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2011 (2) TMI 1251 - HC - Income TaxWhether after 1.4.2003 New Okhla Industrial Development Authority (Noida) (the Petitioner) is a local authority within the meaning of section 10(20) of the Income Tax Act 1961 petitioner was also declared to be an Industrial Township within the meaning of proviso to article 243Q of the Constitution by the notification dated 24.12.2004 and it performs the service akin to a municipality. It is a municipality or at least a municipal committee within the meaning of section 10(20) of the Act Held that - In Adityapur case the Supreme Court considered the provisions of the Bihar Act and held that the Adityapur-Authority is not a local body within the meaning of Section 10(20) of the Act amendment with effect from Aril 1 2003 the Explanation local authority was defined to include only the authorities enumerated in the Explanation which does not include any authority such as the appellant The Adityapur-Authority the Petitioner namely Noida is also not a local authority within the meaning of Section 10(20) of the Act writ petition dismissed
Issues Involved:
1. Whether the petitioner is a local authority within the meaning of section 10(20) of the Income Tax Act, 1961 after 1.4.2003. Detailed Analysis: Issue 1: Whether WP should be dismissed on the ground of alternative remedy The Department argued that the petitioner should have filed its return and raised the objection before the Tax authorities instead of filing a writ petition. However, the court noted that the question of whether the petitioner is a local authority under section 10(20) of the Act is a question of law and does not require facts. Given that more than five years had passed since the filing of the petition, the court decided to proceed and address the issue on merits rather than dismissing the petition on the ground of alternative remedy. Issue 2: Petitioner Is Not A Local Authority The petitioner argued that it falls under the definition of a local authority as it provides municipal services and is entitled to levy taxes. It was also declared an Industrial Township and performs services akin to a municipality. However, the Department contended that the petitioner does not meet the criteria of a local authority as defined in the Explanation to section 10(20) of the Act. The Department emphasized that municipalities are institutions of local self-government with elected members, whereas all members of the petitioner were nominated. The court refrained from detailed consideration of the arguments due to precedents set by the Supreme Court in the APM and Adityapur cases. The court referred to the APM case where the Supreme Court highlighted that the definition of 'local authority' in the Income Tax Act is exhaustive and not inclusive. Additionally, in the Adityapur case, the Supreme Court held that an industrial authority constituted under a similar Act was not a local authority within the meaning of Section 10(20) of the Act. Considering these precedents, the court concluded that the petitioner, Noida, is not a local authority under the Act. Conclusion: The court decided that the writ petition should not be dismissed on the ground of alternative remedy. It further concluded that after 1.4.2003, the petitioner, Noida, is not considered a local authority within the meaning of section 10(20) of the Income Tax Act, 1961. Consequently, the court dismissed the writ petition as it lacked merit based on the established legal interpretations and precedents.
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