Commissioner of Income Tax-2, vs. Agricultural Market Committee,

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ITTA/557/2011HC TelanganaHBHC01024512201107 August 2012Bench: GODA RAGHURAM,M.S.RAMACHANDRA RAO3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that Section 10(26AAB) is prospective in operation, not retrospective. Therefore, the exemption does not apply to periods before its enforcement.

What were the facts?

The appeals concerned the retrospective operation of Section 10(26AAB) of the Income Tax Act, 1961. The CIT(Appeals) and the Tribunal held the amendment to be retrospective, granting exemption to Agricultural Market Committees for periods prior to its enforcement.

What were the issues?

Whether Section 10(26AAB) of the Income Tax Act, 1961, introduced by the Finance Act, 2008, has retrospective operation.

Which sections of the Income-tax Act were involved?

Section 10(26AAB),Section 260-A

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THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO

ITTA Nos. 547, 556, 557, 581, 551 and 560 of 2011 and 35 of 2012

Dated: 07-08-2012

Between:

The Commissioner of Income Tax-2 Visakhapatnam …Appellant

And

Agricultural Market Committee, Amadalavalasa …Respondent.

Common Judgment (Per Hon’ble Sri Justice Goda Raghuram)

Heard Sri S.R.Ashok, learned Senior Standing Counsel for the appellant and Smt K.Lalitha, learned counsel for different respondent- Agricultural Market Committees.

These appeals by the Revenue under Section 260-A of the Income Tax Act, 1961 are preferred against several orders of the Income Tax Appellate Tribunal, Visakhapatnam Bench rejecting the appeals preferred by the Revenue against appellate orders of the CIT (Appeals). The issue involved is whether Section 10 (26AAB) of the Income Tax Act, 1961 introduced into the parent Act by the Finance Act, 2008 w.e.f 1-4-2008 has retrospective operation.

The Appellate Authority, the CIT (Appeals) held that the amended provision has retrospective effect and Agricultural Market Committees are exempted from liability to tax even for periods prior to the enforcement of the amended provision. The Tribunal concurred.

It is brought to our notice by the learned Senior Standing Counsel for the Revenue and this position is not disputed and is in fact fairly conceded by Smt K.Lalitha, learned Standing Counsel for several respondents, that the decision of this Court in Commissioner of Income Tax v. Agriculture Market Committee[1] had ruled that the provisions of Section 10 (26AAB) of the Act are prospective in operation and do not extend the benefit of exemption from liability to tax for periods prior to the enforcement of this provision.

In the light of the above position in law, these appeals are allowed and the relevant orders of the Tribunal and of the CIT (Appeals) are set aside; and the orders of the Assessing Authority restored.

The appeals are allowed as above at the stage of admission, after hearing the respective counsel for the respective parties. No costs.

_________________________ GODA RAGHURAM, J

7th August, 2012 _______________________________ M.S.RAMACHANDRA RAO, J GRR [1] 337 ITR 299.

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