DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), VIJAYAWADA vs. VISAKHAPATNAM URBAN DEVELOPMENT AUTHORITY, VISAKHAPATNAM

ITA 742/VIZ/2025Status: DisposedITAT Visakhapatnam27 February 2026AY 2016-17Bench: SHRI RAVISH SOOD, HON'BLE (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal referred to the Supreme Court's clarification that while an assessee advancing general public utility cannot engage in trade or business for consideration, it can do so if the activities are connected to its GPU objects and receipts do not exceed 20% of total receipts. The Tribunal noted that the previous order did not consider the Supreme Court's decision.

What were the facts?

The Revenue filed an appeal against the order of the Addl./JCIT(A) concerning the assessment year 2016-17. The assessee, Visakhapatnam Urban Development Authority, is a State Government undertaking that performs commercial activities. The Revenue contended that the Ld.CIT(A) erred in not upholding the AO's order based on a Supreme Court decision regarding such commercial activities exceeding a certain percentage of total receipts.

What were the issues?

Whether the commercial activities undertaken by the Visakhapatnam Urban Development Authority are incidental to its object of general public utility and within the prescribed limit of 20% of total receipts, as per the Supreme Court's ruling.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 2(15),Section 11(4A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam

For Appellant: Shri Badicala Yadagiri

PER OMKARESHWAR CHIDARA, A.M : This appeal filed by the Revenue is directed against the order of the learned Addl./JCIT(A), Kochi vide DIN & Order No. ITBA/APL/S/250/2025-26/1080830640(1) dated 17.09.2025, arising out of order passed by the Ld.AO u/s 143(3) of the Income Tax Act,

2 Visakhapatnam Urban Development Authority

1961 (“the Act”), dated 30.12.2018, pertaining to the assessment ye

The order continues below.

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