The ITO, Ward-2(4), Surat V. M/s. Sachin Notified Area, Dist.Surat

ITA 3750/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9834 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-09-2010
• Assessment Year: misc
• Appeal Filed On: 28-09-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA RAM; A K TIWARI DRS
• Assessee Lawyers: M K PATEL

Judgement Text

` - 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM INCOME-TAX OFFICER, WARD 2(4), SURAT. VS. M/S SACHIN NOTIFIED AREA, PLOT NO.5719, UNNATI BUILDING, ROAD NO.6, GIDC SACHIN, DIST. SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- S/SHRI CHANDRA RAM & A.K. TIWARI, DRS RESPONDENT BY:- SHRI M. K. PATEL, AR O R D E R PER BENCH THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST DIFFERENT ORDERS OF LD. CIT(A) DTD.17/7/2007, 21/4/2008 & 21.3.2009 FOR ASST. YEARS 2004-05 TO 2006-07 RAISING FOLLOWING GROUNDS:- ASST. YEAR 2004-05 (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN TREATING THE INCOME OF THE ASSESSEE SACHIN NOTIFIED ARE AS EXEMPT FROM TAXATION UNDER THE PRO VISIONS OF SECTION 10(20) OF THE IT ACT AND THEREBY DELETING T HE ADDITION MADE ON ACCOUNT OF EXCESS OF INCOME OVER EXPENDITUR E OF RS.1,32,44,080/-, PAYMENT AMOUNTING TO RS.57,80,868 /- MADE TO DRDA AND THE INTEREST OF RS.7,06,061/- RECEIVED ON FDRS. ITA NOS.3750/AHD/2007, 2504/AHD/2008 & 2175/AHD/2009 ASST. YEARS: 2004-05,2005-06 & 2006-07 ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 2 ASST. YEAR 2005-06 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.1,87,55,930/- BEING EXCESS OVER EXPENDITURE. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.11,78,525/- BEING TAXATION OF INTEREST OF FDR. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.1,25,61,557/- BEING THE PAYMENT MADE TO DARDA. ASST. YEAR 2006-07 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED DIRECTING TO THE AO T O TREAT THE ASSESSEE AS A LOCAL AUTHORITY AND TO ALLOW EXEMPT ION ACCORDINGLY. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.87,51,644/- BEING THE PAYMENT MADE TO DARDA (DRD A). 2. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THE ISSUE RAISED IN THESE APPEALS IS NOW COVERED BY THE DECISION OF THIS TRIBUNAL IN ITO VS. M/S SACHIN NOTIFIED AREA IN ITA NO.1315/AHD/2007 FOR ASST. YEAR 2003-04 PRONOUNCED ON 16.7.2010 WHEREIN THE APPEAL FILED BY THE REVENUE H AS BEEN DISMISSED HOLDING THAT THE ASSESSEE IS A LOCAL AUTHORITY WITH IN THE MEANING OF SECTION 10(20). THE TRIBUNAL IN THIS CASE HAS HELD AS UNDER :- 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE ORDER OF LD. CIT(A) DESERVES TO BE