JUDGMENT judgment of court was delivered by S. Samvatsar J. This common judgment shall govern disposal of following connected appeals. Misc. Appeal (IT) 12 of 2007 shall be leading case. Misc. Appeal (IT) 11/2007 CIT v. Krishi Upaj Mandi Samiti, Kailaras. Misc. Appeal (IT) 13/2007 CIT v. Krishi Upaj Mandi Samiti, Ambah. Misc. Appeal (IT) 14/2007 CIT v. Krishi Upaj Mandi Samiti, Porsa. Misc. Appeal (IT) 15/2007 CIT v. Krishi Upaj Mandi Samiti, Sabalgarh. Misc. Appeal (IT) 16/2007 CIT v. Krishi Upaj Mandi Samiti, Joura. Misc. Appeal (IT) 17/2007 CIT v. Krishi Upaj Mandi Samiti, Mehgaon Misc. Appeal (IT) 18/2007 CIT v. Krishi Upaj Mandi Samiti, Lahar. Misc. Appeal (IT) 19/2007 CIT v. Krishi Upaj Mandi Samiti, Bhind. Misc. Appeal (IT) 20/2007 CIT v. Krishi Upaj Mandi Samiti, Alampur. Misc. Appeal (IT) 21/2007 CIT v. Krishi Upaj Mandi Samiti, Mau. Misc. Appeal (IT) 22/2007 CIT v. Krishi Upaj Mandi Samiti, Gohad. Misc. Appeal (IT) 23/2007 CIT v. Krishi Upaj Mandi Samiti, Rannod District Shivpuri. Misc. Appeal (IT) 24/2007 CIT v. Krishi Upaj Mandi Samiti, Karera, District Shivpuri. Misc. Appeal (IT) 25/2007 CIT v. Krishi Upaj Mandi Samiti, Shiv puri, District Shivpuri. Misc. Appeal (IT) 26/2007 CIT v. Krishi Upaj Mandi Samiti, Vijaipur, District Sheopur Kalan. Misc. Appeal (IT) 27/2007 CIT v. Krishi Upaj Mandi Samiti, Khani yadhana, District Shivpuri. Misc. Appeal (IT) 28/2007 CIT v. Krishi Upaj Mandi Samiti, Magroni, District Shivpuri. Misc. Appeal (IT) 29/2007 CIT v. Krishi Upaj Mandi Samiti, Sheopur Kalan. Misc. Appeal (IT) 30/2007 CIT v. Krishi Upaj Mandi Samiti, Khatora, District Shivpuri. Misc. Appeal (IT) 31/2007 CIT v. Krishi Upaj Mandi Samiti, Kolaras, District Shivpuri. Misc. Appeal (IT) 32/2007 CIT v. Krishi Upaj Mandi Samiti, Baroda, District Sheopur Kalan. Misc. Appeal (IT) 33/2007 CIT v. Krishi Upaj Mandi Samiti, Pichhore, District Shivpuri. Misc. Appeal (IT) 34/2007 CIT v. Krishi Upaj Mandi Samiti, Badar was, District Shivpuri. Misc. Appeal (IT) 35/2007 CIT v. Krishi Upaj Mandi Samiti, Bhander, District Datia. Misc. Appeal (IT) 36/2007 CIT v. Krishi Upaj Mandi Samiti, Isagarh, District Guna. Misc. Appeal (IT) 37/2007 CIT v. Krishi Upaj Mandi Samiti, Guna. Misc. Appeal (IT) 38/2007 CIT v. Krishi Upaj Mandi Samiti, Bina ganj. Misc. Appeal (IT) 39/2007 CIT v. Krishi Upaj Mandi Samiti, Dabra, District Gwalior. Misc. Appeal (IT) 40/2007 CIT v. Krishi Upaj Mandi Samiti, Piprai Misc. Appeal (IT) 41/2007 CIT v. Krishi Upaj Mandi Samiti, Mun gaoli. Misc. Appeal (IT) 42/2007 CIT v. Krishi Upaj Mandi Samiti, Mak sudangarh. Misc. Appeal (IT) 43/2007 CIT v. Krishi Upaj Mandi Samiti, Lashkar, District Gwalior. Misc. Appeal (IT) 44/2007 CIT v. Krishi Upaj Mandi Samiti, Aron. Misc. Appeal (IT) 45/2007 CIT v. Krishi Upaj Mandi Samiti, Pohri District Shivpuri. Misc. Appeal (IT) 46/2007 CIT v. Krishi Upaj Mandi Samiti, Ashoknagar. Misc. Appeal (IT) 47/2007 CIT v. Krishi Upaj Mandi Samiti, Datia. Misc. Appeal (IT) 48/2007 CIT v. Krishi Upaj Mandi Samiti, Seondha, District Datia. Misc. Appeal (IT) 49/2007 CIT v. Krishi Upaj Mandi Samiti, Raghogarh. Misc. Appeal (IT) 50/2007 CIT v. Krishi Upaj Mandi Samiti, Shadora. and Misc. Appeal (IT) 51/2007 CIT v. Krishi Upaj Mandi Samiti, Kumbhraj aforesaid appeals filed by Income-tax Department under section 260A of Income-tax Act, 1961 (in short IT Act) challenging common order dated March 29, 2007, passed by Income-tax Appellate Tribunal, Agra, whereby appeals filed by different krishi upaj mandi samitis challenging order of Commissioner of Income-tax refusing to grant exemption certificate under section 12AA(1)(b)(ii) of Incometax Act was allowed. Brief facts of case are that respondent, krishi upaj mandi samiti is established under section 7 under provisions of M. P. Krishi Upaj Mandi Adhiniyam, 1972. Powers and functions of said market committees are under section 19 of said Adhiniyam which empowers market committee to collect market fee from agricultural produce brought and sold in market area. powers to levy market fee is provided under section 19 of Adhiniyam. Section 38 provides for constitution of market committee fund, and all moneys received by committee is paid into fund called market committee fund. Section 39 of Adhiniyam provides for application of committee fund and as per said provisions, funds can be utilised only for purposes laid down under section 39, which are as under: (i) acquisition of site or sites for market yards; (ii) maintenance and improvement of market yards; (iii) construction and repairs of buildings necessary for purposes of market and for convenience or safety of persons using market yard; (iv) maintenance of standard weights and measures; (v) meeting of establishment charges including payments