LexTHE INCOME TAX OFFICER versus URBAN IMPROVEMENT TRUST
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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THE INCOME TAX OFFICER
v.
URBAN IMPROVEMENT TRUST
(Civil Appeal No. 10577 of 2018)
OCTOBER 12, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Income Tax Act, 1961:
Section 10(2) Explanation clause (iii) (as amended by Fiance
Act, 2002) – Whether Urban Improvement Trust (assessee)
constituted under Rajasthan Improvement Act is a local authority
within meaning of clause (iii) of Explanation to s. 10(2) – Plea of
assessee that it is a “Municipal Committee” under clause (iii) of
Explanation to s. 10 (2) – Held: Scheme of the Urban Improvement
Act, under which the assessee was constituted, does not permit
acceptance of the plea that assessee is a “Municipal Committee”
within meaning of clause (iii) of Explanation to s. 10(20) – Rajasthan
Improvement Act, 1959 – ss. 47, 48, 61 to 64 and 105.
Allowing the appeals, the Court
HELD: 1. A perusal of the Scheme of the Rajasthan Urban
Improvement Act, 1959 as well as the Rajasthan Municipalities
Act, 1959 indicate that Urban Improvement Trust undertakes
development in the urban area included in municipality/municipal
board. Urban Improvement Trust is not constituted in place of
the municipality/municipal board rather it undertakes the act of
improvement in urban areas of a municipality/municipal board
under the Rajasthan Urban Improvement Act, 1959. It may also
perform certain limited powers of the municipal board as referred
to in Sections 47 and 48 of Urban Improvement Act but on the
strength of such provision Urban Improvement Trust does not
become a municipality or municipal board. [Para 27][861-A-B]
2. After the insertion of Part IXA in the Constitution by the
Constitution (Seventy-fourth)Amendment Act, 1992 w.e.f.
01.06.1993, Articles 243Q deals with constitution of
Municipalities. Section 10(20) Explanation, Clause (ii) relates to
847
[2018] 13 S.C.R. 847
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SUPREME COURT REPORTS
[2018] 13 S.C.R.
Municipalities; the assessee has not based its claim on the basis
of Clause (ii) of Explanation rather it has confined its claim to
only Clause (iii). Under Clause (iii) claim of the assessee is that
it is a “Municipal Committee”. [Paras 27 and 28][861-C-D]
3. The provisions of Sections 47 and 48 of Rajasthan
Improvement Act, 1959 are to permit certain powers of the
municipal boards to be performed by the Trust which does not
transform the Trust into a Municipal Committee. Sections 61 to
64 are the provisions empowering levy of betterment charges,
which is again in reference to and in context of carrying out
improvement by the Improvement Trust in urban areas. The
Municipal Board, Kota performs its functions, in areas where
Municipal Board still exists. There is no reason to accept that
Urban Improvement Trust is a Municipal Committee within the
meaning of Section 10(20)Explanation Clause (iii). Section 105,
which provides for ultimate dissolution of Trust and transfer of
its assets and liabilities to the Municipal Board, does not in any
manner improve the case of the assessee. When the Trust is
dissolved or at dissolution, properties and funds and dues vested
in or realisable by the Trust shall vest in and be realisable by the
Municipal Board, which is a provision for different purpose and
object. The above provision does not support the plea that
Improvement Trust is a Municipal Committee as referred to in
Clause (iii) of Explanation to Section 10(20) of the I.T. Act. Thus,
the scheme of the Rajasthan Urban Improvement Act, 1959 does
not permit acceptance of the contention of the appellant assessee
that Urban Improvement Trust is a Municipal Committee within
the meaning of Section 10(20) Explanation (iii). [Paras 35, 36 and
37][865-D-H; 866-A-B]
New Okhla Industrial Development Authority v. Chief
Commissioner of Income Tax & Ors. (2018) 8 SCALE
365; Agricultural Produce Market Committee Narela,
Delhi v. Commissioner of Income Tax and Another
(2008) 9 SCC 434 : [2008] 12 SCR 387 – relied on.
Union of India v. R.C. Jain (1981) 2 SCC 308 – referred
to.
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Case Law Reference
(2018) 8 SCALE 365
relied on
Para 10
[2008] 12 SCR 387
relied on
Para 29
(1981) 2 SCC 308
referred to
Para 30
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10577
of 2018.
From the Judgment and Order dated 23.10.2017 of the High Court
of Judicature for Rajasthan Bench at Jaipur in D.B. Income Tax Appeal
No. 287 of 2016
With
Civil Appeal Nos. 10578, 10579, 10580, 10581, 10584, 10582,
10586, 10585, 10583 of 2018.
Vikramjit Banerjee, ASG, K. RadhakrishnaExcerpt shown. Read the full judgment & AI analysis in Lexace.