9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 251 - AT - Income TaxRetrospective/retroactive application of section 10(26AAB) income of an agricultural produce market committee or board - Held that - The decision in Commissioner of Income-tax Versus Agriculture Market Committee 2011 (3) TMI 751 - Andhra Pradesh High Court followed - the provisions of sec. 10(26AAB) of the Act inserted by the Finance Act 2008 w.e.f. 1.4.2009 shall have prospective operation and accordingly - the said provisions cannot be applied retrospectively from 1.4.2003 - the exemption was to be granted to AMCs prior to 1.4.03 as a local authority and after 1.4.09 u/s 10(26AAB) - the assessee s contention that they are eligible for exemption u/s 11 are to be accepted thus, the matter remitted back to the AO for fresh adjudication. Claim of exemption u/s 11 of the Act - Whether the direction may be given to the CIT to grant Registration u/s 12A and Exemption u/s 11(1) & 11(2) of Act Held that - Income of the AMC from different sources i.e. license fees, market fees, losses, etc. which is derived with a profit motive has been considered - license fee is to be considered as income of Assessee - Assessee s claim for exemption has to be considered with reference to the provisions of section 11of the Act - the entire assessment has to be reconsidered afresh in the light of the various decisions of the Hon ble High Court and Tribunal on this issue - The issue of claim of exemption u/s 11 of the Act and taxation of various incomes and its application has to be re-examined by the AO in the light of the facts of the case and law on the issue the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee.
Issues Involved:
1. Applicability of exemption under Section 10(26AAB) of the Income Tax Act. 2. Claim for exemption under Section 11 of the Income Tax Act. 3. Taxability of license fees collected by Agricultural Market Committees (AMCs). 4. Registration under Section 12A/12AA of the Income Tax Act. 5. Filing of Form 10 for accumulation of income under Section 11(2) of the Income Tax Act. Detailed Analysis: 1. Applicability of Exemption under Section 10(26AAB): The Tribunal initially held that the exemption under Section 10(26AAB) of the Income Tax Act applied retrospectively. However, the Andhra Pradesh High Court in the case of AMC Tanuku and others (337 ITR 299) ruled that Section 10(26AAB) is prospective, effective from 1.4.2009, and cannot be applied retrospectively from 1.4.2003. This necessitated the recall of the Tribunal's orders to address the grounds on merits. 2. Claim for Exemption under Section 11: The Tribunal admitted the additional legal ground regarding the claim for exemption under Section 11 of the Act. The Assessee contended that the license fee collected was not taxable as income, arguing that the fees collected were used for public purposes as per the byelaws and rules, and thus should be exempt under Section 11. The Tribunal agreed that the AMCs could claim exemption under Section 11 for the period from 1.4.2003 to 31.3.2009, as per the Andhra Pradesh High Court's ruling, which recognized AMCs as eligible for registration under Section 12A/12AA and thus entitled to claim exemption as charitable institutions. 3. Taxability of License Fees: The Assessee argued that the license fees collected were not taxable as they were used for public purposes. However, the Tribunal noted that the Andhra Pradesh High Court in CIT Guntur Vs. AMC Giddalur held that income from license fees, market fees, and other sources, derived without profit motive, should be used for providing market facilities and thus is considered income. The Tribunal concluded that while license fees are considered income, the Assessee's claim for exemption under Section 11 should be examined afresh by the Assessing Officer (AO). 4. Registration under Section 12A/12AA: The Tribunal observed that the applications for registration under Section 12A/12AA were pending before the Commissioner of Income Tax (CIT). It advised the CIT to consider and grant registration, as the Andhra Pradesh High Court had already decided that AMCs are entitled to registration under Section 12A/12AA, enabling them to claim exemption under Section 11. 5. Filing of Form 10 for Accumulation of Income: The Tribunal highlighted that the AO had pointed out defects in the filing of Form 10, which is necessary for claiming accumulation of income under Section 11(2). The Tribunal referred to judicial precedents, including the Supreme Court ruling in Nagpur Hotel Owners' Association and the Gujarat High Court in Mayur Foundation, which allowed filing of Form 10 before the completion of assessment. The Tribunal directed the AO to re-examine the purpose of accumulation and other related issues afresh. Conclusion: The Tribunal set aside the respective orders of the AO and CIT(A) and restored the entire assessment to the file of the AO for fresh consideration. The AO was directed to re-examine the issues of exemption under Section 11, taxability of income, and the filing of Form 10, providing the Assessee with due opportunity during the fresh assessment proceedings. All appeals were allowed for statistical purposes.
|
