Law:

Section:

Section 10(20) of the Income-tax Act, 1961 - Local authority - Assessment year 1980-81 - U.P. Jal Nigam created under section 3 of U.P. Water Supply and Sewerage Act, 1975 is a local authority for purpose of section 10(20)[In favour of assessee] The assessee-corporation was created by the Government of Uttar Pradesh by enacting the U.P. Water Supply and Sewerage Act, 1975. The assesseeâ€â„¢s claim that it is a local authority for purpose of section 10(20) was negated by the department. Held that the U.P. Jal Nigam has separate legal existence as a body corporate. It is having perpetual succession and a common seal and is capable of suing and being sued in the name of the U.P. Jal Nigam. It is an independent body created by the statute, i.e., the U.P. Water Supply and Sewerage Act, 1975 (1975 Act), it cannot be said that it is merely a Government agency. The service of water supply and sewerage is a Governmental function and was earlier entrusted to the municipal authorities, namely, Municipal Corporation, Municipalities and the District Board. The U.P. Jal Nigam has been given power to prepare, execute, promote and finance scheme for supply of water and for sewerage and sewage disposal, to render all necessary services in regard to water supply and sewerage to the State Government and local bodies, etc., like the Municipal Committees, the District Board, Gram Panchayat, Jal Nigam represents the units of local self-Government. Section 17 of the 1975 Act provides that the Nigam may include in the cost of any scheme or work, supervision and centage charge at such rate not exceeding such limit as may be prescribed, as it may determine under clause (v) of sub-section (2) of section 15. The Jal Nigam has been empowered to lay down the schedule of fees for all services rendered to the State Government, local bodies, institutions or individuals. This empowers the Jal Nigam to realize fees for the services rendered by it from the State Government, local bodies, institutions or individuals. Section 40(1) declares that the fund of the Jal Nigam shall be deemed to be local fund. In the said fund, it shall credit all moneys received otherwise than by way of loans…

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