UPHELD. NO DOUBT PROVISIONS OF SECTION 10(20A) OF I T ACT HAS BEEN OMITTED W.E.F. 1.4.2003 AND THEREBY LAW RELATING TO LOCAL AUTHORITY, AS CONTAINED THEREIN COULD NOT BE BORROWED TO FIND OUT WHETHER ASSESSEE IS A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20 ). IT IS TO BE ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 3 INDEPENDENTLY SEEN WHETHER THE ASSESSEE IS COVERED UNDER SECTION 10(20) OF THE ACT AS A MUNICIPALITY. AS PER CLAUSE (II) OF SECTION 10(20) A MUNICIPALITY, AS REFERRED TO IN CLAUSE (E) OF ARTIC LE 243P OF THE CONSTITUTION WOULD BE A LOCAL AUTHORITY. IN ARTICLE 243P (E) THE MUNICIPALITY IS DEFINED AS UNDER :- 243 (E) MUNICIPALITY MEANS AN INSTITUTION OF SELF-GOVERNM ENT CONSTITUTED UNDER ARTICLE 243Q. FROM THIS DEFINITION MUNICIPALITY IS AN INSTITUTION OF SELF-GOVERNMENT. THEREFORE, ANY INSTITUTION WHICH IS CREATED FOR SEL F-GOVERNANCE OF ANY AREA COULD BE A MUNICIPALITY. THE CONSTITUTION OF S UCH INSTITUTION OF SELF- GOVERNMENT HAS BEEN LAID UNDER ARTICLE 243Q WHICH R EADS AS UNDER :- ARTICLE 243Q (1) THERE SHALL BE CONSTITUTED IN EVERY STATE - (A) A NAGAR PANCHAYAT (BY WHATEVER NAME CALLED) FOR A T RANSITIONAL AREA, THAT IS TO SAY, AN AREA IN TRANSITION FROM A RURAL AREA TO AN URBAN AREA; (B) A MUNICIPAL COUNCIL FOR A SMALLER URBAN AREA; AND (C) A MUNICIPAL CORPORATION FOR A LARGER URBAN AREA, IN ACCORDANCE WITH THE PROVISIONS OF THIS PART: PROVIDED THAT A MUNICIPALITY UNDER THIS CLAUSE MAY NOT BE C ONSTITUTED IN SUCH URBAN AREA OR PART THEREOF AS THE GOVERNMENT MAY, HAVING REGARD TO THE SIZE OF THE AREA AND THE MUNICIPAL SERVICES BEING PROVIDED OR PROPOSED T O BE PROVIDED BY AN INDUSTRIAL ESTABLISHMENT IN THAT AREA AND SUCH OTHER FACTORS A S HE MAY DEEM FIT BY PUBLIC NOTIFICATION, SPECIFY TO BE AN INDUSTRIAL TOWNSHIP. (2) IN THIS ARTICLE, A TRANSITIONAL AREA, A SMAL LER URBAN AREA OR A LARGER URBAN AREA MEANS SUCH AREA AS THE GOVERNOR MAY, HA VING REGARD TO THE POPULATION OF THE AREA, THE DENSITY OF THE POPULATION THEREIN, THE REVENUE GENERATED FOR LOCAL ADMINISTRATION, THE PERCENTAGE OF EMPLOYMENT IN NON -AGRICULTURAL ACTIVITIES, THE ECONOMIC IMPORTANCE OR SUCH OTHER FACTORS AS HE MAY DEEM FIT, SPECIFY BY PUBLIC NOTIFICATION FOR THE PURPOSES OF THIS PART. 9. THE ABOVE ARTICLE CLEARLY DEFINES VARIOUS INSTIT UTIONS OF THE NATURE OF MUNICIPALITY BASED ON SELECTED AREAS OF THE URBA N AREA. THE SELF- GOVERNING INSTITUTION WHICH IS IN THE STATE OF TRAN SITION FROM A RURAL AREA TO AN URBAN AREA IS CALLED NAGAR PANCHAYAT. THE SEL F-GOVERNING INSTITUTION IN SMALL URBAN AREA IS CALLED MUNICIPAL COUNCIL AND SELF- GOVERNING