TaxTMI 
TaxTMI 
2011 (9) TMI 535
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....ihar Agricultural Produce Markets Act 1960 (hereinafter referred to as the 'local Act'). It is an institution for charitable purposes within the meaning of section 2(14) of the Act. The local Act was repealed by the Bihar Agricultural Produce Market (Repeal) Act 2006 (Bihar Act 23 of 2006), with effect from 12.9.2006. The learned assessing officer passed order of assessment on 19.12.2006 (Annexure-1), whereby the assessee was assessed to tax. Its claim for exemption beyond 15% of its receipts under the provisions of section 12 of the Act was rejected under the provisions of section 11 of the Act. Aggrieved by the order, the assessee preferred appeal which was dismissed by order dated 5.7.2007, passed by the learned Commissioner of Income Tax (Appeals), Patna, and the order of assessment was upheld. The assessee challenged the same by preferring appeal before the Tribunal which has been rejected by the impugned order. Hence this appeal at the instance of the assessee. 3. While assailing the validity of the proceedings, learned counsel for the appellant submits that the Act was repealed with effect from 1.9.2006, and the assessment order was passed on 19.12.2006. The same will be de....
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....All). 3.1 Learned counsel for the appellant has advanced elaborate submissions in reply to the contentions of the learned senior Standing Counsel. 4. The learned Senior Standing Counsel has supported the impugned order. Relying on the provisions of the Repeal Act, he submits that the successor body contemplated under the Repeal Act is the State Government itself whose senior functionary has always remained the Managing Director of the Board. The assessee has contested the matter at all stages and, therefore, the quondam Board was throughout effectively represented by the Board's Managing Director, a senior member of the Indian Administrative service. He further relies on the provisions of section 170 of the Act. He next submits that the information as to non-utilisation of 85% of the receipts has to be given in Form 10 within the time prescribed by the Explanation -2 to section 139(1) (b) of the Act. He relies on the judgment of the Supreme Court in CIT v. Nagpur Hotel Owners' Association [2001] 247 ITR 201/114 Taxman 255, and further states that the judgment in the case of Mayur Foundation (supra) stood on a different footing. 5. We have perused the materials on record and cons....
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....nment; (d) Chief Engineer of the Rural Engineering organisation of the State Government, ex-officio; (e) The Chief Town Planner of the State Government, ex-officio; (f) an officer of the Ministry of Agriculture of the Government of India to be nominated by that ministry; (g) Managing Director of the State Bank of India or his nominee; (h) five members to be nominated from amongst the members of the Market Committee; (i) Director, Marketing; (j) The managing director of the board shall function as the member secretary of the board. (4) The Managing Director of the Board shall function as the Chief Executive Officer of the Board who shall be an officer of the State Government not below the rank of a Collector. (5) The membership of persons, other than the official members shall be at the pleasure of the Government." 6.1 It is evident from a perusal of Section 33A of the Act that its Chairman shall be the person nominated by the State Government. Traditionally the State Government has always nominated a senior member of the Indian Administrative Service as the Managing Director. It is evident under....
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.... Act reads as follows: "An Act to provide for the better regulation of buying and selling of Agricultural Produce and the Establishment of Markets for Agricultural Produce in the State of Bihar and for matters connected therewith". 9. Section 27 of the Act empowers the market committees to levy and collect market fee from the licensees which can be used for the purposes mentioned in Section 30 of the Act. The Act contemplated and constituted a network of market committees at the local level to achieve the aims and objects of the Act enumerated above under the over all guidance, supervision, control, and regulation of the Board. Section 2(bb) of the local Act defines 'Board' to mean the Bihar Agricultural Marketing Board established under Section 33A of the Act. Chapter IV-A of the Act is headed 'Marketing Board'. Section 33-A is headed 'Establishment of Board', and provides for its composition and appointment. In view of the provisions of section 33A of the Act, the Marketing Board is a body corporate having perpetual succession and common seal, and can sue and be sued in its own name. Section 33-C of the Act, which is headed 'Board's Fund', is of utmost importance in the present....
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....poration from the Bihar Government was entitled to the benefit of exemption from taxation. The relevant portions of the judgment are reproduced hereinbelow: 10. We must consider the judgment of the Supreme Court in Sahney Steel & Press Works Ltd. (supra), on which the learned appellate authority as well as the learned Tribunal have placed full reliance. We are of the view that the judgment is inapplicable to the facts and circumstances of the present case, inasmuch as it did not deal with 'charitable purpose' within the meaning of section 2(15), nor the 'benefits of exemption available to educational institutions from the State Government', within the meaning of section 10(23C), of the Act. Sahney Steel & Press Works Ltd. was really concerned with industrial subsidy from the Government which is fundamentally different and distinct from educational institutions to which has to be added Chapter-IV of the Constitution of India which lays down the governmental duty to promote education amongst all, particularly the downtrodden sections, of this country. In view of the facts and circumstances of the case, the Supreme Court held that the amount paid to the assessee in that case was in t....
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....ecipient is bound to use the subsidy from public funds for a particular purpose, as was the case in Seaham Harbour Dock Company, or Lincolnshire Sugar Co. Ltd. v. Smart [1937] 20 TC 643 (HL), it would not be operational or trade receipts, and would therefore not be taxed. 11.2 We would next like to notice the facts and circumstances of Lincolnshire Sugar Co. Ltd. (supra). In that case, it was found that the Company carried on the business of manufacturing sugar from home-grown beet. The company was paid various sums under the British Sugar Industry (Assistance) Act 1931, out of monies provided by Parliament. The question was whether these monies were to be taken into account as trade receipts or not. The object of the grant was that in the year 1931, in view of the heavy fall in prices of sugar, sugar industries were in difficulty. The government decided to give financial assistance to certain industries in respect of sugar manufactured by them from home-grown beet during the relevant period. Lord Macmillan held that: "What to my mind is decisive is that these payments were made to the company in order that the money might be used in their business." He further observed that: "....