2009 (8) TMI 1160 - AT - Income Tax

Summary

Issues involved: Stay of demand collection, claim of exemption u/s 10(26AAB) of the Act.

Stay of demand collection: The appeals were filed against the order of the Commissioner of Income Tax (Appeals) for the assessment years 2005-06 and 2006-07. The assessee sought a stay of demand collection, citing that the issue raised was covered by a previous order of the bench. The Departmental Representative had no objection to the cases being taken up on a priority basis instead of granting the stay.

Claim of exemption u/s 10(26AAB) of the Act: The core issue raised by the assessee was regarding the claim of exemption under Section 10(26AAB) of the Act. It was argued that the amendment to this section is clarificatory and retroactive in nature based on the Finance Minister's statements during the parliamentary debate. The bench had previously held that the income of Agricultural Market Committees is exempt under Section 10(26AAB) of the Act, and this decision was cited to support the assessee's claim. The bench reversed the tax authorities' orders and ruled that the income of the assessees is exempt from tax due to the retroactive operation of Section 10(26AAB) of the Act.

Conclusion: The appeals were partly allowed, and the stay applications were rejected based on the decision regarding the exemption u/s 10(26AAB). Other issues raised by the assessee were not considered in light of the decision on the legal issue. The orders passed by the tax authorities were reversed, and the Assessing Officer was directed accordingly.