE HAVE CON D ONED THE SAME ADMITTED THE APPEALS. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE PLEADED THAT THE REASON FOR DELAY IN THE FILING OF THE APPLICATIONS FOR REGISTRATION WAS THE SAME AS THE ONE CONSIDERED BY THE TRIB UNAL IN ITS ORDER CITED SUPRA. THEREFORE, C O N SISTENT WITH THE VIEW TAKEN BY THE COORDINATED BENCHES OF THE TRIBUNAL IN SIMILAR MATTERS IN IDENTICAL CIRCUM S TAN C ES, IN THESE MATTERS ALSO, WE DIRECT THE DIRECTOR OF INCOME - TAX(EXEMPTION) TO CONDONE THE DELAY AND PASS APPROPRIATE ORDERS GRANTING REGISTRATION TO THE ASSESSEES HEREIN UNDER S.12AA OF THE ACT , AFTER GIVING REASONABLE OF HEARING TO THE AS SESSE E. 8 . IN THE RESULT, THESE TWELVE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.927 - 928/HYD/2013 9 . IN THESE TWO MATTERS AS WELL, THE ISSUE REL A TING TO GRANTING OF REGISTRATION TO THE ASSESSEE - APPELLANTS HEREIN CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL, AND THE TRIBUNAL VIDE I T S ORDER D ATED 5.8.2008 SET ASIDE THE MATTER TO THE FILE OF THE DIRECTOR OF INCOME - TAX(EXEMPTION) FOR PASSING AN ORDER ON MERITS AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE , IN ACCORDANCE WI T H LAW. THE DIRECTOR OF INCOME - TAX(EXEMPTION), IN PURSUANCE OF THE ORDERS OF THE TRIB U NAL REFUSED TO GR ANT R E GI S TRATION TO THE ASSESSEES ON THE GROUND THAT THE ACTIVITIES OF THE AGRICULTURAL MARKET COMMITTEE MAY NO T COME WITHIN THE AMBIT OF CHARITABLE PURPOSES . AGGRIEVED BY THE SAID FINDING OF THE DIRECTOR OF INCOME - TAX(EXEMPTION), DECLINING TO GRANT REG ISTRATION, ASSESSEES PREFERRED THE PRESENT APPLICATIONS BEFORE US. ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 7 10 . WE HAVE HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE DIRECTOR OF INCOME - TAX(EXEMPTION) AND OTHER MATERIAL AVAILABLE ON RECORD. IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED COUN SE L FOR THE ASSESSEE THAT SIMILAR ISSUE CAME UP FOR C ON S I D ERATION BEFORE THE COORDINATE BENCH OF THE TRIBUNAL IN ITA N O .903 AND 904/HYD/2013 IN THE CA S ES OF AGRICULTURAL MARKET COMMTITEEE, SA RANG A PUR, ADILABAD DSIT. AND AGRICULTURAL MARKET COMMITTEE, KUBEE R, ADILABAD DI S T. R E SP E CTIVELY, WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 17.9.21013, FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF AGRICULTURAL MARKET COMMITTEE (336 ITR 641) HELD THAT THE ASSESSEES HAVE TO BE GRANTED REGISTRATION . RELEVANT PORTION OF THE SAID ORDER OF THE TRIBUNAL READS AS FOLLOWS - 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THE JUDGEMENT RELIED ON BY THE DIT(E) IN THE CASE OF AP STATE SEED CERTIFICATION AGENCY HAS NO RELEVANCE TO THE FACTS OF THE CASE. THE TRIBUNAL IS CONSISTENTLY HOLDING THAT OBJECT FOR WHICH THE AGRICULTURAL MARKET COMMITTEE WAS FORMED IS FOR THE PURPOSE OF CARRYING ON THE OBJECTIVES AS ENUMERATED IN SECTION 2(15) OF THE ACT AND THE PROVISO