INSTITUTION IN LARGER URBAN AREA IS CALLE D MUNICIPAL CORPORATION. THE PROVISO TO CLAUSE (1) IN THE ABOVE ARTICLE ENABLES THE GOVERNOR NOT TO CONSTITUTE MUNICIPALITY UNDER THIS CLAUSE IF MUNICIPAL ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 4 SERVICES ARE PROVIDED OR PROPOSED TO BE PROVIDED BY AN INDUSTRIAL ESTABLISHMENT IN THAT AREA. IN OTHER WORDS MUNICIPA LITY OF THE NATURE OF NAGAR PANCHAYAT, MUNICIPAL COUNCIL OR MUNICIPAL COR PORATION MAY NOT BE CONSTITUTED IN THAT URBAN AREA WHERE MUNICIPAL S ERVICES ARE ALREADY BEING PROVIDED OR PROPOSED TO BE PROVIDED BY AN IND USTRIAL ESTABLISHMENT. FOR DECIDING AS TO WHETHER MUNICIPA LITY UNDER THIS CLAUSE IS REQUIRED TO BE CONSTITUTED IN AN URBAN AREA OR N OT THE GOVERNOR MAY TAKE INTO CONSIDERATION THE SIZE OF AREA OR MUNICIP AL SERVICES ALREADY PROVIDED OR PROPOSED TO BE PROVIDED AND OTHER FACTO RS AS HE MAY DEEM FIT. FROM BARE READING OF ABOVE ARTICLE, WE INFER T HAT WHERE MUNICIPAL SERVICES ARE PROVIDED BY INDUSTRIAL ESTABLISHMENT T HEN FURTHER OTHER TYPES OF MUNICIPALITY NEED NOT BE CONSTITUTED IN SUCH URB AN AREA. IN OTHER WORDS THERE CANNOT BE DUPLICATION OF MUNICIPALITIES ONE LIKE NAGAR PANCHAYAT, MUNICIPAL COUNCIL OR MUNICIPAL CORPORATI ON AND OTHER LIKE INDUSTRIAL ESTABLISHMENT, (LIKE NOTIFIED AREAS AS T HE ASSESSEE IS) IF ONE TYPE IS ALREADY PROVIDING MUNICIPAL SERVICES. THE BASIC FACTOR IS THE PROVIDING OF MUNICIPAL SERVICES. THIS MAY BE PROVIDED BY GRAM PANCHAYAT, MUNICIPAL COUNCIL OR MUNICIPAL CORPORATION OR BY AN INDUSTRIAL ESTABLISHMENT I.E. NOTIFIED AREA. IT IS NOT A CASE OF CARVING OUT AN EXCEPTION FROM THE GENERAL CATEGORIES OF DIFFERENT MUNICIPALITIES AS LISTED IN SUB-CLAUSE (A), (B) & (C) OF CLAUSE (1) OF ARTIC LE 243Q BUT A CASE OF AVOIDING DUPLICATION AND THEREFORE, AN ADDITIONAL C LASS OF MUNICIPALITY CALLED INDUSTRIAL ESTABLISHMENT OR NOTIFIED AREA PROVIDING MUNICIPAL SERVICES OR PROPOSED TO PROVIDE SUCH MUNICIPAL SERV ICES IS CREATED BY THE PROVISO. THEREFORE, WE UPHOLD THE CONTENTION OF LD. AR THAT PROVISO TO CLAUSE (1) TO ARTICLE 243Q CREATES ANOTHER CLASS OF INSTITUTION OF SELF- GOVERNANCE IN ADDITION TO NAGAR PANCHAYAT, MUNICIPA L COUNCIL AND MUNICIPAL CORPORATION. HONBLE SUPREME COURT IN THE CASE OF SAIJ GRAM PANCHAYAT VS. THE STATE OF GUJARAT & ORS. IN CIVIL APPEAL NO.364 OF 1999 [ARISING OUT OF SLP (C) NO.3765 OF 1998] RENDE RED ON 27.1.1999 HAS CONSIDERED THE DEFINITION OF MUNICIPALITY AS CONTAI NED IN ARTICLE 243Q WHICH IS ALREADY REFERRED ABOVE. 