URBAN IMPROVEMENT TRUST Vs. UNION OF INDIA

JUDGEMENT

(1.) In the instant petitions, the petitioners have challenged the action of the Assessing Officer in initiating proceedings against the petitioners-Urban Improvement Trusts/Development Authorities for assessment of the tax under the provisions of Income Tax Act, 1961 (for short "the Act of 1961").

(2.) Precisely, the legality of the proceedings is challenged on the ground that the petitioner being local authority within the meaning of Section 10(20) of the Act of 1961, its income is not assessable to tax and therefore, the proceedings initiated are without jurisdiction. It is submitted that the term 'District Board/Municipal Committee' used in clause 3 of Explanation to Section 10(20) of the Act of 1961 in the context it is used include in its meaning Urban Improvement Trust/Development Authority as it is legally entitled and entrusted by the State Government with the control or management of local fund.

(3.) Learned counsel appearing for the respondents submitted that the question involved in the present writ petitions is no more res integra inasmuch as in the matter of "Income Tax Officer and Ors. vs. Urban Improvement Trust and Ors.", AIR 2018 SC 5085, the Supreme Court while setting aside a Bench decision of this court deciding the issue in favour of the assessee-Urban Improvement Trust, has categorically held that the Urban Improvement Trust constituted and established under Rajasthan Urban Improvement Act, 1959 does not fall within the definition of 'local authority' within the meaning of clause 3 of Explanation to Section 10(20) of the Act of 1961.