and contributions towards provident fund, pension and gratuity of officers and servants employed by market committee; (vi) payment of interest on loans that may be raised for purpose of market and provisions of sinking fund in respect of such loans; (vii) collection and dissemination or information relating to crops statistics and marketing of agricultural produce; (viii) (a) expenses incurred in auditing accounts of market committee; (b) payment of honorarium to chairman, travelling allowance of chairman, vice-chairman and other members of market committee and sitting fees payable to member for attending meeting. (c) contribution to State marketing development fund; (d) meeting any expenditure for carrying out order of State Government and any other work entrusted to market committee under any other Act; (e) contribution to any scheme for increasing agricultural production and scientific storage; (f) to develop necessary infrastructure within radius of one kilometre from market yard/sub-market yard for facilitating flow of notified agricultural market yard/sub-market yard for facilitating flow of notified agricultural produce with prior sanction of director and with prior permission of local authority concerned for using their land for this purpose; (g) to provide for development of agricultural produce in market area; (h) payment of expenses on elections under this Act. (ix) any other purpose whereon expenditure of market committee fund is in public interest, subject to prior sanction of State Government. respondent-market committees filed applications for registration under sections 12A and 12AA of Income-tax Act. These market committees were exempted under section 10, clause (20) of Income-tax Act which provides for exemption to local authorities from payment of income-tax. market committee being local authority by virtue of section 7(3) of Adhiniyam was exempted from payment of income-tax by virtue of clause (20) of section 10 and section 10(29) of Act up to April 1, 2003. On April 1, 2003, amendment was introduced and Explanation to sub- section (20) of section 10 was added. By adding of Explanation, words local authority was defined for purpose of Income-tax Act and as per Explanation, only four types of local authorities, i.e., panchayats, municipalities, municipal committees and cantonment boards were included in Explanation. Thus, definition of local authority is restricted only for aforesaid local authorities for purpose of section 10(20) of Income-tax Act. Simultaneously, while adding same Explanation, sub-section (29) of section 10 was omitted with effect from April 1, 2003. said omitted sub- section (29) reads as under: In case of authority constituted under any law for time being in force for marketing of commodities, any income derived from letting of godowns or warehouses for storage, processing or facilitating marketing of commodities. Thus, due to omission of sub-clause (29), exemption of market committee from payment of tax was withdrawn. In view of these amendments, Commissioner rejected application for registration under sections 12A and 12AA of Income-tax Act. This order was challenged by marketing committees by filing appeal before Tribunal and those appeals were allowed by impugned judgment, hence present appeals. present appeals are admitted for final hearing on following substantial two questions of law: (1) Whether Income-tax Appellate Tribunal was justified in directing Commissioner of Income-tax to permit registration of respondent/assessee under section 12AA of Income-tax Act without considering omission of sub-section (29) of section 10 of Income-tax Act with effect from April 1, 2003? (2) Whether in light of omission of sub-section (29) of section 10, respondent-krishi upaj mandi samiti is entitled to exemption of certificate under section 12AA of Income-tax Act without examining whether respondent- krishi upaj mandi samiti falls within definition of local authority ? Mr. R. D. Jain, senior counsel submitted that only those assessees are entitled to registration under sections 12A and 12AA of Income-tax Act who are entitled to exemption under sections 11 and 12 of Act. For this purpose, he has referred to sections 12A and 12AA of Income-tax Act which read as under: 12A. Conditions as to registration of trusts, etc. provisions of section 11 and section 12 shall not apply in relation to income of any trust or institution unless following conditions are fulfilled, namely: (a) person in receipt of income has made application for registration of trust or institution in prescribed form and in prescribed manner to Commissioner before first day of July, 1973, or before expiry of period of one year from date of creation of trust