TO THE SECTION IS NOT APPLICABLE TO THE ASSESSEES' CASES. WE HAVE CONSIDERED THE EARLIER ORDER OF THE TRIBUNAL AND ALSO THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF AGRICULTURA L PRODUCE MARKET COMMITTEE VS. CIT (301 ITR 1). WE TAKE SUPPORT FROM THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AGRICULTURAL MARKET COMMITTEE (336 ITR 641) (AP), WHEREIN THE HIGH COURT HELD AS UNDER: 'CHARITABLE PURPOSE' IN SECT ION 2(15) OF THE INCOME - TAX ACT, 1961 INCLUDES RELIEF TO THE POOR, EDUCATION, MEDICAL RELIEF AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE WORDS 'PUBLIC UTILITY' OR 'GENERAL PUBLIC UTILITY' ARE NOT CAPABLE OF A PRECISE MEANING. THE QUESTION WHETHER SERVICE IS PUBLIC UTILITY OR NOT HAS TO BE DETERMINED IN THE CONTEXT OF DIFFERENT SITUATIONS BUT IT IS WELL - SETTLED THAT 'PUBLIC UTILITY' MEANS PUBLIC PURPOSE DEPENDING UPON THE CONTEXT IN WHICH IT IS USED IN THE STATUTE OR THE RULES. IND EED, IN SOME DECISIONS, PUBLIC UTILITY IS CONSIDERED VERY SIMILAR PUBLIC PURPOSE. AT THE TIME OF CONSIDERING THE APPLICATION MADE FOR REGISTRATION AS A TRUST OR A CHARITABLE INSTITUTION UNDER SECTION 12A READ WITH SECTION 12AA THE COMMISSIONER IS REQUIRED TO LOOK AT THE OBJECTS OF THE TRUST AND NOTHING MORE. THE AGRICULTURAL MARKETING ACTS PROVIDE FOR ESTABLISHMENT OF NOTIFIED MARKET AREAS/YARDS FOR PURCHASE AND SALE OF AGRICULTURAL PRODUCE AND LIVESTOCK AND FOR BETTER REGULATION OF SUCH MARKETS. THE PURP OSE OF MARKETING LEGISLATION IS TO ENABLE PURCHASERS TO GET A FAIR PRICE FOR THE COMMODITIES BY ELIMINATING MIDDLEMEN AND ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 8 PROVIDE A REGULATING MARKET WITH FACILITIES FOR CORRECT WEIGHMENTS, STORAGE, ACCOMMODATION AND EQUAL POWERS OF BARGAIN FOR REASONABLE PRICE TO THE GROWERS AND THE CONSUMERS. AGRICULTURAL MARKETING COMMITTEES DISCHARGE AN IMPORTANT DUTY AND FUNCTION OF PROTECTING THE INTEREST OF A LARGE BODY OF PERSONS, NAMELY, AGRICULTURISTS, FARMERS AND GROWERS OF AGRICULTURAL PRODUCE AND LIVESTOCK. A N AGRICULTURAL MARKETING COMMITTEE CONSTITUTED UNDER THE ENACTMENT OF THE STATE LEGISLATURE DERIVES INCOME FROM PROPERTY HELD UNDER LEGAL OBLIGATION FOR A CHARITABLE PURPOSE TO WIT THE ADVANCEMENT OF AN OBJECT OF GENERAL UTILITY. EVEN IF AN AGRICULTURAL MARKETING COMMITTEE DOES NOT FALL IN ANY OF THE CATEGORIES UNDER SECTION 2(31)(0 TO (VI) OF THE ACT, NAMELY, AN INDIVIDUAL, A HINDU UNDIVIDED FAMILY, A COMPANY, A FIRM, AN ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS AND LOCAL AUTHORITY, IT CERTAINLY FALL S WITHIN THE SCOPE OF ARTIFICIAL JURIDICAL PERSON. BY THE FINANCE ACT, 2002, WITH EFFECT FROM APRIL 1, 2003, AN EXPLANATION WAS INSERTED TO SECTION 2(31) WHICH MAKES IT CLEAR THAT, INTER ALIA, AN ARTIFICIAL JURIDICAL PERSON SHALL BE DEEMED TO BE A PERSON W HETHER OR NOT IT IS ESTABLISHED OR INCORPORATED WITH THE OBJECT OF DERIVING