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TMI Blog2009 (1) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal dt. 14th Sept., 2007 notwithstanding that the issue of registration under s. 12A is under challenge by the Revenue ? 2. Whether the learned Tribunal is justified in confirming the order of CIT(A) directing the AO to compute the income of the assessee after verifying the application of income as per the provisions of s. 19 of the Rajasthan Agriculture Produce Marketing Act, 1961 whereas, the income should be computed as per the provisions of the IT Act, 1961 ? 3. Whether/the learned Tribunal is justified in confirming the order passed by the CIT(A) directing the AO to allow deduction of contribution to Rajasthan Agriculture Marketing Board from the income of the assessee and to compute the income available for application to charitable purpose ignoring that the expenditure is not of revenue nature and the issue of registration under s. 12A of the IT Act, 1961 is under challenge by the Revenue ? 4. Whether the learned Tribunal is justified in confirming the order passed by the CIT(A) directing the AO in respect of the expenditure incurred on construction and repair work which is not of revenue nature ? 5. Whether the learned Tribunal has erred in law in dismissing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion" instead of "local authority" as adopted by the AO while passing the assessment orders. The CIT(A) while accepting the stand taken by the assessees as aforesaid directed the AOs to recompute the income after taking the status of assessees as "public charitable institution" as per the provisions of ss. 11, 12 and 13 of the IT Act. It was further directed that while computing the income of the assessees as "public charitable institution", the AO shall consider the objects of the institutions for which the agricultural produce market committees were established so also the provisions of the Act of 1961. After due consideration of the various provisions of the Act of 1961, the AO was directed to examine whether the facilities were provided by the agricultural produce market committee in the market area as defined in s. 4 and as per notification issued by the State Government to declare market area for the purpose of Act of 1961. It was observed by the CIT(A) that if any amount is applied expended for providing facilities as specified in sub-s. (9A) of s. 19 of the Act of 1961 outside the market area defined in s. 4, the utilisation of the market committee fund shall not be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue aggrieved by the aforesaid orders dt. 25th Oct., 2007 passed by the CIT(A) have been dismissed by the learned Tribunal by the common order dt. 15th April, 2008 relying upon its earlier decisions in the matters involving identical issues. 7. At the outset, the learned counsel appearing apprised the Court that an appeal preferred by the Revenue assailing the validity of the order passed by the Tribunal with regard to issue of registration of the agricultural produce market committee as "public charitable institution" has already been dismissed by this Court vide judgment dt. 18th March, 2008 in the matter of CIT v. K.U.M.S., Jaisalmer [2008] 216 CTR (Raj) 277 . In the said decision, a Bench of this Court has held as under : "5. May be that the income received by the Samiti by way of cess or Mandi fees is not shown to be spent wholly for the purpose of relief of the poor, education, or medical relief, but under the scheme of the Act, being the Rajasthan Agricultural Produce Markets Act, 1961, the entire amount received by the Samiti is required to be spent for the purpose mentioned therein, which obviously includes advancement of 'any other object of general public utility'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to claim as application of income. 10. We have considered the submissions of the learned counsel for the appellant. 11. It is not in dispute that the application of the fund by the market committee and its overall functions are regulated by the provisions of the Act of 1961, which has been enacted by the legislature to provide for better regulation of buying and selling of agriculture produce and the establishment of the markets for agriculture produce in the State of Rajasthan so that the agriculturists may secure a fair return of their agriculture produce. The need of the said enactment was felt for the reason that the agriculturists being generally illiterate and ignorant about prevailing prices of their produce in the market were being exploited by the middlemen and profiteers. 12. Sec. 9 of the Act of 1961 deals with the functions and duties of the market committee. Sec. 17 of the Act of 1961 authorises the levy of market fee by the market committees. The market fees to be prescribed by the market committees is subject to a maximum to be prescribed by the Government under the rules and it has co-relation with the services to be rendered for carrying out the objects of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 52 provides that all works to be taken up by the market committees shall be executed and carried out by the Board in such manner as may be decided by the Board from time to time. That apart, the Board is empowered to specify the limits upto which the market committee may be allowed to carry out the construction works. 15. Thus, keeping in view the scheme underlying the Act of 1961 and the kind of services to be rendered in implementation of the objects set out, it can be safely concluded that there is a definite public purpose behind the said enactment. 16. From bare perusal of the various provisions of the Act of 1961 and the Rules made thereunder referred hereinabove, it is manifestly clear that both the statutory bodies i.e. the market committee and the Board controlling and managing the market committee fund are under an obligation to utilise the same for carrying out the purposes of the Act in accordance with the guidelines prescribed. The marketing committee takes the decision as per its own requirement for providing facilities in the market area such as, shelters, sheds, parking accommodation , construction and repair of the approach roads, culverts, bridges etc. and acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fund by the Board including fund spent outside its market area as application of the income. 19. From bare perusal of the provisions of s. 11(1)(a) of the IT Act, it is manifestly clear that it does not contain any such inhibition that the application of the income for charitable purposes should be restricted to a particular place or the specified area. The words "to such purposes in India" used in said provision show that the application of the income for charitable or religious purposes anywhere in India shall be entitled for exemption in terms of s. 11(1)(a) of the IT Act. The application of the income for the purposes set out in the Act of 1961 by the market committee or the Board on its behalf may be in violation of the provisions of the Act of 1961 which regulates the utilisation of the market committee fund and market development fund but, for the purposes of exemption under s. 11(1)(a), it is wholly irrelevant inasmuch as, under the said provision, the only relevant consideration is that the income should be applied for charitable purposes in India. Moreover, as noticed by the learned Tribunal, as per the provisions of s. 34A of the Act of 1961, the State Government is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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