IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1442/Bang/2025 Assessment Year: 2017-18 APMC Tarikere

01, APMC, B.H. Road Tarikere 577 228 ITOA Vs.

Karnataka Ward-1 Chickmagalur PAN NO : AAJFA8296P APPELLANT RESPONDENT Appellant by : Sri C.R. Vasanth Kumar, A.R.

Respondent by : Sri Balusamy N., D.R.

Date of Hearing : 17.09.2025 Date of Pronouncement : 15.12.2025

O R D E R

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the orders of the ld. CIT(A)/NFAC dated 12.06.2025 vide DIN & Order No.ITBA/NFAC/S/250/2025-26/1076950409(1) for the assessment year 2017-18 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).

2. The assessee has raised the following grounds of appeal:

3. Brief facts of the case are that the assessee is an Agricultural Produce Market Committee (in short “APMC”) established under the Karnataka Agricultural Produce Market (Regulation) Act, 1966 for regulating the marketing of agricultural produce as notified by Government of Karnataka vide Notification No.MD/35211/RM-2/68- 69 dated 15.2.1969. The assessee filed its return of income for the assessment year 2017-18 on 12.9.2017 claiming exemption of income u/s 10(26AAB) of the Act. The return of income was thereafter processed u/s 143(1) of the Act. The case of the assessee was selected for scrutiny under CASS and accordingly notices u/s 143(2) as well as 142(1) of the Act were issued from time to time requiring the assessee to furnish details in electronic mode only. On verification of details furnished, it is seen by the AO that the assessee is also registered u/s 12A of the Act vide F.No. A-

60/12A/CIT/MYS/4-5 dated 6.8.2004 by the ld. Commissioner of Income Tax, Mysore. During the course of assessment proceedings, the AO noticed that as per the statement furnished the gross income is declared at Rs.3,24,21,898/- out of which Rs.1,77,99,088/- is claimed as exempt u/s 10(26AAB) of the Act and the balance of Rs.1,46,30,810/- is claimed as deduction u/s 11 of the Act. On perusal of the details uploaded by the assessee trust, it is also noticed that the trust has claimed accumulation u/s 11(2) of the Act in Form No.10 amounting to Rs.2,81,68,556/- stating that the objective as advancement of any other object of the general public utility. On verification of the same, it is noticed that the Form No.10 is belated as the same was not filed along with return of income within the due date as prescribed u/s 139(1) of the Act. The AO noticed that the assessee trust had not furnished any documents/materials regarding condonation of delay in filing form no.10 nor condonation letter by the ld. CIT(Exemption). Since form no.10 was not filed along with return within the due date specified under the Act, the AO held that assessee trust is not eligible to claim accumulation u/s 11(2) of the Act.

3.1 Further, on verification of the statement filed by the assessee, the AO noticed that the gross income includes interest income, income from deposits and income derived from sale of sites. Thus, it is clear from the above that the assessee trust is engaged in other activities and the income of which does not qualify for exemption u/s 10(26AAB) of the Act. Further upon verification of the assessee trust, details furnished, it is noticed that the trust had incurred expenditure in the course of agricultural produce committee activity and claimed expenditure to the tune of Rs.1,46,30,810/- towards administrative and establishment expenses. The ld. AO held that even though these expenses are not in the nature of charitable activity but considering the fact that they are related to the nature of activity carried out by APMC, this revenue expenditure incurred had been allowed by the AO.

3.2 Upon further verification, it is noticed that the assessee has not supported its claim for deduction u/s 11 of the Act by furnishing necessary deta