Commissioner Of Income Tax Jaipur v. Krishi Upaj Mandi Samiti Chaksu

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 389 / 2011 Commissioner Of Income Tax Jaipur ----Appellant Versus Krishi Upaj Mandi Samiti Chaksu ----Respondent _____________________________________________________ For Appellant(s) : Mr. Daksh Pareek on behalf of Mr. Sammer Jain For Respondent(s) : Ms. Sumati Bishnoi _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 20/09/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department. 2.This court while admitting the appeal on 03.05.2012 framedthe following question of law:- “Whether the Appellate Authorities wereright in law in granting exemption to the assesseeinspite of the fact that the application in Form No.10 under Rule 17 was filed after 3 years ofassessment u/s 143(3) i.e. on 24.11. 2006 underremand proceedings on a fresh evidence contrary todirections of I. T. A. T. remand order dated13.04.2007” 3. The counsel for the respondent has relied on the decision ofthis Court in Income Tax Appeal No. 167/2010 in the case of same assessee decided 18[th]August, 2010 wherein it was granted benefit of Section 12A holding as under:- “ In view of the above referred law that has developed, we areinclined to hold that the K.U.M.S. constituted under theRajasthan Act of 1961 are entitled for registration underSection 12A of the Income Tax Act, 1961 as it is theconsidered opinion of this Court earlier and of the other HighCourts, referred to above, that the Samities/Boardsconstituted under the Statute of various States for thepurpose of regulating the marketing of agriculture produce areentitled for registration under Section 12A of the Income TaxAct, 1961 as charitable institutions for the purposes of theIncome Tax Act, 1961 Chapter-III. Learned Senior Counsel Shri Ranka also cited beforeus a judgment of the Hon’ble Supreme Court in thecase of CIT Vs. Gujarat Maritime Board reported in(2007) 295 ITR 561 (SC) wherein their Lordships of theHon’ble Supreme Court dealing with the case of GujaratMaritime Board which had prior to the Finance Act,2002 been enjoying the exemption under Section10(20) of the Income Tax Act, 1961, as in the case ofthe present Samities. The Gujarat Maritime Board as aconsequence of the amendment introduced by theFinance Act, 2002 w.e.f. 01.04.2003 submitted anapplication for claiming exemption as a charitableInstitution under Section 11 of the Income Tax Act,1961. An objection came to be raised interalia that theGujarat Maritime Board was claiming exemption as a‘local authority’ under Sectio 10(20) of the Income TaxAct. 1961 and therefore, it could not claim anyexemption by having the Board registered underSection 12A of the Income Tax Act. 1961 as a Trust forseeking exemption under Section 11 of the Income TaxAct, 1961 on the basis of the activities of the saidBoard.Inthepresentcasealso learned counsel for the appellant had sought to contendthat since the agricultural produce marketingcommittees, the assessees herein, have been claimingthe benefit of Section 10(20) of the Income Tax Act,1961 as a ‘local authority’, they could not seekregistration as a charitable institution under Section12A. The aforesaid objection was negated by theHon’ble Supreme Court in Gujarat Maritime Board’scase (supra) and it was held that despite the fact thatan assessee may have been claiming exemption as aloal authority under Section 10(20) of the Income TaxAct, 1961 prior to 01.04.2003 it was not precludedfrom claiming exemption under Section 11 of theIncome Tax Act, 1961. It was held by the Hon’bleSupreme Court as follows:- learned counsel for the appellant had sought to contendthat since the agricultural produce marketingcommittees, the assessees herein, have been claimingthe benefit of Section 10(20) of the Income Tax Act,1961 as a ‘local authority’, they could not seekregistration as a charitable institution under Section12A. The aforesaid objection was negated by theHon’ble Supreme Court in Gujarat Maritime Board’scase (supra) and it was held that despite the fact thatan assessee may have been claiming exemption as aloal authority under Section 10(20) of the Income TaxAct, 1961 prior to 01.04.2003 it was not precludedfrom claiming exemption under Section 11 of theIncome Tax Act, 1961. It was held by the Hon’bleSupreme Court as follows:- “…..we may point out that section 10(20)and section 11 of the 1961 Act operate intotally different spheres. Even if the Boardhas ceased to be a “local authority”, it is notprecluded from claiming exemption undersection 11(1) of the 1961 Act. Therefore,we have to read section 11(1) in the light ofthe definition of the words “charitablepurposes” as defined under section 2(15) ofthe 1961 Act.” There is, therefore, no substance in theaforesaid objection of the learned counsel for therevenue that the assesses having already claimedexemptions prior to 01.04.2003 under Section 10(20)of the Income Tax Act, 1961 as a local authority itcould not apply for registration as a charitableinstitution under Section 12A of the Income Tax Act,1961 and claim consequent exemption on that basis.Similar views with regard to the registration underSection 12A have been taken by Allahabad High Courtin the case of CIT Vs. Krishi Utpadan Mandi Samiti,Purva,Unnaoreportedin231 CTR 505 (All) (IT Appeal Nos. 80 to 83 of 2007 decidedon 02.12.2009)”. In the light of the aforesaid discussion, we are ofthe view that these appeals preferred by the revenueagainst the decision of the learned I.T.A.T., in the factsand circumstances, deserves to be dismissed. Ouranswer to the question, therefore, is that the learnedI.T.A.T. has rightly held that looking to the activities ofthe assessees-K.U.M.S. and the Rajasthan StateAgriculture marking Board enshrined under theRajasthan Agricultural Produce Markets Act, 1961 andthe Rules framed thereunder are such while wouldbring these institutions, namely the Samities withinthe purview of “Charitable Institutions” so as to entitlethem for being registered as Charitable Institutionsunder Section 12A of the Income Tax Act, 1961 andentitle them for exemption under the provisions ofSection 11 and 12 of the Income Tax, 1961. As a consequence of the aforesaid answer, the secondset of appeals against the order of learned I. T. A.T. aswas conceded by the learned counsel for the revenuewould also stand dismissed.” 4.In view of the above, the question raised in this appeal iis ofacademic interest and the issue is answered in favour of theassessee against the department.5.The appeal stands dismissed. (VIJAY KUMAR VYAS)J. B.M.G/Gourav-166 (K.S.JHAVERI)J.