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2007] 294 ITR 563 [2008] 166 TAXMAN 392 (PUNJ. & HAR.) HIGH COURT OF PUNJAB & HARYANA Commissioner of Income-tax * v. Market Committee J.S. KHEHAR AND S.D. ANAND, JJ. IT APPEAL NO. 654 OF 2005 MARCH 14, 2007 Section 2(15), read with sections 11 and 12A, of the Income-tax Act, 1961 - Charitable or religious purpose - Whether where assessee, a market committee, was statutorily incorporated under provisions of Punjab Agricultural Produce Markets Act, 1961 with object of benefiting producers traders as well as consumers of agricultural products, it could be said to be trust/institution set-up for charitable purposes and entitled to registration - Held, yes Section 11, read with section 10(20) of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Whether although market committees are not entitled to (or eligible for) tax exemption under section 10(20), yet a claim of exemption is still open to consideration under an alternate provision, if made out - Held, yes Section 13 of the Income-tax Act, 1961 - Charitable or religious trust - Denial of exemption - Whether in terms of Explanation to section 13(7), an assessee discharging legal obligations, has to be treated as a 'trust' for purposes of sections 11, 12 and 12A - Held, yes FACTS The assessee, a market committee was incorporated in terms of the provisions of section 18 of the Punjab Agricultural Produce Markets Act, 1961 (Markets Act). The assessee applied for registration under section 12A contending that all its objects fell within the purview of the phrase 'general public utility', without any motive for profit, and as such, the assessee deserved to be registered as a charitable trust/institution set-up for charitable purposes, under section 12AA. Additionally, it was mentioned, that the assessee had spent huge amounts of funds to promote causes of general public interest, in the shape of development of link roads, water arrangements, shed arrangements and compensation to victims of agricultural accidents. According to the assessee all its activities were primarily promotional and protective of the interest of the agriculturists and traders,…

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