M/s Agricultural Market Committee, Polavaram, Jangareddigudem v. The ITO, Ward-1, Eluru

ITA 1/VIZ/2011 | 2006-2007
Pronouncement Date: 04-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 125314 RSA 2011
Assessee PAN AAKFA9125C
Bench Visakhapatnam
Appeal Number ITA 1/VIZ/2011
Duration Of Justice 6 month(s)
Appellant M/s Agricultural Market Committee, Polavaram, Jangareddigudem
Respondent The ITO, Ward-1, Eluru
Appeal Type Income Tax Appeal
Pronouncement Date 04-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 04-07-2011
Date Of Final Hearing 20-04-2011
Next Hearing Date 20-04-2011
Assessment Year 2006-2007
Appeal Filed On 03-01-2011
Judgment Text
ITA NOS 1 AND 2 OF 2011 AGRIL.MARKET COMMITTEE POLA VARAM PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS.1 & 2/VIZAG/2011 ASSESSMENT YEARS: 2006-07 AND 2007-08 AGRICULTURAL MARKET COMMITTEE POLAVARAM JANGAREDDIGUDEM VS. ITO WARD-1 ELURU (APPELLANT) PAN NO: AAKFA 9125 C (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI T.H. LUCAS PETER CIT (DR) ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THESE APPEALS HAVE BEEN PREFERRED AGAINST THE SEPAR ATE ORDERS DATED 22.11.2010 PASSED BY LEARNED CIT(A) RAJAHMUN DRY AND THEY PERTAIN TO THE ASSESSMENT YEARS 2006-07 AND 2007-08. IN THE SE APPEALS THE ASSESSEE HAS RAISED IDENTICAL ISSUES IN BOTH THE YE ARS. HENCE THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER. 2. WE EXTRACT BELOW THE EFFECTIVE GROUNDS RAISED IN THE APPEAL RELATING TO THE ASSESSMENT YEAR 2006-07: (02) THE CIT (A) SHOULD HAVE SEEN THAT THE INCOME OF THE APPELLANT IS EXEMPT UNDER SECTION 10(26AAB) OF THE INCOME TAX ACT 1961 IN AS MUCH AS THE INSERTION OF SEC.10(26AAB) BY THE FINANCE ACT 2008 IS TO BE CONSIDERED AS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. (03) THE CIT (A) ERRED IN REFUSING EXEMPTION UNDER SECTI ON 11 TO THE APPELLANTS INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS 1 AND 2 OF 2011 AGRIL.MARKET COMMITTEE POLA VARAM PAGE 2 OF 5 (04) THE CIT (A) SHOULD HAVE SEEN THAT THE APPELLANT COU LD NOT FILE FORM NO.10 & 10B DUE TO CIRCUMSTANCES BEYO ND ITS CONTROL. (05) THE CIT (A) SHOULD HAVE SEEN THAT THE MENTION OF OBJECTS FOR ACCUMULATION OR SETTING APART OF AMOUNT S IN A GENERAL MANNER IN FORM NO.10 DOES NOT DISENTITLE THE CLAIM OF THE APPELLANT FOR ACCUMULATION OR SETTING APART FUNDS FOR FUTURE YEARS. (06) THE CIT (A) ERRED IN DISALLOWING THE AMOUNT GIVEN T O APCOB OF RS.30 00 000 BY THE APPELLANT IN ACCORDANC E WITH THE PROVISIONS OF SEC.15 OF THE AP (AGRICULTUR AL PRODUCE AND LIVESTOCK) MARKETS ACT 1966 AS PER THE DIRECTION OF THE GOVT. OF A.P. HE SHOULD HAVE SEEN THAT THE AMOUNT WAS GIVEN FOR PURPOSES OF PUBLIC UTILITY AS PER THE PROVISIONS OF THE ACT AND ARE NOT DIVERSION OF ITS FUNDS. (07) THE CIT (A) SHOULD HAVE ALLOWED DEPRECIATION ON THE ASSETS OF THE APPELLANT IN THE MANNER ALLOWABLE UND ER THE ACT. (08) THE CIT (A) SHOULD HAVE ALLOWED DEPRECIATION ON THE ASSETS OF THE APPELLANT IN THE MANNER ALLOWABLE UND ER THE ACT. (09) THE CIT (A) SHOULD HAVE SEEN THAT THE ISSUE OF NOTI CE UNDER SECTION 148 IS NOT IN ACCORDANCE WITH LAW. 3. DURING THE COURSE OF HEARING NO DISCUSSION TOOK PLACE WITH REGARD TO THE GROUND RELATING TO THE NOTICE ISSUED UNDER SECT ION 148 OF THE ACT. ACCORDINGLY WE DISMISS THE SAID GROUND CONSIDERING THE SAME AS NOT PRESSED. WITH REGARD TO THE GROUND RELATING TO THE APPLICABILITY OF PROVISIONS OF SEC.10(26AAB) OF THE ACT TO THE IMPUGNED ASSESSM ENT YEARS WE NOTICE THAT THE HON'BLE JURISDICTIONAL A.P. HIGH COURT VI DE ITS ORDER DATED 30.03.2001 IN ITA NO.421 OF 2010 AND OTHERS HAS HE LD AS UNDER IN THE RESULT FOR THE CONCLUSION ON THE POINTS UR GED AND THE REASONS AS ABOVE WE HOLD THAT SECTION 10(26AAB) OF THE ACT INSERTED BY THE FINANCE ACT 2008 W.E.F. 01.04.2009 CANNOT BE APPLIED RETROSPECTIVELY W.E.F. 01.04.2003 AND TH AT THE NEW CLAUSE (26AAB) IN SECTION 10 OF THE ACT IS APPLICAB LE W.E.F. ITA NOS 1 AND 2 OF 2011 AGRIL.MARKET COMMITTEE POLA VARAM PAGE 3 OF 5 01.04.2009 AND SHALL ACCORDINGLY APPLY FOR THE ASSE SSMENT YEAR 2009-10 AND FOR THE SUBSEQUENT ASSESSMENT YEAR S. IN VIEW OF THE ABOVE SAID DECISION THE ASSESSEE WOU LD NOT BE ENTITLED FOR RELIEF UNDER SECTION 10(26AAB) OF THE ACT FOR THE Y EARS UNDER CONSIDERATION. ACCORDINGLY WE DISMISS THE GROUNDS RELATING TO THE SAME. 4. ALL OTHER GROUNDS RELATE TO CLAIM OF THE ASSESSE E FOR EXEMPTION UNDER SECTION 11 OF THE ACT. THE FACTS RELATING TO THE SA ID ISSUES ARE STATED IN BRIEF. THE ASSESSEE WAS GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT BY THE COMMISSIONER OF INCOME TAX RAJAHMUNDRY VIDE HIS OR DER DATED 27.8.2009. BEFORE THE ASSESSING OFFICER THE ASSESSEE INTER AL IA CLAIMED EXEMPTION UNDER SECTION 11 OF THE ACT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE DID NOT FILE FORM NO.10 AS REQUIRED UNDER SECTION 1 1(2) OF THE ACT FOR ACCUMULATION OF INCOME WHICH WAS NOT UTILIZED FOR C HARITABLE PURPOSES. ACCORDINGLY HE DENIED EXEMPTION UNDER SECTION 11 O F THE ACT. THE LEARNED CIT (A) ALSO CONFIRMED THE ORDER OF THE LEARNED CIT (A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE FILED BEFOR E US A COPY OF FORM NO.10 PRESCRIBED UNDER RULE 17 OF THE INCOME TAX AC T/RULES WHICH IS REQUIRED TO BE GIVEN TO THE ASSESSING OFFICER FOR ACCUMULATI ON OF INCOME FOR SPECIFIC PURPOSES. THE ASSESSEE ALSO FILED AUDIT REPORT AS R EQUIRED UNDER SECTION 12A (B) OF THE ACT IN FORM NO.10B. THE LEARNED AUTHORIS ED REPRESENTATIVE SUBMITTED THAT THESE DOCUMENTS COULD NOT BE FILED B EFORE THE ASSESSING OFFICER DUE TO THE REASONS BEYOND THE CONTROL OF TH E ASSESSEE. HE FURTHER SUBMITTED THE ASSESSEE IS ENTITLED TO FILE THE ABOV E SAID DOCUMENTS EVEN BEFORE THE TRIBUNAL AND IN THIS REGARD THE LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE DECISION OF GUJARAT HIGH