or establishment of institution, whichever is later and such trust or institution is registered under section 12AA: Provided that where application for registration of trust or institution is made after expiry of period aforesaid, provisions of sections 11 and 12 shall apply in relation to income of such trust or institution, (i) from date of creation of trust or establishment of institution if Commissioner is, for reasons to be recorded in writing, satisfied that person in receipt of income was prevented from making application before expiry of period aforesaid for sufficient reasons; (ii) from first day of financial year in which application is made, if Commissioner is not so satisfied: (b) where total income of trust or institution as computed under this Act without giving effect to provisions of section 11 and section 12 exceeds fifty thousand rupees in any previous year, accounts of trust or institution for that year have been audited by accountant as defined in Explanation below sub-section (2) of section 288 and person in receipt of income furnishes along with return of income for relevant assessment year report of such audit in prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. 12AA. Procedure for registration. (1) Commissioner, on receipt of application for registration of trust or institution made under clause (a) of section 12A, shall (a) call for such documents or information from trust or institution as he thinks necessary in order to satisfy himself about genuineness of activities of trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about objects of trust or institution and genuineness of its activities, he (i) shall pass order in writing registering trust or institution; (ii) shall, if he is not so satisfied, pass order in writing refusing to register trust or institution, and copy of such order shall be sent to applicant: Provided that no order under sub-clause (ii) shall be passed unless applicant has been given reasonable opportunity of being heard... (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before expiry of six months from end of month in which application was received under clause (a) of section 12A. (3) Where trust or institution has been granted registration under clause (b) of sub-section (1) and subsequently Commissioner is satisfied that activities of such trust or institution are not genuine or are not being carried out in accordance with objects of trust or institution, as case may be, he shall pass order in writing cancelling registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given reasonable opportunity of being heard. Mr. R. D. Jain, appearing for appellant vehemently urged that impugned judgment passed by Tribunal is contrary to law. Tribunal has not properly considered effect of amendment in section 10(20) and omission of section 10(29) of Act. He submitted that prior to amendment, local authority included words market committee and were no doubt entitled to exemption but after amend ment they are neither entitled to exemption nor for registration under section 12A or 12AA of Income-tax Act. In reply to these arguments, Shri T. C. Singhal, learned counsel for market committees submitted that market committees are local authorities within meaning of section 7(3) of Adhiniyam which lays down that: Notwithstanding anything contained in any enactment for time being in force, every market committee shall, for all purposes, be deemed to be local authority. He, therefore, contented that even after adding Explanation in sub clause 20, market committee still continues to be local authority for all purpose and is, therefore, entitled to exemption. In alternate, he contented that even if it is held that market committees are not entitled to exemption under section 10, still market committee is entitled to exemption under sections 11 and 12 or any other provisions of Incometax Act and, therefore, merely because section 10 is amended, market committees cannot be deprived of benefit available to it under sections 11 and 12 of Act. hon ble apex court in case of State of M. P. v. Krishi Upaj Mandi Samiti [1998] 8 SCC 430 after considering provisions of section 7(3) of Adhiniyam rejected contention of market committee and held that Explanation for all purposes under section 7(3) will apply to other Acts. In aforesaid case, apex court was considering liability of marketing committee to pay tax under M. P. Nagriya Sthawar Sampatti Kar Adhiniyam, 1964. Punjab and Haryana High Court has considered said question in its judgment in case of CIT v. Market Committee [2007] 294 ITR 563 (P&H), held that (page 577): It is not possible for us to accept that section 10(20) of Income-tax Act, after same came to be amended