Yamuna Expressway Industrial Development Authority Vs CIT (Appeal) (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi bench, pronounced an order in favor of the Yamuna Expressway Industrial Development Authority (YEIDA), a statutory body, deleting a penalty levied under Section 271A of the Income Tax Act, 1961 (the Act) for the Assessment Year (AY) 2006-07. The core issue was whether YEIDA, as a Local Authority providing General Public Utility (GPU) services, was required to maintain the specific books of account mandated by Section 44AA of the Act.
Background of the Dispute
The assessee, YEIDA, is a Local Authority constituted under Section 3 of the Uttar Pradesh Industrial Area Development Act, 1976. Its functions include village development, infrastructure development (sewer, water, electricity, roads), and overall social infrastructure development for its assigned area. The authority operates on a non-profit basis, utilizing any surplus generated solely for development works consistent with its statutory objects. YEIDA was granted registration as a charitable institution under Section 12AA of the Act.
The dispute arose when the Assessing Officer (AO) reopened the assessment and, treating YEIDA as an artificial judicial person and a Local Authority liable to tax, levied a penalty of ₹25,000 under Section 271A on November 20, 2017. This penalty was imposed on the grounds that YEIDA failed to maintain the books of account as prescribed under Section 44AA. The AO simultaneously initiated penalty proceedings under Section 271B for the failure to get the accounts audited. The Commissioner of Income Tax (Appeals) (CIT(A)) dismissed YEIDA’s appeal, leading to the present challenge before the ITAT.
