M/S REGULATED MARKET COMMITTEE , ATTABIRA V. ASSESSMENT UNIT INCOME TAX DEPARTMENT, NEW DELHI

WP(C)/10602/2025

AI Insights

The case involves the Regulated Market Committee, Attabira, Sambalpur, which challenged a notice of demand and assessment order issued by the Income Tax Department for the Assessment Year 2017-18. The petitioner argued that they were exempt from income tax as per a government notification and that there were errors in the computation of tax liability. The court found that there were indeed errors in the computation and acknowledged the exemption granted for a subsequent assessment year, leading to the decision to set aside the demand and order a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746553 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 30-04-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Odisha Agriculture Produce Market Act, 1956, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AVINASH KEDIA
• Assessee Lawyers: JAGABANDHU SAHOO; KAJAL SAHOO
• Keywords: Assessment Order; Exemption from Income Tax; Income Tax; Rectification of mistake; Unexplained income
• Section: 143(2); 250; 69A; 148A(b); 156; 10(26AAB)

Judgement Text

" Page 1 of 5 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.10602 of 2025 M/s. Regulated Market Committee, Attabira, Sambalpur …. Petitioner Mr. Jagabandhu Sahoo, Senior Advocate assisted by Ms. Kajal Sahoo, Advocate -versus- Assessment Unit, Income Tax Department, National Faceless Assessment Centre, New Delhi and another …. Opposite Parties Mr. Avinash Kedia, Junior Standing Counsel for Income Tax Department CORAM: THE HON’BLE THE CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN Order No. ORDER 30.04.2025 02. This matter is taken up through Hybrid mode. 2. Challenging the notice of demand dated 11.03.2025 issued under Section 156 of the Income Tax Act, 1961 along with the computation sheet dated 11.03.2025 forming part of the assessment order for Assessment Year 2017-18 by the Opposite Party No.1- Assessment Unit, Income Tax Department, National Faceless Assessment Centre, the Petitioner has approached this Court by way of filing this writ petition invoking extraordinary jurisdiction under Article 226 of the Constitution of India. 3. The Petitioner, Regulated Market Committee established under the Odisha Agriculture Produce Market Act, 1956, was issued with notice under Section 148A(b) of the Income Tax Act, 1961 (for short, “the IT Act”) for the Assessment Year 2017-18 for assessment of Page 2 of 5 alleged receipt of an amount of Rs.4,77,79,805/- in its bank account for which no Income Tax return was filed. 4. The Petitioner was also served with notice under Section 143(2) of the IT Act to which the Petitioner proffered explanation. Nonetheless, the Opposite Party No.1-Assessment Unit, Income Tax Department, National Faceless Assessment Centre passed the assessment order on 11.03.2025 treating the aforesaid amount as unexplained income under Section 69A. It is complained that errors have crept in while computing tax liability. The Petitioner filed on- line application for rectification of mistake. 5. Mr. Jagabandhu Sahoo, learned Senior Advocate assisted by Ms. Kajal Sahoo, learned counsel appearing for the Petitioner submitted that the Income Tax Department in National Faceless Assessment Centre failed to appreciate the fact that the Regulated Market Company, Attabira (Petitioner) has been exempted from payment of Income Tax vide Government of India, Ministry of Finance (Department of Revenue and Insurance) Notification dated 16.06.1970 read with Letter dated 30.07.1970 issued by the Deputy Agricultural Marketing Adviser to the Government of India in Ministry of Good, Agriculture, C.D. & Cooperation (Department of Agriculture). 5.1. It is submitted that there is mistake apparent on the face of the computation of income tax liability. Bare look at the computation sheet reveals such mistake being committed by the Assessment Unit, Income Tax Department. 5.2. Learned Senior Advocate brought to the notice of this Court that Appellate Authority for subsequent Assessment Year, i.e., 2018- Page 3 of 5 19 considered such exemption granted to the Petitioner and allowed its appeal. The decision so taken by the Appellate Authority for Assessment Year 2018-19 would also apply to the present Assessment Year 2017-18 in all fours. 5.3. He, therefore, essentially submitted that if the matter is remitted to the Assessing Authority, the demand would be almost nil. 6. Mr. Avinash Kedia, learned Junior Standing Counsel appearing for the Income Tax Department sought for instruction pursuant to the order dated 23.04.2025 and on being instructed, he conceded to the fact that on the face of the record there is apparent error crept in the computation sheet which form part of assessment order. 6.1. He further submitted that if the petitioner furnishes the relevant documents before the assessing officer, the same could be considered on its own merit. 7. Heard Mr. Jagabandhu Sahoo, learned Senior Advocate assisted by Ms. Kajal Sahoo, learned counsel appearing for the Petitioner and Mr. Avinash Kedia, learned Junior Standing Counsel appearing for the Income Tax Department. 8. Bare perusal of computation sheet made available vide Annexure-3 of the writ petition reveals that huge amount of demand has been made against the Petitioner by reflecting wrong figures. To illustrate, at Serial No.4 of the Computation Sheet under the Head “Income from other sources” it is shown as Rs.4,77,79,805/- and the same figure is shown at Serial No.6, i.e., total (After Intra Head Adjustment) 6=(1+2+3+4)-5. All other columns up to Serial No.8 has been shown as zero (0). However, at Serial No.9 which is 9 = 6-(7+8), the Gross Total Income (Including Special Income), the figure is shown as Rs.9,55,59,610/-. Likewise, in other columns erroneous Page 4 of 5 figures appear to have been reflected leading to computation of demand of Rs.20,44,80,668/-. Cursory glance at computation sheet transpires without any ambiguity in mind that the figures have been reflected with erroneous perception. In such view of the matter, the notice of demand under Section 156 of the Income Tax Act (Annexure-4) needs modification by undertaking fresh computation of tax liability. 9. During course of hearing, learned Senior Advocate appearing for the Petitioner furnished copy of appellate order dated 28.07.2023 passed under Section 250 of the Income Tax Act, 1961 with respect to demand for the Assessment Year 2018-19 by the National Faceless Appeal Centre (NFAC). Perusal of said order, reveals that the appeal was allowed in favour of the Petitioner by taking cognizance of the fact that it has been granted exemption under Section 10(26AAB) of the Income Tax Act. In the said appellate order, it has been observed that the source of deposit in the bank is the market fee received from the Odisha State Civil Supplies Corporation Limited. Observing thus, the Appellate Authority found no merit in the addition made by the Assessing Officer under Sections 69 and 69A of the IT Act and, accordingly, deleted the additions. 10. Regard being had to such Appellate Order for the subsequent period 2018-19 granting exemption under Section 10(26AAB) and being conscious of the fact that there occurred error in computation of tax liability, it is, therefore, felt expedient to show indulgence in the order of the Assessing Authority. 11. Facing with such situation, this Court has no other option but to set aside the demand raised vide Assessment Order dated 11.03.2025 Page 5 of 5 along with Computation Sheet under Annexures-2 & 3 and also the notice of demand in Annexure-4. It is directed that the Assessing Authority shall pass appropriate order afresh by undertaking the computation of tax liability taking into consideration the appellate order dated 28.07.2023 passed under Section 250 of the IT Act pertaining to the Assessment Year 2018-19 within a period of four weeks from today. 12. With the aforesaid observations and directions, this writ petition as well as the connected Interlocutory Applications stand disposed of. (Harish Tandon) Chief Justice (M.S. Raman) Judge Laxmikant Digitally Signed Signed by: LAXMIKANT MOHAPATRA Designation: Senior Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 02-May-2025 17:47:08 Signature Not Verified "