TaxTMI 
TaxTMI 
2006 (6) TMI 105
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....ce Marketing (Regulation) Act, 1976, which is now replaced by the Delhi Agricultural Produce Marketing (Regulation) Act, 1998. The provisions of the said Act enjoin upon the appellant to provide facilities for marketing of agricultural produce in Azadpur, Sabzi Mandi, Delhi apart from performing other functions and duties such as superintendence, direction and control of markets for regulating marketing of agricultural produce. For the assessment year 2002-03, the appellant-committee claimed exemption from payment of tax on the income earned by it on the ground that it was a local authority within the meaning of section 10(20) of the said Act. The Assessing Officer repelled that claim and brought to tax the committee's income for the said year. Aggrieved, the committee appealed to the Commissioner of Income-tax (Appeals) who affirmed the view taken by the Assessing Officer. The matter was then taken up in a further appeal to the Tribunal who held that the assessee was indeed a local authority and, therefore, exempt from payment of income-tax under the Income-tax Act, 1961. A reference made to the High Court at the instance of the Revenue raised the question whether the Agricultural....
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.... issued by the Central Board of Direct Taxes. It was also of the view that the amended provisions of section 10(20) of the Income-tax Act, 1961, were not attracted to "agricultural produce marketing societies" or Agricultural Market Boards, etc., even when they may be local authorities under other Central or State legislations. Aggrieved by the said order, the appellant-committee filed an appeal before the Commissioner of Income-tax (Appeals) who upheld the view taken by the Assessing Officer and declined the exemption claimed by the assessee. A further appeal before the Income-tax Appellate Tribunal ("the ITAT") having failed, the committee has filed the present appeal in which the primary question that falls for consideration is whether the committee is a "local authority" within the meaning of section 10(20) of the Income-tax Act, 1961. 5. Appearing for the appellant, Mrs. Ahlawat argued that the Tribunal was in error in taking a view contrary to the one taken by this court in the previous round of litigation. She urged that this court having declared the appellant-committee to be a local authority for purposes of section 10(20) of the Act, the reasoning underlying the said c....
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..... Ahlawat's argument, therefore, fails and is rejected. 7. That brings us to the alternative submission urged by Mrs. Ahlawat that the appellant-committee is a municipal committee within the meaning of section 10(20) of the Act, as amended with effect from April 1, 2003, by the Finance Act, 2002, which added the following Explanation to the said provision with effect from April 1, 2003 : "Explanation.-For the purposes of this clause, the, expression 'local authority' means- (i) Panchayat as referred to in clause (d) of article 243 of the Constitution ; or (ii) Municipality as referred to in clause (e) of article 243P of the Constitution; or (iii) Municipal Committee and District Board, legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or (iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924)." 8. The most striking feature of the Explanation is that the same provides an exhaustive meaning to the expression "local authority". The word "means" used in the Explanation leaves no scope for addition of any other entity as a 'loc....
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....nactment under which it is created nor recognised by fiction of law as such by the Income-tax Act or by any other enactment for that matter. That being so, the court cannot by a process of interpretation include an entity like the appellant into the provisions of the Explanation by drawing a comparison between the nature and functions which a municipal committee is expected to discharge with those discharged by the appellant. Any such process would imply that the court interprets the provision by reference to what in its opinion was intended by Parliament and not by what is specifically stated in the provision. It would also amount to reading something into the provision which is not obvious but which the court may on an interpretation attribute or discover. That approach in matters of interpretation has been eschewed by courts in fiscal statutes unlike beneficial legislations where the court has adopted the principle of liberal interpretation. 10. The second reason which dissuades us from accepting the interpretation suggested by Mrs. Ahlawat is also not far to seek. The appellant is a marketing committee as distinct from a municipal committee. The expression "municipal committ....
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....e' means a committee constituted for a market area under this Act." We may also extract section 35 of the Act which provides for constitution of the marketing committee. It reads: "35. Constitution of the marketing committee.- (1) Without prejudice to the provisions of section 26, there shall be constituted by order to be published in the Official Gazette, by the Government for every market area a marketing committee and different marketing committees may be constituted for regulating the marketing of different kinds of notified agricultural produce marketed in the same market area or any part thereof. (2) Every marketing committee shall exercise such powers and discharge such functions as may be vested in it by or under this Act." 16. Mrs. Ahlawat has filed copies of the relevant notifications issued from time to time declaring the market area and constituting a marketing committee for the same. By notification dated January 14, 1977, the administrator declared the Union Territory of Delhi to be a market area. The relevant portion of the said notification reads: "Now, therefore, in exercise of the powers conferred by sub-section(1) of ....