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Facts
The assessee, an Agriculture Produce Marketing Committee, failed to file its income tax return. The Assessing Officer reopened the assessment under section 147 and completed it ex parte under section 144 due to non-compliance. The assessee claimed exemption under section 10(26AAB) based on a government notification, but the claim was denied due to lack of documentation.
Held
The Tribunal held that the exemption claim under section 10(26AAB) was not examined on merits. It was rejected merely for non-furnishing of documents. Therefore, the matter was restored to the Assessing Officer for fresh examination of the exemption claim and consequential penalty proceedings were quashed.
Key Issues
Whether the assessee is eligible for exemption under section 10(26AAB) and if consequential penalty orders survive when assessment is set aside.
Sections Cited
147, 144, 10(26AAB), 270A, 271AAC(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, B BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member to 2765 & 2797, 2798/Kol/2025 Assessment Years: 2017-18 to 2019-20 Jalpaiguri Zilla Regulated Market Committee..…………………..………………....…………………....Appellant Jalpaiguri Sadar, Jalpaiguri, W.B 735101.. [PAN: AACAJ0159Q] vs. ITO, Ward-1(1), Jalpaiguri...…….……....…..………………….…..... Respondent Appearances by: Shri Pradeep Agarwal, AR, appeared on behalf of the appellant. Shri Bonnie Deb Barma, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : February 04, 2026 Date of pronouncing the order : February 05, 2026 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
The captioned appeals filed by the assessee are directed against the separate orders of the NFAC, Delhi (hereinafter referred to as “ld. CIT(A)”) all dated 19.09.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) and 2797 & 2798/Kol/2025 are related to consequential penalty u/s 270A, u/s 270A & u/s 271AAC(1) of the Act. Since all the above captioned appeals were filed by the same assessee and involve common issues, except variation in assessment years and figures, they were heard together and are being disposed of by this common order for the sake of convenience.
(A.Y 2017-18) is taken as lead case for narration of facts.
2. Brief facts of the case are that the assessee is an Agriculture Produce Marketing Committee, engaged in regulating agricultural marketing activities. The assessee did not file return of income for the relevant assessment year. The Assessing Officer issued notices under section 142(1). Due to non-compliance, the assessment was completed ex parte under section 144, after reopening under section 147. The assessee contended that its income was exempt under section 10(26AAB) of the Income-tax Act, being a statutory Agricultural Produce Marketing Committee, and relied upon Notification dated 17.10.2014 issued by the Government of West Bengal. However, the Assessing Officer held that the assessee failed to produce the said notification or supporting documents either during assessment proceedings or before the CIT(A), and accordingly rejected the claim of exemption. The CIT(A) sustained the assessment order vide order dated 19.09.2025.
Aggrieved by order of the Ld. CIT(A), assessee is in appeal before this tribunal.
At the time of the hearing the Learned AR submitted that the assessee is squarely covered by section 10(26AAB) and exemption was denied merely for want of documents. It was prayed that the matter be restored to the file of the Assessing Officer for fresh examination.
On the other hand the Learned DR supported the orders of the lower authorities.
We have carefully considered the rival submissions and perused the material on record. Although the assessment was completed under section 144 due to non-compliance, we find that the core issue relating to exemption under section 10(26AAB) of the Act has not been examined on merits by the Assessing Officer. It is evident that the assessee claims to be an Agricultural Produce Marketing Committee, reliance is placed on Government of West Bengal Notification dated 17.10.2014, and the claim was rejected only on account of non- furnishing of documents, without proper verification. In the interest of justice and fair play, we deem it appropriate to restore the matter to the file of the Assessing Officer with a direction to examine the claim of exemption under section 10(26AAB) afresh by consider the Notification dated 17.10.2014 and other supporting documents and pass a speaking order after providing adequate opportunity of being heard to the assessee. Accordingly, is allowed for statistical purposes. facts and issues involved in these appeals are identical to those in ITA No.2763/Kol/2025. Following our decision in the lead case, these appeals are also restored to the file of the Assessing Officer on identical directions. Accordingly, & 2765/Kol/2025 are allowed for statistical purposes.
(A.Y 2018-19) – Now coming to the appeals related to penalty proceedings (u/s 270A) & (u/s 271AAC), we hold that since the quantum appeals in 2764 & 2765/Kol/2025 have been set aside to the file of the Assessing Officer by quashing the assessment proceedings, therefore, the consequential penalty passed under sections 270A and 271AAC(1) of the Act do not survive at this stage. Accordingly, these penalty orders are rendered to be quashed. However the Assessing Officer is at liberty to initiate penalty proceedings afresh, if warranted, after completion of the set- aside assessments in accordance with law.