DEPUTY COMMISSIONER OF INCOME TAX(EXEMPTIONS), BHUBANESWAR vs. STATE POLLUTION CONTROL BOARD ODISHA, BHUBANESWAR

ITA 517/CTK/2025Status: DisposedITAT Cuttack03 December 2025AY 2017-185 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the decision of the CIT(A) that the assessee, State Pollution Control Board, is to be treated as a 'State'. The Tribunal noted that the CIT(A) followed the judicial discipline by adhering to the decision of a Co-ordinate Bench of the Tribunal in the assessee's own case for AY 2017-18. The Tribunal found no error in the CIT(A)'s order. Consequently, the penalty levied by the Assessing Officer under Section 270A was deleted by the CIT(A) on the basis that the assessee is a 'State'. The Tribunal found no reason to interfere with the CIT(A)'s order. As the Revenue's appeals were dismissed, the cross objections filed by the assessee, which were only in support of the CIT(A)'s orders, were rendered infructuous and dismissed.

What were the facts?

The Revenue filed appeals against orders dated 17.7.2025 by the CIT(A), NFAC, Delhi, concerning assessment years 2013-14, 2017-18, and 2018-19. The assessee filed cross objections. The appeals concerned quantum matters and penalties under Section 270A. The CIT(A) had held that the assessee, State Pollution Control Board, is a 'State'. The Revenue acknowledged that the CIT(A) followed a Co-ordinate Bench decision in the assessee's own case for AY 2017-18. However, the Revenue stated that this judgment was not accepted and an appeal was filed before the Hon'ble Jurisdictional High Court, requesting the current appeals be kept in abeyance.

What were the issues?

1. Whether the assessee, State Pollution Control Board, qualifies as a 'State' for the purposes of income tax assessment, particularly in relation to Article 289 of the Constitution of India. 2. Whether the penalty levied under Section 270A of the Income Tax Act, 1961, is sustainable when the assessee is held to be a 'State'. Assessee's Contentions: The assessee relied on the Co-ordinate Bench decision in its own case for AY 2017-18, which held it to be a 'State'. This decision was supported by various precedents and tests laid down by the Hon'ble Supreme Court, including cases like Som Prakash Rekhi and Adityapur Industrial. The assessee argued that its finances, fees, and charges are controlled by the Government of Odisha, its funds would revert to the State Government upon winding up, and it cannot open bank accounts without government permission. The assessee also noted that it had not applied for registration under Section 12AA or Section 10(23)(iv) of the Act, unlike in a previous case where the assessee considered itself a separate legal entity. Revenue's Contentions: The Revenue acknowledged that the CIT(A) followed a Co-ordinate Bench decision in the assessee's own case. However, it stated that this decision was not accepted and an appeal was pending before the Hon'ble Jurisdictional High Court, requesting the current appeals be kept in abeyance.

Which sections of the Income-tax Act were involved?

Section 270A,Section 289

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Cases cited in this judgment(2)Show list

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State Pollution Control Board, Paribesh Bhawan, Unit-VIII, Bhubaneswar 2 These are appeals filed by the revenue against the separate orders all dated 17.7.2025 by the Id CIT(A), NFAC, Delhi passed in Appeal No. CIT(A), Bhubaneswar-2/10287/2019-20, NFAC/2016-17/10418285, NFAC/2017- 18/10135149 & NFAC/2017-18/10087368 for the assessment years, 2013-14, 2017-18 & 2018-19, respectively.

2.

The assessee has filed cross objections in the respective assessment years in appeals filed by the revenue.

3.

Shri Ashim Kumar Chakraborty, Id CIT DR appeared for the revenue and Ms Sarmila Agarwal and Shri S.K.Agarwal, Id ARs appeared for the assessee.

4.

It was submitted by Id CIT DR that in the quantum matter, Id CIT(A) has held that the assessee is a 'State'. It was fairly agreed by Id CIT DR that while deciding the issue, the Id CIT(A) has followed the decision of the Co-ordinate Bench of this Tribunal in assessee's own case in ITA No.301/CTK/2024 for the assessment year 2017-18. It was the submission that the Revenue has not accepted the said judgment and has filed the appeal before the Hon'ble Juri ictional High Court. It was the submission that this appeal may be kept in abeyance as the ap

The order continues below.

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