Urban Improvement Trust, Udaipur and Urban Improvement Trust, Bhilwara and Urban Improvement Trust, Bikaner and Jodhpur Development Authority V. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi and The Income Tax Officer, Ward-2(2), Udaipur and The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara and The Income Tax Officer, Ward-2(2), Bikaner and The Deputy Commissioner of Income Tax, Circle-II, Jodhpur and The Income Tax Officer, Exemption Ward, Bikaner

CW/8108/2011

AI Insights

The case involves multiple writ petitions filed by Urban Improvement Trusts from different cities in Rajasthan against the Union of India and the respective Income Tax Officers. The petitions challenged the tax assessments initiated under the Income Tax Act, 1961, arguing that the trusts, being local authorities, were not liable to pay income tax. The Supreme Court had previously ruled that Urban Improvement Trusts do not fall under the definition of 'local authority' as per the Income Tax Act, 1961. This ruling was the basis for the dismissal of the petitions by the High Court of Rajasthan.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 802935 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 24-05-2019
• Assessment Year: misc
• Other Referred Cases: Income Tax Officer & Ors. vs. Urban Improvement Trust & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: AKHILESH RAJPUROHIT; SANDE E P SHAH; PUNEET PARIHAR; ANJAY KOTHARI
• Keywords: Assessment; Income Tax; Jurisdiction; Local authority; Urban Improvement Trust
• Section: 10(20)

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 7158/2006 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ----Respondent alongwith connected matters S.B. Civil Writ Petition No. 1048/2007 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ----Respondent S.B. Civil Writ Petition No. 1040/2008 Urban Improvement Trust, Bikaner, Inside Public Park, Bikaner through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Bikaner. ----Respondent (2 of 9) [CW-7158/2006] S.B. Civil Writ Petition No. 8107/2011 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ….Respondents S.B. Civil Writ Petition No.8108/2011 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.8109/2011 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.8110/2011 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. (3 of 9) [CW-7158/2006] ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.10193/2010 Jodhpur Development Authority, Opposite Railway Hospital, Jodhpur. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Deputy Commissioner of Income Tax, Circle-II, Jodhpur. ...Respondents S.B. Civil Writ Petition No.4426/2010 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.4427/2010 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, (4 of 9) [CW-7158/2006] New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.4428/2010 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No.9300/2017 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 2, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No. 5315/2016 Urban Improvement Trust, Bikaner, Inside Public Park, Bikaner through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New (5 of 9) [CW-7158/2006] Delhi. 2. The Income Tax Officer, Exemption Ward, Bikaner. ----Respondent S.B. Civil Writ Petition No.862/2008 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ….Respondents S.B. Civil Writ Petition No.863/2008 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ….Respondents S.B. Civil Writ Petition No.4375/2008 Urban Improvement Trust, Bhilwara, Ajmer Road, Bhilwara through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward 3, Shastri Nagar, Bhilwara. ...Respondents S.B. Civil Writ Petition No. 390/2011 (6 of 9) [CW-7158/2006] Urban Improvement Trust, Bikaner, Inside Public Park, Bikaner through its Secretary. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Bikaner. ...Respondents S.B. Civil Writ Petition No.5989/2011 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ….Respondents S.B. Civil Writ Petition No.5990/2011 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ….Respondents S.B. Civil Writ Petition No.5991/2011 Urban Improvement Trust, Udaipur, Saheli Road, Udaipur (7 of 9) [CW-7158/2006] through its Secretary ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Udaipur. ….Respondents S.B. Civil Writ Petition No. 7958/2011 Urban Improvement Trust, Bikaner, Inside Public Park, Bikaner through its Secretary UIT Bikaner.. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Income Tax Officer, Ward-2(2), Bikaner. ….Respondents S.B. Civil Writ Petition No.3112/2013 Jodhpur Development Authority, Opposite Railway Hospital, Jodhpur. ----Petitioner Versus 1. The Union Of India through the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi. 2. The Assistant Commissioner of Income Tax, Circle-2, Jodhpur. ….Respondents For Petitioner(s) : Mr.Akhilesh Rajpurohit, Mr. Sandeep Shah with Mr. Puneet Parihar Mr. Anjay Kothari For Respondent(s) : Mr. K.K.Bissa (8 of 9) [CW-7158/2006] HON'BLE MR. JUSTICE SANGEET LODHA Order 24/05/2019 1. In the instant petitions, the petitioners have challenged the action of the Assessing Officer in initiating proceedings against the petitioners-Urban Improvement Trusts/Development Authorities for assessment of the tax under the provisions of Income Tax Act, 1961 (for short “the Act of 1961”). 2. Precisely, the legality of the proceedings is challenged on the ground that the petitioner being local authority within the meaning of Section 10(20) of the Act of 1961, its income is not assessable to tax and therefore, the proceedings initiated are without jurisdiction. It is submitted that the term ‘District Board/Municipal Committee’ used in clause 3 of Explanation to Section 10(20) of the Act of 1961 in the context it is used include in its meaning Urban Improvement Trust/Development Authority as it is legally entitled and entrusted by the State Government with the control or management of local fund. 3. Learned counsel appearing for the respondents submitted that the question involved in the present writ petitions is no more res integra inasmuch as in the matter of “Income Tax Officer & Ors. vs. Urban Improvement Trust & Ors.”, AIR 2018 SC 5085, the Supreme Court while setting aside a Bench decision of this court deciding the issue in favour of the assessee-Urban Improvement Trust, has categorically held that the Urban Improvement Trust constituted and established under Rajasthan Urban Improvement Act, 1959 does not fall within the definition of ‘local authority’ within the meaning of clause 3 of Explanation to Section 10(20) of the Act of 1961. (9 of 9) [CW-7158/2006] 4. The legal position settled by the Supreme Court as aforesaid is not disputed by the counsel appearing for the petitioners. 5. In this view of the matter, these writ petitions are liable to be dismissed in light of the decision of the Supreme Court in Urban Improvement Trust’s case (supra). 6. Accordingly, the writ petitions are dismissed in light of decision of the Hon’ble Supreme Court in Urban Improvement Trust’s case (supra). The interim orders passed in these matters by this court shall stand vacated. No order as to costs. (SANGEET LODHA),J Aditya/- "