TMI Blog2016 (1) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... bjects for which it has been established. Charging of nominal fee/cess in course of performance of its duties would not make the assessee a commercial/business establishment. The activities of the assessee are undoubtedly charitable in nature falling in last limb of section 2(15) i.e. ‘advancement of any object of general public utility’ and at the same time is not adversely hit by proviso to section 2(15) of the Act. Thus the assessee is entitled for registration u/s. 12A of the Act. - Decided in favour of assessee - ITA No. 1776/PN/2013 - - - Dated:- 29-10-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri C.H. Naniwadekar For The Revenue : Smt. Harshvardhini Buty ORDER PER VIKAS AWASTHY, JM : The appeal has been filed by the assessee against the order of Commissioner of Income Tax-I, Pune dated 31-07-2013, whereby the application of the assessee for grant of registration u/s. 12A of the Act has been rejected. 2. The brief facts of the case are: The assessee was formed by a Government notification, Department Co-operative Societies published in the Government of Maharashtra Gazette dated 10-05-2012. The assessee - Market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no bar seeking registration u/s. 12A of the Act. The ld. AR submitted that vide Notification No. 25 of 2012 - Service tax dated 20-06-2012, Ministry of Finance, Government of India has granted exemption to the entities registered u/s. 12AA of the Act. The assessee wants to seek immunity from the payment of service tax by registering u/s. 12AA of the Act. (ii) The activities of the assessee are in nature of / in relation to trade, commerce or business. Therefore, it is hit by proviso to section 2(15). The assessee is engaged in serving small and marginal farmers, therefore, the activities of the assessee are charitable in nature. The assessee is an extended arm of the State Government in providing various facilities to the farmers by regulating the sale of agricultural produce, marketing of agricultural produce, providing common place for sale of agricultural produce, etc. The ld. AR submitted that the assessee has been formed u/s. 11 of The Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 (hereinafter referred to as the Act of 1963 ). The assessee is conferred with powers and duties in section 29 of the Act of 1963. Section 31 gives the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 12A of the Act, since 2003. 7. The Commissioner of Income Tax in his impugned order has observed that exemption u/s. 10(26AAB) is already available to the assessee, therefore, the application for registration u/s. 12A deserves to be considered as infructuous. The assessee, so far has been taking benefit under the provisions of section 10(26AAB) of the Act. There is no bar that if the assessee is enjoying the benefit of exemption under the provisions of section 10, it cannot be registered under the provisions of section 12A of the Act, if it satisfies the other conditions laid down under the said section. Both these benevolent provisions operate in different spheres. Our this view find support from the decision of Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Agricultural Market Committee, Giddalur Ors. (supra), wherein the High Court has observed as under: 38. It is not the case of AMCs that they were not institutions of charity prior to the amendment of section 10(20) by the Finance Act, 2002. As we have analysed earlier, all those statutory, non-statutory entities, concerns and institutions, specified in section 10-subject to the prescribed condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;local authority' (s) from the benefit of tax exemption, would render the market committees ineligible for tax exemption under other provisions of the Income-tax Act. It must necessarily further be concluded that although market committees are not entitled to (or eligible for) tax exemption under section 10(20) of the Income-tax Act, yet a claim of exemption is still open to consideration under an alternate provision, if made out. 39. The absence of any corresponding amendments to sections 11 to 13- although section 10(29) was deleted and section 10(20) was amended, itself is sufficient indication to belie the submission made by the senior counsel. 40. In Gujarat Maritime Board [2007] 295 ITR 561 (SC), the Supreme Court held that section 10(20) and section 11 of the Income-tax Act operate in totally different spheres, that even if the Board has ceased to be local authority', it is not precluded from claiming exemption under section 11(1) . We accordingly hold that an AMC is entitled to seek exemption under section 10(20) read with section 10(29) till March 31, 2003. By reason of the amendment to section 10(20) and deletion of section 10(29) with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y essential for the orderly growth of the society. In these circumstances, we have no hesitation in holding that the assessees are constituted for charitable purposes, namely, advancement of an object of general public utility and, therefore, entitled to registration under Section 12A/12AA of the Act. 9. The Hon'ble High Court further after analyzing the decisions of the Hon'ble Supreme Court of India rendered in the cases of Additional Commissioner of Income Tax Vs. Surat Art Silk Cloth Manufacturers Association, 121 ITR 1 (SC) and Director of Income Tax Vs. Bharat Diamond Bourse, 259 ITR 280 (SC) held: 20. Applying the tests laid down by the apex court in the aforesaid cases to the facts of the present case, there can be no doubt that the object of the market committees (assessees) established under the 1963 Act is to regulate the entire marketing of agricultural and some other produce from the stage of procuring till it reaches the ultimate consumer, which is squarely covered within the meaning of the expression advancement of any object of general public utility contained in Section 2(15) of the Act. 21. It is contended by the Revenue that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been taken by the Co-ordinate benches of the Tribunal in the cases of Market Committee, Sullar Gharat Ors Vs. Commissioner of Income Tax (supra), Agricultural Produce Market Committee, Telhara Ors. Vs. Commissioner of Income Tax (supra) and Rajasthan State Agricultural Marketing Board Vs. Commissioner of Income Tax (supra). 11. The assessee has been established under the provisions of section 11 of The Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963. Thus, it is a creation of statute, the assessee derives its power to levy fee/cess from section 31 of the Act of 1963. The assessee levy and collect fees/penalty in the prescribed manner at the rates within the rate band fixed by the State Government. Thus, the assessee does not have unfettered power to charge fee/cess. Further, the assessee has power of entry, inspection, search and seizure u/s. 32A of the Act, 1963. The assessee can ask any person carrying business in the market area to produce the accounts and other documents and to furnish information relating to the stock of such agricultural produce and also relating to the payment of market fee and payment to the seller. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table purpose includes relief of the poor, education, medical relief and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. In these circumstances, rendering any service in relation to trade, commerce or business cannot, in the opinion of the Court, receive such a wide construction as to enfold regulatory and sovereign authorities, set up under statutory enactments, and tasked to act as agencies of the State in public duties which cannot be discharged by private bodies. Oven, apart from the controlling or parent statutes, like the BIS Act, these statutory bodies (including BIS) are empowered to frame rules or regulations, exercise co-ercive powers, including inspection, raids; they possess search and seizure powers and are inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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