10. THUS THE HON. APEX COURT HELD THAT NOTIFIED ARE AS UNDER SECTION 16 OF GIDA WOULD ALSO BECOME NOTIFIED AREAS U/S 264A O F GUJARAT MUNICIPALITIES ACT AND, THEREFORE, WOULD MEAN AN I NDUSTRIAL TOWNSHIP AREA AS PER PROVISO TO CLAUSE (1) OF ARTICLE 243Q O F THE CONSTITUTION OF INDIA. HON. APEX COURT REFERRING TO THE DECISION IN THE SOLAPUR MIDC INDUSTRIES ASSOCIATION ETC. VS. STATE OF MAHARASHTR A AND OTHERS (JT 1996 (7) SC 14) HAS HELD THAT INDUSTRIAL TOWNSHIP CREATE D UNDER GIDA WOULD BE DEEMED TO BE THE INDUSTRIAL TOWNSHIP FOR THE PUR POSES OF LOCAL SELF- GOVERNMENT BY OBSERVING AS UNDER :- ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 5 AS HELD BY THIS COURT IN SOLAPUR MIDC INDUSTRIES A SSOCIATION ETC. VS. STATE OF MAHARASHTRA & ORS. (JT 1996 (7) SC 14), A MUNICIPAL CORPORATION ACT AND AN INDUSTRIAL DEVELOPMENT ACT HAVE DISTINCT FIELDS OF OPERATION AND THERE IS NO INTER SE CONFLICT BETWEEN THE TWO. BY REASON OF THE NOTIFICA TIONS OF 7.9.1993, THE INDUSTRIAL AREA DEVELOPED UNDER THE GUJARAT INDUSTRIAL DEVELOP MENT ACT IS ALSO DEEMED TO BE AN INDUSTRIAL TOWNSHIP FOR THE PURPOSES OF LOCAL SELF- GOVERNMENT. ANY POSSIBLE CONFLICT IS ALSO REMOVED BY THE SECOND NOTIFICATION OF 7.9.1993 REMOVING THIS AREA FROM THE AMBIT OF THE GUJARAT PANCHAYATS ACT, 1961 CANNOT BE A NOTIFIED AREA UNDER THE GUJARAT MUNICIPALITIES ACT LOSES ALL FORCE. REGARDING INTERPRETATION OF ARTICLE 243Q AND TREATM ENT TO BE GIVEN TO AN INDUSTRIAL ESTABLISHMENT AS DEEMED MUNICIPALITY HON . APEX COURT IN THAT CASE HELD AS UNDER :- ARTICLE 243Q DEALS WITH CONSTITUTION OF MUNICIPALI TIES. MUNICIPALITY IS DEFINED UNDER ARTICLE 243P(E) TO MEAN AN INSTITUTION OF SELF-GO VERNMENT CONSTITUTED UNDER ARTICLE 243Q. ARTICLE 243Q CONSTITUTES THREE TYPES OF MUNIP ALITIES (A) A NAGAR PANCHAYAT (B) A MUNICIPAL COUNCIL AND (C) A MUNICIPAL CORPORATION . THE PROVISO TO ARTICLE 243Q DEALS WITH ALL THREE TYPES OF MUNICIPALITIES CONSTI TUTED UNDER CLAUSE (1). IT PROVIDES THAT A MUNICIPALITY UNDER CLAUSE (1) MAY NOT BE CON STITUTED IN CERTAIN CIRCUMSTANCES. THIS WOULD REFER TO ANY OF THE THREE TYPES OF MUNIC IPALITIES. ALTHOUGH THE PROVISO REFERS TO SUCH URBAN AREA OR PART THEREOF, THIS UR BAN AREA ALSO COVERS A TRANSITIONAL AREA, IN TRANSITION FROM RURAL TO URBAN. IT IS BECA USE THIS AREA IS ALSO IN THE PROCESS OF TURNING INTO AN URBAN AREA THAT IT IS PUT UNDER PAR T IXA WHICH DEALS WITH MUNICIPALITIES IN URBAN AREAS. THEREFORE, IN RESPEC T OF ANY OF THESE THREE TYPES OF AREAS SET OUT IN CLAUSE (1) OF ARTICLE 243Q, HAVING REGARD TO THE SIZE OF THE AREA, THE MUNICIPAL SERVICES BEING PROVIDED OR PROPOSED TO BE PROVIDED BY AN INDUSTRIAL ESTABLISHMENT IN THAT AREA, AND SUCH OTHER FACTORS AS THE GOVERNOR WILL DEEM FIT TO CONSIDER, HE MAY, BY PUBLIC NOTIFICATION SPECIFY SU CH AREA TO BE AN INDUSTRIAL TOWNSHIP. ALL THESE RELEVANT FACTORS WOULD BE IN OP ERATION IN AN INDUSTRIAL AREA ALREADY NOTIFIED MANY YEARS BACK UNDER AN INDUSTRIA L DEVELOPMENT CORPORATION ACT AS IN THE PRESENT CASE. THEREFORE, THERE IS NO BREA CH OF ARTICLE 243Q IF SUCH AN AREA IS, UNDER THE PROVISIONS OF AN INDUSTRIAL DEVELOPME NT ACT, EQUATED WITH AN INDUSTRIAL TOWNSHIP UNDER ARTICLE 243Q. 11. THUS WE ARE OF THE VIEW THAT ONCE HON. APEX COU RT HAS INTERPRETED THAT NOTIFIED AREAS WOULD BE INDUSTRIAL ESTABLISHME NTS WITHIN THE MEANING OF ARTICLE 243Q AND PROVISO THEREOF THEN SUCH NOTIF IED AREAS WOULD BE DEEMED AS INDUSTRIAL TOWNSHIP FOR THE PURPOSES OF L OCAL SELF-GOVERNMENT. 12. NOW WE REFER TO VARIOUS SECTIONS OF GUJARAT MUN ICIPALITIES ACT AS REFERRED TO BY LD. AR AND LD. DR. THEY ARE AS UNDER :- 264A (AS AMEN -DED) ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 6 (1) FOR THE PURPOSE OF THIS CHAPTER, NOTIFIED AREA MEANS AN URBAN AREA OR PART THEREOF SPECIFIED TO BE AN INDUSTRIAL TOWNSHIP AREA UNDER THE PROVISO TO CLAUSE (1) OF ARTICLE 243Q OF THE CONSTITUTION OF INDIA. 264B (2) AN AREA IN REGARD TO WHICH A NOTIFICATION HAS BEEN ISSUED UNDER SUB- SECTION (1) IS HEREINAFTER CALLED A NOTIFIED AREA. (1) THE STATE GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE,- (A) APPLY TO ADAPT TO ANY NOTIFIED AREA THE PROV ISION OF ANY SECTION OF THIS ACT, OR PART OF ANY SUCH SECTION OR OF ANY RULES IN FORCE OR WHICH CAN BE IMPOSED IN ANY MUNICIPAL BOROUGH UNDER THE PROVISIO NS, OF THIS ACT, SUBJECT TO SUCH RESTRICTIONS AND MODIFICATIONS, IF ANY. AS IT MAY THINK FIT; (B) IMPOSE IN ANY SUCH AREA ANY TAX, WHICH MIGHT BE IMPOSED THEREIN UNDER THE PROVISION OF THIS ACT IF THE SAID AREA WERE A M UNICIPAL BOROUGH, (C) APPOINT A PERSON OR A COMMITTEE FOR THE PUR POSES OF THE ASSESSMENT AND RECOVERY OF ANY TAX IMPOSED UNDER CLAUSE (B), AND I N ORDER TO ARRANGE FOR THE DUE EXPENDITURE OF THE PROCEEDS OF SUCH TAXES, AND FOR THE PREPARATION AND MAINTENANCE OF PROPER ACCOUNTS, AND GENERALLY FOR E NFORCING THE PROVISIONS OF ANY SECTIONS OR RULES APPLIED OR ADOPTED UNDER CLAU SE (A). (2) THE PROCEEDS OF ANY LAX LEVIED IN ANY NOTIFIED AREA UNDER THIS SECTION SHALL BE EXPENDED ONLY IN SUCH MANNER IN WHICH, IF THE NO TIFIED AREA WERE A MUNICIPAL BOROUGH, THE MUNICIPAL FUND THEREOF MIGHT BE EXPENDED. 