TMI Blog1999 (11) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for full exemption from payment of income-tax as per s. 10, sub-s. 20 of the IT Act, is clearly going against the provisions of the J K State Sheep Sheep Products Development Board Act of 1979, which power is not vested in any authority other than the State legislature only. 4. That treating the appellant as a company and not as local authority is based on incorrect and illegal surmises only to unjustifiably bring the appellant-Board within the purviews of the IT Act, 1961. 4A. That even the different case rulings cited before the learned CIT(A) in this regards have not found favour and the claim of the appellant has been fully disregarded, leaving the matter to be decided by the Hon'ble Bench of this Tribunal. 5. That even the fact that the appellant-Board was constituted under a special Act of the State legislature and not as a company under the Companies Act, which is a prerequisite to term any institution as a company, has been disregarded. 6. That the submissions that the activities carried but by the appellant-Board are purely those of public functions as per s. 2(15) of the IT Act, 1961, fully covered under the definition of charitable activities and would n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessment made by the learned AO by treating the status of the appellant as a company be set aside and the correct status of 'local authority' eligible for exemption under s. 10(20) be granted. —That a detailed paper book shall be filed at the time of hearing of the appeal. —That the appellant craves to further reserve the right to amend, delete, alter, add or change any of the submissions at the time of hearing and before the final disposal of the appeal. 2. Similar grounds of appeal are involved in all other appeals. 3. The basic issue to be resolved is whether or not the appellant is entitled for exemption from tax under s. 10(20) of the IT Act, 1961. 4. The learned Departmental Representative relied on the orders passed by the authorities below. The appellant is engaged in the business of procurement and sale of wool and also runs a slaughter house. The AO did not accept the claim regarding status as local body, following the order passed by the learned CIT(A) in the asst. yr. 1984-85 vide appeal No. 272/85-86/A-Ward/Sgr. The matter was adjudicated upon before the learned CIT(A) and the appellant pleaded before the learned CIT(A) that the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... governed by internal rules and regulations. The local body acts as an independent institution and supporting to the authority who is cause of its creation. The authority which creates such an institution will put certain limitations and will create jurisdiction for such body. The word 'authority' as defined in Webster's Dictionary means a person or a body exercises power or having legal right to command and be obeyed. The main purpose of making an institution of local authority is to allow the State to create an authority within a State which will function independently for a localise object. In the case of Calcutta State Transport Corporation, the Hon'ble Calcutta High Court has held that State Transport Corporation as a local authority. 8. The issue also came up before the Hon'ble Andhra Pradesh High Court in the cases of CIT vs. Agricultural Market Committee (1983) 143 ITR 1020 (AP) and Budha Veeri Naidu vs. State of Andhra Pradesh. The Hon'ble Andhra Pradesh High Court has held that agricultural market committee is a local authority. The primary conditions embedded by the local authority are that it should become a juridical person by creation of legislative authority. It s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, possessing, therefor, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund. What are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other legal authority ? First, the authorities must have separate legal existence as corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be completed and the degree of dependence may vary considerably but an appreciable measure of autonomy there must be. Next they must be entrusted by statute with such Governmental functions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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