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Issues: (i) Whether availability of exemption under section 10(26AAB) of the Income-tax Act, 1961 barred the assessee from seeking registration under section 12A of the Income-tax Act, 1961; (ii) Whether the assessee's activities under the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 were charitable and not hit by the first proviso to section 2(15) of the Income-tax Act, 1961.
Issue (i): Whether availability of exemption under section 10(26AAB) of the Income-tax Act, 1961 barred the assessee from seeking registration under section 12A of the Income-tax Act, 1961.
Analysis: The statutory benefit under section 10 operates independently from registration under section 12A. Mere enjoyment of exemption under one provision does not disentitle an assessee from seeking registration under another, if the statutory conditions for that registration are otherwise satisfied. The earlier view that the application was infructuous merely because exemption under section 10(26AAB) was available was rejected.
Conclusion: The availability of exemption under section 10(26AAB) did not bar the assessee from seeking registration under section 12A.
Issue (ii): Whether the assessee's activities under the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 were charitable and not hit by the first proviso to section 2(15) of the Income-tax Act, 1961.
Analysis: The assessee was constituted under statute to regulate marketing of agricultural produce, protect farmers' interests, and provide market infrastructure and regulatory control. Its power to levy fees was controlled by the statute and State-prescribed limits, and its coercive powers showed that it functioned as a regulatory arm rather than a commercial venture. Charging of fees or cess in the course of performing statutory duties did not alter the dominant charitable character of advancing an object of general public utility, nor did it render the activity commercial within the proviso to section 2(15).
Conclusion: The assessee's objects and activities were charitable, fell within advancement of an object of general public utility, and were not hit by the first proviso to section 2(15).
Final Conclusion: The rejection of registration was unsustainable, and the assessee was entitled to registration under section 12A.
Ratio Decidendi: A statutory body whose dominant object is to advance general public utility and whose fee-collecting powers are regulated by statute does not become commercial merely because it charges fees or cess, and entitlement to exemption under one provision does not preclude registration under another independently applicable provision.
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