INCOME, PROFITS OR GAINS. AGRICULTURAL MARKETING COMMITTEES WERE ENTITLED TO SEEK EXEMPTION UNDER SECTION 10(20) READ WITH SECTION 10(29) TILL MARCH 31,2003 BUT BY REASON OF AMENDMENT TO SECTION 10(20) AND DELETION OF SECTION 10(29) WITH EFFECT FROM APRIL 1, 2003, THEY, FOR THE PUR POSE OF THE ACT, CEASED TO BE 'LOCAL AUTHORITIES'. THIS ITSELF WOULD NOT DISQUALIFY THEM FROM CLAIMING EXEMPTION UNDER SECTIONS 11(1) AND 12 PROVIDED THEY ARE CONSIDERED AS INSTITUTIONS ESTABLISHED FOR ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY, BEC AUSE THE PARLIAMENTARY BENEFIT UNDER SECTION 10(20) IS ALTOGETHER DIFFERENT FROM THE BENEFIT GRANTED BY THE TAX MACHINERY SUBJECT TO STATUTORY CONDITIONS CONTAINED IN SECTIONS 11 TO 13. AN AGRICULTURAL MARKETING COMMITTEE IS CONSTITUTED UNDER THE STATE ACT FOR THE SOLE PURPOSE OF PROTECTING THE INTEREST OF AGRICULTURISTS, FARMERS AND GROWERS. SECONDLY, THE AGRICULTURAL MARKETING COMMITTEE IS UNDER LEGAL OBLIGATION TO PROVIDE ALL NECESSARY INFRASTRUCTURE AND MARKET FACILITIES WITHIN THE MARKET PLACE/YARD IN A NOTIFIED MARKET AREA, INCLUDING WATER, ELECTRICITY, AUCTION/TRADING PLATFORMS, FACILITIES FOR RECEIVING, PAYING AND DEPOSITING MONEY, AND RESOLVING DISPUTES. THIRDLY, THE INCOME OF THE AGRICULTURAL MARKETING COMMITTEE FROM DIFFERENT SOURCES - LICENCE FEES , MARKET FEES, LOANS, ETC., WHICH IS DERIVED WITHOUT ANY PROFIT MOTIVE IS TO BE USED TO MEET THE EXPENDITURE FOR PROVIDING MARKET FACILITIES. FOURTHLY, ALL THE INCOME HAS TO BE DEPOSITED IN THE MARKET COMMITTEE FUND, OUT OF WHICH TEN PER CENT. SHALL BE, CO NTRIBUTED TO THE CENTRAL MARKET FUND WHICH SHALL VEST IN THE GOVERNMENT, WHICH EXERCISES POWER OF SUPERVISION AND SUPERINTENDENCE OVER THE MARKET COMMITTEES. THE GOVERNMENT ADMINISTERS AND APPLIES THE CENTRAL MARKET FUND, INTER ALIA, FOR PROVIDING GRANTS TO NEEDY AGRICULTURAL MARKETING COMMITTEES. FIFTHLY, AGRICULTURAL MARKETING COMMITTEES SERVE AN IMPORTANT ASPECT OF RURAL ECONOMY, I.E., PROVIDING FACILITIES FOR MARKETING AGRICULTURAL PRODUCE AND PRODUCTS OF LIVESTOCK. SECTION 14(1) OF THE AGRICULTURAL MA RKETING COMMITTEE ACT READ WITH RULE 8 OF THE RULES MANDATE THAT 'ALL ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 9 MONEYS RECEIVED BY AN AGRICULTURAL MARKETING COMMITTEE SHALL BE DEPOSITED IN A SINGLE BANKING ACCOUNT WITH THE NEAREST GOVERNMENT TREASURY, OR WITH THE SANCTION OF THE GOVERNMENT IN A BA NK' OUT OF WHICH ALL THE EXPENDITURE OF THE AGRICULTURAL MARKETING COMMITTEE SHALL BE DEFRAYED. UNDER SECTION 11 (5)(III), DEPOSIT OF THE MONEYS IN A SCHEDULED BANK IS SUBSTANTIAL COMPLIANCE WITH THE LAW. AN AGRICULTURAL MARKETING COMMITTEE IS ENTITLED T O BE REGISTERED UNDER SECTION 12A/12AA.' 5. IN VIEW OF THE ABOVE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT, WE ARE INCLINED TO HOLD THAT THE ASSESSEES HAVE TO BE GRANTED WITH REGISTRATION U/S. 12AA OF THE ACT. 6 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEES IN ITA NOS. 903 AND 904/HYD/2013 ARE ALLOWED. