The Commissioner of Income Tax-1 vs Krishi Utpadan Mandi Samiti Bangarmau Unnao and Others

Heard Shri D.D. Chopra learned Counsel for the appellant and Shri Amit Shukla learned Counsel for the respondents.

These bunch of Appeal was admitted on following substantial question of law and also involve common facts, hence, we proceed to decide the present appeals by present common judgment:

Whether, issuance of notice u/s 143(2) of Income Tax Act, is mandatory even if the return is filed after statutory period as provided u/s 148 of the Act?

Whether, filing of return after expiry of time limit provided u/s 148 of the Act, may be treated as invalid return as done by the Department?

The question framed by this Court has been settled at rest by a Division Bench of this Court of which one of us (Hon''ble Dr. Justice Satish Chandra) was the member, had held that U.P. Krishi Utpandan Mandi Parishad, Lucknow is a local authority prior to assessment year 2003-04. The Judgment has been reported in 2010 186 Taxman 460 Commissioner of Income Tax v. Krishi Utpadan Mandi Parishad, Unnao.

Relevant portion from the Judgment of Krishi Utpadan Mandi Parishad (surpa) is reproduce as under:

Therefore, it is evident that prior to 1-4-2003 (Assessment year 2003-04), assessees being the ''local authorities'' income from house property and other income enumerated under Sections 10(20) and 10(29) were not to be included in computing the total income....

In the instant cases, prior to 1-4-2003 registration u/s 12A of the Act was not needed for the reason that the respondent assessees were enjoying the exemption by virtue of Section 10(20) as well as Section 10(29) of the Act before its deletion. After the amendment in Section 10(20) brought by the Finance Act, 2002, the assessees were required to get registration u/s 12A with effect from 1-4-2003. Almost in all the cases, for this purpose, after getting necessary permission, applications were filed in the month of March, 2006. So, the assessees were eligible to get registration in normal course with effect from 1-3-2006 (Assessment Year 2006-07) by virtue of Proviso (ii) of Section 12A(1)(a) of the Act (supra). Hence, before us the issue for condoning the delay is pertaining to 1-4-2003 to 31-3-2005, i.e., assessment years 2003-04, 2004-05 and 2005-06 (total three years). For condoning the delay for these three years, it may be mentioned that in Ananda Marga Pracharaka Sangha Vs. Commissioner of Income Tax, it was observed that the condonation of delay may relate back to the very date of creation of the trust or institution. However, it has been now made clear by the proviso with effect from 1-10-1991, that it is possible to grant the registration with effect from the date of creation. Where delay is not condoned, it can be effective from the year of application. In the instant cases, prior to 1-4-2003 registration u/s 12A of the Act was not needed for the reason that the respondent assessees were enjoying the exemption by virtue of Section 10(20) as well as Section 10(29) of the Act before its deletion. After the amendment in Section 10(20) brought by the Finance Act, 2002, the assessees were required to get registration u/s 12A with effect from 1-4-2003. Almost in all the cases, for this purpose, after getting necessary permission, applications were filed in the month of March, 2006. So, the assessees were eligible to get registration in normal course with effect from 1-3-2006 (Assessment Year 2006-07) by virtue of Proviso (ii) of Section 12A(1)(a) of the Act (supra). Hence, before us the issue for condoning the delay is pertaining to 1-4-2003 to 31-3-2005, i.e., assessment years 2003-04,2004-05 and 2005- 06 (total three years). For condoning the delay for these three years, it may be mentioned that in Ananda Marga Pracharaka Sangha Vs. Commissioner of Income Tax, it was observed that the condonation of delay may relate back to the very date of creation of the trust or institution. However, it has been now made clear by the proviso with effect from 1-10-1991, that it is possible to grant the registration with effect from the date of creation. Where delay is not condoned, it can be effective from the year of application.

In view of above, question framed is answered in favour of Assessee.

Appeal dismissed.

Tribunal''s order confirmed.