Specific exemption for agricultural produce market committee income prevails over general charitable exemption rules and section 2(15) proviso.

An agricultural produce market committee was treated as entitled to exemption on its entire income under section 10(26AAB), because that provision specifically covers income of a committee constituted to regulate marketing of agricultural produce. On that basis, the income was not includible in total income, and the earlier section 12A registration and the section 11 controversy became irrelevant for tax computation. The Tribunal held that the proviso to section 2(15) could not be used to deny the specific exemption in these facts, so the Revenue's challenge failed and the assessment based on denial of exemption was annulled.

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Issues: Whether the income of an agricultural produce market committee is exempt from tax under section 10(26AAB) of the Income-tax Act, 1961, and consequently whether exemption under section 11 can be denied by invoking section 2(15).

Analysis: The Tribunal noted that the assessee is an agricultural produce market committee constituted under the relevant market committee law and that section 10(26AAB) grants exemption to any income of such a committee or board constituted for regulating the marketing of agricultural produce. Once the income is covered by this specific exemption, it is not to be included in the computation of total income. In that situation, the earlier registration under section 12A and the controversy regarding section 11 become irrelevant for the purpose of taxation. The Tribunal therefore held that the proviso to section 2(15) could not be used to deny the exemption in the facts of the case.

Conclusion: The assessee's income was held to be exempt under section 10(26AAB), and the denial of exemption by applying section 11 read with section 2(15) was set aside.

Final Conclusion: The Revenue's appeals failed and the assessee succeeded on the core exemption issue, with the assessment made on that basis being annulled.

Ratio Decidendi: Where a statute grants a specific exemption to the entire income of an agricultural produce market committee, that income cannot be brought to tax by invoking the general charitable-exemption framework or the proviso to the definition of charitable purpose.

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