TaxTMI 
TaxTMI 
2026 (4) TMI 1463
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.... of convenience. 2. For the Assessment Year 2015-16, a lead Appeal has been filed against the Appellate Order issued by the National Faceless Appeal Centre, Delhi (the learned CIT [A]), dated 26.08.2025. This consolidated Appellate Order addressed four Appeals pertaining to Assessment Years 2015-16, 2016-17, 2018-19 and 2019-20, and disposed of them by dismissing the Appeals against various assessment orders issued by the Income Tax Officer, Ward-1, Chamarajanagar, u/s. 147 r.w.s. 144 of the Income Tax Act. 3. For the Assessment Year under consideration, the facts indicate that Appellant is an Agricultural Produce Marketing Committee (Gundlupet Division) located in Chamarajanagar and regulated by the Department of Agriculture, Government of Karnataka. It generates income from providing services to farmers for the sale of their produce, which is regarded as exempt income u/s. 10[26AAB] of the Act. It is understood that, on the assumption that all its income is exempt, it did not file a return of income. However, during the application process for a Permanent Account Number (PAN), it was inadvertently classified under trust status and consequently allotted a PAN accordingly. It....
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.... and balance sheet, in paper format to the Ld. Assessing Officer. It was also stated that the primary sources of receipts are market fees and market cess from agricultural produce trades and commission agents. The main transactions generating income are remitted to the account in cash, resulting in cash deposits in the bank account. Furthermore, the Assessee clarified that all cash deposited in these bank accounts is accounted for, with all cash receipts reconciling with the books of accounts and bank statements. Therefore, there is no unaccounted income. 8. The Ld. Assessing Officer explicitly observed that the entire transaction was conducted under the Permanent Account Number assigned to a trust bearing the name of the Assessee. This permanent account number does not correspond to the status of a local authority. The modification in the Permanent Account Number reflecting local authority status became effective on 12.05.2022, applicable from Assessment Year 2023-24 onward. As the assessee remains registered under the trust's Permanent Account Number, eligibility for exemption under section 10(26AAB) is not established. 9. Consequently, the Assessment Order was issued to th....
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....pellant's income was exempt, yet still subjected to tax under the Assessment Order, which required additional time to address. The First Appellate Authority was noted to have erred in this aspect, primarily on the grounds that no relevant evidence or specific details were provided. However, it was contended that, in such situations, it is not always feasible to provide a detailed, date-wise analysis or documentation of legal consultations. The principal reason for rejection was the Appellant's inability to submit pertinent evidence and specific particulars to support the condonation of delay. Therefore, it was requested that the delay be condoned and the Appeal be heard on its merits. 16. For the Assessment Year 2015-16 under review, the Authorised Representative, Shri Ravi Shankar, Advocate, submitted a paper book comprising twenty-three pages. Reference was made to the first page, containing a letter dated 10.12.2025 from the Income Tax Officer, Ward-1, Chamarajanagar, addressed to the Secretary of the Assessee under the Right to Information Act. In this correspondence, the Assessee requested copies of the sanction granted under Section 151 of the Act by the Principal Comm....
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....ncluded a copy of the order issued u/s. 148A(d) on April 5, 2022, while the notice u/s. 148 was issued on 06.04.2022. He relied on the Supreme Court's decision in Income Tax Officer v. Bangla Gupta [2026] 183 Taxmann.com 121 (Supreme Court), which held that when a notice u/s. 148A is issued to the assessee after more than three years from the end of the relevant Assessment Year, approval must be obtained from the appropriate authority as specified in Clause 2 of Section 151. If approval is sought from authorities listed in Clause 1 instead, both the notice and the order may be quashed due to a lack of proper authorization u/s. 151. 20. The Assessee also cited the Delhi High Court's ruling in Kusum Healthcare Private Limited v. Deputy Commissioner of Income Tax [2025] 173 Taxmann.com 58 (Delhi), which further established that reassessment actions commenced more than three years after the relevant Assessment Year require approval from the Principal Chief Commissioner, not the Principal Commissioner. Thus, sanction provided by the Principal Commissioner for reassessment under Section 148A would not stand. 21. In this context, he submitted that, based on information avail....
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....ing these circumstances, no Revenue Authority could have granted assessee the benefit of Section 10 [26AAB] of the Act. 24. Regarding the order of the Ld. CIT(A), both officers submitted that the Assessee was provided opportunities to submit an application for condonation of delay and to substantiate the reasons for the delay before the first appellate authority. Despite multiple specific chances, the Appellant failed to present any persuasive justification. Consequently, the Ld. CIT determined that there was no sufficient cause for the delay in filing the Appeal and, therefore, did not condone it. 25. We have carefully considered the rival contention and perused the orders of the Ld. lower authorities. 26. The first contentious issue in this Appeal is whether the Ld. CIT(A) was correct in not condoning the delay of 84 days all these Appeals were disposed of dismissing them by not condoning the delay. The main reason given by the Assessee that Assessee is an Agricultural Produce Marketing Committee naturally its income is exempt u/s 10(26AAB) of the Act. It is not required to file its return of income because there is no requirement to file any return of income where Appel....
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....d not admitting the Appeal of the Assessee for all four years. Thus, the Appellate Orders for all 4 years are reversed. 27. The second issue concerns the fact that, as confirmed by all parties including the revenue authorities, the Assessee is an Agricultural Produce Marketing Committee. Its income is exempt u/s. 10(26AAB) of the Act. According to the Law, any income earned by an Agricultural Produce Market Committee or Board constituted under any current legislation for the regulation of agricultural produce marketing shall be excluded from the computation of total income for a given previous year. 28. The mere possession of a different Permanent Account Number, reflecting the Assessee's status as a "trust," does not warrant denial of benefits nor taxation of its income. Subsequently, the Assessee was granted a Permanent Account Number indicating its classification as a local authority from 2022. Therefore, an error in obtaining or allotting the Permanent Account Number should not result in taxation, particularly when the Income Tax Act provides for complete exemption of the Assessee's income u/s. 10(26AAB) of the Act. 29. Based on the foregoing facts, we conclude tha....