2013 (9) TMI 1106 - AT - Income Tax

Registration u/s. 12AA - Held that - Object for which the Agricultural Market Committee was formed is for the purpose of carrying on the objectives as enumerated in section 2(15) of the Act and the proviso to the section is not applicable to the assessees cases. Assessees have to be granted with registration u/s. 12AA of the Act.

Summary

Issues involved:
- Rejection of applications for registration u/s. 12AA of the Income-tax Act, 1961 by the Director of Income-tax (Exemptions), Hyderabad.
- Interpretation of the judgement of the jurisdictional High Court in WP No. 31640 of 2011.
- Consideration of the objects and functions of Agricultural Market Committees in relation to section 2(15) of the Income-tax Act, 1961.
- Application of the provisions of section 12A/12AA for registration of Agricultural Marketing Committees.

The judgment by the Appellate Tribunal ITAT Hyderabad involved two appeals by different assessees against the rejection of their applications for registration u/s. 12AA of the Income-tax Act, 1961 by the Director of Income-tax (Exemptions), Hyderabad. The Tribunal had previously set aside the orders of the Assessing Officer and directed the DIT(E) to decide the matter afresh. The CIT(A), relying on a judgment of the jurisdictional High Court, rejected the applications for registration. The Tribunal, after hearing both parties and considering relevant precedents, found that the judgment relied upon by the DIT(E) had no relevance to the case. The Tribunal referred to the Supreme Court's judgment and another judgment of the jurisdictional High Court to support its decision. The High Court had clarified that "public utility" in section 2(15) of the Act includes relief to the poor, education, medical relief, and other objects of general public utility. It emphasized that the Commissioner, when considering registration applications, should focus on the objects of the trust. The Tribunal concluded that Agricultural Marketing Committees are entitled to registration under section 12A/12AA based on the functions they perform and their legal obligations for the advancement of general public utility. Therefore, the appeals of the assessees were allowed, and they were granted registration u/s. 12AA of the Act.

In summary, the judgment addressed the issues related to the rejection of registration applications u/s. 12AA of the Income-tax Act, 1961 for Agricultural Marketing Committees. It analyzed the legal interpretations of relevant judgments and the functions of the committees in the context of section 2(15) of the Act. The Tribunal's decision was based on a comprehensive review of precedents and statutory provisions, ultimately granting registration to the assessees under section 12AA.