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Facts
The appellant, a market committee, did not file a return for AY 2008-09. Its case was reopened under Section 148, and a nil return was filed claiming exemption under Section 10(26AAB), which the AO disallowed. The CIT(A) confirmed this disallowance, leading to the present appeal.
Held
The Tribunal held that Section 10(26AAB) was inserted by the Finance Act, 2008, effective from April 1, 2009, making it prospective and applicable from AY 2009-10 onwards. Relying on an Andhra Pradesh High Court decision and CBDT Circular, the Tribunal concluded that the appellant was not entitled to the exemption for AY 2008-09.
Key Issues
Whether the income of a Market Committee is eligible for exemption under Section 10(26AAB) for AY 2008-09, considering the provision's prospective application from AY 2009-10.
Sections Cited
148, 139(1), 10(26AAB)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2008-09 Urban Wholesale Market Authority .......... Appellant Vengeri, Kozhikode 673010 [PAN: AAALU0257D] vs. The Income Tax Officer, WSD-1(3), Kozhikode .......... Respondent Assessee by: Shri Somy Cherian Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 04.11.2025 Date of Pronouncement: 19.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-7, Kolkatta [CIT(A)] dated 12.08.2025 for Assessment Year (AY) 2008-09.
Brief facts of the case are that the appellant is a market committee constituted as per GO(Ms) No. 117/99AD dated 17.04.1999 by the Government of Kerala. It is formed with the object of facilitating marketing of agricultural produce. The appellant had not filed return of income for AY 2008-09 under the provisions of section 139(1) of the Income Tax Act, 1961 (the Act). The case was reopened by issue of notice u/s. 148 on 28.03.2015. In Urban Wholesale Market Authority response to the notice u/s. 148, the appellant filed return of income on 22.04.2015 disclosing Nil income after claiming exemption u/s. 10(26AAB) of the Act. However, the Income Tax Officer, Ward 1(4), Kozhikode (hereinafter called "the AO") had disallowed exemption on the ground that the appellant is not a legal entity under the provisions of any Act passed by the state Legislative Assembly. Further, provisions of section 10(26AAB) are applicable only from AY 2009-10.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee submits that the income of the appellant marketing committee is eligible for exemption u/s. 10(26AAB) of the Act and also placed reliance on the decision of ITAT Pune Bench in the case of Perfect Krushi Market Yard Pvt. Ltd. v. PCIT dated 07.01.2022.
On the other hand, learned Sr. DR opposed the above submission and submits that provisions of section 10(26AAB) are prospective in nature and applicable only from AY 2009-10. In this regard she placed reliance on the judgment of Hon'ble Andhra Pradesh High Court in the case of CIT vs. Agriculture Market Committee [2012] 337 ITR 299.
Urban Wholesale Market Authority 7. I heard the rival contentions and perused the material available on record. the issue that arises for my consideration is whether the income of the Market Committee is eligible for exemption u/s. 10(26AAB) of the Act for AY 2008-09. Provisions of section 10(26AAB) were inserted by Finance Act, 2008 w.e.f. 01.04.2009. They are prospective in nature as held by the Hon'ble Andhra Pradesh High Court in the case of CIT vs. Agriculture Market Committee [2012] 337 ITR 299. Circular No. 1 of 2009 dated 27.03.2009 of CBDT clarifies that these provisions shall apply for AY 2009-19 and subsequent assessment years. Respectfully following the decision of the Hon'ble Andhra Pradesh High Court cited supra, I hold that the appellant is not entitled for deduction u/s. 10(26AAB) of the Act. Thus, the decision relied upon by the learned A.R. have not application to the facts of the present case.
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 19th November, 2025.