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TMI Blog2011 (4) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... ts case for the said years. The issues arising being common, the appeals were heard together and are being decided by a common, consolidated order, even as was done by the revisionary authority. 2. The assessee stands assessed as a `local authority vide assessments framed u/s. 143(3) of the Act for the said years. The said status stood accorded to it as the same came into existence vide Notification u/s. 53A of the Town Planning Act 1108ME, a state legislation, in May, 1980. The assessee is thereby charged with the responsibility of town planning for areas covered by the territorial jurisdiction of the Corporation of Trivandrum and ten Panchayaths surrounding the limits of the Corporation. Opening his arguments on behalf of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of any authority constituted in India by or under any law for the purpose of, inter alia, planning, development or improvement of cities, towns and villages, stood omitted. In view of the specific meaning accorded to the term local authority under the Act, the assessee s claim for the status of a `local authority on the basis of a Notification under the state legislation is of no consequence. A Notification by the state government, it was averred by him, could not accord the status of a local authority to any body, the same being only within the competence of the Parliament (through a Central Act) or the Constitution of India (COI). He prayed that the court may direct the assessee to produce the Notification, which has not been bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of any clear definition thereof under the Act, i.e., prior to Finance Act, 2002, w.e.f. 1/4/2003. The matter is not virgin, and stands examined by the apex court per its decisions in the case of Agricultural Produce Marketing Co., Narela v. CIT (2008) 305 ITR 1 (SC) and Adityapur Industrial Development Authority vs. Union of India (2006) 283 ITR 297 (SC), (besides in the case of R.C. Jain - no citation given), relied upon by the ld. CIT, who has considered the assessment orders as erroneous and prejudicial to the interests of the Revenue on two counts, i.e., the grant of the said status, and the treating the assessee as a tax-exempt person u/s. 10(20). The difference between the two is purely academic. As afore-stated, we are only concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n light of the amended law, by the AO, or not, in which case it could be subject to examination only through the revisionary proceedings. Toward this, we find the assessee, through the ld. AR, argues that the same to be in consistence with the status accepted by the Revenue in its case for past years, i.e., AY 2002-03 onwards. The AO has, as such, adopted one of the possible views, excluding action u/s. 263. In this regard, firstly, only the assessments AY 2003-04 onwards would be relevant; there being a change in the relevant provision of law w.e.f 01/4/2003. Secondly, there is no reference to any such assessment/s in the assessment order/s for the current year/s nor any of them stand brought on record by the assessee, so as to exhibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O having failed to examine the issue on both its factual and legal aspects by the ld. CIT. In fact, the very fact that the AO grants the assessee the status of a `local authority and, yet, denies it tax exemption u/s. 10(20) without assigning any reason for the same, would go to show a complete omission to consider the said aspect by him while framing the assessments. The decision by the hon ble Allahabad high court relates to the pre-amended law and, consequently, is of little significance in interpreting the extant law. There is, as such, no question of the AO having adopted one of the two possible views. 3.3 The second argument advanced is that it having been denied exemption u/s. 10(20) anyway, where is the prejudice. We find the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific definition u/s. 10(20). In this regard, we find the ld. CIT has only directed the AO to make proper inquiries, and redo the assessments accordingly. The same would only imply of them being made in accordance with the law, as enunciated by the higher courts of law, considering all the relevant aspects, including the scope of the amendment (i.e., what was sought to achieved thereby) as well as the facts of the assessee s case, which would include the state legislation being relied upon, making due inquiries, and after allowing proper opportunity to the assessee to present its case before him. The relevant question would be the satisfaction or otherwise of the mandate of the defining provision. That the (state) legislation would legally ..... X X X X Extracts X X X X X X X X Extracts X X X X
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