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN SIMILAR MATTERS AS NOTED ABOVE, WE ACCEPT THE CON T ENTION S OF THE ASSESSEES IN TH E SE APPEALS, AND DIR E CT THE DIR ECTOR OF INCOME - TAX(EXEMPTION) TO GRANT REGISTRATION TO THE ASSESSEE - COMMITTEES. 11 . IN THE RESULT, BOTH THESE APPEALS ARE ALLOWED. 1 2 . TO SUM UP, WHIL E ITA NOS.927 - 928/HYD/2013 ARE ALLOWED, THE OTHER TWELVE APPEALS OF THE ASSESSEES , BEING ITA NOS.925 - 926/HYD/2013; ITA NOS.933 TO 936 AND 938 TO 943/HYD/2013, ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 23 . 9 .201 3 SD/ - SD/ - (ASHA VIJAYARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 23 RD SEPTEMBER, 201 3 COPY FORWARDED TO: 1. AGRICULTURAL MARKET COMMITTEE, SULTANABAD, ( KARIMNAGAR DIST PIN 505 185 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 10 2 . AGRICULTURAL MARKET COMMITTEE, HUSUNABAD , ( KARIMNAGAR DIST PIN 505 467) C/O. SHRI S.RAMA RAO,FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 3 . AGRICULTURAL MARKET COMMITTEE, MANTHANI, ( KARIMNAGAR DIST PIN 505467 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 4 AGRICULTURAL MARKET COMMITTEE, CHOPPADANDI, ( KARIMNAGAR DIST PIN 505415 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 5 AGRICULTURAL MARKET COMMITTEE, KATARAM, ( KARIMNAGAR DIST PIN 505503 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 6 AGRICULTURAL MARKET COMMITTEE, GANDHARI ( NIZAMABAD DI S TRICT ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 7 AGRICULTURAL MARKET COMMITTEE, GANDHARA ( KARIMNAGAR DIST PIN 505 445 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 8 AGRICULTURAL MARKET COMMITTEE, DHARMAPURI, ( KARIMNAGAR DIST PIN 505467 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 9 AGRICULTURAL MARKET COMMITTEE, HUZURABAD, ( KARIMNAGAR DIST PIN 505468 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 50002 9 10 AGRICULTURAL MARKET COMMITTEE, MUSTABAD, ( KARIMNAGAR DIST PIN 505 404 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 11 AGRICULTURAL MARKET COMMITTEE, GOLLAPALLY, ( KARIMNAGAR DIST PIN 505468 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 12 AGRICULTURAL MARKET COMMITTEE, SIRCILLA, ( KARIMNAGAR DIST PIN 505 301 ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 ITA NO.925 /HYD/1 3 & 13 OTHERS AGRICULTURAL MARKET COMMITTEE, SULTHANABAD & 13 ORS 11 13 AGRICULTURAL MARKET COMMITTEE, KAMAREDDY, ( NIZAMABAD DIST ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 14 AGRICULTURAL MARKET COMMITTEE, ARMOOR, ( NIZAMABAD DIST ) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 15 DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD 16 DY. DIRECTOR OF INCOME - TAX(EXEMPTION) HYDERABAD 17. DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD B.V.S