COURT IN T HE CASE OF CIT VS. MAYUR FOUNDATION REPORTED IN (2005) (274 ITR 562). HE FUR THER SUBMITTED THAT THE LEARNED CIT (A) DID NOT PROVIDE AN OPPORTUNITY TO F ILE THIS DOCUMENT BEFORE HIM AND THE SAME IS NOT IN ACCORDANCE WITH THE LAW AS HELD BY THE HON'BLE ITA NOS 1 AND 2 OF 2011 AGRIL.MARKET COMMITTEE POLA VARAM PAGE 4 OF 5 JAMMU & KASHMIR HIGH COURT IN THE CASE OF CIT VS. T REHAN ENTERPRISES REPORTED IN (2001) (248 ITR 333). ACCORDINGLY HE PL EADED THAT THE ISSUE OF ALLOWING EXEMPTION UNDER SECTION 11 MAY BE SET ASID E TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION AFRESH. 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED THE CLAIM O F EXEMPTION UNDER SECTION 11 IN THESE TWO YEARS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE FROM THE ASSESSMENT ORDER THE ASSESSING O FFICER HAS DENIED EXEMPTION UNDER SECTION 11 FOR WANT OF FORM NO.10 F OR ACCUMULATION OF INCOME AS REQUIRED UNDER SECTION 11(2) OF THE ACT. THE ASSESSEE HAS FILED COPIES OF FORM NO.10 AND ALSO THE AUDIT REPORT IN F ORM NO.10B. THE HEAD NOTES OF THE DECISION OF THE HON'BLE GUJARAT HIGH C OURT IN THE CASE OF MAYUR FOUNDATION (SUPRA) READ AS UNDER: CHARITABLE TRUST-ACCUMULATION OF INCOME-APPLICATIO N FOR ACCUMULATION FILED DURING PENDANCY OF APPEAL BEFORE TRIBUNAL- WHEN THE MATTER IS PENDING BEFORE THE TRIBUNAL BY W AY OF AN APPEAL THE ASSESSMENT PROCEEDINGS CAN BE SAID TO B E PENDING - IT CANNOT BE CONTENDED THAT THE ASSESSMENT PROCEEDINGS COME TO AN END WHEN THE ASSESSMENT ORDE R IS FRAMED - HENCE TRIBUNAL WAS WELL WITHIN ITS JURISD ICTION TO ENTERTAIN THE NEW GROUND BY WHICH THE ASSESSEE TRUS T CLAIMED THE BENEFIT UNDER SECTION 11(2) AND ADJUDICATE UPON IT- TRIBUNAL HAVING FOUND THAT THE ASSESSEE TRUST HAD C OMPLIED WITH ALL THE REQUIREMENTS STIPULATED IN S.11(2) IT WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO BENEFIT S OF S.11(2). HOWEVER WE PREFER TO SET ASIDE THE ISSUE RELATING TO ALLOWING OF EXEMPTION UNDER SECTION 11 OF THE ACT TO THE FILE OF THE ASS ESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND DI RECT THE ASSESSING OFFICER TO REDO THE ASSESSMENT DE-NOVA AFTER AFFORDING THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND AFTER CONSIDERING ALL THE DOCUMENTS THAT MAY BE ITA NOS 1 AND 2 OF 2011 AGRIL.MARKET COMMITTEE POLA VARAM PAGE 5 OF 5 FILED BY THE ASSESSEE. THE ASSESSEE IS ALSO DIRECT ED TO FILE NECESSARY DOCUMENTS AND DETAILS THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER. 8. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE A RE TREATED AS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 4 TH JULY 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 04-07-2011 COPY TO 1 AGRICULTURAL MARKET COMMITTEE POLAVARAM (HQ) JA NGAREDDIGUDEM 534432 WEST GODAVARI DISTT. 2 THE INCOME TAX OFFICER WARD-1 ELURU 3 4. THE CIT RAJAHMUNDRY THE CIT(A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM