Commissioner Of Income Tax-Ii, Jodhpur v. Krishi Upaj Mandi Samiti, Didwana

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR.J U D G M E N T Commissioner of Income Tax-II, Jodhpurv.Krishi Upaj Mandi Samiti, Didwana D.B. Income Tax Appeal No.53/2010 Date of Judgment :: 16[th] January, 2015 P R E S E N T HON'BLE MR.JUSTICE GOVIND MATHURHON'BLE MR.JUSTICE ANUPINDER SINGH GREWAL Mr. Sunil Bhandari forMr. K.K.Bissa, for the appellant.Mr. M.K.Garg ]Mr. Pankaj Gupta] for the respondent. .... BY THE COURT: (PER HON'BLE GOVIND MATHUR,J.) During the course of arguments learned counselfor the appellant pressed only one substantial question oflaw out of three questions framed and that reads as under:- “Whether on the facts and in the presentcircumstances of the case, the Tribunalwas justified in treating the assesseeSamiti as registered under Section 12-A ofthe Income Tax Act, 1961 for the yearunder consideration when the assessee gotitself registered under Section 12-Aw.e.f. 26.9.2005?” In brief, facts of the case are that the assesseeis a Krishi Upaj Mandi Samiti established under theRajasthan Agriculture Produce Market Act, 1961. For the purposes of the Income Tax Act, 1961 the Samiti is acharitable institution registered under Section 12-A of theAct of 1961. The Assessing Officer computed income of theSamiti by holding that it does not qualify for deductionunder Section 11 of the Act of 1961 prior to the date ofissuance of the registration certificate under Section12-A. The Commissioner of Income Tax (Appeals) affirmed theorder passed by the Assessing Officer, however, by thejudgment impugned learned Income Tax Appellate Tribunalheld that the Krishi Upaj Mandi Samiti is a publiccharitable institution and, therefore, it is entitled tohave computation of income by application of the provisionsof Section 11 throughout. The only argument advanced in the instant matteris that a certificate as per provisions of Section 12-A ofthe Act of 1961 in favour of the assessee was issued at alater stage, therefore, income for the years prior to thatis required to be computed without treating it a publiccharitable institution. We do not find any merit in the argumentadvanced. Section 11 of the Act of 1961 provides thatsubject to the provisions of Sections 60 to 63, the incomederived from property held under trust wholly forcharitable or religious purpose shall not be included inthe total income of the previous year of the person inreceipt of the income. The Krishi Upaj Mandi Samiti beingcreated under a statute is discharging public charitablefunctions from the date of its establishment and as suchmerely the fact of certification at a belated stage will not make it disentitled to have benefit of Section 11 ibid.Looking to peculiar fact that the instant assessee wascreated under the Rajasthan Agriculture Produce Market Act,1961 with its statutory duties and liabilities, we are ofthe view that the Income Tax Appellate Tribunal wasjustified in holding that the Samiti is a charitableinstitution from inception and, thus, is entitled forgetting its income computed by taking into considerationprovisions of Section 11(1) of the Act of 1961, even forthe years prior to having certificate under Section 12-A ofthe Act of 1961. The appeal is dismissed accordingly. (ANUPINDER SINGH GREWAL),J. (GOVIND MATHUR),J. kkm/ps.