S. P. GOYAL J. - This judgment will dispose of seven Income-tax Reference Nos. 30 to 32 of 1975 and 46 to 49 of 1975 as they involve a common question. References Nos. 30 to 32 relate to the Punjab Warehousing Corporation and the remaining to the Haryana Warehousing Corporation. The assessment years in case of the Punjab Warehousing Corporation are 1969-70, 1970-71 and 1971-72 whereas in the case of the Haryana Warehousing Corporation are 1968-69 to 1971-72.
These warehousing corporations were established under section 18(1) of the Warehousing Corporations Act, 1962, by notifications of the respective Government of Punjab and Haryana. The assessee-corporations were assessed to income-tax on the income derived by them from the letting of their godowns during each year of account under consideration by the Income-tax Officer and the plea of exemption under section 10(29) of the Income-tax Act (hereinafter called 'the Act') was rejected. The order of assessment was upheld on appeal by the Appellate Assistant Commissioner. However, the Appellate Tribunal, relying on U. P. State Warehousing Corporation v. Income-tax Officer : 94ITR129(All) allowed the appeals of the assessees, but referred the following question to this court at the instance of the revenue :
'Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was within the meaning of section 10(29), Income-tax Act, an authority and that that authority had been constituted for the marketing of commodities ?'
The answer to the question entirely depends on the interpretation of clause (29) of section 10 of the Act which reads as under :
'10. Incomes not included in total income. - In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - ......
(29) in the case of an authority consituted under any law for the time being in force for the marketing of commodities, any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities.'
The challenge against the applicability of the exemption contained in this clause is two-fold, viz., that the assessee-corporations are not an 'authority' within the meaning of this term as used in the said clause and that they have not been constituted for the marketing of commodities.
As noticed above, identical matter concerning U. P. State Warehousing Corporations case : 94ITR129(All) , came up before a Division Bench of the Allahabad High Court and Satish Chandra J., in a very elaborate judgment, after taking into consideration the dictionary meaning of the terms and other aspects, held that any legal entity or juristic personality constituted by law for the purposes of marketing commodities would be an authority within the meaning of section 10(29) of the Act and the warehousing corporation having been established under an Act of Parliament was an 'authority' constituted under a law.
Mr. D. N. Awasthy, learned counsel for the revenue, sought to challenge the correctness of this decision mainly on the ground that the provisions of section 39 of the Warehousing Corporations Act were not taken into consideration by the Bench while interpreting the word 'authority'. The said section 39 provides that for the purposes of the Income-tax Act, a warehousing corporation shall be deemed to be a company within the meaning of that Act and shall be liable to income-tax and super-tax accordingly on its income, profits and gains. The learned counsel, therefore, argued that the warehousing corporation, being a company within the meaning of the Income-tax Act, could not be taken to be an authority within the meaning of section 10(29) of the Act. Support for this contention was also sought from the fact that in various other clauses such as 10(6)(vii), 10(6)(xi) and 10(20), specific words like 'local authority', 'corporation', etc., were used, meaning thereby that whenever a corporation was intended to be included in the word 'authority' it was specifically mentioned in the concerned clause. We are unable to agree with the contention of the learned counsel. The scope of section 10(29) of the Act is neither subject to nor contorlled by the provisions of section 39 of the Warehousing Corporations Act. All that section 39 lays down is that a warehousing corporation, when liable to tax under the Income-tax Act, shall be assessed as if it were a company within the meaning of that Act. It, however, does not mean that it cannot as well as be an authority constituted under law within the meaning of section 10(29) of the Act. In a recent Supreme Court case, Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi [1975} 45 Comp Cas 285, it was held that the Industrial Finance Corporation was an 'authority' within the meaning of article 12 of the Constitution of India. The considerations which weighed with the court were that the corporation was under the complete control and management of the Central Government; that the citizens could not be shareholders; that only specified institutions like scheduled banks could apply for the shares but the Central Government could acquire those shares and that the corporation could not be dissolved except by the Government. In the case of a warehousing corporation, it is also a statutory body and not a company. Its entire share-capital belongs to the Central Warehousing Corporation and the State Government. Its management is entirely in the control of the State Government and it cannot also be dissolved except by the State Government. There can, therefore, be no manner of doubt that the warehousing corporation is an 'authority' constituted under law within the meaning of clause (29) of section 10 of the Act.
As regards the arguments that in the various clauses of section 10, specific authorities have been named, suffice it to say that the legislature appears to have deliberately used the word 'authority' in this clause instead of any other specific word because in the various States such entities are named differently and to cover all of them a word of wide amplitude, viz., 'authority', has been used in clause (29).
In support of the second contention that the assessee-corporation has not been constituted for the marketing of commodities, the only argument raised was that a corporation established primarily for the marketing of the commodities such as the agricultural marketing committees established under the Punjab Agricultural Produce Markets Act, would be only covered by clause (29) of section 10 of the Act. The primary function of the State Warehousing Corporations, according to the learned counsel, was to acquire and build godowns and warehouses for the storage of agricultural produce, seeds and manures, etc. These corporations, therefore, cannot be said to have been established for the marketing of commodities. We, however, find no merit in the contention of the learned counsel. Clause (d) of section 24, which defines the functions of the State Warehousing Corporations, specifically provides that a warehousing corporation may act as an agent of the Central Warehousing Corporation or of the Government for the purpose of the purchase, sale, storage and distribution of agricultural produce and other notified commodities. Moreover, as held in U. P. State Warehousing Corporations case : 94ITR129(All) , the word 'marketing' has been used in section 10(29) of the Act in the wider sense so as to include the various activities such as storage of commodities which generally go to form the trade of marketing.
In view of the above discussion, we do not find any reason to differ from the decision of the Allahabad High Court in U. P. State Warehousing Corporations case : 94ITR129(All) , and respectfully following the same, answer the question in the affirmative.