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Facts
The assessee, Jalpaiguri Zilla Regulated Market Committee, was found by the Assessing Officer to have deposited substantial cash in its savings account. The assessee did not file a return of income and proceedings were initiated under section 148A of the Income-tax Act, 1961.
Held
The Tribunal held that while the assessee claimed exemption under section 10(26AAB) of the Act, it failed to provide supporting documents to the lower authorities. However, the assessment order was passed without properly examining the assessee's claim of exemption.
Key Issues
Whether the assessee is eligible for exemption under section 10(26AAB) of the Income-tax Act, 1961, and whether the lower authorities properly examined this claim.
Sections Cited
10(26AAB), 139(1), 142(1), 148, 148A, 148A(b), 148A(d), 250
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Income Tax Appellate Tribunal, ‘B’ BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2016-17 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 Satyajit Mandal, DR, appeared on behalf of the Respondent. Date of concluding the hearing : February 02, 2026 Date of pronouncing the order : February 03, 2026 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal filed by the assessee is directed against the order of the NFAC, Delhi (hereinafter referred to as “ld. CIT(A)”) dated 19.09.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).
Brief facts of the case are that in the case of the assessee information was received by the Assessing Officer that the assessee had deposited substantial cash in its savings bank account maintained with Indian Overseas Bank during the assessment year 2016–17. It is an admitted fact that the assessee did not file any return of income under section 139(1) of the Income-tax Act, 1961. Accordingly, proceedings under section 148A of the Act were initiated. Show-cause notice under section 148A(b) was issued and thereafter an order under section 148A(d) was passed, holding that income chargeable to tax had escaped assessment. Consequently, notice under section 148 of the Act was issued. As no return of income was filed, statutory notice under section 142(1) of the Act was issued. In response, the assessee submitted a reply dated 25.10.2024 stating that her income was exempt under section 10(26AAB) of the Act. However, no supporting documentary evidence was filed in support of such claim. The Assessing Officer did not accept the contention of the assessee and proceeded to complete the assessment by making addition of cash deposits amounting to ₹2,76,25,785 and interest income of ₹3,18,190, thereby determining the total income at ₹2,79,43,975.
Aggrieved, the assessee preferred an appeal before the learned CIT(A). It was contended that the Assessing Officer passed the assessment order mechanically without examining the assessee’s claim that assessee was a Marketing Committee engaged in regulating agricultural marketing and, therefore, the income was wholly exempt under section 10(26AAB) of the Act. It was further contended that the Assessing Officer failed to consider the Notification dated 17.10.2014 issued by the Government of West Bengal. The learned CIT(A), however, dismissed the appeal and upheld the assessment order.
Before us, the learned Authorised Representative reiterated that the assessee is a regulated market committee and its income is exempt under section 10(26AAB) of the Act. It was argued that both the Assessing Officer and the CIT(A) failed to examine the statutory exemption and the relevant Government Notification.
On the other hand, the learned Departmental Representative supported the orders of the lower authorities and submitted that the assessee failed to substantiate its claim with supporting evidence.
6. We have heard the rival submissions and perused the material available on record. We find that although the assessee, in its reply dated 25.10.2024, claimed its income totally exempted under section 10(26AAB) of the Act, no supporting documents, including the Notification dated 17.10.2014 issued by the Government of West Bengal, were filed either before the Assessing Officer or before the learned CIT(A). At the same time, we also find that the assessment order has been passed without examining the assessee’s claim of exemption under section 10(26AAB) of the Act in a proper and reasoned manner. Considering the totality of facts and in the interest of justice and fair play, we deem it appropriate to restore the matter to the file of the Assessing Officer. The Assessing Officer is directed to re-examine the issue relating to exemption under section 10(26AAB) of the Act after considering the Notification dated 17.10.2014 issued by the Government of West Bengal and after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to file all relevant documents to substantiate its claim. In terms of the above appeal of the assessee is allowed for statistical purpose.