Commissioner of Income Tax vs. Agricultural Market Committee

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ITTA/483/2011HC TelanganaHBHC01049600201108 February 20123 pages
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What did the High Court hold?

The tribunal agreed with the Revenue that the proposed questions of law should be answered in favour of the Revenue and against the assessee. This implies the ITAT's prior decision was being overturned or clarified in line with a Supreme Court ruling.

What were the facts?

The Commissioner of Income Tax appealed against an ITAT decision concerning the taxability of an Agricultural Market Committee. The appeal raised questions about the applicability and retrospective nature of Section 10(26AAB) of the Income Tax Act.

What were the issues?

The key issues were whether the ITAT improperly adjudicated on Section 10(26AAB) without it being raised, and whether this section was declaratory or amending in nature, affecting its retrospective operation.

Which sections of the Income-tax Act were involved?

Section 10(26AAB)

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HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND HON’BLE SHRI JUSTICE SANJAY KUMAR

I.T.T.A.No.483 of 2011

Date: 08-02-2012

Between

Commissioner of Income Tax, Rajahmundry … Petitioner

and

Agricultural Market Committee, Yanam … Respondent

HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND HON’BLE SHRI JUSTICE SANJAY KUMAR

I.T.T.A.No.483 of 2011

Judgment: (per Hon’ble the Chief Justice Shri Madan B. Lokur)

Learned counsel for the parties are agreed that in view of the decision rendered by this Court in CIT v. AGRICULTURE MARKET COMMITTEE[1], the proposed questions of law are required to be answered in favour of the Revenue and against the assessee.

2.

The proposed questions of law are as follows: “(A) Whether the Appellate Tribunal is justified in adjudicating the issue relating to taxability of Agricultural Market Committee on the anvil of Section 10(26AAB) of the Income Tax Act, though such a contention was never urged either in appeal memo or at the time of hearing of the appeal?

(B) Whether the Appellate Tribunal is justified in holding that Section 10(26AAB) of the Income Tax Act as introduced by the Finance Act of 2008 w.e.f. 1.4.2009 is declaratory in character and hence, retroactive in operation? (C) Whether the Appellate Tribunal is justified in not holding that Section 10(26AAB) of the I.T.Act insofar as carving exemption in favour of Market Committees from levy of tax is amending in nature and hence liable to be given effect to w.e.f. 1.4.2009?”

(D) Whether the Appellate Tribunal is justified in holding that Agricultural Market Committee is exempt from income tax for the period in question inspite of the decision of the Hon’ble Supreme Court in the case of Agricultural Market Committee, Narela Vs. CIT (305 ITR 1)?”

3.

Reference answered accordingly.

______________________ MADAN B. LOKUR, CJ

___________________ SANJAY KUMAR, J 08th February, 2012. Ak/Bnr [1] (2011) 337 ITR 299 (AP)

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