The Delhi High Court on Monday exempted the Greater Noida Industrial Development Authority (GNIDA) from paying income tax, saying it was not carrying out any commercial activity with any profit motive.
CBDT order
A Bench of Justice Sanjiv Khanna and Justice Pratibha M. Singh allowed a plea of the GNIDA seeking to set aside a 2015 order of the Central Board of Direct Taxes (CBDT) rejecting its application for grant of exemption under Section 10 (46) of the Income-Tax Act 1961.
‘Specified income’
Section 10(46) of the I-T Act deals with the exemption of ‘specified income’ of certain bodies or authorities. It says that any specified income arising to a body or authority, constituted by or under a central or State Act with the object of regulating or administering an activity for the benefit of general public and which is not engaged in any commercial activity, shall be exempted.
The GNIDA had said that it was established for the development of certain areas in Uttar Pradesh as an industrial and urban township, and thus discharged sovereign functions as an arm of the government. GNIDA had contended that the CBDT had on June 8, 2015, arbitrarily rejected its plea to declare its income under ‘specified income’ on the ground that it was making huge profits out of its activities, which are commercial in nature.