so as to exclude local authority from benefit of tax exemption would render market committees ineligible for exemption under other provisions of Income-tax Act. Although market committees are not entitled to (or eligible for) tax exemption under section 10(20) of Income-tax Act, yet claim of exemption is still open to consideration under alternate provision if made out. Thus, Punjab and Haryana High Court has held that market committees are not entitled for exemption under section 10. Another judgment on this issue is judgment of Delhi High Court in matter of Agricultural Produce Market Committee v. CIT [2007] 294 ITR 549. In that case, Delhi High Court has held that section 10(20) of Income-tax Act, 1961, was amended with effect from April 1, 2003, and Explanation was added to. most striking feature of Explanation is that it provides exhaustive meaning of expression local authority . word means used in Explanation leaves no scope for addition of any other entity as local authority to those listed in Explanation. Thus, it is clear that market committees are not entitled for exemption under section 10(20) of Act after April 1, 2003. Now question is whether market committee is entitled for exemption under some other provision of Income-tax Act? Learned counsel for market committees submitted that they are entitled for exemption under section 11(1)(a). Section 11(1)(a) reads as under: 11. Subject to provisions of sections 60 to 63, following income shall not be included in total income of previous year of person in receipt of income (a) income derived from property held under trust wholly for charitable or religious purposes, to extent to which such income is applied to such purposes in India; and where any such income is accumulated or set apart for application to such purposes in India, to extent to which income so accumulated or set apart is not in excess of fifteen per cent. of income from such property. On bare perusal of said section, it is clear that for getting exemption under section 11, three requirements must be fulfilled: (i) income is derived from property (ii) property held under trust (iii) income is applied wholly for charitable or religious purposes first question is whether income of krishi upaj mandi is derived from property and is held under trust wholly for charitable or religious purpose. Sub-section (2) of section 11 provides that for getting exemption it is necessary that income must be applied for charitable or religious purpose in India to extent of 85 per cent. of income derived during that year from property held under trust. In present case, Commissioner while rejecting application for registration has held that committee charges 2 per cent. from farm houses who come to mandi for sale of their produce, as mandi fees and out of 2 per cent., 1.2 per cent. is directly transferred to State Government. Thus, committee is not applying 80 per cent. of its income towards charitable purposes. This finding is reversed by tribunal. Punjab and Haryana High Court in matter of CIT v. Market Committee [2007] 294 ITR 563 has held that by virtue of section 28 of Act of Punjab, market committee is required to spend entire amount for public utility. Similar is position with our Adhiniyam. Section 39 of Adhiniyam pertains to purposes for which amount can be spent by market committees and said amount is utilised only for public amenities. Section 2(15) of Income-tax Act defines charitable purposes which includes relief of poor, education, medical relief and advancement of any other object of general public utility. Relying on this definition, contention of learned counsel for respondent is that as amount was spent only on public utility krishi upaj mandi committees are applying entire income towards charitable purposes and hence Tribunal has rightly allowed appeal and reversed findings of Commissioner. Applying entire income towards charitable purposes is not sole requirement of Act. provision further requires that income must be derived from property held under trust. Learned counsel for respondent relying on sub-section (4) of section 11 submits that for purpose of section 11, property held under trust includes business undertaking and, therefore, it must be held that income is derived from property. He also relied on Explanation of section 13(7) of Income-tax Act, which reads as under: For purposes of sections 11, 12, 12A and this section, trust includes any other legal obligation and for purposes of this section relative in relation to individual means: (i) spouse of individual; (ii) brother or sister of individual; (iii) brother or sister of spouse of individual; (iv) any lineal ascendant or descendant of individual; (v) any lineal ascendant or