264C FOR THE PURPOSES OF ANY SECTION OF THIS ACT, W HICH MAY BE APPLIED TO A NOTIFIED AREA, THE PERSON OR COMMITTEE APPOINTED FOR SUCH AR EA UNDER SECTION 264B SHALL BE DEEMED TO BE A MUNICIPALITY UNDER THIS ACT , AND THE AREA SHALL BE DEEMED TO BE A MUNICIPAL BOROUGH. FURTHER SECTION 16 OF GIDA 1962 READS AS UNDER :- SECTION 16 OF GID ACT, 1962- NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISION S FOR THE TIME BEING IN FORCE RELATING TO NOTIFIED AREAS IN THE GUJARAT MUNICIPAL ITIES ACT, 1963, THE STATE GOVERNMENT, BY NOTIFICATION IN THE OFFICIAL GAZETTE - A) DECLARE THAT THE PROVISIONS RELATING TO NOTIFIED AR EAS AND ANY OTHER PROVISIONS OF THAT ACT SHALL EXTEND TO AND BE BROUG HT INTO FORCE IN ANY INDUSTRIAL AREA, AND THEREUPON SUCH AREA SHALL BE D EEMED TO BE A NOTIFIED AREA UNDER THAT ACT. B) APPOINTS THE CORPORATION OR ANY OFFICER OR COMMITTE E THEREOF FOR THE PURPOSES OF THE ASSESSMENT AND RECOVERY OF ANY TAXE S, WHEN IMPOSED UNDER THE PROVISIONS SO EXTENDED AND FOR ENFORCING SUCH P ROVISIONS; ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 7 C) PROVIDE THAT THE PROVISIONS OF ANY OTHER LAW RELATI NG TO LOCAL AUTHORITIES WHICH IS IN FORCE IN THAT AREA SHALL CEASE TO APPLY , AND THEREUPON SUCH PROVISIONS SHALL CEASE TO APPLY THERETO; D) MAKE SUCH OTHER PROVISION AS IS NECESSARY FOR THE P URPOSES OF THE ENFORCEMENT OF THE PROVISIONS SO EXTENDED TO THAT A REA. 13. A COMBINED READING OF THESE SECTIONS INDICATES THAT THE STATE GOVERNMENT CAN CREATE, BY NOTIFICATION IN OFFICIAL GAZETTE, A NOTIFIED AREA AND PROVISIONS OF GUJARAT MUNICIPALITIES ACT WOULD BE APPLICABLE TO SUCH NOTIFIED AREAS UNDER SECTION 16 OF GIDA. NOTIFIED A REAS CREATED UNDER SECTION 264B OF MUNICIPALITIES ACT AND NOTIFIED ARE AS DECLARED UNDER SECTION 16 OF GIDA WOULD BE TREATED AT PAR AS THERE IS NO CONFLICT BETWEEN THE TWO PROVISIONS. NO DISTINGUISHING FEATU RE HAS BEEN PROVIDED IN THE GIDA OR UNDER MUNICIPALITIES ACT. FURTHER IT IS PROVIDED THAT THE PROVISIONS OF GUJARAT MUNICIPALITIES ACT WOULD BE A PPLICABLE TO ALL NOTIFIED AREAS WHETHER CREATED UNDER SECTION 16 OF GIDA OR UNDER SECTION 264B OF MUNICIPALITIES ACT. ONCE PROVISIONS OF MUNI CIPALITIES ACT ARE APPLICABLE TO NOTIFIED AREA AND THEY ARE TREATED AS A SEPARATE A CLASS OF SELF-GOVERNING INSTITUTION THEN THEY HAVE ALL THE I NGREDIENTS OF A MUNICIPALITY AND, THEREFORE, THEY ARE COVERED BY CL AUSE (II) OF SECTION 10(20). WE FURTHER NOTE THAT SUCH NOTIFIED AREAS HA VE BEEN GIVEN POWER TO IMPOSE TAXES UNDER THE PROVISIONS OF MUNICIPALITIES ACT, 1963 AND COLLECT TAXES BY APPOINTING A PERSON OR COMMITTEE FOR THAT PURPOSE. THE NAGAR PANCHAYAT, MUNICIPAL COUNCIL, MUNICIPAL CORPORATION HAVE ALSO BEEN ENTRUSTED WITH THE POWER TO LEVY, ASSESS AND COLLEC T TAXES. IT IS NOT THE CASE THAT NAGAR PANCHAYAT, MUNCIPAL COUNCIL