TMI Blog1997 (8) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 997 - B. N. KIRPAL. and K. T. THOMAS. JUDGMENT The judgment of the court was delivered by K. T. THOMAS J .--The question raised, in its broad parameters, is whether industrial development could be enveloped within the expression "planning, development or improvement of cities, towns and villages or for both" in section 10(20A) of the Income-tax Act (for short "the I.T. Act"). The appellant, the Gujarat Industrial Development Corporation (for short "the Corporation"), claimed exemption from taxation under the Income-tax Act on two alternative premises, one under article 289(1) of the Constitution and the other clause (20A) of section 10 of the Income-tax Act. A Division Bench of the High Court of Gujarat (see [1985] 151 ITR 255 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of planning, development or improvement of cities, towns and villages, or for both. " Any income falling within the ambit of the said clause would automatically slip out of the exigibility under the Income-tax Act. The clause pertains to any income of an authority constituted by or under any enacted law. This first limb of the clause is squarely available to the Corporation as it has been constituted under the Gujarat Act. The second limb of the clause consists of two alternatives, of which the first is that the authority constituted by law should be for dealing with the need to provide housing accommodation. That alternative is obviously not available to the appellant-Corporation as nobody has a case that the appellant-Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities in the area, some trade and commerce may grow, but that does not necessarily mean that it would develop that particular area. It may also create pollution and several other problems. Apart from that, the question which is required to be considered is as to whether the purpose of the Corporation or the object of the Corporation is to develop any city, any town or any particular area. The answer would be in the negative. " The Gujarat Act was enacted "to make special provision for securing the orderly establishment of industries in industrial areas and industrial estates in the State of Gujarat, and to assist generally in the organisation thereof, and for that purpose to establish an Industrial Development Corporation, and for purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is almost analogous to the Gujarat Act, is of some use. While examining issues relating to the validity of the Maharashtra Act a Division Bench of this court has said in Shri Ramtanu Co-operative Housing Society Ltd. v. State of Maharashtra, AIR 1970 SC 1771 ; [1970] 3 SCC 323 (page 1776 of AIR 1970 SC) : " The functions and powers of the Corporation indicate that the Corporation is acting as a wing of the State Government in establishing industrial estates and developing industrial areas, acquiring property for those purposes, constructing buildings, allotting buildings, factory sheds to industrialists or industrial undertakings, It is obvious that the Corporation will receive moneys for disposal of land, buildings and other properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10(20A) is to protect public bodies created under law for achieving the purpose of developing urban or rural areas for public good. When the object is such, an interpretation which would preserve it should be accepted even if the provision is capable of more than one interpretation. That principle of interpretation is very much applicable to fiscal statutes also. [vide State of Tamil Nadu v. M. K. Kandaswami [1975] 36 STC 191 ; [1976] 1 SCR 38]. This court has reiterated the said principle in Calcutta Jute Manufacturing Co. v. CTO [1997] 106 STC 433 ; [1997] 5 JT 690 (SC). The position is, therefore, clear that authorities constituted by law for facilitating all kinds of development of cities, towns and villages for public purposes sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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