REVISED ITEM NO.106 COURT NO.8 SECTION IIIA SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Civil Appeal No(s). 2091/2006 ADDITIONAL COMM. OF INCOME TAX Appellant(s) VERSUS VIDARBH IRRIGATION DEVELOPMENT CORPN. Respondent(s) (With office report) Date : 16/02/2017 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE R.K. AGRAWAL For Appellant(s) Mr. Rupesh Kumar,Adv. Ms. Gargi Khanna,Adv. For Mrs. Anil Katiyar,Adv. For Respondent(s) Mrs Sarla Chandra,Adv. UPON hearing counsel Court made following ORDER Heard learned counsel for parties. appeal is dismissed in terms of signed order. Pending application, if any, also stands disposed of. (Anita Malhotra) (Mala Kumari Sharma) Court Master Court Master (Signed order is placed on file.) Signature Not Verified Digitally signed by ANITA MALHOTRA Date: 2017.02.28 17:22:11 IST Reason: IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2091 OF 2006 Additional Commissioner of Income Tax ...Appellant VS. Vidarbh Irrigation Development Corporation ...Respondent ORDER Heard learned counsel for parties. issue that arises for our consideration in this matter is as to whether respondent, namely, Vidarbh Irrigation Development Corporation, is local authority within meaning of Section 10(20 A) of Income Tax Act,1961 (hereinafter referred to as Act ). Section 10(20 A) of Act stipulates certain kinds of income which are not to be included in total income. Though this provision stands omitted vide Section 4(m) with effect from 1st April,2003 by Finance Act, 2002, assessment period in question is much prior thereto and is, therefore, relevant. Section 10(20 A) reads as under: Any income of authority constituted in India by or under any law enacted either for purpose of dealing with and satisfying need for housing accommodation or for purpose of planning, development or improvement of cities, towns and villages, or for both. This provision came for interpretation before this Court in case of Gujarat Industrial Development Corporation and others v. Commissioner of Income Tax, reported in 1997 Vol.227 ITR 414, and was interpreted in following manner: Any income falling within ambit of said clause would automatically slip out of exigibility under Income tax Act. clause pertains to any income of authority constituted by or under any enacted law. This first limb of clause is squarely available to Corporation as it has been constituted under Gujarat Act. second limb of clause consists of two alternatives, of which first is that authority constituted by law should be for dealing with need to provide housing accommodation. That alternative is obviously not available to appellant Corporation as nobody has case that appellant Corporation has anything to do with obligation to provide housing accommodation. It is second alternative in clause under which appellant seeks shelter to be absolved from liability to pay income tax. As per that alternative, if authority is constituted for purpose of planning or development or improvement of any city or town or village or combination of them, income of such authority is not exigible to income tax. We find that High Court in impugned judgment has referred to aforesaid judgment and observed that since Income Tax Appellate Tribunal did not consider issue in light of provisions of Vidarbha Irrigation Development Corporation Act,1997, under which respondent assessee has been constituted, as well as provisions of Maharashtra Irrigation Act,1976 and Bombay Canal Rules,1934, High Court has remanded case back to Tribunal for fresh consideration. operative part of judgment of High Court in this behalf reads as under: So far as Section 10(20A) of IT Act is concerned, it is in two parts. first part contemplates Authority constituted by or under any law enacted for purpose of dealing with and satisfying need for housing accommodation. income of such Authority could be exempted from tax. second part of Section provides that income of such Authority whose objective is of planning, development or improvement of cities, towns and villages or both, is also exempted from tax. It is, therefore, evident that if Authority is constituted under enactment, either for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages or for both, income of such authority is exempted from tax under Section 10(20 A) of IT Act. It was, therefore, necessary for appellate Tribunal to consider issue in light of provisions of VIDC Act, Maharashtra Irrigation Act,1976 and Bombay Canal Rules,1934. However, conclusion arrived at by appellate Tribunal in respect of question No.1 mentioned hereinabove in present appeal appears to be not correct and in our view, needs to be reconsidered by appellate Tribunal. We do not understand as to why Income Tax Department has preferred instant appeal against aforesaid judgment of High Court where issue has only been remanded to Tribunal for fresh consideration. In these circumstances, we are not inclined to interfere with impugned judgment and dismiss this appeal. There shall be no order as to costs. .....................J. [A.K. SIKRI] .....................J. [R.K. AGRAWAL] New Delhi; February 16, 2017. ITEM NO.106 COURT NO.8 SECTION IIIA SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Civil Appeal No(s). 2091/2006 ADDITIONAL COMM. OF INCOME TAX Appellant(s) VERSUS VIDARBH IRIGATION DEPARTMENT CORPN. Respondent(s) (With office report) Date : 16/02/2017 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE R.K. AGRAWAL For Appellant(s) Mr. Rupesh Kumar,Adv. Ms. Gargi Khanna,Adv. For Mrs. Anil Katiyar,Adv. For Respondent(s) Mrs Sarla Chandra,Adv. UPON hearing counsel Court made following ORDER Heard learned counsel for parties. appeal is dismissed in terms of signed order. Pending application, if any, also stands disposed of. (Anita Malhotra) (Mala Kumari Sharma) Court Master Court Master (Signed order is placed on file.) Additional Commissioner of Income-tax v. Vidarbh Irrigation Development Corporation