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2011 (3) TMI 1265 - HC - Income TaxRegistration u/s 12A - Agricultural Market Committee (AMC), constituted u/s 4(1) of the AMC Act was availing exemption as a "local authority" - Revenue contended that AMCs cannot be given the benefit of exemption, which have been permitted u/s 10(20) prior to amendment w.e.f. April 1, 2003 - Revenue also contended that said AMC does not come within the expression "person" and does not exist for charitable purpose - Held that:- In Gujarat Maritime Board [2007 (12) TMI 7 - SUPREME COURT OF INDIA] it has been held that "section 10(20) and section 11 operate in totally different spheres, that even if the Board has ceased to be "local authority', it is not precluded from claiming exemption u/s 11(1)". Thus accordingly hold that an AMC is entitled to seek exemption u/s 10(20) r.w.s. 10(29) till March 31, 2003. By reason of the amendment to section 10(20) and deletion of section 10(29) w.e.f. from April 1, 2003, they, for the purpose of the Income-tax Act, ceased to be "local authorities". This itself would not disqualify them from claiming exemption u/s 11(1) and 12 provided they are considered as institutions established for advancement of objects of general public utility. Applying the law, as laid down by the Supreme Court in the above cited precedents, we are convinced that an AMC, constituted under the enactment of the State Legislature, is deriving income from property held under legal obligation for a charitable purpose to wit the advancement of general object of utility. It is, therefore, entitled to be registered u/s 12A/12AA to enable an AMC to claim exemption as per law. Therefore, denial of registration to the agricultural market committees constituted u/s 4(1) of the Andhra Pradesh (Agri-cultural Produce and Livestock) Markets Act, 1966 is erroneous and ITAT has correctly applied the law in reversing the decision of the CIT.
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