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TMI Blog2012 (9) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Authority for the assessment years 1998-1999 to 2000-2001 insofar as the denial of exemption under Section 10(20A) of the Income Tax Act ('the Act' for short). 2. The appellant is a Public Limited Company incorporated under the provisions of Companies Act, 1956. It was set up for the purpose of development, granting financial assistance and marketing products of small scale industries and also constructing and managing the industrial estates. It was fully controlled by the Government of Karnataka. The shareholders of the company belonged to the State Government in entirety. 3. The appellant filed return of income for the assessment years 1998-1999 to 2000-2001 declaring NIL income on the ground that it is eligible for exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before the Commissioner of Income Tax (Appeals) [CIT (Appeals) for short], Bangalore. The Appellate Authority also rejected the said appeal. Being aggrieved by the same, the assessee preferred appeals before the Income Tax Appellate Tribunal in ITA Nos.1015, 1269/Bang/2003 and 1557/Bang/2004. The Appellate Tribunal after considering the matter in detail and also considering the various judgments of the Hon'ble Supreme Court and other High Courts held that the appellant does not fall within the purview of Section 10(20A) of the Assistant Commissioner and hence they are not entitled for any exemption under Section 10(20A) of the Act by its order dated 26-5-2006 dismissed the appeals. Being aggrieved by the said order, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned counsel appearing for the Revenue argued in support of the order passed by the Income Tax Appellate Tribunal and contended that though the appellant-company is a Government undertaking, it will not come under the purview of Section 10(20A) of the Act. The main purpose of incorporation of the appellant is for formation of the industrial layouts, granting assistance to the Small Scale Industries and marketing their products. To claim exemption under Section 10(20A) of the Act, the authority should be constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, town and villages or for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnataka Undertaking registered under the Companies Act, 1956 (a general law) holding the company as "an authority" within the meaning of Article 12 of the Constitution of India and under company is nothing but a instrumentality and agency of the State Government and physical form of a company is merely a cloak or cover for the Government equally applies to the appellant which is a 100% Government Undertaking incorporated under the Companies Act, 1956?" 7. We have carefully considered the arguments addressed by the learned counsel for the parties and perused the orders passed by the authorities below. 8. The records clearly disclose that the appellant-company was promoted by the Government of Karnataka. It was fully owned and controlled by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment of Mysore as deposit with or without interest, for operating the raw materials depots; 6. To undertake organization of exhibitions and display of the articles of small scale industries in permanent places inside and outside the State; 7. To conduct publicity on behalf of small scale industries; and 8. Other activities to be developed within the Memorandum and Article of Association as and when necessary. 10. Sri. S. Parthasarathi, learned counsel appearing for the appellant contended that, the appellant has fulfilled the requirements of Section 10(20A) of the Act. The appellant is an authority within the meaning of article 12 of the Constitution of India and it is established by or under the law enacted by the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporated for the purpose of achieving certain objects and cannot be equated with the authority constituted in India by or under any law enacted. Looking at the object of the appellant-company it cannot be treated as an authority under article 12 of the Constitution of India. Since they are not discharging the functions of housing accommodation and for the purpose of planning and development of the Cities, towns and villages, the appellant does not fall under the purview of Section 10(20A) of the Act. Hence, they are not entitled to claim exemption. We find that the judgments relied upon by Sri. Kamaladhar in the case of State Industrial Promotion Corpn. of Tamil Nadu (supra), would squarely applies to this case, wherein the Tamil Nadu Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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