Special exemption for Agricultural Produce Market Committees prevails over section 12A registration, restoring income tax exemption.

ITAT Mumbai held that an Agricultural Produce Market Committee covered by the special exemption in section 10(26AAB) remains entitled to that exemption despite registration under section 12A. The tax authorities' objection based solely on section 11(7) was rejected because the special provision operates independently and prevails where the income falls within its scope. Relying on the assessee's own earlier decisions, the Tribunal treated the statutory exemption as complete and set aside the denial of exemption, directing the income to be treated as exempt under the special provision applicable to such committees.

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Issues: Whether an Agricultural Produce Market Committee registered under section 12A is entitled to exemption under section 10(26AAB) of the Income-tax Act, 1961, and whether such registration disentitles it from claiming that exemption.

Analysis: The assessee was an Agricultural Produce Market Committee constituted under the relevant marketing regulation law and its claim was that its income fell within the specific exemption granted to such committees under section 10(26AAB). The denial made by the tax authorities rested only on the fact that the assessee held registration under section 12A and, therefore, could not invoke section 10 in view of section 11(7). The issue had already been decided in the assessee's own case for later assessment years, where it was held that the special exemption for agricultural produce market committees is a complete statutory exemption and that section 12A registration does not prevent the assessee from claiming it.

Conclusion: The assessee was held entitled to exemption under section 10(26AAB), and the denial based solely on section 12A registration was rejected.

Final Conclusion: The addition made by denying the statutory exemption was set aside and the assessee's income was directed to be treated as exempt under the special provision applicable to agricultural produce market committees.

Ratio Decidendi: A specific statutory exemption for agricultural produce market committees prevails independently of section 12A registration, and section 11(7) does not bar such a claim where the income is covered by the special exemption provision.

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