M/S Agriculture Produce Market Committee, Paonta Sahib v. ITO,, Nahan

ITA 387/CHANDI/2010 | 2008-2009
Pronouncement Date: 14-05-2010 | Result: Dismissed

Appeal Details

RSA Number 38721514 RSA 2010
Assessee PAN AAPFA7777H
Bench Chandigarh
Appeal Number ITA 387/CHANDI/2010
Duration Of Justice 28 day(s)
Appellant M/S Agriculture Produce Market Committee, Paonta Sahib
Respondent ITO,, Nahan
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 14-05-2010
Assessment Year 2008-2009
Appeal Filed On 16-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI G.S.PANNU ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NOS. 386 & 387/CHD/2010 ASSESSMENT YEARS: 2007-08 & 2008-09 M/S AGRICULTURE PRODUCE MARKET VS. THE ITO NAHAN COMMITTEE PONTA SAHIB H.P. SIRMOUR (H.P.) PAN NO. AAPFA7777H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY VAIDYA RESPONDENT BY: SHRI N.K. SAINI ORDER PER SUSHMA CHOWLA JM THESE TWO APPEALS BY THE ASSESSEE ARE AGAINST THE DIFFERENT ORDERS OF CIT(A) SHIMLA DATED 1.12.2009 & 11.1.2010 RELATING TO ASSESSMENT YEARS 2007-08 & 2008-09 AGAINST THE ORDER PASSED UNDER SE CTION 143(3) /147 OF THE I.T. ACT. 2. BOTH THE APPEALS HAVING IDENTICAL GROUNDS WERE H EARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. 3. THE COMMON GROUNDS RAISED IN BOTH THE APPEALS AR E AS UNDER:- 1) THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND FACT OF THE CASE BY TREATING THE APPELLANT AS AOP T HAN LOCAL AUTHORITY AND THUS ASSESSING THE INCOME ON TH E BASIS OF AOP BUT NO WHERE IN THE ORDERS THE ASSESS ING OFFICER HAS SUBSTANTIATED ON WHAT GROUND THE APPELLANT IS TO BE TREATED AS AOP. THE ORDERS OF TH E LEARNED ASSESSING OFFICER IS CONTRARY TO THE LAW E QUITY 2 AND JUSTICE AND FACTS AND MATERIAL ON RECORD DEVOI D OF JURISDICTION ARBITRARY BASED ON CONJECTURES AND SURMISE. SINCE AS PER EXPLANATION AS INSERTED IN T HE INCOME TAX ACT W.E.F. 1.4.2003 THE APPELLANT IS IN CONTROL AND MANAGEMENT OF LOCAL FUND AND QUALIFIES TO BE TREATED AS LOCAL AUTHORITY ON THIS GROUND THE AP PEAL OF THE APPELLANT DESERVES TO BE ALLOWED. 2) THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND FACT OF THE CASE BY CHARGING / IMPOSING INTEREST U/ S 234A AND 234B OF THE I.T. ACT WITHOUT APPRECIATING THE CIRCUMSTANCES AND FACT OF THE CASE AND NOT GIVI NG ANY REASON ON WHAT GROUNDS THE INTEREST HAS BEEN CHARGED / IMPOSED ON THIS GROUND ALSO THE APPEAL DESERVES TO BE ALLOWED. 4. THE LEARNED AR FOR THE ASSESSEE AT THE OUTSET PO INTED OUT THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED AGAINST THE ASSESSEE BY ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSM ENT YEARS 2003-04 TO 2005-06 IN ITA NOS. 697 TO 699/CHD/2009. THE LEARNE D DR PLACED RELIANCE ON THE AFORESAID ORDER OF THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ISSUE ARISING IN THE PRESENT APPEAL IS WITH REGARD TO THE STATUS OF THE ASSESSEE. THE ASSESSEE IN THE RETURN OF INCOME HAD DECLARED THE INCOME AT NIL AFTER CLAIMING EXEMPTION U/S 10(20) OF THE AC T CLAIMING IT TO BE A LOCAL AUTHORITY. HOWEVER ASSESSEE WAS HELD NOT TO BE A LOCAL AUTHORITY UNDER THE AMENDED PROVISIONS OF SECTION 10(20) OF T HE ACT THE AMENDMENT BEING EFFECTIVE FROM ASSESSMENT YEAR 2003-04. 6. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THE TRIB UNAL IN ITA NOS. 697 TO 699/CHD/2009 IN THE CASE OF ASSESSEE ITSELF RELATING TO ASSESSMENT YEARS 2003-04 TO 2005-06 WHEREIN THE TRIBUNAL VIDE ORDER DATED 26.2.2010 HELD AS UNDER:- 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. UNDER THE PROVISIONS OF SECTION 10(20) O F THE ACT THE INCOME OF A LOCAL AUTHORITY IS EXEMPT FROM TAX. THE FINANCE ACT 2002 W.E.F. 1.4.2003 HAD INSERTED AN EX PLANATION U/S 10(20) OF THE ACT DEFINING LOCAL AUTHORITY WH ICH READS AS UNDER:- EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE TH E EXPRESSION LOCAL AUTHORITY MEANS (I) PANCHAYAT AS REFERRED TO IN CLAUSE (D) OF ARTICLE 243 OF THE CONSTITUTION; OR (II) MUNICIPALITY AS REFERRED TO IN CLAUSE (E) OF ARTICLE 243P OF THE CONSTITUTION ; OR (III) MUNICIPAL COMMITTEE AND DISTRICT BOARD LEGALLY ENTITLED TO OR ENTRUSTED BY THE GOVERNMENT WITH THE CONTROL OR MANAGEMENT OF A MUNICIPAL OR LOCAL FUND; OR (IV) CANTONMENT BOARD AS DEFINED IN SECTION 3 OF THE CANTONMENTS ACT 1924 (2 OF 1924) 7. THAT AFTER THE INSERTION OF EXPLANATION UNDER SE CTION 10(20) OF THE ACT THE LOCAL AUTHORITY HAS BEEN DEF INED TO INCLUDE THE PANCHAYAT MUNICIPALITY CANTONMENT BOA RD MUNICIPAL COMMITTEE AND DISTRICT BOARDS LEGALLY E NTITLED TO OR ENTRUSTED BY THE GOVERNMENT / CONTROL / MANAGEME NT OF A MUNICIPAL OR LOCAL FUND. THE CBDT VIDE CIRCULAR NO . 8 OF 2002 HAD CLARIFIED THAT THE EXEMPTION U/S 10(20) OF THE ACT IS NOT AVAILABLE TO THE AGRICULTURAL MARKETING SOCIETI ES AND AGRICULTURAL MARKETING BOARDS DESPITE THE FACT THAT THEY MAY BE DEEMED TO BE TREATED AS LOCAL AUTHORITIES UNDER ANY OTHER CENTRAL OR STATE LEGISLATION. THE SAID CIRCULAR IS INCORPORATED AT PAGE 2 OF THE ASSESSMENT ORDER. 8. THE NEWLY INSERTED EXPLANATION TO SECTION 10(20) OF THE ACT DEFINING THE EXPRESSION LOCAL AUTHORITY RESTR ICT THE MEANING OF THE LOCAL AUTHORITY TO THE PANCHAYAT MU NICIPALITY CANTONMENT BOARD AND MUNICIPAL COMMITTEE AND DISTRI CT BOARDS. THE ASSESSEE BEFORE US IS AN AGRICULTURE MA RKET COMMITTEE WHICH DOES NOT FALL WITHIN THE CATEGORIES ENLISTED IN THE EXPLANATION TO SECTION 10(20) OF THE ACT. WE F IND NO MERIT IN THE CLAIM OF THE ASSESSEE THAT IT IS MANAGING A LOCAL FUND BECAUSE THE PROVISIONS OF THE ACT ENTAILS THE LOCAL FUND TO BE A MUNICIPAL FUND WHICH IS NOT THE CASE OF THE ASSESS EE BEFORE US. THE ASSESSEE COMMITTEE EVEN IF IS PROVIDING CIVIL AMENITIES IS NOT AUTHORIZED UNDER THE MUNICIPAL ACT AND HENCE NOT COVERED BY THE EXPLANATION TO SECTION 10(20) OF THE ACT. THE LEARNED AR FOR THE ASSESSEE FAIRLY AGREED THAT THE ISSUE IS COVERED BY THE RATIO LAID DOWN BY THE CHANDIGARH BE NCH OF THE TRIBUNAL IN THE CASE OF AGRICULTURAL PRODUCE MARKET COMMITTEE SOLAN. IN THE TOTALITY OF FACTS AND CIR CUMSTANCES OF THE CASE WE HOLD THAT THE ASSESSEE IS NOT A LOCAL A UTHORITY ENTITLED TO THE BENEFIT OF EXEMPTION US/ 10(20) OF THE ACT. 4 HENCE THE COMMON GROUND OF APPEAL RAISED BY THE AS SESSEE IN ALL THE APPEALS IS REJECTED. 7. THE FACTS OF THE PRESENT CASE BEING IDENTICAL TO THE FACTS IN ASSESSMENT YEARS 2003-04 TO 2005-06 AND RESPECTFULL Y FOLLOWING THE RATIO LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE R ELATING TO ASSESSMENT YEARS 2003-04 TO 2005-06 WE HOLD THAT THE ASSESSEE IS NOT A LOCAL AUTHORITY UNDER THE AMENDED PROVISIONS OF SECTION 1 0(20) OF THE ACT. ACCORDINGLY WE CONFIRM THE ORDER OF CIT(A) AND DI SMISS THE GROUND NO. 1 RAISED BY THE ASSESSEE. 8. THE GROUND NO.2 RAISED BY THE ASSESSEE RELATES T O CHARGING OF INTEREST U/S 234A AND 234B OF THE ACT WHICH IS DIS MISSED BEING CONSEQUENTIAL IN NATURE. 9. IN THE RESULT APPEALS OF THE ASSESSEE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF MAY 2010. SD/- SD/- (G.S.PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14 TH MAY 2010 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR