COMMISSIONER OF INCOME TAX, HISAR vs. MARKET COMMITTEE FATEHABAD

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ITA/165/2011HC Punjab & HaryanaPHHC01095482201106 July 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal was covered against the revenue by its previous judgments. For the first question of law, the Court referred to its own judgment dated 5.7.2010 in I.T.A. No.151 of 2010 (CIT v. Market Committee, Narwana). For the second question of law, the Court referred to its judgment dated 28.1.2011 in I.T.A. No.823 of 2010 (Commissioner of Income Tax, Hisar v. Market Committee, Sohana). Based on these precedents, the Court found that the ITAT's order was justified. Therefore, the appeal preferred by the revenue was dismissed. No issue was expressly left undecided.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The appeal pertains to the assessment year 2006-07 and challenges the ITAT's decision regarding the Market Committee, Fatehabad. The core of the dispute revolves around whether certain payments made by the Market Committee constitute an application of income for charitable purposes or a statutory obligation, and whether the assessee fulfilled the requirements of Section 11(2) for accumulation of income. The High Court was presented with two questions of law.

What were the issues?

The High Court was asked to decide the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the learned CIT(A) was justified in allowing payment of 30% of Market fees earned by it paid to Haryana Agricultural Marketing Board as application of income for charitable purpose, despite the finding that 30% of the market fee has to be paid to the said Board as a statutory obligation under the Agricultural Marketing Board Act, and therefore, it is not application of income, but it is sharing of Income by an overriding title as per the Act by which the Market Committee is governed? (Section 11(1)(a) and Section 11(2) are implicitly relevant). 2. Whether, on the facts and circumstances of the case, the learned ITAT was justified in holding that the assessee has fulfilled the mandatory requirements of section 11(2) without specifically mentioning the definite purpose or purposes of accumulation in form No.10? (Section 11(2) and Rule 17 of the Income Tax Rules are implicitly relevant). Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the payment of 30% of market fees was a statutory obligation and not an application of income for charitable purposes. Also argued that the assessee did not fulfill the mandatory requirements of Section 11(2) regarding the form for accumulation of income.

Which sections of the Income-tax Act were involved?

Section 260A,Section 11(1)(a),Section 11(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.165 of 2011 (O&M) Date of decision: 6.7.2011 Commissioner of Income Tax -----Appellant Vs. Market Committee, Fatehabad -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, ACJ This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench “F”, New Delhi dated 18.7.2009 in I.T.A. No.1413/Del/09 for the assessment year 2006-07 proposing following questions of law:- “i) Whether on the facts and in the circumstances of the case, the learned CIT(A) was justified in allowing payment of 30% of Market fees earned by it paid to Haryana Agricultural Marketing Board as application of income for charitable purpose, despite the finding that 30% of the market fee has to be paid to the said Board as a statutory obligation under the Agricultural Marketing Board Act, and therefore, it is not application of income, but it is sharing of Income by an overriding title as per the Act by which the Market Committee is governed?”

I.T.A. No.165 of 2011 ii) “Whether on the facts and circumstances of the case, the learned ITAT was justified in holding that the assessee has fulfilled the mandatory requirements of section 11(2) without specifically mentioning the definite purpose or purposes of accumulation in form No.10.” Learned counsel for the appellant fairly states that as far as question (1) is concerned, the same is covered against the revenue by judgment of this Court dated 5.7.2010 in I.T.A. No.151 of 2010 in CIT v. Market Committee, Narwana and as far as questions (2) is concerned, the same is covered against the revenue by judgment of this Court dated 28.1.2011 in I.T.A. No.823 of 2010 Commissioner of Income Tax, Hisar v. Market Committee, Sohana. Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE July 06, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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