OR MUNI CIPAL CORPORATION ARE ALSO FUNCTIONING SIMULTANEOUSLY ALONG WITH ADMI NISTRATION BY NOTIFIED AREA. THE JURISDICTION OF NAGAR PANCHAYAT, MUNICIPA L COUNCIL OR MUNICIPAL CORPORATION AND NOTIFIED AREA ARE DIFFERE NT AND DEFINED AND THEY DO NOT OVERLAP. THE URBAN OR TRANSITIONAL URB AN AREAS GIVEN FOR SELF GOVERNANCE TO THESE BODIES ARE CLEARLY DEMARCATED. AT LEAST NO CASE HAS BEEN MADE OUT THAT THEY OVERLAP. THE NOTIFIED AREA LIKE THE ASSESSEE HAS BEEN GIVEN THE SAME POWER UNDER THE MUNICIPALITIES ACT AS IS GIVEN TO NAGAR PANCHAYAT, MUNICIPAL COUNCIL OR MUNICIPAL COR PORATION. THE MUNICIPALITIES ACT IS APPLICABLE TO ALL CLASSES OF URBAN AREA EITHER NAGAR PANCHAYAT, MUNICIPAL COUNCIL OR MUNICIPAL CORPORATI ON. IT IS ALSO APPLICABLE WITH EQUAL FORCE UPON THE ASSESSEE FUNCT IONING UNDER DEMARCATED AND SEPARATE AREAS CALLED NOTIFIED AREAS WHICH ARE INDEPENDENT OF ANY NAGAR PANCHAYAT, MUNICIPAL COUNC IL OR MUNICIPAL CORPORATION. THE POWER TO CONSTITUTE SUCH NOTIFIED AREAS OR MUNICIPAL COUNCIL OR NAGAR PANCHAYAT OR MUNICIPAL CORPORATION ARE DERIVED FROM ARTICLE 243Q OF THE CONSTITUTION AND, THEREFORE, WE CANNOT SEE ANY DISTINCTION AS TO HOW NOTIFIED AREAS WOULD NOT BE A SELF-GOVERNING ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 8 INSTITUTION LIKE OTHER THREE BODIES. WE MAY FURTHER ADD THE WORD MUNICIPALITY AS USED IN ARTICLE 243P OF THE CONST ITUTION AND ALSO IN SECTION 10(20)(II) OF I.T. ACT IS A GENERIC TERM AN D HAS NO EXISTENCE AS SUCH EXCEPT IN THE FORM PROVIDED IN ARTICLE 243Q. N O SEPARATE INSTITUTION LIKE MUNICIPALITY CAN BE CONCEIVED AS SUCH. WHAT IS CREATED IS A NAGAR PANCHAYAT OR MUNICIPAL COUNCIL, MUNICIPAL CORPORATI ON WHICH ARE MUNICIPALITY AND SO IS THE NOTIFIED AREAS OF INDUST RIAL ESTABLISHMENT WHICH IS ALSO A MUNICIPALITY BECAUSE OF THE POWERS AND PROVISIONS CONTAINED IN GUJARAT MUNICIPALITIES ACT EQUALLY APP LICABLE TO ALL OF THEM. THUS WE UPHOLD THE ORDER OF LD. CIT(A) THAT ASSESSE E IS A MUNICIPALITY UNDER SECTION 10(20) OF THE ACT AND, THEREFORE, ITS INCOME IS EXEMPT UNDER THAT SECTION. THE APPEAL OF REVENUE IS DISMISSED. 3. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE DI SMISS THE APPEALS FILED BY THE REVENUE. 4. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 30/9/10. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEM BER AHMEDABAD, DATED : 30/9/10. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NOS.3750, 2504 & 2175 ASST. YEARS 2004-05 TO 2006-07 9 1.DATE OF DICTATION 27 /9/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 28/9/2010 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..