The DCIT, Circle-2(1), Guntur v. M/s Agricultural Market Committee, Vinkonda

ITA 478/VIZ/2009 | 2005-2006
Pronouncement Date: 19-01-2010 | Result: Dismissed

Appeal Details

RSA Number 47825314 RSA 2009
Assessee PAN AAALA0745Q
Bench Visakhapatnam
Appeal Number ITA 478/VIZ/2009
Duration Of Justice 3 month(s) 26 day(s)
Appellant The DCIT, Circle-2(1), Guntur
Respondent M/s Agricultural Market Committee, Vinkonda
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 19-01-2010
Date Of Final Hearing 31-10-2012
Next Hearing Date 31-10-2012
Assessment Year 2005-2006
Appeal Filed On 23-09-2009
Judgment Text
PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM B EFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI B.R.BASKARAN ACCOUNTANT MEMBER SL. NO. CASE NO. ASST. YEAR P.A.N.NO. APPELLANTS RESPONDENTS 1 ITA NO.474 / VIZ/2009 2006 - 07 AAAALA 0745 Q ITO WARD - 2(2) GUNTUR AGRICULTURAL MARKET COMMITTEE TADIKONDA 2 ITA NO.475/ VIZ/2009 2006 - 07 AAAALA 0744 R ITO WARD - 2(2) GUNTUR AGRICULTURAL MARKET COMMITTEE MANGALAGIRI 3 ITA NO. 477 /VIZ/2009 2004 - 05 AAALA 0301 L DCIT CIRCLE - 2(1) GUNTUR AGRICUL TURAL MARKET COMMITTEE VINKONDA 4 ITA NO.478/VIZ/2009 2005 - 06 AAALA 0301 L DCIT CIRCLE - 2(1) GUNTUR AGRICULTURAL MARKET COMMITTEE VINKONDA APPELLANT BY : SHRI SUBRATA SARKAR CIT-DR RESPONDENTS BY: SHRI CH.SRINIVASA RAO. ORDER PER BENCH: - THE APPEALS FILED AT THE INSTANCE OF THE REVENUE AR E DIRECTED AGAINST THE ORDER OF THE LD CIT (A) GUNTUR PASSED AGAINST THE QUANTUM ASSESSME NTS RELATING TO ASSESSMENT YEAR 2006-07. 2. THOUGH THE REVENUE HAS RAISED SEVERAL GROUNDS T HE ONLY ISSUE THAT EMERGES IS WHETHER THE LD CIT (A) IS RIGHT IN HOLDING THAT THE SECTION 10(26AAB) IS RETROACTIVE IN OPERATION AND THEREBY THE INCOME OF THESE ASSESSEES ARE EXEMPT U/S 10(26AAB) OF THE ACT. 3. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. FOR THE SAKE OF CONVENIENCE WE EXTRACT THE OPERATIVE PART OF THE OR DER OF THE LD CIT (A). . WE ARE LEFT FOR CONSIDERATION WITH ONLY TWO ISSUES (I) WHETHER INSERTION OF SUB-CLAUSE (26AAB) OF SECTION 10 OF TH E INCOME TAX ACT WAS A DECLARATORY ACT TO REMOVE DOUBTS EXISTING WIT H REGARD TO THE EFFECT OF PRE-EXISTING STATUTE AND HENCE IT IS RETR OSPECTIVE IN OPERATION; PAGE 2 OF 3 AND (II) WHETHER THE IMPUGNED EXPENDITURE IN THE FO RM OF CONTRIBUTION TO NEERU MEERU ETC. AND THE MANDATORY PAYMENT TO THE CENTRAL MARKET FUND UNDER SEC.16/26 OF THE MARKET COMMITTEE ACT CAN BE CONSIDERED AS AMOUNTS INCURRED FOR THE OBJECT OF TH E AMCS UNDER SEC.36(1)(XII) OF THE INCOME TAX ACT OR WHETHER THE INCOME AS SUCH CAN BE TREATED AS FALLING OUTSIDE THE KEN OF TAXATI ON ON THE PRINCIPLE AND DIVERSION OF INCOME BY OVERRIDING TITLE . SINCE WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 10(26AAB) OF THE INCOME TAX ACT ARE INTENDED TO BE RETROACTIV E IN OPERATION HAVING BEEN INSERTED IN THE STATUTE BOOK WITH A VIE W TO CLARIFY THE POSITION OF AMCS EVEN UNDER PRE-EXISTING STATUTE A ND THE FINANCE MINISTER HAVING SPECIFICALLY MENTIONED WHILE REPLY ING TO THE DEBATE IN THE LOK SABHA THAT THERE IS NO INTENTION TO TAX AM CS THE ENTIRE FEE/INCOME COLLECTED/RECEIVED HAS TO BE CONSIDERED AS EXEMPT FROM THE LEVY OF TAX IN WHICH EVEN THE DECISION ON THE ANCIL LARY ISSUE IS OF ACADEMIC IMPORTANCE AND THUS NEED NOT BE GONE INTO 5. FOLLOWING THE ITATS DECISION THAT SEC.10(26AAB) HAS RETROSPECTIVE APPLICATION THE INCOME OF THE AMCS IS HELD TO BE E XEMPT FOR THE A.Y 2006-07 ALSO AND THE APPEAL IS ALLOWED. 4. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THIS BENCH ON THE INSTANT ISSUE. IN A BATCH OF APPEALS I.E. IN I.T.A.NO.90/VIZAG/2007 AND BATCH I.T.A.T. VISAKHAPATNAM BENCH VIDE ORDER DT.28.11. 2008 HELD THAT THE INCOME OF THE AGRICULTURAL MARKET COMMITTEES IS EXEMPT UNDER SECT ION 10(26AAB) OF THE ACT. THE DECISION RENDERED IN THAT CASE IS EXTRACTED BELOW: HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE ARE OF THE FIRM VIEW THAT THE INSERTION OF SUB-CLAUSE (26AAB) TO SE CTION 10 OF THE INCOME TAX ACT IS ESSENTIALLY INTENDED TO DECLARE T HE INTENTION OF THE LEGISLATURE OF NOT TAXING THE INCOME OF AMCS CONSTI TUTED UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR THE PURPOSES OF REGULATING THE MARKETING OF AGRICULTURAL PRODUCE AND HENCE IT HAS TO BE TREATED AS RETROACTIVE IN OPERATION AND APPLICABLE EVEN FOR TH E PRIOR YEARS WE ORDER ACCORDINGLY. 5. SINCE THE LD CIT(A) HAS FOLLOWED THE DECISIO N RENDERED BY THIS BENCH WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. 6. IN THE RESULT THE APPEALS FILED BY THE REVE NUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEES ARE ALLOWED. PAGE 3 OF 3 PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 19-01-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 19 TH JANUARY 2010 COPY TO 1. ITO WARD-2(2) GUNTUR 2. DCIT CIRCLE 2(1) GUNTUR 3. GUNTUR AGRICULTURAL MARKET COMMITTEE TADIKONDA 4. AGRICULTURAL MARKET COMMITTEE MANGALAGIRI 5. AGRICULTURAL MARKET COMMITTEE VINKONDA 6. THE COMMISSIONER OF INCOME-TAX (APPEALS) GUNTUR 7. THE COMMISSIONER OF INCOME TAX GUNTUR 8. THE DEPARTMENTAL REPRESENTATIVE I.T.A.T. VISA KHAPATNAM 9. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM