TMI Blog2006 (6) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... of the General Clauses Act, 1897, would, in fact, be permissible only in cases where the enactment in which the expression occurs does not itself provide for a definition or meaning to be given to the same. It is possible that an expression which as defined under the General Clauses Act, 1897, is, at the same time, also given a meaning or definition under a special enactment which meaning may be different from the one given in the former Act. The decision of this court in the previous round of litigation does not, therefore, provide a complete answer to the question that arises for the year under consideration in the present appeal. Whether the appellant-committee is a municipal committee within the meaning of section 10(20) of the Act, as amended with effect from April 1, 2003, by the Finance Act, 2002? - HELD THAT:- The most striking feature of the Explanation is that the same provides an exhaustive meaning to the expression local authority . The word means used in the Explanation leaves no scope for addition of any other entity as a 'local authority to those enlisted in the Explanation. In other words, even if an entity constitutes a local authority for purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committee is not a 'local authority' within the meaning of section 10(20) of the Income-tax Act, 1961? 2. The question arises in the following backdrop: 3. The appellant-committee is established under the Delhi Agricultural Produce Marketing (Regulation) Act, 1976, which is now replaced by the Delhi Agricultural Produce Marketing (Regulation) Act, 1998. The provisions of the said Act enjoin upon the appellant to provide facilities for marketing of agricultural produce in Azadpur, Sabzi Mandi, Delhi apart from performing other functions and duties such as superintendence, direction and control of markets for regulating marketing of agricultural produce. For the assessment year 2002-03, the appellant-committee claimed exemption from payment of tax on the income earned by it on the ground that it was a local authority within the meaning of section 10(20) of the said Act. The Assessing Officer repelled that claim and brought to tax the committee s income for the said year. Aggrieved, the committee appealed to the Commissioner of Income-tax (Appeals) who affirmed the view taken by the Assessing Officer. The matter was then taken up in a further appeal to the Tribunal who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10(20) of the Act in response to a notice issued to it under sections 142(1) and 143(2) of the said Act. The Assessing Officer repelled the assessee's claim for exemption relying upon Circular No. 8/2002, dated August 27, 2002, issued by the Central Board of Direct Taxes. It was also of the view that the amended provisions of section 10(20) of the Income-tax Act, 1961, were not attracted to agricultural produce marketing societies or Agricultural Market Boards, etc., even when they may be local authorities under other Central or State legislations. Aggrieved by the said order, the appellant-committee filed an appeal before the Commissioner of Income-tax (Appeals) who upheld the view taken by the Assessing Officer and declined the exemption claimed by the assessee. A further appeal before the Income-tax Appellate Tribunal ( the ITAT ) having failed, the committee has filed the present appeal in which the primary question that falls for consideration is whether the committee is a local authority within the meaning of section 10(20) of the Income-tax Act, 1961. 5. Appearing for the appellant, Mrs. Ahlawat argued that the Tribunal was in error in taking a view contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven in the former Act. The decision of this court in the previous round of litigation does not, therefore, provide a complete answer to the question that arises for the year under consideration in the present appeal. The first limb of Mrs. Ahlawat's argument, therefore, fails and is rejected. 7. That brings us to the alternative submission urged by Mrs. Ahlawat that the appellant-committee is a municipal committee within the meaning of section 10(20) of the Act, as amended with effect from April 1, 2003, by the Finance Act, 2002, which added the following Explanation to the said provision with effect from April 1, 2003 : Explanation.-For the purposes of this clause, the, expression 'local authority' means- (i) Panchayat as referred to in clause (d) of article 243 of the Constitution ; or (ii) Municipality as referred to in clause (e) of article 243P of the Constitution; or (iii) Municipal Committee and District Board, legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or (iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924). 8. The most striking feature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with definite statutory functions and powers. There is, therefore, no question of treating the appellant-committee as a municipal committee for it is neither known as a municipal committee under the enactment under which it is created nor recognised by fiction of law as such by the Income-tax Act or by any other enactment for that matter. That being so, the court cannot by a process of interpretation include an entity like the appellant into the provisions of the Explanation by drawing a comparison between the nature and functions which a municipal committee is expected to discharge with those discharged by the appellant. Any such process would imply that the court interprets the provision by reference to what in its opinion was intended by Parliament and not by what is specifically stated in the provision. It would also amount to reading something into the provision which is not obvious but which the court may on an interpretation attribute or discover. That approach in matters of interpretation has been eschewed by courts in fiscal statutes unlike beneficial legislations where the court has adopted the principle of liberal interpretation. 10. The second reason which dissuade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration. (4) XXXXXXX 14. The expression marketing committee is defined in section 2(p) of the Act as under: 'marketing committee' means a committee constituted for a market area under this Act. We may also extract section 35 of the Act which provides for constitution of the marketing committee. It reads: 35. Constitution of the marketing committee.- (1) Without prejudice to the provisions of section 26, there shall be constituted by order to be published in the Official Gazette, by the Government for every market area a marketing committee and different marketing committees may be constituted for regulating the marketing of different kinds of notified agricultural produce marketed in the same market area or any part thereof. (2) Every marketing committee shall exercise such powers and discharge such functions as may be vested in it by or under this Act. 16. Mrs. Ahlawat has filed copies of the relevant notifications issued from time to time declaring the market area and constituting a marketing committee for the same. By notification dated January 14, 1977, the administrator declared the Union Territory of Delhi to be a market area. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fiction by which a municipal committee is made synonymous to a marketing committee or vice versa, it will not be permissible to read one for the other especially in the context of a taxing statute. 19. The argument that since the marketing committee takes care of the maintenance of the roads and other functions which ordinarily fall within the jurisdiction of a municipal committee, does not, therefore, lead us anywhere, for similarity in regard to some of the functions between the two entities would not in itself make the two expressions interchangeable. That is precisely how the Central Board of Direct Taxes has also understood the provision and issued a circular paragraph 12.3 whereof reads as under: The exemption under clause (20) of section 10 would, therefore, not be available to agricultural marketing societies and agricultural marketing boards etc., despite the fact that they may be deemed to be treated as local authorities under any other Central or State legislation. Exemption under this clause would not be available to port trust also. 20. In the circumstances, therefore, the Tribunal was, in our opinion, correct in answering the question in the negative and ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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