descendant of spouse of individual; (vi) spouse of person referred to in sub-clause (ii), sub-clause (iii), sub- clause (iv) or sub-clause (v). another judgment relied on by counsel for respondent is CIT v. Agricultural Produce and Market Committee [2007] 291 ITR 419; [2007] 210 CTR 386 (Bom), wherein Bombay High Court has also taken similar view. After perusal of judgment of Bombay High Court, we find that in that case one of considerations of High Court was that committee was already registered under sections 12A and 12AA of Act and, therefore, Bombay High Court held that unless and until that exemption is cancelled or set aside, it is not open for Commissioner of Income-tax to hold that market committee is not exempted from payment of tax. However, Bombay High Court after considering merits held that market committees are entitled to exemption under section 11 of Act. first contention raised by counsel for appellant is that intention of Legislature in deleting clause (29) of section 10 and introduction of section 10 sub-clause (20) itself shows that Legislature did not want to extend benefit of exemption to krishi upaj mandi samiti. This argument is without any force because sections 10(20) and 10(29) of Income-tax Act provide for exemption to all local authorities and exemption under this section was blanket exemption without fulfilling any condition. Section 11 provides for exemption on fulfilment of certain conditions. Thus, intention behind amendment was to remove blanket exemption to local authorities and provide exemption only if they fulfil conditions under section 11. As per section 11, exemption can be granted to marketing committees provided that they spend amount for charitable purposes as required by sub-section (2) of section 11. Marketing committees are bound to spend their income as per section 39 of 1972 Adhiniyam and as per said section, amount could be spent only for public amenities like construction of roads, market, etc. Section 2(15) of Income-tax Act provides that if amount is spent towards public amenities, it will be deemed that amount is spent for charitable purposes. Hence, by virtue of section 2(15) of Income-tax Act, it will have to be deemed that amount spent by marketing committees is spent towards public purposes. apex court in case of CIT v. A. P. State Road Transport Corporation [1986] 159 ITR 1 has considered this aspect and held that by virtue of section 2(15) of Income-tax Act, amount spent by Road Transport Corporation towards public amenities is charitable purpose. In view of aforesaid, we hold that respondent-assessees are applying their income for charitable purpose. apex court in case of CIT v. Gujarat Maritime Board [2007] 295 ITR 561, has held that expression charitable purpose has been defined by way of inclusive definition, so as to include relief to poor, education, medical relief and other object of public utility. In aforesaid judgment, apex court has also held that sections 10(20) and section 11 of Income-tax Act operate in totally in different spheres and even if Board has ceased to be local authority, it cannot be precluded from claim ing exemption under section 11(1) of Income-tax Act. So far as ingredients of section 11(1) of Income-tax Act are concerned, apex court in paragraph 11 of said judgment has held that income of business undertaking held for charitable purpose falls under section 11 subject to such income fulfils required conditions of that section. apex court has interpreted words general public utility as under (page 567): said expression would prima facie include all objects which promote welfare of general public. It cannot be said that purpose would cease to be charitable even if public welfare is intended to be served. If primary purpose and predominant object are to promote welfare of general public purpose would be charitable purpose. When object is to promote or protect interest of particular trade or industry that object becomes object of public utility, but not so, if it seeks to promote interest of those who conduct said trade or industry... Thus, in view of aforesaid judgment of apex court in cases of Gujarat Maritime Board [2007] 295 ITR 561 and CIT v. A. P. State Road Transport Corporation [1986] 159 ITR 1 (SC), we hold that respondent marketing committees fulfil all requirements of section 11 to get exemption and, therefore, are entitled to registration under section 12 and sections 12A and 12AA of Income-tax Act and, hence, Tribunal has rightly allowed appeals filed by krishi upaj mandi samitis and set aside orders passed by Commissioner. Thus, all these appeals are without any merit and are dismissed. *** COMMISSIONER OF INCOME TAX v. KRISHI UPAJ MANDI SAMITI, MORENA & ORS.