ACIT Vs Urban Improvement Trust (ITAT Jaipur)
ITAT Jaipur held that Urban Improvement Trust is a “State” within the meaning of Article 289(1) of the Constitution of India being an instrumentality of State within the meaning thereof. Hence, income is not chargeable to tax under the Income Tax Act.
Facts- The appellant is a statutory body created and established under the Rajasthan Urban Improvement Act, 1959 vide notification no. 5(3)/TP/70 dated 09/07/1970 in the Official Gazette with the object to carry out improvement of urban areas in the city of Kota, Rajasthan. In view of the statutory status and the object of the trust, the appellant claimed to be a local authority within the meaning of section 10(20) of the Income Tax Act, 1961 and claimed exemption of its income. It is observed that the assessee under consideration is not falling in any of the category above hence benefit of section 10(2) is no more available to the assessee w.e.f Assessment Year 2003-04. There was another section, i.e. section 10(20A) of the Act directly dealing with the facts of the matter was also abolished w.e.f A.Y 2003-04. Thereafter, the assessee chosen for registration u/s. 12A of the Act, which was denied to the assessee hence the assessee, is in appeal before us.
