IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM &

MS PADMAVATHY S, AM I.T.A. No. 5185/Mum/2024 (Assessment Year: 2016-17)

Mumbai APMC , ACIT (Exemption), Circle-2, 3^rd Floor, Administrative Building, Piramal Chamber, Lal Baug, Sectgor-18, Vashi, Vs. Parel, Mumbai-400012.

Navi Mumbai-400703. PAN: AABTM6722G Appellant) : Respondent Appellant /Assessee by : Shri Kapil Harani (Hybrid)

Revenue / Respondent by : Smt. Sanyogita Nagpal, CIT-DR Date of Hearing : 25.02.2025 Date of Pronouncement : 11.03.2025 O R D E R Per Padmavathy S, AM:

This appeal by the Assessee is against the order of The Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi (In short "The CIT (A)") dated 30/08/2024 for Assessment year (AY) 2016-17. The Assessee raised the following grounds of appeal:

“1. On the facts and circumstances of the case and in law, the assessment as

completed is illegal, invalid, and violative of the principles of natural justice

and which deserves to be quashed as per law and in the interest of justice.

2. On the facts and circumstances of the case and in law, the Appellant undisputedly being an Agricultural Produce Market Committee (APMC). the AO grossly erred in denying and the CIT(A) grossly erred in confirming the denial of the benefit of exemption under section 10(26AAB) of the Income Tax Act, 1961 to the Appellant which is statutorily allowable to the Appellant and which deserves to be allowed and the entire income of the Appellant deserves to be treated as exempt under section 10(26AAB) as per law and in the interest of justice.

3. Without prejudice, on the facts and circumstances of the case and in law the Appellant also being registered under section 12AA of the Income Tax Act, 1961, in case it is held that the Appellant is not eligible for the benefit of exemption under section 10(26AAB) as claimed, then the benefit of exemption under section 11 and 12 of the Income Tax Act, 1961 deserves to be allowed as per law and in the interest of justice which has been wrongly denied by the AO and further wrongly confirmed by the CIT(A).

4. On the facts and circumstances of the case and in law, under any case the entire income of the Appellant deserves to be treated as exempt as per law and in the interest of justice.”

2. The assessee incorporated in 1977 is a state Government Agricultural Produce Market Committee (APMC) formed under the aegis of the Maharashtra Agricultural Produce Marketing (Regulation) Act 1963. The income of the assessee is exempt under section 10(26AAB) that allows 100% exemption to the AMPC. The assessee filed the return of income for Assessment Year 2016-17 on 17/10/2016 declaring Nil income. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer (AO) while completing the assessment, held that the assessee being a society registered under section 12A cannot claim exemption under the provisions of section10 and accordingly denied the exemption under section 10(26AAB). The AO also rejected the alternate plea of the assessee to allow exemption under section 11 stating that that the activities of the assessee are in the nature of trade and commerce and that the assessee claiming exemption under section 11 during the assessment proceeding is not substantiated properly. Accordingly, the AO assessed the income of the assessee at Rs.19,85,78,350/-. Aggrieved, the assessee filed an appeal before CIT(A). The CIT(A) upheld the order of the AO by holding that the assessee being registered under section 12A is not eligible for exemption under section 10(26AAB). The CIT(A) also rejected the alternate plea of the assessee to allow exemption under section 11 for the reason that the same can be claimed only through filing a revised return of income. The assessee is in appeal against the order of the CIT(A) before the tribunal.

3. The ld.AR submitted that the assessee being an APMC is eligible for exemption under sec