D.b. Income Tax Appeal v. The Income Tax Officer, Ward 1(1), Udaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR O R D E R D.B. INCOME TAX APPEAL NO. 66/2010Krishi Upaj Mandi Samiti, Udaipur Vs. The Income Tax Officer, Ward 1(1), Udaipur DATE OF ORDER : 19.8.2015 HON'BLE MR. JUSTICE AJAY RASTOGIHON'BLE MR. JUSTICE VIJAY BISHNOI Mr. Anjay Kothari, Adv., for appellant.Mr. K.K. Bissa, Adv., for respondent. Heard. This income tax appeal has been preferred on behalf of theappellant against the order dated 25.5.2009 passed by the Ld.Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur. This Court by order dated 27.8.2010 while admitting theappeal has framed following substantial questions of law: “(i)Whether ITAT has erred in subjecting theappellant (assessee) to tax by holding thatregistration under Sec.12A had not been accordedto them for the assessment year underconsideration despite the fact that issue relating toits registration was subjudice before the Tribunal inappeal No.46JU/2009 at the instance of appellant? (ii)Whether the Tribunal was justified in notdeciding other issues raised by the assesseeappellant regarding disallowance of proportionateexpenses and levy of interest under Sec.243-B ofthe Act and rejecting the said issues, in absence ofregistration under Sec.12-A, the orders passed bythe authorities were in accordance with law?” It is brought to our notice that the Division Bench of this Court vide order dated 16[th] January, 2015 passed in D.B. Income Tax Appeal No.181/2010 has answered the substantial questions in the following terms: “We do not find any merit in the argumentadvanced. Section 11 of the Act of 1961 providesthat subject to the provisions of Sections 60 to 63,the income derived from property held under trustwholly for charitable or religious purpose shall notbe included in the total income of the previous yearof the person in receipt of the income. The KrishiUpaj Mandi Samiti being created under a statute isdischarging public charitable functions from thedate of its establishment and as such merely thefact of certification at a belated stage will not makeit disentitled to have benefit of Section 11 ibid.Looking to peculiar fact that the instant assesseewas created under the Rajasthan AgricultureProduce Market Act, 1961 with its statutory dutiesand liabilities, we are of the view that the IncomeTax Appellate Tribunal was justified in holding thatthe Samiti is a charitable institution from inceptionand, thus, is entitled for getting its incomecomputed by taking into consideration provisions ofSection 11(1) of the Act of 1961, even for the yearsprior to having certificate under Section 12-A of theAct of 1961.” In light of the order referred to above, the substantialquestions framed in the instant appeal are answered in favour of the appellant-assessee. The appeal is disposed of accordingly. (VIJAY BISHNOI), J. (AJAY RASTOGI), J. ms rathore